Cautiously optimistic on higher freight rates. Brent hovers near 110 aed my amid fears over tensions in egypt after they call for prayers today. Good morning, everyone. Youre watching a brandnew edition of Worldwide Exchange on this final trading day of the week. We are pretty flat one hour into the trading day after those big declines in yesterdays session. Not just on the european markets and also in terms of the u. S. And asian session. We have upbeat earnings reports from the likes of Moeller Maersk. Look at the shares right in the bottom lefthand corner, you see Moeller Maersk, the biggest gainer, up by 5. 5 . This is after the Company Beat Expectations with its Second Quarter numbers and also lifted its guidance for the shipping unit. Well be talking much more about Moeller Maersk later on in the session. I want to show you whats going on in the european markets in more detail. The ftse 100 still seeing a little underperformance, but not flat versus the big declines over the two past trading days. It seems as though positive data in the uk is now back for the markets. Well talk about the relationship in the show as well. The xetra dax is off by. 3 . And are seeing similar percentage declines for the ftse mib, the ibex 35 pretty much flat. In the bond markets, we saw the big selloff throughout this week with yields spiking for the treasuries, for the gilts and the bunds. Yesterday, treasury yields reached 2. 8 on the back of better than expected Economic Data. Remember, jobless claims falling to a sixyear low. But we have seen yields coming down just a touch back below the 2. 8 level but at twoyear highs. Tenyear gilt yields at a twoyear high, 2. 67 is where were standing now. The market doesnt believe mark carneys Forward Guidance, and we also got the better than expected data points out of the uk recently. In the forex markets, we have been seeing a little dollar weakness and that continues to persist in todays trading session. The dollar has been very volatile in yesterdays trading session on the back of the conflicting Economic Data which well talk about in more detail. The aussie dollar above that 90 level and the sterling dollar has seen that big jump in yesterdays trading session yet again, but today it is pretty much flat against the dollar, 1. 5630. I want to draw your attention to a couple of other forex pairs making big moves. The yuan hit another record high against the dollar. This is on dollar weakness. But also on signs that the chinese economy is slowly but surely stabilizing the indian rupee hitting another record low against the dollar. This is, of course, on fed tapering fears and Central Banks actions to stem the decline in the rupee are not really helping right now. Today, the indian rupee is down by. 5 against the dollar and the new Zealand Dollar is higher now, was under pressure before on the back of the earthquake that we saw in the capital of new zealand. Lets check in on asian markets with li sixuan. Good afternoon to you. Good morning to you, carolin. Following wall streets selloff overnight, asian markets extended yesterdays losses in the very dramatic way. Shanghai composite today, it was surging by as much as 5 before ending down by. 6 . We were also watching the 50 index which tracks the top 50 stocks on the shanghai composite. Some surged up by 10 , just past 11 00 this morning. This includes index giants like petro china and china unicom. According to chinas 21st century business herald, it was a fat finger trade by everbright Securities Investment department. Shares of everbright securities were suspended in the afternoon session. China markets gave back all of the early gains in the afternoon session. But guess who became the big winners of that flash surge . It security stocks got a strong boost on market rumors of the technical glitches. Surging over 7 in todays trade. The rest of asia had a volatile day of trade due to the drama on the shanghai composite. Japanese financials extended their weakness from yesterday after more strong u. S. Data added to the speculation of the feds tapering moves. Back to you. Sixuan, thank you for that. A quick check of the dow jones. Yesterdays trading session, pretty big declines, off by 1. 5 . The nasdaq losing almost 1. 7 . And the s p 500 off by 1. 5 . We saw pretty low volumes again, given we are still in the summer lull. But the dow is now on track for the worst week since the beginning of the year. Consumer prices rises for a Third Straight month. Weekly jobless claims below since october 2007. The industrial output number that wasnt too inspiring. Lets talk about what is going on in the markets. Lota, let me kick things off with you. What happened in the markets yesterday . Is it fed tapering fears or lower yields choking off the rally in stocks or low volumes . It is a bit a combination of a few things. One of the elements that hasnt been mentioned very much is egypt. And that event there, the military really driving that country close to the brink of civil war, really, is increasing the uncertainty levels that we have around the globe and thats never good for equities. I think we also ned to mention that which has further stoked that selloff. Pk, out to you. What do you think is the biggest driver for the selloff we have been seeing in the markets of late . Obviously egypt is a bit of a factor with oil prices spiking as a consequence. But i think really the issue of higher inflation rate in the u. S. With the core cpi inflation 1. 7 basically reinforcing what bernanke said in may and june, which is that in his view, the weakness in the core cpi inflation rate was transtory and he has proven to be right. We have seen a modest spike up in inflation which removes the last excuse for fed tapering not to begin in september. Now it is almost a certainty that tapering will begin, at least be announced at the next fomc meeting. I think thats the real factor driving markets at the moment. The most important factor, globally. Would you agree that inflation is increasingly becoming a concern . Because just two days ago we heard James Bullard warning about the deflationary effects in the u. S. Economy. Lets face it, the investors worldwide are very much watching the fed now and any one of those parameters that the fed has mentioned. If inflation is going up a little bit, then there is less of a possibility or potential more of a potential that they will actually start the tapering. So there is tapering anxiety around very much again, but that doesnt necessarily in the longer term need to really hurt equities. It will hurt bonds, but in our Investment Strategy we still much rather hold equities than bonds. How would you position yourself, going into september, huge event for us obviously with the fed, with the jobs data, with potentially the start of tapering, how do you want to hedge yourself . Are you buying puts or want to stay in cash . Well, we have increased our cash positions, but not because we are shy of equities. It is more because we dont like bonds and we still need to keep risk levels at roughly the same level. We are warning our investors that there is a bit of a dhopy time ahead. We cant help that, but we very much believe that if the fed is right, and the Macro Economic recovery is continuing, then equities will see this through and after the initial folds will rally into the end of the year. Pk, what is your best hedging strategy against another vat of volatility . Well, i think volatility will continue, but i think the important point to remember about when at is happening in t markets at the moment is were seeing evidence of a strangling u. S. Economy, a continuing recovery in japan that has had a few ups and downs, but is continuing. And the end of the recession in europe. So the developed markets are in reasonably good shape, and i think equities consequently will do quite well over the next six to nine months globally. And i think within asia there are some markets that will do reasonably well as well, in particular in Southeast Asia it they didnt throw the kitchen sink at the problem during the Global Financial crisis and you have a number of markets that are in reasonably good shape. The philippines, malaysia, singapore. And i think, you know, beginning now to see some value emerging in places like indonesia and india, which have had a fairly torrid time but there is, i think, subvalue emerging there, especially with the big selloff in the currencies. Okay. Pk, thank you very much for now. Lota, thank you for initial thoughts as well. Youre both staying with us for another chat. If you have any questions to either of the two gentlemen or comments on the program or whats going on in the markets, send in your emails and comments to worldwide cnbc. Com. Lets get back to one of our top stories, egypts Muslim Brotherhood called for a nationwide march of millions following afternoon prayers today as the clashes between pro morsi supporters and Security Forces show no signs of abating. Several Foreign Companies have shut offices across the country in response to the ongoing violence. Y yousuf gamal eldin is live with the latest. It seems like theyre still defying the curfew out there. They are defying it. Theyre calling it the friday of anger, but you need to keep in mind the curfew is now over. It has been over since 6 00 a. M. Local time and what is interesting to point out is just in the last few minutes we have had some activity from the military. Four tanks have positioned themselves right below us here to cut off access roads to the bridge in the background, one of the key arteries of the city, and state tv, which is right beside our vantage point. Taking the precautions because they are arguably expecting large numbers to come out today. They are also authorizing the Egyptian Ministry of interior to use deadly force to protect state institutions. Remember, we had a fire that basically took out the office of the minister of finance and shows you the amount of trepidation in the air. When it comes to the death toll, carolin, and you mentioned the number 600, and the figure that is being thrown around now by various governmental sources is 638, though we also have other sources who are denying that number. In any case, it is difficult to ascertain the exact figure. The Muslim Brotherhood claims the figure is much higher than that. And, again, theyre going to be out in numbers. We had attacks not just in cairo, but also across the country with churches that have been set ablaze and attack on a military checkpoint in the sinai. The operation of the suez canal, notably remains unaffected and so does the operation of the various ports as well. The International Response you saw including the statement by u. S. President s barack obama, a clear sign and clear message to the egyptian military, and effective punitive response, you could argue, to basically rein in the violence and get the country back on track. A lot of observers will call for further measures and there will be a lot of discussions in the United States and elsewhere about why he didnt go the extra mile of cutting off Financial Assistance to the tune of 1. 3 billion. Thats a key discussion point and also well just have to wait and see how this day evolves. It is a key day. The Muslim Brotherhood will fight this to the very end and the death toll may rise further. Carolin . Yousuf, thank you for that update. Make sure you do stay safe. The violence in egypt is playing a part in the moves that were seeing in the commodity markets. Brent had a fourmonth high yesterday, and the concerns of supply disruptions through the suez canal. The price of Precious Metals also rallied as investors were seeking safe havens. Silver jumped more than 5. 5 to a threemonth high. Gold hit a twomonth high. This morning, though, brent crude just a tap lower, sitting at 139. 53 and crude oil at 107. 32. Pretty much flat on the day. Lota and pk are still with us. Pk, let me get out to you. What is moving the oil price . Is it really the unrest in egypt or is it really just tapering fears . It is primarily the unrest in egypt, the uncertainty generated by that. The fact that you could have the suez canal affected. I think those are the sorts of factors i think driving that. There is, of course in the background also the strengthening of the Global Economy, particularly the u. S. And japan. That is probably playing a small part, but really the spike in recent days is primarily on account of egypt, and i think it is consequently temporary. We will see we will see brent come back below 100. Id say within the next two or three months. Pk, i dont think everyone would agree with that. I think, you know, some people in the market are saying, lets say 5 or 10 to what were seeing in the oil price is actually down to egypt. Many are saying, yes, it is tapering fears putting a lid on the market on prices. Which camp are you in . Im more in pks camp. I think the suez canal at the moment and this heightening, this increase of uncertainty and geopolitical risk at the moment is very much there driving the oil price in the shortterm. I hope very much pk is right, and the oil price will fall again because i am concerned about egypt and what may happen today. I think well have quite a choppy day today. I just want to get your thoughts on the uk market, putting gold and oil aside for a second. Because the uk markets, the equity markets have been behaving very irrationally. Almost like the u. S. Markets were behaving towards the start of the summer. Essentially now, good data is bad for the markets because were expecting Interest Rates to rise. Why this irrationality all of a sudden . It is a bit depressing, isnt it . It is always because Market Participants arent still quite sure or convinced whether theyre at the moment on a sugar high from all the quantitative easing or whether it is real. And until that certainty comes through, we will see these ups and downs with the markets and seemingly irrational behavior. But im with pk there that over the longer term, actually were going to go with equities in the right direction. That is up where bonds are really not somewhere where we want to be at the moment. How much upside does the ftse still have this year . Thats the Million Dollar question. I think there is still some considerable upside in the ftse and i think ill leave it there. Well leave it there. In number from you. Now 5 to 10 number. Too bad. I tried at least. Thank you so much for that. Pk stays with us for one more chat. Business liked merkel. It says more than 60 of executives around the world say that the german chancellors reelection would make them feel more confident about the outlook for the eurozone economy. They see her as a, quote, safe pair of hands. A german industry official are feeling less optimistic. The companys manufacturing lobby warn had that current export growth is not sustainable, calling for more investment in the german economy. But according to the latest election poll, merkels conservative party and Bavarian Sister Party have gained in popularity. They would get 41 of the vote, while coalition partner, the liberal fdp party has not moved with 5 . The opposing party has lost two points, only taking 25 . While the greens have lost 1 point, looking at a 13 result if the ballot would take place this weekend. Make sure to tune in next week, thats when we kick off our coverage of the german election in high gear with a political and corporate road trip starting in the capital of berlin. I hit the auto bon to explore germany, from industry to incubator, entry level to executive. Find out the powers and pitfalls of europes biggest economy as its leaders wrangle over who gets to lead the way. Join me monday to find out why the future of this country matters to you. 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The Third Quarter will mark the beginning of the end for easy money. Is ice cream being left out in the cold by growing sales of frozen yogurt . We hear from both sides and the dessert debate. Heavy selling in local stocks have pulled the indian rupee lower. The Market Action seen related to fresh concerns that Central Banks are starting to slow the supply of cheap money. The rupees fall to a new record low against the dollar happened despite ongoing efforts by the Indian Government to prop the currency up. Pk is still with us. The rbi has initiated a lot of measures to stem the decl