At the moment we hit 1. 40 on friday. The climate index, 110. 6, so a little better than the forecast 110. We have seen the dollar weaker against the yen, but the euro seems to become more of a safehaven currency than the dollar over the last week or so. So plenty more to come on that. Joining us with his views, chris watley, good morning to you. Nice to see you. Good morning. The Germany Economy is chugging along rather nicely. The question is how much of a benefit it is to the rest of the eurozone. Europe is in a clear recovery phase. Thats been ongoing for 12 to 18 months. We have seen terrific flows over the last 12plus months into the equity market. The question now is whether you can start creating credit in europe. That is the last piece of the growth puzzle that were waiting to see, which we think may come this year as we see the credit expansion. Are you concerned about france or not . Pmi was slightly better than we thought. Yeah. Its the one that hasnt really embraced structural form in a significant way. And, yeah, i mean, its not a world performing economy, but i wouldnt be concerned about it until money starts to get really tight. And thats quite a distance away for europe. So it will chug along. You say money is tight, what do you mean . I mean as we get towards the end of the Economic Cycle and Central Banks start raising rates or tightening up liquidity markets in a meaningful way. They are starting to do that now and we see the effects in the markets. When we get to the end of the cycle when the u. S. And europe have up nation pressures, im talking two to three years away, then i think france will standout as having a significant problem. Okay. Stick around. More to come from you. Straight off the back, jules is not here as shes on her way to brussels to speak to policymakers. Shell be with us tomorrow from the business europe conference to speak to more highprofile guests including emma masaglacia and the president of medeff will be here as well. Investors are eyeing the feds decision later this week and the potential for more tapering. Well ask if the un currency is here to stay. And well speak to the chairman and ceo of instan bull in around 15 minutes. Robert de niros resort is set to open later this year. Well hear from the acting legend at 10 45 ct. And the Cambridge Satchel Company that started with a 600pound budget now armed with 21 Million Pounds of budget is targeting children. Well speak to the woman who started it all at 11 20. And apple is reporting after the quarter today with updated ipad and a global release of iphones all set to fall within sales figures. Well preview those figures at 10 45 cet. First, though, well be up to speed with global equities. On the dow jones heat map, weighted to the downside at the moment. Equities decline around 7 to 2. We are not quite at the session low, we hit that half hour after the open, but plenty of red. The s p is down 2. 5 . The biggest loss since june 2012. Ftse 100 down 1 . T the cac is down. 06 . And a number of stocks to talk about. Motorfo motorfone, we are hearing at t deny that they are possibly taking over vodafone. They cant do anything for six months or so. And theres a deal for erickson claiming they should boost their swedish crowns. And merck has left the company to rejoin their rival in midmay. And lanxess is up 8 . Italian banks are under pressure this morning. They will post a bigger than expected loss of 600 Million Euros in 2030 due to loan loss provisions. Bmps is down 3. 5 . U. S. Bond treasury yields hit twomonth lows on friday. Down to 2. 0 . The guilt yields are heading up to 2. 9 . On the currenty market, the dollar is a bit weaker across the board. We hit 1. 37 on friday. The Dollar General is at 102. 33. Aussie, we are at. 87. And sterling, 1. 65 on friday. We hit a twoandahalf year high on friday. Thats where we stand in europe trading. Joining us for the first time this week, im happy to bring on board li sixuan. Good morning. These assets came under pressure and selling currency such as indonesian rapia. The dramatic composite trading lower by 2. 6 in india. Over in japan, the nikkei is dipping to a twomonth low ending down by 2. 5 . And hong kongs hang seng broke look for the first time in five months ending down by over 2 . So profit taking hit recent outperformers and the Growth Stocks also continue to lose ground after they posted a profit warning. But over in china although the fears linger, the markets were doing relatively okay compared to the rest of the region. The shanghai composite ended down after the Chinese New Year holiday, but do note ipos remain pretty strong. Trading eight stocks debuting on the shenzhen was suspended after they hit their upper limits on their first day moves. And there are nine to come online tomorrow. And in corporate news, we are watching shares of foxcon. They see revenue growing to 10 trillion over the next decade while it considers manufacturing to the u. S. , in hopes of garnering more business from apple. This is also focusing on indonesia to design phones with blackberry, but the group shares ended in the road. So thats the recap of the asian markets. Ross . Thank you for that, li sixuan. I want to get your views, interesting the dollar here, you want expect it to fall against the yen but its also falling against the sterling and the euro as well. The euro is more of a safehaven than the dollar. Straightly strange, isnt it . It surprised me. And actually, if you look at the trade against the dollar, not just against the currencies you mentioned, it was weak on friday as well, which is quite bizarre in the selloff. Normally you get it rallying. I just wonder if the dollar is switching to becoming a growth currency. Well, that may be part of it and it may also be, in fact n europe, you have slightly tighter money anyway. The Balance Sheet is shrinking faster, so maybe thats become more of a safehaven the last 12 months. Whats the figure for the emerging markets this week . I think it will be embarrassing for the fed if they change their move on the one weeks movement because it is heightened in the media over the last few days. So i think the fed will carry on as usual. I suspect as we get into the march meeting it may well change the way they behave. I argue this has just begun. In what sense . In a sense this is a way of risk aversion, so all the models were pretty close sellers coming into midjanuary. You put this note out saying sell it, buy bonds, right . Exactly. Longer term portfolios we positioned in late dis, more into bonds now of u. S. Equities and beginning the shorter term ones we were trimming as well. We would be looking for a pullback. We are short in our trading models as well. And yeah, i mean, if you look at our models, it really shows you everyone is positioned the one way. Equity often was at a 27year high. I couldnt find anyone that liked bonds running around the base, so everyone hated bonds, as you know. And, of course, a 3 yearold at the end of last year isnt a disaster. Almost 4 on the 30year. If you worry about deflation, it is quite attractive. So it is interesting to me, so thats why i said, i think it is about positioning and a way for risk aversion as we unwind the overly bullish positions. And i think well see a bit of stability perhaps this week. You always get that after the initial selloff and then more downside into february. But you think that more downside will interrupt the fed in march . Yeah, i think theres every chance. Its very difficult at this stage to know how significant the pullback will be, but theres plenty of macro with it this time, it is not just positioning. The event is a macro event. And this is affecting emerging markets. And theres every chance significant enough but its not the tight anything of the liquidity, how meaningful is that, more in the mind it is all in the margin. We forget, markets work in the margin. So weve gone from we never knew when they were going to tighten reduce qe in december the first one, now we are on a set path. And i think thats theres a lot of leverage based on the fed trade, this unwinding. And so the market says, look at the margin with time and liquid did. A tenyear bond model is backed up significantly in seven months. If you look over the last 30 years, when they back up that much, something normally happens in the world of finance. And thats what were seeing. Volatility stays, essentially. Where does this wash out then . When does this where does it wash out . How long for it to wash out . Very difficult to be precise, but best guess, into midfebruary, late february, possibly a bit longer. It may be a brief flutter here, we rally and then pull back significantly, but until we see our models move back towards buy signals, we wouldnt want to be putting money back to work. It may be that you need a crisis moment to mark a low. Always good to see you, chris. Chris watling at long view economics. We have been seeing the currencies continue to get crushed forcing Central Banks to intervene and send them low. We have your currency markets coming up. Google has snapped up Intelligence CompanyDeepmind Technologies in a reported 500 million deal. The british startup was funded in british in 2012 and they use ecommerce and games. They are also focusing on machine learning. Tech companies are placing a greater effort on ai, we want to hear what job would you gladly hand over to your computer . Join the conversation and get in touch with us, email us at worldwide cnbc. Com or tweet me rosswestgate. What would you hand over to a daily job to a computer or robot or whatever it is . Those little chores we dont like doing. Shares of vodafone slumped after at t ended months of speculation they wont take it over. The press was suggesting the Telecom Giant was looking to take a 60 billion pound bit, this was after the ceo Randall Stevenson met with the eu telecom chief last week. But they made their position clear following the review of the takeover panel. The u. S. Company is ruled out from buying vodafone for the next six months. Shares of vodafone have been up 30 over the last few months. At t is up 1. 75 . Liberty owns 20 of ziggo. This is a big move to expand libertys reach across europe. And the worlds biggest bank by assets may be expanding in britain. Dow jones reports that icbc is in talks to take a 60 stake in standard banks commodities for an Exchange Trading business. Sources have said the deal is now worth around 700 million but could give the chinese bank the option to boost to 80 . Last week the chairman of icbc cold cnbc they are announcing a major acquisition this week. The icbc today is down 1 . And the u. S. Attorneys office has investigated whether a trader at bank of america engaged in improper activities by doing their own futures trading ahead of putting in orders for clients. They disclosed the investigation in a regulatory filing and said the cftc also launched its own probe. Shares of bank of america are up 41 over the last 12 months. On friday they closed down near 2. 5 . Staying with banks. Most of citigroup bankers in europe will receive half their bonuses in cash this year. This is due to competitiveness of the european banks hit by tougher rules. Shares of citigroup are down with a decline around 1. 5 in the last three months. Up 2. 7 on friday. Nasdaq omx is set to take a 5 fall in istanbul. Joining us is ibraham, thank you for joining us, why is it important for you to sign this agreement . Thank you. And have a good day. This is really very important for istanbul borsa, this will improve our i. T. Infrastructure and bring state and also have them partner in a lasting relationship will help in various aspects and various angles to anchor borsa inst instanbul. Nasdaqs suite of technologies, how do you think that will help you attract more business . Integrated technology will enable us across market Collateral Management and very smooth transaction between markets and it will be, of course, fast, efficient and sound technology. So, for example, High Frequency trading is not possible for the time of being, at the time of being, and infrastructure hft will be possible. We will have location services, we will be able to host investors or even other exchanges in the region. So those are the very first points that come to my mind. And also since well be able to connect in Financial Centers through nasdaq financial network. Again, this will contribute sizably to the availability of borsa. The markets just hit a record low of 2. 38 of the dollar against the lira. How worried are you . Well, you know, ups and downs are something that may happen, especially in emerging markets, and this is the very reason why investors put their money in emerging markets to enjoy, to benefit from high volatility sometimes. But i would say that if you look at a longer horizon, the physical outlook of turkey has been high. Only for the last year the Public Sector as a whole was less than 1 or 1. 2 of the gdp. The Banking Sector is really very solid, sound and resilient. And the Growth Prospect is still there. So this kind of, you know, volatility can happen at any time, but i think it will be settled in the very near future. What will remain will be the general outlook of turkish economy, which is great. And i think this kind of, you know, temporary depreciateuations are relatively cheaper. It does indeed do that. Thank you for joining us. Congratulations there and our apologies for a bigger delay therein that we might have expected. And we are talking about emerging market currencies extending losses from last week down for the sixth day in a row. The filipino peso hitting its lowest as well since 2010. Joining us is the head of global currencies at usb. Thank you for joining us. Thank you. How much further has this got to go . Chris watling says it may stabilize, but he thinks we are only at the beginning of a shakeout. Yes, the figure has happened yet, so emerging markets is more fixed income trade than an equity trade. For the last five years we have seen fixed income come in more than equity money. This hasnt left yet, so while there has been underperformance in em currencies, theres been underperformance in the equities. You havent seen these rates perform in a big way as of yet. Theres been credit worsening, so they have been widening out. So i can see why this stabilizes in the near term. And so far this has been entirely an em trade. We have not seen the dollar leg of the movers yet. In fact, euro has held up throughout the course of the last year. So when the u. S. Front end begins to move as it inevitably will over the next two to three years, em will be compromised in that move as well. Whats the exact trade for this latest argentina decided to give up the peso, is that it . Because Everything Else, the fact that chinas pmi is slow yes, number one, argentina said europe and china were getting very unhinged. China is a very big deal. Everyone expects 7 to 8 growth, i think they are going to be disappointed because china wants to deliver. And that means it comes at a cost. But also in mainstream em, a place like turkey is just not following the right policy, so central bank of turkey is meeting where they completely missed to make a bold statement is compromised confidence in the emerging markets. These three figures have been the approximate figures. For all the talk about balance of the crises when you look at the markets and volatility, when you look at what the options cues are, it is actually reasonably priced. It is not priced for distress at all. Well, stay there. Well have more from you in a few moments. Still to come, profit warnings for the last day of 2013 kept the Fourth Quarter high with earnings alerts. Well get into that as soon as we come back. U. S. Stocks closed lower after the fed makes a decision later this week. And at t denies rumors of vodafone takeover this week. And google is in a reported 400 million deal. It is the biggest acquisition in europe to date. And ericsson in the green after joining with samsung to increase sales in britain. European equities are down at the beginning of the trading week. The ftse 100 over 1 . Vodafone is low. The ftse is down 1 . Bull market yields have gone lower. Tenyear bond yields are down to 2. 93 . The guilt is down up 2. 78 . The real focus is on emerging currencies. In tushish lira this morning, a record low against the dollar at 2. 38. You said turkey is getting it horribly wrong, whats going on . Should the central bank raise rates . Lets think about what turkeys problem is. Their problem is low savings rate. They are competitive and their leverage has increased and they borrowed money from abroad, but low savings rates, how do you fix those rates . Grow aggressively out of it and we are improving very slowly. To fix the rate, you need to hike real Interest Rates. And i think they have completely missed that opportunity so far. And perhaps a change in the future for the situation is alarming enough for them to have done it previously. Local demand for dollars, remember, this is a dollarized economy, it has had periods of high inflation, is going up. And once that is out of the bag, it becomes very difficult to control. So i think the ice is already extremely thin. In fact, it has been for a while. Im surprised the cb has not reacted more aggressively. This is em generally, you cant capitalize this as one player, presumably each world investors pick countries individually rather than sweep across the board. They are very different stories. It is a big world between here and indonesia, but once you get five stories going, investors do tend to panic. And panic can be an assumption, over the medium term, investors get good levels to come in. Mexico is one, korea is another, but in the near term investors will probably book profit. And the most liquid ones, perhaps. So those good fundamentals ironically are in harms way in the near term, so i think right now as volatility goes up, revenues do not work. But for longterm investors, that gives you the opportunity to come in. Korea, asia, mexico maybe the philippines . Philippines perhaps. It has good fundamentals but assets are priced for it. Philippines has not sold off in a big way yet at all, so you need to see further cheapening of that. It could be discriminatory. To say that em is going to blow and you get a series of balance payment crises, it is simplistic and