Asian currencies definitely under pressure. Chinas move last week really shocked the market. I think it continues to tell the story. Saw. This big move we this is the move we are seeing here now. It is highlighting the extent of the move we are seeing it electrically show you. Month. Over the last you could see this they move for the u. S. Dollar. The asian currencies really focus right now. Caroline we did an interview with morgan stanley. Now there are 10 currencies. How much will we see . Have seen little change coming from the central bank. Chief economist saying the government might well be there to steady the ship. Guy lets continue to focus on china. Our guest is standing by in hong kong. Good morning as you say, it is all about the yuan. We are seeing some weakness coming through from hong kong shares. The enterprise indexed has followed by close to 2 . Foreigners are exiting out of chinese and hong kong stocks. It does make their assets less attractive. In and out of positive territory today. It really impacts malaysian stocks. The worst performing in the region today. Elsewhere, weakness from south korea. Samsung shares on the cost be kospi. Good movement in australia and new zealand. It is quite a busy day in terms of earnings reports. It is done really well today. This is where the deadly blast was asked week. Last week. We are seeing oil starks a stocks falling to sixyear lows. And the chemicalbased companys about to update investors shortly. Down 6 . Electronics in korea not doing very well. Disappointed. One really dragging of the overall kospi. That is a Health Care Stock in japan. I will show you all of the other currencies. Perhaps it is going to be more currencies we need to keep an eye on. Still falling heavily. And there is another currency that is being impacted by the devaluation. 2 10 of 1 . A lot of fluctuation. Guy thank you for the update. Caroline keep an eye on japanese stocks. Quite what happened. The announcement came a week after its biggest trading partner. How does the yuan devaluation add to their woes at the moment . Morning. It is making things much more complicated. We have seen exports in the country following the steepest in four years. We are starting to see that negative outlook. It is very weak. Down 8 10 of a percent. Mostly on the bad weather. It does not in line with the corporate rockets we are seeing in japan. Telling these is companies the need to trickle some of these profits to employees. Spending hasnt looked too great. The economy is flashing the warning signs. You may remember we saw continuous confidence. Inventories in the highest since 2009. Theyre adding more pressure to the manufacturers to cut production. Nothing too great about it. Reboot. D a caroline give us a sense of what some commentators have called for. What does this all mean . Will the seamer stimulus on hold . At this point he still doesnt see a need for the new stimulus. There are contemporary factors. A lot of people are asking questions about the structural reforms. They have slowed down to a crawl. That will be the key to growth here. They are still thinking on this rebound chasing that inflation target. If we continue to see we consumption down the line, they will have no choice but to discuss the stimulus. Caroline thank you very much indeed. Adjusted had by number is not a big number. Nevertheless, the cost of production is north of 700. It is coming down. Trading stillgold well below that. Still profitable mining gold. Caroline there was an interesting rally. Generally it has been a downward trend. We look at it to a busy week. Guy they will vote on the bailout. Chancellor Angela Merkel says it. S still not an option with regards to the extension , we have room for more. We did extend maturities. It is oh is possible to do something else. Always possible to do something else. Guy Angela Merkel. Caroline we will be watching that development. They have a july meeting they have a meeting on wednesday. Guy it should be better. Is that trading arm going to soft in the blow . Well talk about that as the week progresses. We will look at the u. K. Housing sector as well. Caroline were not building enough. Theyre trying to make up for the lack. Double for the past five years. Why cant britain build more homes . Tweet us. Guy we will break on Angela Merkels message and we will be talking about the reports out. Here that she is hiring a hiring spree at the moment. Uy 6 15 a. M. In london these stories you need to know. Caroline consumers and businesses cut spending and exports tumbled. Growth. Wo quarters of the scene of the explosion. The number of People Killed has risen to 114. For. Are still unaccounted businesses have been severely disrupted. Caroline the wreckage of a plane that went missing has been spotted. Toeam is heading to the area check the survivors. It lost contact with air Traffic Control. Guy back to greece. The latest greek bailout is that imfsman lawmakers with role very much in question still. She said signal shes willing to to help inat police the bailout. Hans nichols is on the story. A defensive Angela Merkel. Said they would do that. The member the last time she lost . She showed confident you get this through. On the reform, she insisted the imf will join. Howis indicating here is you put the issue of debt relief. Extensiongards to the , the setting of Interest Rates roomssibly have, we have for maneuver, just like we had in previous times. Theres a clear statement that they cannot allow another haircut. About 10 billion would go for bank recapitalization. She is delaying her trip to brazil. She says it is confident it will pass. He has indicated hell support the package. Were looking to see how many defections she will have. Shes not entirely confident this will work out. They insisted there are no guarantees. Caroline it has been a busy time for Angela Merkel. Spree . Bit of a hiring hans her office is looking tired drivers and household staff. Theyre looking for some Civil Engineers did we have a new i will like guy and to be Angela Merkels drivers. This will be great. Limits here. Send me your no speed limits here. Send me your resume. Guy im in. [laughter] is she doing some Home Improvements . What is going on there . Hans maybe she will do an extension. Just quite regarded. The Civil Engineer part we are not qualified for that. We want to be her drivers. Caroline we will give you that one. Guy barclays upgrading bmw this morning. I cant believe she just drives audis. She is the boss. You can decide what she wants to drive. That was hans nichols in berlin. Caroline lets shift years. Lets get a take on the greek crisis. Give us a sense of the groups we will see jumped. Concerned whenry. We have achieved progress since then. Very fast. Ve they decide to go ahead with a new program. This is a really positive surprise. Us. Are ahead of at the end of the day, implementation this was always the problem. And the election . We believe he wants to get it done as soon as possible. Beoline how much will he able to depend upon the opposition . He has not been in support. Have to explain this is the right path for greece. This is not a sustainable situation. Nobody is making the case for the reform. They are still trying to argue that greece is put under pressure. Somebody needs to make the case that greece needs reform. Agrees. Now everybody we need somebody in greece to do it. Everybody realizes greece cannot survive in the eurozone without the program. They cannot survive the eurozone without these reforms. Guy if there is any kind of problem, if any issue arises, a failure to implement even the most extreme measures that were imposed, ari back to stage one . Are we back to stage one . This is the last chance for greece. Guy even a fourth one we are worried about. Or we miss something. This is an incredibly tight program. Concerned if more a future great government tries to get away with things. This is why they came to power against the reader arms they are now having to swallow. That is part of the problem. Arguing ey are they are a new party. They are trying to have a balance between the two. Im just asking a question. Im reading stories about mario if he starts doing it come at maybe i should start doing it as well. Defaulting on great taper was always a case in only an extreme scenario of a grexit p it caroline where would of a grexit. Caroline or would you even access this . Is there liquidity out there at all . It is about 33 billion. You can buy it. Caroline were starting to hear Angela Merkel talking about extending the deadline. Will most likely take place after. This is inevitable. Guy coming up, we discuss the priorities. We will have a nice conversation. See you after the break. Get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swifts music videos, interviews, and more. Xfinity is the destination for all things taylor swift. Tand thats what were doings to chat xfinity. Rself, we are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Caroline welcome back. 7 30 a. M. If you arguing from brussels. Guy consumers and businesses cut spendings and exports 1. 6 between january and march. Despite the poor numbers, it was better than the estimate. Caroline the german chancellor Angela Merkel says the imf will join date Greece Bailout to help make it happen join the Greece Bailout to help make it happen. Comes as the lower house prepares to vote on the bailout on wednesday. The People Killed in the blast has risen. 95 are still unaccounted for. Caroline more about that tragic situation in tianjin. It was a sense of what is the latest. Their toxic materials where government officials have that promised a swift investigation. Were getting a clear picture that there may have indeed been violations. Guy this is something the chinese authorities need to be taking seriously. It is raising a lot of questions of how this was allowed to happen. On one hand you have the act tianjin, veryhat few people outside of china know it existed. It become central to the governments plan to develop the north of china. At the same time, there are a lot of questions it if youre going to love this place to grow so fast, where are the regulations and the control to mature some like this doesnt happen . The government will have a lot of questions to answer. It is quite a great guilt for the government to be answering. Many businesses affected here in europe. Thank you very much indeed. Guy it is unlikely we will see markets drive the yuan rate. Good morning. Action for the chinese over the last few days. Your sense is they are not done yet . I dont think they are anywhere near done. It is in very it is very important. Managing risk for domestic demand. In the sense in the long term in the short term, the effect for the yuan on the foreign pipelinelows and the and the highlighting of the fact that asia is that a deflationary risk. Levels. E high debt there is nowhere in the market no worry in the market. Are we going to see another 4 weakening . Is it going to be more fiscal stimulus . It is very much going to be a function. China clearly doesnt want to see a panic outflow. It is running the risk of a very costly to support the yuan. Caroline is that happening today . I think so. It will help train the markets. It allows the central bank to get some results from the rate cuts. More yuanope for devaluation. The implementation was more marketdriven. Bet is something that could savings. Global there is a lot writing riding here that they dont make a mess of it. [laughter] guy trading books are being affected. You referenced what happened with the fed back in the financial crisis. Think about it in those terms. Q he continues to have a massive continues to have a massive effect. Absolutely. There will be a huge rebalancing. It is a capitalist for the massive outflows. Theres no question about it. It has been based on the valuable Exchange Rates. I logged into the bloomberg terminal. He had his finger on the pulse. Is the fed is looking at has come down. The fiveyear adjustment for inflation premium rate has come down in the last week. What is driving that . Inflation . The global story . Premium was a u. S. Fiveyear yield and 10 year yield. The real Interest Rates has come up. There is more plausible explanation. Theres a lot riding here. Think the fed hike is on the cards. Caroline do think a fed hike is land . I think so. Is planned . I think so. There is a bubble globally and in Exchange Rate bubble bursting at the same time even before the fed Interest Rate is being it is hardly a reason to raise rates. You have a booming u. S. Economy. Caroline thank you very much indeed. Before we take it to the break, lets take a quick look at some airline news. A company that is not afraid to bet on china. It is equivalent to the dreamliner. We speak to the ceo about his plans for the jet fleet. It will replace the current model. Very expensive aircraft. Seatsl be fitted with 297 40 more than the existing model. Theyre going from a really expensive airplane to a really cheap airplane. Caroline even wireless connection. And part of a 30 million euro project to the airlines entire airbus seats with wifi. We are all excited. We will be the third airline globally. We ordered those aircrafts a long time ago youd almost 10 years ago. We have been waiting for them for quite some time. We will put the aircrafts on our shanghai routes. Caroline stay with countdown. Next up, we speak with the chief after one Company Releases earnings. Weighin on twitter. Why cannot britain build more homes . Twetet us. See you in a moment. Guy 6 44 a. M. In london. Good morning here and here are the stories you need to know. Caroline defense economy contracted last quarter. Businesses and consumers cut spending. Exports tumbled. Ending at two quarters of growth. It was better than estimate. Guy Angela Merkel said she is confident the imf will join greeces third daylight and signaling willingness to make that happen. The lower house in germany prepares to vote on the bailout on wednesday. Caroline and visiting the scene explosion. Jin People Killed in the blast is 114. 5 are still unaccounted for investigators are try to confirm reports of the warehouse export it may have helped as much as 700 times of sodium cyanide. Businesses have been severely disrupted. Guy they are calling on the president to resign. Elliott has more. Very much on the ropes at the moment. Ratings incredibly low. Absolutely. It is a look like she will be impeached or resigning. Weve got inflation at 9 . Interest rates rising to try to curb some of that inflation. Related tois scandal a oil company. Her personal Approval Rating has. Lumped on top of the you have people taking to the streets to vent their frustrations. Feel that the buck stops with her. Caroline we are seeing similar issues. There are political wrangling within malaysia as well. And a commodities slumped hitting malaysia. Feeding into the parallels are quite uncanny. What the chinese hans evaluating chinese yuan has done look at the real against the u. S. Dollar. That is what has been going on. China is brazils number one partner. Number onee brazilian export. Iron ore. It is being hit on the commodities front and evaluation front as well. This is playing into what is going on there. Fragile five. It was to suffer as a result of rising global Interest Rates. Potential forout the troubled 10. Brazilian real sorry. 30 over the coming 12 months as well. That will hit brazil as well. Guy how far through this process . Look at what is happening with the fed. Hina is doing what it is doing Commodity Prices on the fall but it could go lower you are we halfway through this for the Global Markets . How much further . Policy has been easy response to our last crisis in 20072008. It was too much debt and too little growth. It would have exported at the same problem for emerging market. We have a Global Financial economy good too much liquidity. We have this under demand an oversupply. We will see this come through. We are nowhere near the end of it yet. Caroline what should we be most worried about . Is malaysia or brazil the focal point . What other countries could we see . Linksre talking about the of globalization over a decade. When you have week level demand and a fall in global trade problems, this becomes follow. Get hit first and get hit hard. But were looking at here is a major migration. The recovery is a very disappointing one. We want that restructuring. We talk about lost decades. 1980s elliott we talk about lost decades. Will this take it be another lost one . Lena im really a develop. Arkets economist da thing. Robably not a bad i think it is probably good where we think the double is good and volatility that. Bad. I think there is a lot going on. I think it would be healthy for those economists. On. Lets continue we have got this amazing move. People have long memories. They have understanding what is happened in the past. Went back into the territory. Responsehrough the they are dissipating from the authorities. Are anticipating from the authorities. Reducee are no plans to during thatwe saw financial crisis in asia. Theyre not really taking the essential think banks where they are. They might rigid is capital controls and hypocrites against the dollar. Caroline this is what it and pit it against the dollar. What wills is we see capital controls reduced anytime soon . This is what the market is panicking about. Yes. We have a political scandal involving the Prime Minister and an Investment Company where billions in the form of a political donation. Oil prices are coming down again. We have the yuan devaluation. This has been a