We see the pboc once again holding steady, keeping that yuan at a steady level. Yuanconomists saying, the can rise, it can fall, and we will combat both moves should we need to. The dax up 0. 5 . Big vote on wednesday. Angela merkel trying to rearrange her schedule to get this vote through, talking potential debt relief for greece. Trying to woo the imf to get on board with the third bailout being offered to greece. That third payment comes on august 20. We are higher across the board looking at the eurozone when it comes to equities. The euro is down against the dollar. Weve got Interesting Data coming out of the u. S. Later today. We got manufacturing, inflation, we also get fed president william, voting member, speaking on his view of whether has what happened in asia changed the Federal Reserve . Still about 5050 think we will get the goahead in september. Euro still slightly lower against the dollar. Lets have a little look at how the Chinese Renminbi is doing. Stability back on course. We are seeing it completely flat today. That giving a little bit of these to some of the markets in asia. Chinese stocks fell, some feeling they will pull back on support for the stock market. Japan, Economic Data not looking too rosie. Does that mean there is more stimulus to come . You will be going to Juliette Saly to look at that. I want to focus on one complete asset, the oil market, down by 1 . Oil is still getting hit. The glut is still in everyones mind. If you are looking at the short positions, they climbed to the highest level since march. Lets have a few of the stocks that are slightly exposed to oil. Bmw, airbus. Bmw is off 1. 8 . Barclays putting out a statement saying, go over weight the stock. Far too much already priced in in terms of china. Bmw was beaten up last week. Saying it is about 30 off its peak in the year. Barclays going over weight, saying the discount is now priced in. Even if you get zero earnings from china in bmw, the share price is still worth 91 euros per share, higher than this. Even if china is zero. They feel the market got overzealous at the selling of bmw. Airbus, we get some news out of airbus. 1. 6 . Order, 250 coming from india. Even though we saw 9 growth in sales and profit, bovis homes getting a bit of a selloff. Mark lets go to Juliette Saly in hong kong for a look at markets in asia. Juliette good morning, mark. It is the end of the trading day here in asia. We are just seeing the close of the shanghai composite and hang seng. A bit of a mixed picture. Mainland china stocks close higher, up around 0. 75 . A lot of other chinese stocks are in the red. 0. 6 . Ng seng closing down the China Enterprise index at any month low. Meaning a lotan of Foreign Investors are pulling their money out. The weaker ringgit weighing on the malaysian stock market. The worst performer in the region. Througheakness coming in india, singapore, the philippines, and have korea. The nikkei off around 0. 5 . Just before i go, i will quickly show you how the Malaysian Ringgit is faring. This has been the other major currencies story. The Malaysian Ringgit holding at 4. 11. That is the lowest level since 1998. We are seeing it at those 17year lows. Mark japan growth stumbling after two consecutive orders of growth. Gdp dropping 1. 6 . The announcement came a week after its biggest trading partner, china, drastically devalued its currency. Lets get out to tokyo for more. How does this devaluation of the yuan add to japans woes . Does. Certainly i think it is very much a recognition from chinas side that theres weakness in that economy. With the importance of china to japan as an export market, that is very harmful to japan. The figures today, the gdp numbers are a reality check for japan. Having had a recession last year, took roll back just for two quarters and then start sliding again is that news. Mark some commentators calling for fresh stimulus measures. What does this mean for the boj . It certainly means a lot more pressure on the boj. Up until this point, the governor has been very clear in saying he doesnt see stimulus coming immediately. The bank is looking past the current weakness, expecting things to get better. Private economists are seeing as soon as october the possibility of stimulus. We will be looking closely at data between now and october to see what that means for the boj. A lot of attention will come on any gains in wages and consumer spending. They have been the weakest points for japan. Those are things people will look to very closely to see whether the the oj does need to increase stimulus or not. Mark brad miller in tokyo. Thanks for joining us today. More, we are joined by antonin. Thanks for joining us today. Is it time for japan once again to press on the monetary or fiscal stimulus . Probably not just yet. We still expect ongoing liquidity in the future if needed. With liftoff in september in the u. S. , with what is happening in china, q1 gdp revised up, we need to wait a bit more. Mark can japan whether this devaluation in the yuan, with china being its biggest trading partner . For now, yes, probably. If the weakness was more pronounced in china, it would probably bring a response from china. A bit early to say. It does act as a potential put to the market. If japan was too week, the argument for more easing would be very valid. It is wait and see for now. Mark where is abenomics, antonin . Shinzo of a has been focusing on restarting Nuclear Activity and worrying about the defense of the rail. Where is abenomics . Arrow is being waited for. More reforms would be obviously very healthy for the japanese market. We have seen some of the changes, especially at the index intensity ong more corporate governance, buybacks, dividends, shareholderfriendly actions. We think that is panning out. Japan equities a buy . It is beating many of the markets. It is beating dollars as well. If you look at europe, it has been primarily an fx story. In dollar terms, europe is not performing that well. It is not super stellar. If you look at japan, the story has been more about earnings delivery. In euroei is up 17 terms and 14 in dollar terms. Mark thats a more interesting story. We are going to come back in just a second. A quick check on how European Equity markets have opened. They opened this week higher. Concerns from china dissipating. We will ask antonin more about that in just a second. That is the equity situation. Have a look at what is happening to the euro against the dollar. Best week since april. The yield on the german 10year bond down a couple basis points. Is there still a flight to the haven that is core european debt markets . That is what is happening to the dollar against the ringgit. Boostissues continue to the dollar, pulled the Malaysian Ringgit lower. It is in its lowest level since the backend of the 1990s. Crude oil, lowest level since 2009. 1. 3 lower today. 41. 94. House low does the oil go . Antonin stays us. Coming up on the show, as the yuan stabilizes, chinas devaluation continuing to impact emerging economies. For minds. Anglogold ashanti investors showing the love for gold. Merkel backs the bailout. Stay with us. Tok lets bring you up speed on the big stories today on bloomberg television. Chancellor of germany Angela Merkel is confident the International Monetary fund will join greeces third bailout. She signaled willingness to consider debt relief in some form, but not a haircut. With regards of extension of maturities, the selling of the Interest Rates we have, we have room for more. Just like we had in previous times, we did extend maturities. , buts always possible theres also a core statement that the eurozone cant allow another haircut. Mark merkels comments come as the bundestag lower house prepares to vote on the bailout on wednesday. Chinas premier has visited the scene of last weeks tianjuin explosion. The number of People Killed in the blast has risen to 114. The port remains closed and businesses have been severely disrupted. Japans economy contracted last quarter as consumers and businesses cut spending and exports tumbled. 1. 6 between january and march, ending two quarters of growth. China may be slower than official data revealed. According to a bloomberg survey, the economy expanded 6. 3 in the first half. That compares to the official figure of 7 . For more, we are joined by bloombergs asia economics correspondent. How do we explain this discrepancy . You know, the Chinese Administration sets a growth target every year as a hangover from soviet era style planning. This year it is 7 . Even though chinas economy has been slowing quite sharply. Secondquarter growth came in at 7 . Economists are donating the veracity, whether it is capturing real activity in the economy. What they point to our indicators such as electricity consumption as a gauge of weakening demand. They say, look at imports and look at some other indicators that are capturing a better sense of how the real economy is going, rather than the headline gdp number that the government put out, which some people say is overinflated. Mark what is Holding Things back . Obviously, we have a cyclical slowdown here in china, like other parts of the world. Exports are struggling here. That is not all because of the exchange rate. It is because of weak external demand in key markets as well. They have cyclical issues, but they have structural problems too. They have a slowing population growth. They have an aging population. They need to do more to boost productivity within the economy itself. These are all areas that require hard political reforms if china is to get itself back on track to meet these ambitious growth targets. Mark what about the yuan . It was the big story globally last week. Will we see more weakness in the currency to help engender growth . I suppose, mark, they will have to let it weaken by more than they have so far. 3 depreciation last week isnt considered a game changer by economists. They say you have to go much more, maybe 10 , maybe higher. I think the pboc has sent a message that it is not going to the openended depreciation. We just have to wait and see how the regime does move. I would say to you what i said earlier. It is not all about the weak currency. A lot of the problems for exports are weak external demand and a week yuan will not fix that. Mark thanks, we will talk to you later. The yuan stabilizing, the fallout from china continuing to hit emerging economies. Malaysias ringgit continues its slide further into its weakest level against the dollar since 1998. The surprise move on the peoples bank of china has put investors minds back on some of those economies which Morgan Stanleys call the fragile five. Elliott has been following the story. Should we really be worrying about the socalled troubled 10 . Fragile five was coined in 2013 by morgan stanley. The country whose currencies were most vulnerable to depreciation because of the need for them to finance their current account deficit. Were therencies brazilian real, the turkish lira, the South African rand, the indian rupee, and the indonesian rupiah. The trouble 10 are on your screen. We are talking about countries that are exposed to china because of their trading relationships and potentially would suffer the biggest devaluation in response to what has been going on in china themselves. Top of the list, only by virtue of it beginning with a b is the brazilian real. There are similarities with the Malaysian Ringgit. China is its number one trading partner. China is the number one destination for its exports. It is also a big commodity exporter. When you think about not only that but Goldman Sachs saying that iron ore prices will decline over the next 18 months, there isnt really much cause for optimism for the brazilian real. It is worth noting that when they first coined the fragile five in 2013, four of those five currencies went on to be the worst are forming currencies since that phrase was coined. Mark you touch on the real. Againstve been protests president rousseff over the weekend. What is going on . Elliott i dont think it is related to currency depreciation, but there is a lot for brazilians to the frustrated about. When youve got half a Million People on the streets, they are concerned. Inflation is running at 9 . Interest rates are rising to try to curb that inflation. The thing that has annoyed brazilians the most is this massive corruption scandal. Multibillion dollar scandal related to the state oil company, petrobras. There are 30 sitting politicians under investigation. President rousseff not among them, but she was head of petrobras at the time that some of these corruption allegations took place. She is not herself under investigation. They are on the streets to protest not just economic mismanagement, but against the president. Two thirds of brazilians want to see her impeached. Mark thanks a lot. Elliott there talking about the fragile five, which has evolved to the troubled 10. Antonin is here. Troubled, im sure the 10 will become something even bigger. What arethe question, the longterm effects from last weeks evaluation . Antonin to zoom in on the actual devaluation, the move so far is pretty benign. The big question it is going to be quick to jump to conclusions. Is it the start of a huge devaluation . The flip side of the coin was that the potential inclusion of november with the imf and the renminbi may be part of the action taken by china to make this entry much easier. The next few weeks will be interesting. Today already feels better than a week ago. The fact that the yuan was overvalued because it was pegged to the dollar, and given the strength of the dollar, was no surprise. The timing was extremely surprising last week. In terms of other currencies, the fragile five, the current account deficit countries, it has been well flag. Since the taper can from a year ago, a lot of these countries have done work to try to get to a situation where a liftoff in the u. S. Whatnot end up with significant issues for them. I do think what is complicated is when you start doubling up issues. If you are brazil, you not only have a current account deficit, but you have a political situation. Mark as you do in turkey. Another record low today. Antonin the same way russia, the weakness is doubling up on it. If you look at countries which have not one issue, but two or three, from a price action point of view, that should mark malaysia on other great example as well. Antonin indonesia as well. Is it a cleaner trade to focus on areas of the world where there is momentum, where there is some gdp growth, pmi growth, im talking about europe mark you prefer europe to the u. S. . Antonin we prefer europe to the u. S. , we prefer japan to the u. S. [indiscernible] were you pull off last week by fridays gdp number, which was still showing growth in the eurozone, but not as much as economists hoped, and the three main economies didnt grow as much as hoped either . Antonin no. Weve seen a supportive ecb and a supportive draghi. If it is not as good as hoped, it means it is liquidity for longer. Mark so qe equals equity gains . Antonin yes. Mark does that apply for china . Theyve implemented their own type of qe. Should the model be, dont fight the pboc . I stole that. That is yours. Antonin china is different. Of Central Bank Balance sheet sizes to assets is consistent across the globe. More liquidity equals higher prices. Only one which doesnt completely fit the bill. It is very cheap. The authorities are continuing to help. Whether it was a bit of devaluation or additional measures, we do think that china is so cheap, it is interesting. China necessarily look at versus the rest of the world . It is still a hard situation to look at. It is still very volatile. Mark and fed rates . When is it going to be . Antonin who knows, september, december. Unlikely the chinese devaluation will dramatically change the timing. Now, we stick to december we stick to september. Mark if it is not september, that will have a big effect. Antonin the bigger question i have on liftoff is, yes, weve had a much stronger dollar, it is continuing to strengthen versus other currencies. Once you get liftoff, thats quite likely. Mark great to chat to you, antonin. Still to come, we talk gold. The commoditys biggest rally since june after china devalued the yuan. We will talk gold and the latest from the liners after the break. Have a look at what is happening across markets. You can always follow me on twitter as well. Equity forceshe are looking today. Ftse up 0. 25 . Dax up 1. 1 . Declines, stocks in europe have open higher today. The yuan is stabilizing, or is it . Tell me what you think. Mark welcome back to bloomberg news. I am mark barton. 30 minutes into the trading. Lets see how things are shaping up so far. Stocks rising after four weeks. More gains for the ftse. Bigger gains in germany and france today. Lets check on some of the other possible that are moving. Euros biggest weekly game last week. Kerfuffle from the you want evaluation. Today isurrency move the continuing plunge and the toasian since crude oil its lowest since 2000. Lets get to our top stories. Caroline, what are you watching . Caroline resurgence of the m a coming back into our minds. More than 6 . This is a Big Industrial deal. General electric buying out. We understand we could be close to eu approval for the deal that is being reported by other sources. Not to turbine element be taken on by General Electric. They have concerns about cross competition. If they sell off the gas turbine assets to an italian rival the Company Buying up those assets and likely to be the preferred buyer. Overall, we are getting there. Alstom General Electric deal tied up. Nicely largely because of its line. Sales beating expectation. Up to 60 . That is pretty good considering the top comparison, compared to this time last year. 12 growth. Shares rise ashe well. N the downside, the tonk lower it is doubt it is about commodities. Down 1 . Would group and report said they could be slashing jobs 4000 jobs over the next six to eight months. We have numbers coming from john would group. The instinct fact is it is still the oil selloff. One of the many people betting against the oil price. That seeing a shorting of particular oiling price that tickler price. Youre seeing plenty of other companies down. Mark shanties quarter million profit shopping. Reduced its also for your forecast. Shares up. Kevin crowley. Kevin, good morning. Where is this . The chief executive of anglo gold see this going . Kevin he sees it trading in a 1050. Tween he is cost that she is cost to say this will be volatile. He is cautious to say this will be volatile. Going down to 1000 an ounce. The company does have plans to mitigate the impact. Isthe moment, the gold price really hurting the Worlds Largest gold miner right now. Mark how of the company continue to deal with low gold prices . It has a number of strategies. Mindscapital consuming that it is looking to get partners to share those capital costs. It is cutting spending across the globe. It says as the gold price declines, as the u. S. Raises Interest Rates, that should to weaken which helps to provide a natural cushion for the low gold prices. Mark the South AfricanWage Negotiations. Will there be a strike . Kevin at the moment negotiations are in deadlock. The gold producers have made their final offer a couple of weeks ago. That is been turned down by unions. Currently about to start mediation talks. Talk of strikes is probably premature. It is looming large on the horizon. In platinum last year there was a five month strike which was damaging to the industry. Gold companies will be looking to avoid a repeat. Mark kevin, thanks a lot. Kevin crowley there. Kirin. T guest welcome will we avoid a strike in south africa. And all balance, i would say strike, butl have a it will be a short one. The expectations the unions have ,laced on the Wage Negotiations companies cannot afford that. A lot of the South African operations to accommodate such a hike in wages which is one of the largest would take a lot of those operations into a situation. Dropping gold, high depreciation, how does it look to its threats . Competition . Peers . Kieron if you take out some parts of the statement, the company is addressing a lot of the issues the shareholders wanted to address, highcost operations. There is a Rationalization Program going on. Reholders are looking at they are seeing a low gold price environment. This locale thinking price will not remain. Yououre not thinking are thinking this low gold price environment will not remain. John paul said it has cut his gold holdings. Everything seems to be pointing to gold staying as it is. Youre looking in the other direction. Why is that . Ieron we have been negative for over four years. Short on the positions. Everyone has and one that has , it is negative. If your kicking this will supply and reducing it on a net balance , youre going to see increased tension. Premiums inncreased the largest consuming nations in the world, youre going to see increasing reliance. The other thing were looking at is Interest Rates moving to the right. That is something the market is not anticipating. Ifterest rate cycle the Interest Rate cycle does not , the onlyn september reaction youre good to see in gold is a negative one. We see a falling supply increasing demand. You actually have got producers looking at their Production Profile and saying where do i make money at this level . Mark give us a price forecast. 1117 today. What are the price we are thinking of next year . Kieron the average now is 11. 90. We think there is an argument to start over whether or not everyone should be sure. Mark exactly. The base metals index, lowest and it has 2009 fallen seven consecutive weeks. Kind of like china did last week. Is it all bearish . Ieron you have to look at the supply and demand metrics. We have seen china increase about 20 this year. In an oversupplied market. Over 90 of production seems to be profitable. The more active supply constraints are going to come large you see some measures by the governments and producers. From the philippines and indonesia. In these metals we have seen price spikes when prices tend to fall down below the cost of production. We dont discount the fact that these two metals could see a price spike. Supply cuts coming out of the industry may be something that could stabilize. Mark favorite commodity . Think there will be a hockey stick return to pricing. Also maybe a left field, uranium. Mark why is that . Ieron an abundance of supply coming out of the industry. Youll get that type list of demand. You. Thank after the break, merkel backs the bailout. Faces. Llenges she the german vote on greece on wednesday. Stay with us. Mark looking back. This is on the move. Lets get to some of bloombergs top stories. Chinas economy contracted last quarter. It did cut spending and exports tumbled. Ending two quarters of growth. 1. 8 drop. A study indicates that chinas economy is growings is going more slowly than data suggests. The economy expanded by 6. 3 for the first half, compared to the official the officially reported 7 . Visit to last week seen. The explosion. The number of People Killed 214, according to the media agency. Chinas airports remain closed. Businesses have been disrupted. Bailout is expected to to the above this time go before the bundestag. Merkel is considering debt relief to ensure the imf will remain patient in the bailout. On the story. S welcome back from new york. What did we hear from merkel over the weekend . We heard on an optimistic merkel. The idea that the imf will be a part of a bailout program. The imf has not said anything. They indicated that there needs to be that relief before they do that. Merkel in her interview rolled out a debt reduction. She opened up an idea. With regards to extension of we have room. Just like we had in previous times, we did extend maturities. We move forward the rates. It is always possible to do something else. There is a clear statement of the eurozone cannot allow another haircut. Merkel noted the seachange. Insistedme time, she she could not guarantee anything. She did not know if this third bailout package, if it passes, but six billion 26 billion will get shipped in the first package. She has her finance minister, he is for the deal. Aret of german newspapers reporting it is a part of a debt relief. The average majority would be a 60 year majority the average maturity would be a 60 year maturity. Mark . Mark if i live another six years, that will be a miracle. I will see you later. Good to see him back. Rose. Half revenue and record level a Record Number of the chief executive spoke to bloomberg. He gave his view on how the Housing Market will handle a bank of england rate rise. We are in a situation where paying a mortgage is relatively stable. Affordability is there for good. We recognize industries are on the rise. It will be gradual and modest. We believe the control within the Mortgage Market will be forced to accommodate those rises and Interest Rates. Our business is capable of dealing with those rises as we invest. Mark elliott joins us with more. Let us break down the numbers. Elliott they are on track to complete the number of houses they were planning to compete. Thats planning to complete. They are planning to boost the dividends, around 40 p a share. Shares are down today. They had a pretty good run. Of the money off the table. Mark the broader housing sector. Theiroften dropping asking prices. Elliott it is a question of supply and demand. This august, compared to last august, down almost 1 5. As a result, prices will drop. Prices down 1. 3 . Talking northre of. 8 . Upward pressure in the pipeline. , south london down by 12 , compared with eight year earlier. Gains showing showing gains. Mark up next, where the wrap up we are going to wrap up what youre going you to look out for. It is all about greece. What do you think about the summer sprawl in the summer Housing Market . I am on twitter, 24 hours a day. Tell me what is on your mind on this monday morning. Mark welcome back to on the move. I am mark barton in london. Lets get to our top stories. Chinas economy contracted last quarter. It cut spending, exports tumbled, gdp fell 1. 6 . Ending two quarters of growth. 1. 8 . Tes of a bloomberg study indicates that chinas economy is growing more slowly than official data suggests. The survey showed the economy expanded by 6. 3 in the first half, compared to the officially reported 7 . Chinas premier lead visited the scene of last weeks tangent explosion. Last weeks tianjin explosion. Tianjins port remains closed. What to watch this week. Tomorrow we get the u. K. Inflation German Parliament will vote on greeces bailout program. Ecb payment es greeces ecb payment. A special monday morning treat, they have are you they have reunited us for two minutes only. Go. Microsoft. Athan he is the deputy manus he is the deputy leader. What are the issues . We know the dissent. We know that merkel changed her schedule. To back this bailout for greece. Hans was just saying im a look at a sixyear extension. They mayas just saying look at a 60 year extension. It would be good news for everybody. Just after the start of 9 00 a. M. Mark you want to stay alive for the second day. It seems that some currencies are feeling the brunt. Story theres a great that the challenge of george sorrows, which is the hedge funds trying to better the currency. What they did then in terms of capital controls. Companies. Article on they are going to know when we are stressful and how we talked to one another. Olivia is going to join us. She is an economist here and bloomberg. This is the first of her innovation pieces. Mark a check in on European Equity markets. Here is what is happening on stocks. After a week of declines last week. Here are some of the other asset classes. Gain since april is down today. Yields are down in germany. 1998. K to crude oil the lowest level since 2009. What are you focusing on . You will always find me on twitter. Here i am. What is manus is thats what is manuss . And he doesnt have the tv. There you go. I am mark barton. The pulse is up next. His partner, francine lacqua. I will see you tomorrow. Francine Angela Merkel makes the case for a greek dale in her first comments since euro area ministers were agreed on an aid package. Manus abe under pressure. The japanese economy goes negative as consumers and businesses cut spending. Francine and gold loses its shine as the Precious Metals price falls. Fall. Gold sees its profit welcome to the pulse