9 billion to settle. And aceos is back online. The fashion retailer gets back to business after a warehouse fire over the weekend, but the firm says its fully insured. Shares pair losses. Well, a warm welcome again to Worldwide Exchange this morning, a bright, early monday morning. We do have some further pmi data out this morning, too. We had france and germany already this morning. Now weve got the composite pmi coming. It was estimated at 52. 8. Its coming in right now at 53. 5. Thats for june. So, compared to the estimates pretty much in line with forecast, but the pmi manufacturing estimate at 52. 1, manufacturing coming in at 52. 2, so slightly better on the manufacturing. On the services, too, its come in at 53. 2, bang in line with estimates, of course. And we did have france and germany out this morning. Germany pretty much in line as far as the manufacturing is concerned, weaker on the services, and that dragged the composite down. France weak across the board, both services and manufacturing, disappointing. Thats europe. Of course, chinas factory sector expanded in june for the first time in six months. Thats according to preliminary hsbc survey data. The pmi rose to 50. 8 with new orders pushing the index into growth territory for the First Time Since december. Er jeremy stretch joins us now in studio. Jere jeremy, good morning. Hi. Start with europe. Thoughts on these numbers . I think the particular interest is in terms of the weakness in the french data. I think that continues to cause some concern, because of course, were seeing an increase aing divergence from france and germany, and i think that will undermine, if that team or trend continues to develop over the course of the next couple months. Were looking at contraction in you, according to these numbers. Indeed. It looks like gdp in france for the Second Quarter will be back in negative territory. Thats bad news both for the French Economy and also the eurozone, but also politically for president hollande. Its another headache, if youd like, and of course, after the very weak performance his party had in the recent elections. At what point is the ecb policy action going to ride to the rescue . That is the issue, because of course, it takes time and they force measures to actually work through the system. And of course, in essence, easing rates from already low levels isnt going to materially improve or boost french sentiment in the short term. I think ultimately, it has to be a case of looking towards structural reforms, and i think thats going to be the debating point, because of course, as we know from other members of the eurozone, particularly the periphery, structural reforms, yes, can work, but they take time and theyre also painful. And of course, that also inflicts pain or difficulty on the unions. On the german side, weaker Services Data than expected. Any thoughts there . Well, thats a little disappointing, but were still well in expansionary territory, so i think we have to keep that in mind. But in essence, what the data tells us is, of course, the eurozone is incredibly still reliant on germany to drag it along, with some of the other Northern European economies moving at slipstream, but it is still a germanled eurozone. Any fragility seen there would obviously play through in terms of the activity data relatively quickly, and ultimately, for the euro as well. Triple highs for the aussie dollar against the greenback and the yen. Were not too far away from years peak, around 9,461, i think it is. Will we make a test on that. Seems like we are predicated in that direction. I think the china story is proven relevant in that regard. The upcoming rba may signal again government concerns leaning on that exactly. I think they will be mindful of the continuing strength of the aussie because of the impact that will have in terms of the economic data. And i think, of course, if we go back to the previous statement, not only is the highback the standard, but they added Commodity Prices and i think thats going to be another interesting point because over recent weeks weve seen some of the Commodity Index in australia weakening. If china is stronger, perhaps that provides a caveat for that, but thats another factor we need to monitor. I think at these sort of levels, the aussie does look gyrating. And were seeing markets extending aussie positions to all different levels. We have important data in the u. S. This week, housing data that the markets focused on, also the pc inflation data on thursday, particularly important given what yellen said or didnt say or didnt do last week. What are your thoughts there . And if you bring this all together, how should we be trading . The data is fascinating, particularly in terms of the cpi data recently. Question is, is that a statistical blip or are we seeing some evidence of a small degree of not inflationary pressure, but certainly, a lack of disinflationary concerns, and i think that together, if we see those home sales data remain relatively supportive, and as we move through towards next weeks payrolls report, then i think a combination of those factors remain relatively supportive. Should provide the dollar with some support. The dollar index has traded back towards the 200day moving average. At that sort of level, i think it remains supportive. If core pc starts to come in or head towards the top side, i think that will provide yield support for the u. S. Dollar as well. What is the outlook for sterling . Because the outlook will be tested tomorrow, arguably, when the matters of the mpc testify on the inflation report, i believe it is. Was the pound to go much higher, possibly retest levels above 1. 70 . I think if you look at how the market is positioned, the data is historical, but were back at levels we havent seen since late 07, so markets already have long positions in sterling already in place. Thats not to say they cant extend further, particularly if the bank of england tomorrow, carney and others, including miles and mccafferty, dont stamp down on some of the rate expectation scenarios that have been playing up over the course of the last couple weeks or so. So, as long as they maintain the rate stories very much as the markets have been increasingly discounting, then sterling still has a potential to rally. I think possibly, necessarily, i would look away from trying to buy sterling at these sort of levels against the u. S. I would prefer to be short of the euro sterling or sterling yen may be another way to play the trade. Well get feedback on potential measures to cool the Housing Market on thursday as well. Jere jeremy, stretch, thank you so much, head of ethic strategy at cibc. Coming up, not backing down. Lululemon founder chip wilson looks to goldman to help take on the board as he battles full company control. Were also watching you. Google could soon be in our homes as the company nestlab with a home monitoring camera, startup dropcam. And the rock star with tight pursestrings. Sting denies his six kids the chance of easy money, as he says there will be no inheritance money for any of them. And finally, up and down or steady . Well break down the numbers of our latest cnbc commodities survey with a look ahead on gold and the price of oil for the week. All that and more coming up. A pretty cautious start for european markets this week, despite some of the gains that we saw across the asian session. Actually lost a bit of ground in the last couple hours. Were 82 right now reds to greens taking the euro stoxx 600 down 0. 6 . A lot of things on investors minds, talking about that in terms of the pmi data this morning. Cautious tone to be taken as far as the french data is concerned. Weaker on the Services Side, weaker on the manufacturing side, too, an indication suggesting actually we could see a contraction in that q2 gdp data for france. Perhaps the french government should be less focused on m a deals and more focused on Economic Growth performance and what to do to boost the markets. Lets have a look at what happened on friday as far as the u. S. Markets are concerned, because the momentum seemed to continue. Minor gains as far as the markets are concerned in fridays session, but the one were really watching is the dow, of course. 50 points now away from that 17,000 level. And we did see fresh highs for the s p 500 and the dow in fridays session. So, the question is, given the sentiment weve seen in the european markets this morning, can the rally in the u. S. Continue . Asia . Lets look at it, because the big theme was the data coming out from china. This is the flash hsbc manufacturing pmi. The first expansion in six months. On the whole, the markets like that, with the exception of the shanghai composite, oddly enough. 2,024, down just a smidgen. Once again it seems to be the story of new share issues thats bleeding liquidity from the list of shares, the established shares on the main board. One of the biggest beneficiaries of the upbeat pmi from hsbc, the aussie dollar, getting a lift. Spaep asx 200 up almost 30 points. Remember, the aussie economy is wired into the chinese in terms of their trade, biggest trading partners. Nikkei 225, 15,369. The kospi having a reasonably good run today, 1,974. Lets flip the boards and show you the activity in the credit markets. Tenyear german bonds yielding just over 1. 3 . Its going to be an important week for the gilts market and sterling because of what we were talking about earlier with jeremy. We got mpc Board Members testifying tomorrow, including Governor Carney on that inflationary report. Tenyear gilt yielding just over 2. 7 . And the u. S. Over 2. 6 and the italian bond market a little bit weaker. Over in the currency markets, we are seeing some giveback from the single european currency, because remember, at the french pmi, it was on the softer side as Services Sector contracted in germany as well. So, some weakness below that 1. 36 market. Aussie having a good day after the robust china pmi from the hsbc. Dollar cad under some pressure, 1. 0719 and cable just over 1. 70. Julia . The worlds leading Fund Managers and investors are gathering in monaco for the International Fund forum. Karen is, of course, in monaco for us. I was looking at your shot earlier, and no offense to sri, but i have major location envy. What a beautiful backdrop to be discussing markets. Reporter yes, julia. I hope you saw that beautiful shot of the beach, one of the famous beaches just down the road. I hope that was the shot you were looking at. This is the playground of the rich and famous, but it is playing host to the largest annual mutual fund event. And many of those Fund Managers have already flown in, but it is a rather distracting backdrop, and some are off playing golf and having lunches today. Thats the first day of the fun forum. Its about meeting with clients and discussing the markets. Dont forget, its been a very interesting quarter. Weve had record highs across in the states, but also on some of the european indeces, so a lot to discuss. With all the m a activity out there as well. Joining me now is someone who actually hasnt gone off to golf or lunch yet. Mark mobias with executive chairman of templeton emerging markets. Great to see you, mark. Thanks for joining us today. Thank you. Its been an interesting year so far, first and Second Quarter. You focus on emerging markets. How different is this year versus last year . Well, very different, because now emerging markets are outperforming the u. S. And the world indices, wheres as you know, last year we were underperforming. The year before, outperforming. The year before that, underperforming. So, weve had a very checkered history in the last three years. Now things are looking better. There was an enormous u fo euphoria around the brics countries. Where do you still see the growth and opportunities in those markets . China is going through this incredible reform program, the tenpoint program by the communist party. Its an amazing document and means tremendous changes in china. And thats why i think the 7 growth target is achievable for china. So, we see a lot going on. In brazil, of course, as you know, the demonstrations against the government and the unhappiness with the infrastructure and so forth and so on i think could result in the change, not necessarily change in government, but that could happen, but a change in the policies of the government towards more marketfriendly, towards more companyfriendly attitudes. A lot of investors wade into emerging markets thinking they were easy pickings, easy gains to be made, and many people got burnt on some of those investments. How specific do you have to be with these emerging markets these days in terms of buying assets . You have to be very, very specific and very companyspecific, not only countryspecific. And you have to start broadening your scope into frontier areas, because if you look at frontier, Frontier Markets have outperformed even emerging markets, generally. So, the scope of our work has widened considerably over the last few years. When you say frontier, youre looking at the likes of africa. Theres been enormous chatter about nigeria, now one of the Fastest Growing economies in the african region. Is this where youre focusing your attentions . Africa is one of the most important and niger, of course, is the biggest in our portfolios. South africas important for us because many of the companies in south africa are moving north to the rest of southern africa. But dont forget the middle east. The middle east is on a tear. The uae, kuwait, abu dhabi, all these countries are moving very, very fast. And then some countries in asia, such as vietnam, look very good. When you say the middle east is moving fast, other people may be thinking of a different connotation to that, meaning the events unraveling in iraq, the insurgency, the spike in the oil price at very low levels and low volatility. What does that mean for your portfolio when you look at middle east markets . Because even some local Fund Managers are saying im not touching exposure to iraq now . Well, its true that iraq has got a problem, but then if you look at kurdistan, the kurdish areas, youll see a lot of good things happening there, and drilling for oil is one of the most important things theyre doing and pumping that oil to turkey and other parts of the world. So, i think you have to look at, again, either within a country like iraq, specific areas where they might be very good things happening. Perhaps it could help if you would flesh out your russia exposure, because this is a good example, World Markets sold off the nysex, which recovered, but concerns about ukraine and russia. Youre still invested in the country, the type of assets you were buying and looking to add more. We saw just the other week, jpmorgan kaz no changed to buy on equities and some people felt that was too late. Are there still opportunities in russia, and where do you see the best place to play those investments right now . Well, its certainly not too late because the russian ruble is down against the u. S. Dollar. So, u. S. Dollar investors have a good opportunity. And the market has not done that well. Theres been a little bit of a spurt, but theres lots of opportunities there. A company that is not only nickel but palladium, and demand for palladium is going through the roof in china and other countries that use gasoline engines and need catalytic converters using palladium. So, there are lots of things there we can look at. Quickly, last week we saw a lot of inflation go on after the fed suggested Interest Rates are going to stay low for much, much longer. Is there room in your portfolio for those types of inflation pages or do you think its just an irrelevant issue right now . Its not irrelevant, because inflation will hit some countries and will have an impact on Interest Rates, of course, but at the end of the day, if you look at the correlation between the movement of markets and conflation Interest Rates, its not that high. So, you have to look at each individual company specifically on how theyre going to be impacted. Mark, its exciting whats happening this week. Very glamorous. Anything youre doing in the french rivera today . I have a few speeches, but other than that, i hope to enjoy the sun. Remains to be seen. Mark mobius, chairman of temp templeton emerging markets. Julia, let me toss it back to you. Were going to cool off and perhaps have a little paddle in the water there next to us. Very nice, indeed. We officially hate you. Hardship sign if ever i saw one. Punishing. Thanks, karen. All right. Beautiful. Send us a postcard. Please do. Exactly. Interesting comments there. I think its a great point about inflation mark makes, and id say two things about that. Emerging markets, of course, especially deficit countries like india, which is a net importer of crude oil. But its not just oil, the headlines coming out of iraq, its the price of food as well. Remember cpi absolutely. In china. Pork is such an important component of the food basket. So, watching el nino, watching food Price Inflation as well. And china, 7 growth is achievable. Thought it was a legally binding target, but we have to take a quick break. So sad, beijing. Coming up next, has the french government squeezed the best possible deal . Stay tuned as we cross the palace. Spokesperson the Volkswagen Passat is heads above the competition, but were not in the business of naming names. The fact is, it comes standard with an engine thats been called the benchmark of its class. Really, guys, i thought. It also has more rear legroom than other midsize sedans. And the Volkswagen Passat has a lower starting price than. Much better. Vo hurry in and lease the 2014 passat s for 199 a month. Visit vwdealer. Com today. We stathat the kid onhe thought the back of the bus might have a song that he has in his head but he just cant get out. With the technology of cloud, we change all that. I can sing something into my device. Up to the cloud it goes. Back down it comes sounding better. We break down the walls of creation, and we give music creation for the masses. Thats keeping you from the healthcare you deserve