Does that mean for the stock market route . Shanghai we saw off by 3 . Japan held onto its record stimulus downwardly trending its forecast for inflation at 1. 9 rather than 2 . A little bit of caution happening in asia. In the european trading we are seeing a flat day. Germany opens flat. I think it is all about those talks that will happen in greece. Alexis tsipras says they need more debt relief beyond what the creditors have thought, will he manage to pass through what the creditors are demanding. That will likely happen at 6 00 p. M. Tonight in greece. You will see me out there tomorrow. The eurodollar is trading basically flat. Oil is flat as well. 53 at the moment. People are paring back their ideas on what to produce over the next 12 months. Will the deal that was struck with iran get to congress. Money going out of the germany, they are selling debt today. We are seeing borrowing costs coming down. Yields coming down on the 10 year from the twoyear, a little more risk aversion. We see great by an cost rising up 27 . Lets have a look at some of the stocks. We have exposure to china. Burberry numbers coming out they beat they rose 6 . We are seeing Mainland China low growth. D seller rated further to a doubledigit ascension climb china is 25 of the luxury market. U. S. And japan doing well though. A competitor is feeling the pain of a slowdown in china, meet johnson nutrition, a u. S. Company, infant formula maker seeing pressure on the sales in china. Bhp billiton up, interesting because its taken a ride down on its u. S. Asset. It is the biggest overseas investor in u. S. Shale. Jonathan iron ore, a big headache for that company as well. Lets keep it on china gdp top estimates writing 7 from a year earlier. Tom, sometimes economist follow the government to guidance what was behind this . Tom i think there is always that suspicion with the chinese numbers. In this case, there are a couple of genuine factors that we can point to to explain the price. The impact of the stimulus chinas government has gotten serious supporting growth. Three more rate cuts since 4014. 2014. In particular we are seeing Real Estate Sales up, Infrastructure Spending is up. The second factor, more difficult to sustain is what has been going on in the equity market. We had a surge in the equity market in the Second Quarter. Along with that came an explosion in turnover, that was positive. That was positive for banks well management businesses Wealth Management businesses. The issue for chinas government is as the equity boom come to an end the Third Quarter will not to that kind of support for the gdp growth coming through. Jonathan they have been active over the last six months just to keep the gdp number in line with their own market. They have also been active around the equity market. When you that together, for polysemy next six months or becomes more important . We look at back at the equity market and leave that alone, or is that the front forefront of the policy . Tom i think really see i think we will see domestic easing. Reductions in Interest Rates. I think that is necessary as the government tries to reduce the burden of debt surfacing and get more capital spending. I think we will also see the government being forced to do more to support the equity market. As we saw today with the shanghai composite index coming down, a sentiment amongst mainland investors, fragile. After the government worked so massively to support the index a continued downslope would be a risk of continued slump in equities. Jonathan tom, thank you. Bloomberg intelligence economist. For more, with bring in the chief strategist. He helps manage 58 billion euros in assets. Howell, hal, im looking at starter development plunging. They are the old way of looking at chinese growth. Do i have to look at it with a new way . At the moment there is a lack of coherence in the data. On the highfrequency economic data, we are seeing growth we can we can. They are all turning down. Trending down. Most people in the market the market trending down is one of the sources of liquidity today. Jonathan can you tell me what you think gdp is running at in china . If you look at the ip figure, which used to be highly correlated with electricity generation, we are probably closer to 6. 5 or lower than 7 . We are seeing consumption resilient in the Second Quarter, probably mostly because of the rise in the stock market. That helps. I think the government needs to do more on the physical policies from the stimulus side to stabilize growth. Jonathan john, you listen to the comments, would you agree . The real story, do you care to comment. I dont believe the absolute number is the real story. We have seen some traditional indicators like iron ore consumption. What is important for china is a big increase of consumption on one hand over investment and an increase of services over industry in the gdp breakdown. This is what we think is the most positive factor for the rebalance of the economy. Jonathan the shift from the industry of old to consumption to the equity market in the conversation given a market that we have seen come at you expect that routes to weigh on consumption . I think at this point it would be likely to have a downward pressure on consumption if the route in the stock market continues. That is because historically the savings rate in china has been high. We do not consume as much. Going into 2016 we have seen a pickup in the service sector. It helped a little bit in terms of growth. It hurts it helps the chinese economy by turning into a service and consumptionbased economy. Consumption growth is bounded by Income Growth, Income Growth is bounded by Economic Growth. As Economic Growth slows, were seeing probably further downward pressure on growth. That is not to say the new 6 is not as good as the old 9 . We just have to use get used to slower growth. Jonathan i want to talk about the equity market. You say the casinos of shanghai have moved from the casinos of macau and people have been betting on stocks unique discipline. When i say see blanket risk on and off, can i be an investor . You have lots of investors with very little Financial Literacy who have created this upside and downside movement. One of the good attributes of the Chinese Market is it has a lot of brett breadth. I think you can find some compelling investment opportunities. You can still find good value and good stock stories in china the name of the game is to be active and selective. Jonathan you are active, ira number when we i remember when we had a huge runup you were out front. You said it was a bubble. It was one of the bestperforming equity markets, what do you think now . We had a decent pullback. Most notably in higher evaluation china export, even after the correction d smaller cap stocks are still trading high. Some of them are still hundreds of times. I would say that the bubble bursting process in that part of the market is more likely to continue. If so, the volatility generated from that part of the market could spill over to the big blue chip part. That is the risk we are trying to monitor. The market had a decent rebound since last week, that is because we had National Money going into the market. We also had a lot of other rescue measures in place. We have done all that. Volatility continued to be heightened because the leverage trading account is still being investigated. It is still being processed and in the process of closure. Volatility is still here, it has not been removed. That is why my concern is the volatility from the bubble bursting process in the smaller cap sectors could spill over that is one of the main risks. Jonathan we literally have 30 seconds for break one important question, when we talk about greece we talk about how long and difficult it is to unwind those capital controls. When i look at the market in shanghai, when you look at the amount of stocks suspended, the ipo suspended the ban on major stockholders from selling, how long will it take for them to unwind these measures and actually allow a market . Probably as long as the regulators think is necessary. It is not up to us. Jonathan john will stay with us. Coming up, a deal in doubt. We talk about a Greek Parliament vote. What will we hear from janet yellen on the first rate hike since 2006 . Could be bank of england move first the bank of england move first . Good morning. Jonathan good morning and welcome back. Chinese growth beats economist estimates coming in at 7 . Stocks on the shanghai composite down more than 3 . Bank of japan kept its record stimulus in place. The boj cut its inflation outlook. The Bank Forecast inflation at 1. 9 for next year. Janet yellen is scheduled to address u. S. Lawmakers today. She has been readying markets for a rate hike she will speak at 3 00 p. M. U. K. Time. Lets get the latest on greece. The countrys new Loan Agreement is set to pass parliament today. Taking on state tv, alex this suppress Alexis Tsipras used delicate language. We were made to go towards the wishes of the most europe powerful people in europe. First the agreement with the specific requirements or leave the eurozone. Jonathan lets get the latest from our bloomberg team. David what can we expect from the vote today . I think about Alexis Tsipras and how he would like a bullish man now he is defeated. David last night his chance to make his case to his people, it brought in raising the sales tax was something he said was irrational that he had to agree to it. He was also talking about pension reform and raising the retirement age. It will go to committee and parliament in parliament. Later at 10 00 p. M. , parliament will have another chance to speak. Jonathan disentangle something, front and center is a call from the imf for a haircut. Now take me inside the politics of creditors until me why greece did not want the imf to have a big role if they are fighting for grace greece . Hans they do not want to have monitors on the ground. The ims has on imf has almost taken on this mythical notion inside the greek government. Ims analysis was actually in brussels over the weekend. When they made these decisions they knew that the imf had concerns. Here is a quote about how worried the ims imf is about this mountain of debt. They say they can only remain sustainable through debt relief measures. Remember, they are getting a massive new loan, that is new debt. Here is how you can split the difference, you extend maturities. Yes the imf is deeply concerned about the size of the debt. Because the interest is low, the net present value of the debt is much lower than 200 their gdp. The other suggestions, having annual transfers from the german treasury to the greek treasury obviously that will not happen. A haircut of greeces debt will not happen. They say it is against the rules. In some way we knew the imf was for this haircut. It looks like out of the options, you extend. Jonathan lets bring back john. John the imf has concerns, do you . How long before you and i are talking about this again. John i think this is something that is constructive for investors like us. Lets all the great problem . Of course not. It is a comprehensive deal. It is a deal that is significant in terms of the amount. Of course the problem is the amount. This will add to the debt file. The imf is adding that it could probably be unsustainable any longterm. In the longterm. I think the main message is we avoided a nasty grexit. Jonathan when they are adding to the debt pile, at the same time, these guys are getting debt at almost nothing. As for everyone else adding to the debt pile, they are not getting those kinds of rates. I am talking about italy. Do you think the ecb will have to be able to cut the pile down for others . John there is a fine line in europe between reforms but also political reforms of the governments. That said, youre right, with the level in europe and the kind of Growth Potential in europe we have to have a active ecb in order to make this debt sustainable. Jonathan are you thinking about getting back in . John i think we are looking at it. They need to be selective. Jonathan up next, john it janet yellen softens up the rate market for a rate hike. Jonathan good morning and welcome back to on the move your code. He dax the dax added almost 8 . Switch of the boards and lets get straight to fx, euro sterling down by a 10th of 1 that is a november 2007 low. Holidaymakers happy, is mark carney happy . That could be a headache with inflation running at zero. The german bonds is up. Italy is down by two basis rights. Point. That is the fx market, the bond market, the commodity. Lets go to caroline hyde. Caroline asml they make a to the goes into your smartphones. The equivalent is flying off the shelves. They are forecasting higher numbers than their Third Quarter. The stock is up 1. 7 . Just eat, a way of getting delivery to work for you want it is an online takeaway service, up 2 . Goldman sachs reinstates conviction by buy. The ramping up the competition could amazon and google get in on the game . Just eat, still a conviction by for Goldman Sachs. As chaos as kf skf, the world of lubricants this is not looking pretty. China particularly. They say demand for their technology is looking uncertain particularly in the next quarter. China feeling its effects on the stock market here. Jonathan today, full attention turns to washington dc where janet yellen will address u. S. Lawmakers. I will expect that it will be appropriate some point later to take the first step to raise the federal funds rate and normalize monetary policy. Jonathan that was yellen last friday. Joining us now to shed some light, jen. We are eager to get to the bank of england. Janet yellen, she is laying the groundwork for that first rate hike, she reconciled that with the message that we are data dependent. It is not supporting her right now. That is the point. The markets are not convinced the hike will come this year. The recovery may not look even. The market trading is not coming forward to match the idea of a rate hike in 2016, perhaps todays testimony might be an opportunity to hammer home the message. Jonathan the market rate cap seems more dovish. The fed has been wrong. Who is wrong . The market or janet yellen . I think the Economic Growth prospects might be a bit optimistic. I think it is an interesting exercise. I think it is successful of yellen, for me that is what this exercise is about. The first rate hike would lead to crash he crash like behavior. Jonathan the fed is not the only bank and focus. The u. K. Inflation rate was shown to drop back to zero. Mark carney said this. The point at which Interest Rates begin to rise is moving closer given the performance of the economy. It is counterbalanced somewhat by disinflation. Jonathan that comment sounded somewhat familiar. Mark carney dropped this bomb. There is already speculation about the exact timing of the first rate hike, this decision is becoming more balanced. It could happen sooner than Financial Markets currently expects. Jonathan that was 2014. We are still waiting. Will todays labor market data support his comments . He got a lot of criticism for those comments last year. He was called and under unreliable boyfriend. The point we were discussing is the idea of what has changed since may . One of the things bank of england officials have said is they have seen is a pickup in pay growth. Todays date would support that that it would support that. The question is, is that enough to support a rate hike . Jonathan as jennifer said, you have the opposite problem in the u. K. In the u. S. , the market was dovish it was the same in the u. K. Until yesterday when the bank of england changed its mind. We have come forward to may, i was wondering if that was the objective of the exercise yesterday. I think it is more of drawing a picture. I think in terms of the job market, we are close to full employment in the u. S. And the u. K. They need to have to be able to use when there will be at turn down any economic cycle. Now it is a time to start a rate hike prospects, even if we believe it would be extremely gradual. A Global Growth environment remains one of moderate Global Growth. Jonathan there will be cynical people that suspect mark carney has seen it. At this point, forget that, and conspiracy theories, and look at the hard data. We going to have the argument we had in 2014 . Some say its daft for the bank of england to hike. If the fed moves before the boe, inc. About what that does to the dollar sterling, the global trade environment . Once you get those consequences locked into your forecast, you have to see what that does for your own Protection Area jonathan lets talk stocks. When i look at euro sterling at a low, and i look at the members of the index and beyond across the u. K. In london, what are your thoughts on the u. K. Stocks in that environment . The ethics is going to be a headwind. It will be a headwind to foreign earnings. This is something you need to factor into your investment strategy. This is worth explaining why the Central Banks government the ethics. Jonathan who is going first now . Doesnt matter . Basically the fed and boe need to start raising rates. I think it is for more of a question of the boe facing treasury. Jonathan thank you very much. Reports coming out of barclays report on barclays i should say. Caroline more changes at the top. Last week it was about the ceo being ousted now the deputy chairman will be leaving. Reports that mike rake might be leaving barclays. He will take on a role of role play. Not Much Movement in terms of share prices. Remember, this is the u. S. Uks number one lender. Since they ousted antony jenkins, they are looking for a new person. It has been a slow churn higher in terms of share price. The financial director is in for the running. It could be the investment making chief. Banking chief. Tom king, the Investment Banking chief the consumer bankhead could all be in the running. Today it looks as though the deputy chairman, mike rake could be leaving. That is coming from other reporting, back to you. Jonathan still to come we talk about how the slowdown in china is affecting burberry. We are back after the short break. Jonathan good morning and welcome back to bloomberg tv. Lets get you up to speed on the top stories. The Greek Parliament will vote on european creditors. The vote comes as the imf says greek needs relief far beyond what european creditors have been willing to consider including deep cuts. The boj cut its inflation outlook for the fiscal year 20. 7 to 0. 7 . Industrial production beats projections. The uks largest luxury goods maker, burberry had headwinds from its asia business. Caroline hyde joins us for more. Caroline shares trading off by 2 . Many analysts have been bracing themselves for the us as we see the economy start to take a downturn. They managed to post sales growth in the first quarter. It evened up to their it even upped their overall forecast. Asiapacific for burberry, low single percentage decline. They say hong kong is where it is hurting. That is where they go on holiday. Taxes are lower their there. They are not splurging anymore though. Jonathan when you look at the market route in china since june , you wonder how many people got caught up in that and how will this hit consumption. If i do not feel good about my stocks going up 50 every day, and my buying less smartphones, fewer burberry handbags. Is anyone talking about that . Caroline many feel that car sales were falling in the Second Quarter because money was piling into the stock market. Will you actually see, because people do not want to put their money in the stock market, they start buying tangible goods . It will be interesting. Im sure there are people who would buy tangible items and would be burned. We will have to see how those stocks are hit. I think it will be fast fascinating. Jonathan burberry did a good job with digital leveraging presence in asia. Caroline its because most of their sales come from the americas, europe, and japan. They say they had extraordinary growth in japan. Europe, they saw doubledigit growth. In italy, spain, france, the luxury traveler is spending cash when they travel through europe. We are also seeing the americas full recovery is what burberry says. In terms of digital, that is where the outpouring is. Mobile penetration triples this year. They took a risk. Many other luxury channels do not go online. Burberry has gone to the younger generation. They will you with a lipstick. Interestingly, Goldman Sachs says ecommerce will be the biggest driver of divergence between grands going forward. Maybe this is where they will see the growth in china going forward. They could go into the digital area first. Jonathan thank you ray much thank you very much. Lets get you up to see speed where markets are trading. The dax lower by 20 point. There is only one thing i am interested in, euro sterling, a little bit lower. A stronger pound as the bank of england signals the rate hike may come sooner than you think. Up next, we look ahead. U. K. Jobs data in real focus. Janet yellen and the vote, those of the things we will be watching. Jonathan welcome back. Later today, were watching out for u. K. Unemployment data. Later 3 00 p. M. , janet yellen will deliver her semiannual testimony to congress. Also, a Rate Decision from the bank of canada. The expectation is that central bank will cut rates. Of course we were await we await the Greek Parliament vote. Manus cranny will talk to us. Manus i think we will pick up on janet yellen in terms of the possibility of rate hikes. Mark carney is the unreliable boyfriend, it was you who referred to the mansion speech. Jonathan a lot of people will say, i heard this before. We sat here asking, why is 2015 different . Manus wages. Who cares about tumbling commodity. None of that will trump wages. That is based on the assumption there is a wage bubble on the way in the u. K. We have a couple of great guests. The ceo of gam will join us. We will cover it all. Janet yellens testimony comes this afternoon. Is china a threat . Is it just a lot of Retail Investors . Jonathan another question, what a world where we start to get paid more and then the Central Bank HikesInterest Rates. Another thing is the greek debate, the imf a big role but coming out and saying we need a b, c. Nothing suggested that anyone was listening. Manus there is no debt relief immediately on the table, this entire proposition made is about implementation and trust. The negotiations are soft commodities. It is about the ability of the greek people to tolerate this level of austerity. Jonathan manus cranny coming up after the break. Breaking down the numbers for you. About 56 minutes into the session here in europe. A strong pound, euro sterling at a 2000 and seven low 2007 low. Italian yields are lower. That is it for me. Im on twitter. Best of luck for the rest of your day. Manus china growth beats estimates but stocks fall as investors fear beijing may back off its stimulus program. A knife on my neck. Alexis tsipras says he was forced to accept the deal with creditors, which the Greek Parliament will vote on today. The imf says the country needs a debt relief far beyond what europe has been willing to consider so far. And we get u. K. Unemployment and wages data. What might they reveal about the state of the british economy one week on from George Osbornes first budget of the new parliament