Motion goes to a secret ballot. It is 8 00 across the emirates. Is a pause for the market andy that we saw in asia the regional benchmark just barely holds onto gains. This is leading the declines. We are seeing every sector there is also a little bit of loss for south bank and they are not able to upset the gains with the earnings and that is a key driver of the markets. The exports missed estimates and guru. We are seeing the renminbi grow has aluminum at its best levels in five years and they are seeing a lot of momentum. Caseurse, that is not the of oil, which is losing ground. Once the weaker dollar feeds into some of this community. You have the meeting and you have u. S. Inventory to look ban watch out for what is happening in terms of oil companies. Futures at 1200 tuesday five dollars an ounce and it is the lowest since march 2016 to spread with the bonds over the it is ahead of this noconfidence vote. What is going to happen . There is a big decision ahead this is local time. But the show you the wider equities and get you a feel of how the investors traded with a large and midcap company. There is a broad and positive picture with key earnings coming through and some Consumer Staples there. Gain with aing a weak patch coming through and lets take a look at the step. Deborah has the latest. Surplus widened for july and the imports moderated. The shipments jumped in dollar terms and there was an 11 expansion. 11 fromast is rising a year earlier. Seven longer than expected. North korea has condemned uns state tv denounced america for the hustle strategy and said they would pay dearly for the crimes. In a separate statement, north korea says that the program is dangerous and that they need weapons to avoid the fate of iraq, afghanistan, and libya. Why some are examining are falling behind on plans to cut output. In december, they agreed to reduce the Global Supply by the fund ended up with tech startup and generating income of more than 9 million in that quarter. They are among the packers committing a total of 93 billion. Local news is 24 are as it today cant car by journalists and analysts. I am deborah and this is bloomberg. The pressure for a weakening operating conditions. Is in alloway. Metrics and this keeps the space with the qatari and saudi reall and it has come down a bit. It is relatively modest. Talk to me about some of the latest elements. Sure. This does not come as a surprise. There is the sovereign Credit Rating a few weeks ago and the traded in the diplomatic dispute began and you can see andactual credit markets system,comes to the they talk about the reliance on the external funding and there was an embargo of the country. They mentioned this growth could slow to 2. 4 percent. It was once doubledigit growth. Seen this take some they are diversifying Funding Sources and they may have loans or bonds and we have the bank and the commercial bank doing a similar thing. We also have the external financing point and i want to highlight that this is about signaling. This is quite an expert in the soft power. Investorshe foreign that you say that you want more money from it and they are not relying on domestic sources when it comes to this financing. They made friends in those markets and we have seen them exercise a lot of the soft power and they filed the complaint with the world trade organization. This is something to the world and you can even extend the and it is accomplished in the world. That is what we see in the world. Is hearing that the u. S. Is sending to envoys to the gulf. What exactly can they seek to accomplish . Question and the right one to be asking. Andave a domestic mediator they try to make some inroads and Rex Tillerson comes over to the region. It was just last month. You might remember that he was maysuccessful and you remember that he made some with theafter leaving fractured Decision Making of american politics and the mixed messages in foreign policy. This has been issues for the u. S. And we have had signals coming from trump, who praised the notion on going hard for support of terrorism, versus some of what was coming out of the state department. Good image of what they are trying to come push year and the press panel last week. There is only so much you can do by telephone and he hopes to have envoys here and there will be more effective. Traveledtant secretary last month and he is coming with the retired general. He used to be the special envoy to the u. S. He is familiar with complex issues. Tweet fromto see a President Trump just break everything apart. Tracy, we will keep a close eye on that. A quick check of some of the Corporate Stores from the middle east. Abu dhabi stayed with the discussion on there are more than a dozen potential partners. He is seeking more chinese partners. Developmentp the and a local dealer to build 150,000 vehicles there a year. The rest is according to a lady Iranian State media. The specifics when i given on how much each partner would spend. The government is urging them to bring jobs and operations back home and suggest that it may be part of this. This is the biggest employer and is struggling to pay back. It is into last year. The startup and focus on emerging markets. He will tell us about his plans to take on netflix and amazon. Withme elvish talks policy. This is bloomberg. This is Bloomberg Markets middle east. , it from Officials Say that it is more likely that the fed will stay on hold and it all leads to a balance of the sheets. They look to cause a minimum disruption of the markets. The sluggish inflation says now is not the time to move. Inflation was going to return to target. On this measure, you can see the return to target and it all seems to go to plan until we got to this year and this number has fallen way off on the scale that you had here. It has fallen quite a ways off. The next guest thinks the hawkish fed would catch the markets offguard. We are joined by the head of dynamic markets. Great to have you here. Hank you talk about catching markets offguard. Are you talking about rate hikes . The Balance Sheet unwinding . Both . The thisok at this and and this is what the market has come to believe, but you look at the dynamics of what we did notn and the fed buy into this and they are going to buy into this and inflation is on the wall on the rise. It will be more hawkish than expected. The market will be surprised. This, thiscomes to shows the financial conditions it has carried the trade index. It still seems like a long way for this unwind to happen. This is precisely my point. Since the rate hikes began, the financial conditions have eased leaveu dont want this to to an abrupt tightening of the financial conditions, but you do want to see some new types of financial conditions and the economic backdrop is Strong Enough to handle that. There has been an easing of the conditions and it would give the fed more leeway to pursue the rate hikes that are measures with the market complacency around this being high and it has led to strong growth and crowded momentum. Reversal, atof least in the short term. Thehere are two titans of market and they think that inflation is going to make a comeback. How confident are you that inflation will come through in a way . Know, it doesnt have to come back with a vengeance. Place ine in the the face of depressed expectations and it is enough to royal the market. You look at the growth correlation and the inflation andwe have the rate change it is a depressed oil price and the inflation number jumped and you look at the same ratio and it is up again. Some of the things we searched through led to a disappointment in the Inflation Numbers and we is likely to go to the outside. There are specifics with the this is yournd keycode and it shows us what happens with the broadbased weakening and you can see it, regardless of the economic surprises. How much more downside does the dollar have . It was unwinding the Balance Sheet. Position andt the the sentiment towards the dollar and it is a massive turnaround and you gone from extreme optimism, were nobody bought anything other than higher prices to expectations of ongoing depreciation and it is some measure with Technical Support and it follows betterthanexpected reversals expectations has further depreciation in the dollar. When it becomes of the us, it is too late. I think there would be a rally. Market that is a new amount, at least, if there is a downtrend, the trend does not unfold in a Straight Line and i think were through the first phase for the next few months. Meanickly, does that shorting . That is right. We look at the position that is the most crowded and we carry we look at the risks space and it is narrowing. Become vulnerable to correction. Hedge and a good trade. Thank you for joining us. Rights. Coming up, fighting for the future as a noconfidence motion goes to a secret ballot. We are live in johannesburg and this is bloomberg. This is bloomberg. Lets go to a developing story in south africa. Parliament will vote by secret facinginto the president mounting opposition and some lawmakers say they will do fine leadership and go against it after they look at the impact of list. Thank you so much for joining us. This secret ballot will make it easier for some to vote against him. Lets just show this chart. It shows this output we have seen from south africa. Selling bonds every month and one is up. If we see actation, victory of noconfidence, how much will that improve the south african standings . 2009, they came into power and we have seen a downward trend in Economic Growth and it has affected the markets with allegations of corruptions and the perception is that we see a change and it could come out positive for a natural markets. Where does that leave the south african . These should be technical chart and the average. Been what hasas happened. Where do you see it . This in the mediumterm and it is probably true for the emerging markets. Andet the Financial Markets there isa cycle and the Balance Sheets, as well as. They expect a Credit Rating decision by moodys. How would be downgraded affect the economy . We have the key ratings and the anticipation is no downgrade. Risk with moodys on the negative outlook and there the riskcurrency and is that we could see it move back to the dollar again. The indication seems to be that if you lawmakers will support this motion. What chances do you put on this . Isi say that this noconfidence vote not going inough and it will remain power. Obviously, the Opposition Party i strongly against that and think that there will be a close vote. It does seem like the odds are in favor of the president. In johannesburg, please stick around. We want to get your views on currency and oil. If you want to rewatch the interview, there is the function on the bloomberg terminal and you can send us your questions. We will try to get through them. Do keep in touch with us. This is bloomberg. Got you outnumbered. The dinosaurs extinction. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Find your awesome with the Xfinity Stream app. Included with xfinity tv. More to stream to every screen. It is 12 30 p. M. In hong kong, 8 30 in dubai. These are the first word headlines from around the world. Latest push to defuse a twomonth diplomatic standoff over qatar, the u. S. Is said to be sending two envoys to the gulf. Bloomberg has been told the former head of u. S. Central command and Deputy Assistant secretary of state timothy lender came will first visit to wait, which has taken a role in mediating the dispute. It will then head to the states that have isolated qatar saudi arabia, the uae, bahrain, and egypt. Venezuelas opposition dominated the legislature of the National Assembly with robust president by refusing to recognize his new constitutional assembly. Lawmakers voted unanimously to ignore a decision to replace the chief prosecutor with a government loyalist and to create a socalled truth commission. Maduros Super Assembly has been given virtually unlimited authority. Voting is underway in kenya, with the president facing an opposition leader. Observers are waiting to see if kenya follows the largely peaceful 2013 poll for the 2007 postpone clashes killed more than a thousand people. Kenya has 40,000 polling stations and 20 million registered voters. Prosecutors in koreas wideranging corruption inquiry are demanding 12 years in jail or the de facto samsung boss. Hes accused of authorizing the payment of millions of dollars to a confidant of the toppled president in return for political favors. He denies the charges. Park is also a detention, accused of corruption and abuse of power. She has refused to testify at his trial. Global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. Im debra mao. This is bloomberg. Thank you. Were seeing the regional benchmark barely holding on to gains, trading near the highest level since 2007, but very barely. A lot of markets under pressure. Less bring in Sophie Kamaruddin to give us a breakdown of whats happening in the markets. Sophie, barely any gains for the msci asiapacific. A lot of the markets right now in the red. Just hanging on. Of data points this morning that could be perceived as disappointing, for example chinese trade figures and we arepressure, seeing a drop in sydney and tokyo, the nikkei 225 down a third of a percent while the yen is a 10th of a percent higher to trade stronger for the first day against the dollar. We do have the housing swinging to gains, set for a third day higher. Tencent is leading in hong kong, along with this 23 year high. We did have another data point today, chinese retail sales rising 5. 5 on year. They continue the momentum. And take a look at this, a little change well be won is rising, despite some political risk. Its looking to change ahead of inflation data later this afternoon. One winner today is the yuan, earlier extending gains against the dollar, just below that level now for the First Time Since october. The dollar snaps it to do again amid dovish comments from fed officials ahead of the meeting. Sophie, thank you. We are seeing wti a t brent. Kuwait has begun oil talks in abu dhabi to find why some producers are falling behind in their commitment to reduce output. They are meeting separately with iraq, uzbekistan, and saudi arabia. Said it wouldyadh turn up the heat on producers for not complying with a deal to cut the global oil glut, yousef. Yes, lets continue the oil conversation with our guest out of johannesburg. And lets talk about this opec nonopec deal. That will be the key theme, or will it be the Global Demand story . Libby venezuela, the wildcard . What are you looking at . I cant hear you, it has gone completely dead. Yeah, Annabel Bishop we have some technical issues. I want to get back to some of the issues that continue to weigh on the market. We are looking out for u. S. Inventories, expected a draw down. No large expectations but this is one to watch for. Lets get you a preview of hows to calm information revolution is taking shape in a 100 billion vision fund. This is bloomberg. Lets continue that oil conversation with Annabel Bishop, everything is patched up. She is live out of johannesburg. In terms of the meeting in abu dhabi between opec and nonopec, some of the technical representatives, do you expect them to up their game in terms of compliance . What real impact will that have on rebalancing global inventories . I think theres going to be an attempt at that. On a longerterm basis, you will probably see the oil price drift slightly higher, and short to mediumterm we expected to come off somewhat. There are probably a lot of conversations going on, and obviously the unrest is putting some pressure on oil prices currently. Onabout that upward pressure the price of oil, lets talk a little bit about the u. S. Market, because we could see seasonal maintenance. Would that be a dent in prices . I think so. I think we will probably see some volatility in oil price, but we will see it move around. Particularly moving into seasonal components, we will have a price picture as well. Annabel, what about when it comes to some of the metals . Tremendous volatility in iron ore. Weve put this up on the bloomberg. Iron ore futures. You can see what has been happening, not everybody is bullish for the remainder of the year. There is Research Suggesting it could turn around quickly. Share with us some of your topline views about where the metals are headed for the remainder of 2017. We certainly expect metal prices not to be out performers. We think they will probably come at the bottom. Upswing,ving a global and that is expected to see effects on imports, but it is a significant buildup of fixed investment. It is going to take a while to work through. As the chief economist, inflation is always at the top of the radar. How confident are you that this inflation that a lot of the Central Banks are chasing around the world is actually going to come through, given the commodities that rallied, that you just pointed out . Are probably going to see a very modest performance on metal prices. We are specifically looking for a commodities rally, but longerterm there should be some risk, next year and the year after we are looking for an improvement in inflation, but it could disappoint. And of course, when we talk about inflation, we cannot take china out of the equation. Export data this morning missing expectation. Will china be able to become the exporter of the inflation going forward, or has its growth peaked now . I think china is probably going to find it difficult to come back. The growth rate is something which we are urgently trying to lift and rebalance, so we arent looking for it to become a major inflation driver longerterm. It seems that china, though, is seeing an uptick when it comes to its own consumption. That of course is stemming from the weakness in the u. S. Dollar. Where do the currencys go from here when you are comparing the u. S. Dollar against emergingmarket currencies . Thats exactly right. We think china will continue to see improvement. Longerterm, looking at the global currencies, i think we probably can see some Dollar Strength coming through next year, possibly the end of next year, but this year i think we will see the flux between expectations on the market and dovish fed comments coming through. Certainly we have seen great concerns from the fed over inflation in the labor market, and of course that is something we will be watching very closely. We are certainly looking for steepness in the trajectory, and we could see a bit of weakness further into this year, and next year we could see strength coming through. Looking at the column on the Bloomberg View talking about Central Banks and whether they are too independent. Its a fascinating article that talks about how is a developed world Central Banks enjoy large independence, but now you are in a time where they are easing, perhaps more than fiscal lawmakers would like. When you look at south africa, when you look at what the central bank has been doing there, how do you predict they will move going forward, given what has happened with the domestic political story and the global weakness when it comes to currencies like the u. S. Dollar . Independence of the south African Reserve bank is tough at the moment, given the political situation, and certainly given the desire for substantially lower Interest Rate as we have just been through a recession. We may continue to see extremely weak growth, and we have an environment a secular stagnation playing out in south africa because of very low Business Confidence and great uncertainty about the political situation. He recently had a 25 basis point cut, and we are anticipating another cut in september this year. I think it is probably a possibility for a further one or two, but we wouldnt look for it to go much below 6 , because we need to maintain a differential between the developed market Interest Rate. It seems that Market Investors right now are feeling that sense of the Central Banks moving toward tightening. We had that National Bank just pull in euro, canada going ahead. For you, anabel, acid economist, do you feel that sense that we are headed toward a rate hike even in asia, that this will become a Global Movement . I think longerterm, yes. South africa is obviously going against this International Rate hiking cycle. Very gradual at the moment as we receive more communication. But i am certainly expecting less, where we will be seeing higher Interest Rates globally. Annabel bishop, chief economist at investec, talking up the key themes. Lets get you some of the other major stories. Bloomberg first says qatar is among major lenders considering sending options with gulf neighbors threatening to meet liquidity. The bank is also said to be exploring options including private placement of bonds, for a deposit for a deposit dropped the most in june, and moodys has lowered the outlook. A saudi prince is planning to invest 800 million in Egyptian Hotel projects in one of the biggest injections of foreign cash since cairo began reforms. Kingdom holdings is owned by the prince and is teaming up with an egyptian developer. Tourism is key to the recovery program, and cairo hopes to attract 10 billion in Foreign Investment this year. A mexican chemicals maker has agreed to buy an Israeli Company for drip irrigation. Purchasehoping the will strengthen its role in the smarty rotation market. The deal is expected to close in the fourth quarter. That includes an agreement that the core operations will stay in israel for at least the next 20 years. Topping the corporate headlines today here in asia, softbank earnings beat estimates, although the stock is not really reacting much, falling just a percent. Firstquarter operating profit coming in at 4. 3 billion. That was helped by the u. S. Sprint returning to profits for the first time in three years. Wassoftbank vision fund included in the results for the first time. Our managing editor from asia joining us now from tokyo. Peter, it seems that sprint is finally paying off, but now we are also seeing a vision funds being added to the results. There seems to be a little bit of confusion over the lines being blurred between softbank and this vision fund. What can you tell us about this . Is getting toank be a quite complicated company. In the past, it was traditionally a Wireless Company in japan along with broadband operations. Now it has spread to the u. S. , arm the chipmaker, it has invested in a number of different areas and even owns a baseball team. This quarter, for the first time, the vision fund has been added in. Softbank has become a portfolio of assets, and its results overall and on the performance of different assets. Division funded just begin hasntng, and so far it made any investments directly, butting heads recorded a gain of about 1 billion because it had agreed softbank had agreed to move in shares of the chipmaker that had done quite well. But that will be close to watching the future to see how softbank does. Peter, i know numeral described the division from this jeffrey has put out a different number, and they say they expect the performance to be very volatile. What do we know about the outlook for the fund . Well, the fund will be volatile in the sense that it will report gains and losses on its investment portfolio. It will invest in a number of different areas and that gives them the opportunity to invest in areas like Artificial Intelligence and the internet of things. Assets will bounce up and down and he is looking across the industry including some of the Ride Hailing Companies around the globe. Aboutt we are talking with softbank investment, there are a lot of them. Softbank is putting money into a lot of businesses. Just last week there was chatter about them buying charter their credit default swaps jumped on the bloomberg. I wonder, how does this fit with investors . Investments they have made so far in some of the smaller companies, including that Ride Hailing Company in those are more like the investments they have made in the past where they made a fortune. The ideal that they will do something in the u. S. Has been a , then another wireless carrier, the idea that he would go after charter and combine is a very complicated deal and would be very expensive. He would have to take on a huge amount of that in order to get that deal done. That makes investors was very nervous at this point. But there is also the possibility that he will merge tmobile, which would be more of a deal between Similar Companies and a bit more manageable from a financial stand. Thank you for joining us. We will keep a close eye on softbank and its business dealings. The bloomberg managing editor for asia technology. Coming up, a streaming video start up gets a 100 and 33 million funding boost. We will ask the ceo how he can compete with netflix and amazon. This is bloomberg. You are watching bloomberg, im shery ahn in hong kong. And im yousef gamal eldin in dubai. Thes cross over to streaming service that completed its new round of funding, led by u. S. Media group hearst corporation. Mark, thanks for coming on the program. I want to kick off with what is the evaluation of the business after the new financing round . Thank you for having me. U. S. The one question i wont answer. It is still a private company and we are very honored to have the shareholders we have to join us but we wont be answering. Mark, lets talk a little bit, then, about what she will do. It is a huge chunk of money, that would add to the 220 million total this year and then route. E 300 million the what are you going to do with it . We are in the middle of a transformative period in media globally. The whole world is moving to watching what you want to watch whenever you want to watch it. That means watching in the palm of your hand, and a mobile device. This is bringing Internet Television to a massmarket for the price of a pirated dvd. We have been building up his visit asia for the last few years, we will be watching in africa next week. We will take that ambition globally. I am looking at some of the pricing structures for countries like malaysia and the differential is astounding to say the least. When will you be profitable at this rate . We will be profitable in the next two to three years. Emerging markets have different strategies you can go with the superrich group of people with credit cards, often educated in a western institution, or there is the massmarket who are pricesensitive. Over the next three years that is one point 3 billion people with a smart phone and mobile broadband connection and they will not be able to have paid tv or netflix. That 1. 3 billion people, their only way to get Great Entertainment is piracy. What we are competing with is the price of a pirated dvd, two dollars to three dollars per month. Bring that out of piracy, out of the illegal market, and into the legal market and start giving it back in the hands of using content creators in hollywood and also in the local markets in which we operate. But mark, when it comes to piracy, intellectual property, emerging markets and their governments are not really very supportive. What are you seeing out there . Governments in emerging markets have many priorities, economically and socially, and piracy is not the top of the list. People dont want to pirate content, they just want access to Great Entertainment. And if i cant afford paytv or netflix, the best selection is going to the pirated dvd guy down the road. So we have been working with global studios who produce extraordinary content and Telecommunications Companies to make it incredibly simple and easy to use. It is integrated with my prepaid data package, so even if i dont have a bank account, i can still get access, i can download and watch absolutely everything quickly, and stream it at very low speeds. So for the products that work, it is really convenient. Briefly, for the broader base of investors, when and where are you going to list . We havent focused on listing yet. We will be executing our global ambition in the next 12 months. We would love to be a Public Company in the future and have access to global capital, but certainly for the for siebel future we are focused on execution and Building Customer base. Great having you. Thank you for talking to us. The cofounder and ceo. We are seeing downward pressure across markets in asia as we had to the open in just over an hour. What are you watching . We are still sifting through earnings. We also have a few changes and recommendations, a couple from goldman sachs. They have been cut to neutral down from a previous buy. Upgrade, 16 so far. , goldmanajor lender has been lifted from a previous neutral. Lets cross over briefly to secondquarter numbers earnings beat analysts highest q2,mates, 158 million in stocks taking a hit, 19 down. And watch out for Industries Qatar as well, that will be a key one, one of the Largest Companies in qatar. It will be interesting to see what comes out with that. Thats only have for this edition. Daybreak europe is next along with other headlines and a breakdown of the market. This is bloomberg. The great unwind. Said president bullard and kashkari say they are ready to shrink the Balance Sheets, playing down the risk of market disruption. Mind the gap. Chinas trade surplus widens for the fifth month of july as the President Trump continues his tough talks on commerce. Consumers debt. South africa lawmakers hold a secret noconfidence vote on the president. The model, those price securities in kenya as pulling is underway. Polling is underway