They failed to produce a majority government putting credit at risk. Anna welcome to countdown. It is 6 00 in the morning here in london, Independence Day in the united states. Markets. To the wipingn the asiapacific out brexit losses but if that makes you think we are also seeing money going into safe haven assets. There is a surge going into the silver, indicated by this dotted line. Weve seen a surge in safe haven assets because part of the enthusiasm for equity markets a nature comes from the expectation that we might see more support from Central Banks. Lets put up the risk radar. We mentioned the bounce in equity markets wiping out brexit losses and commodities also on the rise. Commodities, the wti price is fairly flat. Nigeria having a trouble enforcing a ceasefire in oriole country. We have Seen Movement in the Australian Dollar. It dropped but then recovered. Neither large party in australia managed a majority more coming up throughout the hour. We will have more analysis from sydney shortly. George osborne had set the goal of lowering britains Corporate Tax rate is 15 to keep businesses investing in the country. He expects the result of the referendum and wants to mitigate of thenomic impact brexit. Australias election has resulted in Neither Party having enough seats to form a government, undermining their Credit Rating, possibly. There are limited implications but it indicates a wider deficit. The Election Results have yet to be completely finalized. An increasing number of economists predict that chinese banks will receive the bailout within two years. Is among thebank respondents in the latest inswerve saying they expect the move. The majority asked believed cost every capitalization will receive 0. 5 billion. One of londons biggest law firms has threatened to take action if the British Government tries to initiate the process of leaving the eu without consulting parliament. Article 50 canof only be started with parliaments consent. Baghdadliest attack in in one year kills at least 115 people. A truck exploded in a mostly shia neighborhood despite heavy security. The area has many stories and restaurants. The streets were filled with people after breaking ramadan fast. Global news 24 hours a day in more than 120 countries and you can find more stories on our bloomberg app. Anna thank you. Lets check out how the markets are behaving. We have the latest action on the markets from hong kong. Markets behaving nicely. A good way to kick off the trading week. Hong kong, some robust trade happening that we are in the form of this asian rally. We are now back to know where we were before the brexit volatility started. I know you have more analysis on australia to come, but sydney is up by 0. 25 . The week is turning positive. We actually spoke to jpmorgan assetmanagement and they said that in the longer term, there are issues given the political instability and the possibility of a Hung Parliament the when it comes to the shortterm sentiment, we are not seeing that playing out. Some weakness in the Australian Dollar. Also, the weaker yen, the nikkei 225 up by 1. 5 . China stocks rallying to a twomonth high. This rally is being driven regionally by this search we are seeing in commodity prices. Materials, copper, steel policy and games today. From thest gainers sydney session, gold and silver surging. New crest mining up over 4 . Doingf these large minors well. It is an interesting situation where you have a risk on the session but also money going into some of these safe havens. Anna thank you. The latest on the asian session. One week after the brazen, france is pushing ahead. The French Economy minister has laid out why he thinks that paris is the new home for banking operations. Think for a lot of financial players and will beions, the brexit a pushing mark because it will depend upon the access to europe. It will depend upon the organization of the brexit. Role is not to play on uncertainties because we are collectively responsible and i do iswhat we have to respect the vote and to organize a brexit but at the same time, it could be a positive for our Financial Sector because we have a lot of financial players and institutions and, definitely, we can welcome a lot of institutions who would like to join. We are live in paris now. Good morning. The finance minister seeming confident that they could get a piece. Analysts also point out that taxes might keep certain institutions in london . Yes. Ter they are trying to compete to get a piece of the financial cake and the prices the 500 trillion market. A lot of the clearing in europe, about 70 of the action traders need to complete their transaction. Minister told us that he believes paris is a better place than frankfurt to move then clearing business from london to paris despite, of course, the Bad Reputation of france. He was trying to defend the image saying that the violence we have seen on the sidelines of the strikes only comes through a tiny minority and the labor law reform will be passed by the end of the month. Before him, the french finance minister was more cautious and the idea, saying that we should not divide the spoils, that he did not appreciate when david the red carpetut to france and he did not intend to roll out the carpet in the other direction. Anna we will watch that with interest. He also spoke to many ceos over the weekend, who were present en provence. What of the concerned about the consequences of the brexit . I could feel some anxiety, like what i felt a few exit p duringr the he wasof theovence not the only one who thought that france could turn a brexit into profit for french businesses. The euronext ceo believes that paris and amsterdam are better or dublin, frankfurt saying that the brexit could make the eurozone and the and asnt more relevant market participants, we will have to get closer to the clients. Outside the eu, things have to be relocated. With a number of companies and , it could be a legitimate player. He also told me that for the first time in paris, he sees alignment between the large paribas, large and the governments in order to promote the attractiveness of harris. Anna thank you. The head of the u. K. Rate strategy is with us in the studio. Good morning. Away from the corporate agenda lets get back to the macro story around the eu. In the wake of the vote, do you sense we will see closer integration . Slower integration . We are getting mixed signals. Guest of course, they have a lot of issues to cope with as a result of the fallout. It is obviously going to be a better outlet for the eu if it can integrate. Decisions will need to be made if integration is the way that the eurozone wants to move, some assetsattention and risk can start to reduce but there are risks that it moves and the other direction that is why we are seeing Rapid Movement from central bankers and politicians to shore things up. Anna how seriously our clients uitaly . About a q the vote is seen as a step in the journey. Its partly a consequence of what has been going on in the eu. For some, it have to do with migration. That is partly because of the economic difficulties of some european countries. This seems to be a process and this is why more integration is needed. And wide isst far growing and that does lead to greater risk at the moment it seems that the u. K. Is an isolated case but not necessarily anna what do you expect from the ecb . Analysts have been reevaluating what the brexit will do to , the averageth forecast seems to be 0. 6 percentage growth taken off, probably not based on the eurozone falling apart but a conservative assessment of politically where does this go. How does the ecb respond . Well, they are so many uncertainties. How much depends Economic Growth slows. The pressure is not that great. They are already in an easing mode but as things so abruptly, then have to assist with asset purchases and at some point, over the coming months, they will have to make some announcement of the economic fallout has yet is toertain and i think we need try and have a common attitude to see how it evolves before any central bankers are allowed to [inaudible] ,nna here is your week ahead u. S. Stocks and bonds are closed today for Independence Day. Holdrow, mark carney will a News Conference to present the Financial Stability report. On wednesday, the release of the june policy meeting. Barack obama will attend the 2016 nato summit in warsaw to me with the president s of the European Council and on friday, the nonfarm payroll. , cranking up the heat, terrys turning told reese turning on teresa they. This is bloomberg. Teresag may. Nin on this is bloomberg. Anna welcome back, this is countdown. 1 18 in hong kong, 6 18 here in london. Rosalind bank of china seeking to raise a billion dollars for what could be the worlds biggest ipo this year. Are said to have filed applications last week. Analysts are confident that the ipo will be a success. Shares in china bank have dropped by 10 . The developer was halted in december after it emerged that a consortium had been purchasing equity. Dhabitional bank of abu has merged with the first gulf been to create a regional powerhouse with 175 billion. It will operate under the National Bank of abu dhabi name. It will allow them to better compete with regional rivals like qatar National Bank. Misses deliveries because slump. Oduction the carmaker deliver just over 14,000 vehicles in the second quarter. That is your Bloomberg Business flash. Anna thank you. Have minister candidates turned on teresa may. Michael grove said the country needs someone who supported brexit. I want to advance arguments in principle. We need to have the next Prime Minister someone who believes that britain should be outside the European Union and argued for it. I have always taken difficult decisions because about my principles first. Thousands marched on london to protest the decision to leave the eu. John race is with us. Looking very much more at this specific u. K. Implications here, then, john, the chancellor flooding this idea of a Corporation Tax rate that we are free the plan does this what does this tell you . It is certainly interesting. It changes tone when there were warnings about emergency budgets moving in the opposite direction. It is interesting because if the u. K. Is going to leave it is going to have to strike in a different direction in many ways. Trade agreements struck bilaterally, these are new initiatives that they will have to pursue. To an extent, it is reassuring that the chancellor is moving swiftly to shore up the economic problems that may lie ahead. Anna there does seem to be some decisionmaking. Chart shows below 1 . The number of conflicting forces you think that the status of the safe haven outweighs anything that could detract . Guest clearly that is what we had seen since the vote. Fear is the safe haven demand, over nominal growth expectations that need to be factored, the possibility that the bank of england may have to restart quantitative easing, all of that pushing yields lower. Anna concerns about Credit Rating . Guest possibly, and overseas investors may be wary of increasing exposure to u. K. Assets until they are confident that the pound has finished falling. The strongest forces towards lower yields. Know,in terms of what we we have our from George Osborne about the 15 tax but also abandoning certain targets. It is a long time to wait to get some clarity. Guest it is. The political backdrop is not helpful. This is all about uncertainty at the moment. It is probably just as well. We need to see how the economic data, when the dust settles. Numbers will relate to the time before the brexit votes. End of only be at the this year we make a clarity on how the economy has been affected. Hopefully by then, we will have political stability. Anna do you think that the ovi needs to wait to see the evidence in the data before we can action from them yet come mark carney speaks tomorrow. There is a toolbox of things that were put in place around the time of the financial crisis that they can use that are not around the Monetary Policy story. Ease policy but again, until they had seen the evidence of what the economy is doing, it is hard to know how. Hey will calibrate that liquidity operations were already in place. Said, the Financial Stability report tomorrow will enable them to give views as to how much more support might be needed. When the data reflects what happen, and what will they will be in a position to the side the setting for Monetary Policy good anna politically, mark carney is under pressure under fire during the campaign because the leave side said that he had got to politically involved. It is interesting to see the names now praising his handling of the economy are not expecting any sort of change at the top . Guest we knew the referendum was coming and we knew there is never whatever the results of the the bank of england had to strike a balance between not seeming to politically involved with the same Time Technology was as we all know a very large risk event so i think for the markets i think the bank of england was seen as treading a line appropriately and now they obviously have to address with ac and the fallout. Eric nielseneading talking about how the market could be underestimating the chance that politicians are actually going to be tempted to tear up residual relationships. Are we in danger of underestimating how far away the u. K. Could get . Guest the truth is that we do not know. It is not helpful to have the political flux that we are in that we are where we are. The sooner that we have a stable government that can start making those decisions and having those conversations the better but that is not going to be anytime soon. Anna thank you very much. Int, investors in australia limbo after an uncertain election result which could mean a Hung Parliament. 6 30 welcome back, it is in london. The u. K. Chancellor has set the goal of lowering britains tax rate in an effort to keep businesses investing in the country. He told the times he expects the result of the referendum and wants to mitigate the Economic Impact of the brexit. The French Economy minister has told bloomberg that paris is a contender for european business. Frankfurt andike dublin have been battling for transactions currently done in london. For a lot of financial players and institutions, the question mark. A our role is not to play on this uncertainty because we are collectively responsible and i think what we have to do is respect the vote and organize a brexit but at the same time, it could be positive because we have a lot of financial players and institutions and we can welcome a lot of institutions who would like to join. One of londons biggest law firms has threatened to take action if the government tries to initiate the belief without consulting parliament. The triggering of article 50 can only be done with the consent of parliament. The deadliest attack in baghdad this year has killed at least 115 people after a truck explodes in a shia neighborhood. Andarea has many stores restaurants, the blast coming after people had broken the ramadan fast. Louisville news 24 hours a day powered by more than 2600 journalists in more than what is countries, you can find more stories on the bloomberg cap. Anna thank you. And for a check on the market action. Heidi sometimes it looks like a tale of two markets because we are seeing that Risk Appetite in equity markets but you are seeing the move to a safe haven asset so let me start with asian stocks rallying for a fourth day. The asiapacific index building on an advance. We are seeing Oil Heading Higher today. Yennt to talk about the because it is weakening today as the bank of japan governor says more funding could be injected into the market should they be needed but the brexit has shiftd the biggest upward in the yen since 2008 so a Bloomberg Survey actually has the currency weakening to ¥107 to the dollar. That prediction tops the most bullish estimate at the turn of the year here in green, jpmorgans call at the turn of the year. The most bullish call is barclays predicting a rally to ¥87 this year. Not seen since 2013, three months before japan launched a stimulus program. This is the outlook towards the year end. Take a look at silver and gold. 21 and an ounce for the first time in two years. Outpacing gold. Some see it continuing to outperform. As for gold, gaining for a fourth day, and assets the highest since 2013. Anna thank you. A growing number of Analysts Expect a china bank bailout could be close to 915 respondents predict recapitalization in china within two years. Yousef joins us now. This is gone from being a niche expectation to something more mainstream . Absolutely. Not too long ago, you would have been considered fringe for thinking that this scenario would materialize. Of responders to over survey for see this happening within the next two years. A chart to together give you a better perspective in terms of how investors are feeling about this. This shows you the average price for chinas largest for banks. We have crossed it with the financials index so you can see what is being suggested, that it. S trading at an average of 32 you can easily pull of this chart on your bloomberg as well. The majority said that his bailout could exceed 500 billion. It is a far cry from the other predictions we have seen in the last few weeks but we have had some other views on that. The chinese yuan could be the centerpiece of the bailout and maintenance up to 30 . Anna thank