Anna a very warm welcome to countdown. Manus where is the money flowing this morning . The pound has a bit of a reprieve. We will talk about that in the risk radar. I thought we would go for the shiny stuff, coming back from gold. And there is a real move here, of course in the headlines more funds shutter in the u. K. What you have is the assets, going into gold trading up one quarter of 1 . Etf Holdings Rise by 37 this year. The assets have jumped by 38 million tons, the most since the global crisis. We have entered a new bull run, according to ubs, we are with in a hair. Goldman is shifting the threemonth and sixmonth target. The risk momentum and the fed playing into the equation, all moving the dollar holding back. It is based on fact, not fiction. Anna very much about what the fed is going to say, manus, negative low rates good it seems. Punishing the risk radar, what else is on the move. We have a currency market dominating things this morning little bit. Quite a few in here, the Australian Dollar pretty flat, as in p putting them on negative watch. It hasimproving, but decreased since the election. We still dont have the conclusion of that process, the electoral process of the week and of course in australia. The pound getting little reprieve, remember we are lower than that yesterday, the 31 year low now up by half a percent against the u. S. Dollar. Though a of banks talking about more pain to come, goldman and city and Deutsche Bank saying that about the pound. We have begin at the dollar, above 100. Increasing for a third day, this conversion trade writ large across the markets. We should say we have oil going higher, and that has been helping the equity section over in asia. Actually the equity session in asia not a bad one on the back of some of those energy socks going higher. Lets do the bloomberg first word news. Here is rosalind chin. The fed is losing confidence in the move to tighten anytime soon. Ministers at the fmoc meeting showed officials facing rising uncertainty about the outlook for growth at home and abroad. Policymakers want proof that growing at a healthy pace and the underlying momentum of the economy is intact, and inflation will hit the 2 target. Sovereign bond yields and record lows are not worth the risk. The 72yearold has built the biggest fund at Pacific Investment management, speaking a bloomberg television. Bill we have high durations, low Interest Rates, even a small change in terms of yield can produce a significant loss. So the sovereign bonds are not up my alley. U. K. Business confidence sank below in the days after the referendum last month. As sentiment slipped from 32 in may, according to data compiled by Lloyds Banking group, the lowest since 2011 amid the euro area sovereign debt woe. Global ratings have lowered the outcome on aa from negative to stable, that is after the outcome of saturdays election, denting the process of writing in the budget deficit. There is a one in three chance they could lower the rating within the next two years, if ary gridlock continues. Nearing an agreement to buy, in a deal that could value the maker of silk brands at 10 million. That is according to someone with knowledge of the matter. 2020, with half of the business kenyan on consumers seeking Healthy Eating alternative. And Donald TrumpsVice President told choices keep sinking. Bob corker has removed his name as a running mate. The move surprised republicans, in a move that could have added spirits and gravitas to the ticket. Global news powered by more than 2600 journalists and analysts in more than 120 countries. You can find more on the bloomberg top. Thank you. Ind chin, let us check in on the Market Action with haidi lun. She has the details. Manus, we have been neither here nor there for much of the asian session. After yesterdays brutal selloff, not much conviction in either direction. Regionally about 4 10 of 1 , which is pretty close to the low about 2 10 of 1 at one point. But we are looking at present volumes across the board as investors are kind of treading weigh out theto Global Growth conservator japanese down by one half of percent, a little bit of an impasse from the yen that continues to strengthen, a third day of losses for the japanese markets. Were looking at yen pretty close to the 101 level. Australia focusing off the announcement, revising the outlook from stable to negative promising gains at about one half a percent, this just went through saying that there could be a one in three chance of a cut to the Credit Rating, within the next two years. If these measures to push through budgets or rather deficit reduction measures are pushed through parliament. One way of looking at here in hong kong, the hang seng up by 1 10 of 1 , stocks rebounding in hong kong after the threeweek low. We are seeing energy produces really across the board selling off, having said that the reverse in shanghai. Giving back most of yesterdays gains there. Look at some of the movers, as i say it is really in the energy space where we had a pretty deep selloff yesterday. They are rebounding on the backs of some bargainhunting. And we are also seeing gold from china all the way to australia continue to gain as gold surges for now, in a seven session. Anna . Anna thanks very much, haidi lun and hong kong. Getting news, manus. Manus speculating they would buy, all about fresh foods now, delivering the deal. They are to buy for 12. 5 billion dollars. It is all about fresh dairy, health food, wallaby organic, and sales. This all about getting the sales targets up to 5 by 2020. So this is a deal, that adds to the continent, the whole sort of speculation that we had. Game looks to be done. At about 20. 5 billion. Anna since 2010, just illustrative of the assets for both organic foods and the other parts of the nondairy place manus at this business operating. Manus just a justification for doing the deal, growing by 5 . This is exactly what they are saying to the markets, the purchase was significantly enhance the 2020 platform. Most of this business is in north america. 89 is in north america. 2. 9 billion in terms of revenue last year. Europe contributed about 14 of the overall revenue for them. Culturally that is a whole other issue. It is all about the bottom line, 5 sales growth by 2020. Anna in terms of the property story in the u. K. , formal funds are frozen as investors seek to dump Real Estate Holdings in the wake of the u. K. s brexit though. Manus anderson, global investors, canada life have all suspended trading in at least 5. 7 billion pounds of assets. Aberdeen cut the management portfolio by 70 , and a redemption. Nejra is standing by. Bill gross says this is nothing to worry about. This is a question of contagion, and in terms of impact, what is the fee . Nejra who am i to disagree with bill gross . What he says is this is from an innocent of bear stearns subprime funds for the lehman debacle. Moreso said if there are to follow after what has happened so far with the u. K. Property funds, this could be summoned to worry about. And indeed we started with one at the beginning of the week, standard life. Now a total of seven u. K. Property funds have frozen withdrawals. In terms of numbers , it takes a total number of real estate assets frozen by Money Managers since monday to 15 billion pounds. To give be some context, about 24. 5 billion pounds is allocated to real estate funds, talking about more than half that. So the impression is where do we go from here . Well you can Property Funds analysts basically warned that 20 on values could fall by in the three years following the u. K. Leading the eu. And of course we saw all of this happening actually since brexit. And then Morgan Stanley has also put out a note to say u. K. Property funds could come under further stress. Now to put this note out before canadathe latest, life and aberdeen. But what it said was that the funds are designed a circuit breakers, but the sentiment generator can still drive a negative feedback loop, similar to that seen during the last financial crisis. This i final point, and found really interesting, the question of whether the u. K. Property fund scenario could send a warning to the junk on world. Because junk bonds may actually pose a greater Liquidity Risk than those invested in u. K. Commercial real estate. Anna nejra, thank you much. To discussh us now more detail, managing director , goodief economist, lena morning. I do like setting as a question at 6 00 a. M. It would be summoned around comparing and contrasting in terms of the property sector now. Versus 2720 you see parallels . Is there worry for you . Elan the property is the epicenter of leverage, and the fact that we have a slide to quality is a slightly liquidity and away from highly leveraged assets, it is little surprise that it is the pound and the u. K. Housing sector at the epicenter of this divestment crisis. I think that the fact we have seen poverty funds closing in such a short space after the referendum shows the extent of the Political Risk in the financial stock were underpriced and financial valuations. But also shows to this point the pounds weakness is really a testament to the fact the rest of the world is investing in the world, rather than inflationary. The capitalizing inflationary signal, and that is the worst thing because it means the fact that we have record low gilt yields, looking at manus looking at the chart. Discoverys is annas in the bloomberg terminal. What we have is the heat map. Anna i called the heat mpa. Manus credit where it is due. And if you look at the gilt wave, looking at these graphs, what you see is his period right out here, this 30 year bond market. Down we went in terms of the yield collapsing, the contraction. Around the 23rd of june, around that period of time for the referendum. Money is continuing to go, gilt returning 14 in 2016. The spread between 30 year on the far end of this heat map, and the closed paper is delegated. Given that we are such an indebted nation, with the currently high deficit is under pressure lena it is a flight to liquidity, from the very funds that are seeing outflows from Foreign Investors. The fact that gilt yields haves the. N, this is reflected u. K. Market that it is a sign of markets collapsing a sign of low yields not working for growth. At the moment, rather than a sign of inflation at this point. They could be worse of course. We could be seeing u. K. Bank yieldsfalling and gilt rising, a default scenario. Manus which would be a default scenario . Lena bank stocks falling. Manus they already are. Yieldshe fact that gilt falling, it shows the Financial Systemic risks that has risen, the results of income markets pricing down the neutral rates in the u. S. Economy. But also the fact this is happening globally, bond yields are at record lows cannot is the u. K. Story but a global systemic story. The u. K. Being one of the biggest centers in the world. The second one of course is a signal of the fact that the bank of england has expressed a willingness to do whatever it takes to contain the contagion from brexit. Therefore, the bulk of the default will happen through a cheaper pound, rather than hire gilt premium. And it is the shock absorber, i think. Anna describing that is necessary, mark carney of the bank of england. Have we seen any expression of risk in the pound so far, and the real estate market, looking for other places where he might see this express, other dominoes to fall, are there other assets classes you look at that might be the worrying next step . Lena exactly. The highly interconnected Financial System that we have, what we have seen in the last week is that the financial contagion from brexit is not over yet. And the third one is that it is not contained to the u. K. And so the domino effects here are vulnerable credits elsewhere. And there is one in particular that should pay more attention, china. Anna so this is the china lake . Lena what we are worried about here is that sterling is declining, and at this point there is no evidence yet that the drop is fully hatched. In other word will be have is the run on aaa rated reserve currency is unprecedented. Manus a run on the currency, 1. 20, various people saying 1. 15, is it over yet in your timeframe, very briefly . Lena this could lead to a broadbased Dollar Strength that could lead to a weaker yuan, theyve all the managed carefully so far. But what you want against the europe or the yen, if the Dollar Strength continues, we could see an impact on global commodities. We havent seen it yet, but that doesnt mean we are not going to see it because the pound declines. Anna the manager for communications showing the better than previous, but we will see how far that goes. Manus we a lot more global issues to get through, lena joins us. We have to get to the fed. We will talk about payroll paying. In. That is up, next. Anna welcome back to countdown. 1 20 in the afternoon in hong kong where the hang seng is up, moving higher with the Energy Stocks helping the agent asian sector. London it is 6 20 in the morning. Here is rosalind chin. Buying the foods in a deal worth about 12. 5 billion, representing a premium of 24 on the 30 day average closing price. Targeting sales growth of more than 5 by 2020, with half of the business kenyan on consumer seeking Healthy Eating alternatives. Fundsore u. K. Property have closed doors, as investors seek to dump Real Estate Holdings in the aftermath of the brexit vote. Global investors, columbia threadneedle, and canada live have suspended trading. Aberdeen Fund Managers cut the Property Portfolio by 70 , briefly holding redemptions, so investors can get their money back with time to reconsider. Samsung has reported the biggest profit in more than two years, bolster my demand for its galaxy s7 smartphones, cost controls, and sluggish iphone sales. The largest maker made 6. 9 billion in the latest quarter, beating estimates. The results underscore how the company is defined the slowdown in the smartphone market. And that is your Bloomberg Business flash. Anna and manus . Manus thank you very much. The Federal Reserve is losing confidence to tighten rates anytime soon. The minutes from the fmoc meeting last month held a week before the britain referendum showed that officials taking rising uncertainty about the outlook for growth at home and abroad. Mike mckee has more. Mike if youre looking for guidance for future fed moves, you will not find it in these minutes. Instead, you are seeing a committee groping to figure out what the prospects were for the u. S. Economy. Keep in mind the timing. This was after the dismal jobs report in may, but had the brexit vote. Brexit get surprisingly little mentioned in the minutes, but it could be a risk and a flinch to development. But no details on what the risk might be or what the policy response might be appropriate. However, most of the discussion was devoted to figuring out what the may jobs report met. Remember 38,000 jobs were created. Many participants the minutes note fell the number was likely distorted by the verizon strike and statistical noise. The labor market might be slowing , but in general the labor market was stronger than the data showed. Some suggested the lower rated games could be suggesting a general slowdown ahead, while others a few blame the weak hiring on the inability to find employees. Bottom line, almost all judge the surprisingly weak may report increase the uncertainty for the outlook of the labor market. It is a terrible cliche, suggesting the outcome remains to be seen, but that does seem minutes fore fed the june meeting. Michael mckee, bloomberg washington. Anna managing director at g plus economics, lena, did you get any a direction from the minute . Might suggest that we did not get any clues. Lena the business for the markets right now, the biggest risk is from the jobs report, and the reason for that is that of brexit wearket have seen the markets waiting. Panic over three things, the brexit is not fully priced income of the fact that the financial contagion is not priced in, Global Confidence is not prices. The median sales of the brexit fallout, and on the other hand the markets have been rising in the media implications of lower for longer against Interest Rates. And this is against the instability of the bank of england ecb easing this year. That stimulus, that nearterm stabilizing effect in terms of lower bond volatility and liquidity the result, the key anchor holding markets away from a panic right now. Manus holding markets, the contagion is not done. You specifically look at this chart, this is the s p 500 and invertible syncopation with the u. S. Dollar. Why does that matter . Is your best Case Scenario that there is a window for the fed to do more rate hikes. That was the headline yesterday. Will the fed do more heights . And why are you obsessed by this correlation . Has globalization happened directly challenging the stronger dollar. The fact that we have seen the s p 500 close higher yesterday, as result of the european markets holding a better this morning, directly related to the fact that the eurodollar is higher. In other words, the weaker dollar and stronger equities, more expensive, riskaverse, meeting a stronger support for global trade, the very least minimizing deflationary risk. Anna you talk about how the biggest risk this week has been the strong payroll number, because you like, or the markets like the nonthreatening environment from Central Banks. Not looking for them to threaten. Where does that leave us with other banks, the boj for example . We will get more that story for the month of july. The fact the boj is struggling with inflation is a great indication this is a global phenomenon, rather than a japanspecific phenomenon. More specific for the boj is that the management by china ha