welcome to "countdown." i'm manus cranny. fed, what they speak about drives every single market, from stocks to bonds to the dollar-yen. let's check in on the dollar-yen . we have this dollar weakness on a divided fed. this do toue to thdoes the dollar-yen? are dudley's comments the more -- the more of today to comments of the fed meetings? let's look at the wrist radar because there is really a pervasive theme there. and that is the federal reserve. the dollar is down for the fifth day ina row. we have not seen a run of losses like this since the end of july. dudley's comments yesterday are perhaps, more of to up to date. topix is down by 1%. the dollar-yen is breaking the dollar level. we are seeing japanese stocks deal with the challenge and reality of a 20% rally in the yen. and the emerging market currencies, where the fed lapses or wanes in terms of what they will do. you have got the measure headed. currencyhe em perry i index, by the way. that is your risk radar. is standing by with the bloomberg first word news. rosalind: thanks, manus. minutes of the fed's last meeting reinforced that interest rates would stay lower longer. others want to go as soon as possible when the labor market is full and poignant. exports july dropped 16%, marking the 10th consecutive month of shipments falling. the drop highlights the ethical difficulty in japanese growth. in 51 cities, as opposed to 55 in june. australia's jobless rate droppe did in july. surged during the national election. the aussi dollar gained. the head of island's national olympic body was arrested in rio for allegedly scalping tickets. ireland's olympic committee says hickey is temporarily stepping down from all of his roles in sports. global news 24 hours a day, powered by 2600 journalists in more than 120 countries around the world. you can find more stories at the bloomberg at top . manus: let's get into these markets. we have the dollar-yen moving. let's break this down from an equity perspective. what is this? we've exports down in japan and the dollar-yen on the move. from an equity perspective, it is a real challenge, isn't it? >> it certainly is, manus. but we can see here is a reversal of what we saw yesterday. so, the yen stronger against the dollar, surging past 100, sending export stocks down as well in response to that data. we do see the nikkei up by one poin 1%, one of the worst performing markets in the region. hong kongtocks in are set for their highest close since november. that is thanks to some higher earnings. by over 5% today. the outlook for the second half also shows the airline is facing some headwinds in the future. the asx australia is down by .4% on that mixed commodities run. new zealand though, is to looking pretty good. we have been looking at the commodities as well because gdp is coming in at 7% growth. shanghai market as well, which closed pretty flat yesterday. there is still some optimism coming through with a lot of analysts quite bullish on that market that had been showing some overbought signals. having a look at some of the other players we are looking at. of course, i mentioned tencent. but leanova as well, coming through with some good marks. it is up by over 3%. estates, thisine is the company that owns the brand. most of its business is coming from asia now, rather than from its home base in australia. so, up by 12% for the treasury wine estates. manus: thank you very much, juliette. committee's the july meeting show a divergence over the timing of the next rate hike. though the door still does appear to be opening to tightening this year. just before those minutes were bullard, james stuck to his view on one move. >> real gdp growth would be about 2%. the unemployment rate, which would stay about where it is, it is at about 4.9%, but we have it up 4.7% over the next two and a half years. it is a little bit smoother than was headlined and that will be a 2% over this horizon. the policy rate would have to be only 63 basis points over this two and a half year horizon. manus: joining us now to get the latest perspective is mohammed. thank you for joining us. from my perspective, i look at the fed minutes, which i suppose are divided, right? you then have dudley, the deputy chair in new york, he was talking about september live. being verybun, bullard, bullish. the market is already tightening. it is already adjusting. the sou hear bullard dovish and deadly being so hawkish, where do we stand? is dudley moore up today? -- is deadly more up to date? divided.d is they have mixed data and are not sure what to do it. on balance, the fed is airing on the side of caution. unbalanced, the fed is airing on the side of caution. consumer confidence has been quite strong supporting the hawks, but unbalanced, the fed is staying on the side of caution. seem to be talking about the medium to longer term implications. and the fed has a yield mandate and that stands at unemployment and inflation. that is that we do not see, the whites of the eyes of inflation in the united states of america. >> you are absolutely right. the inflation data is actually not that far from where the fed wants it to be. beyond someto look of the short-term risks in the economy, it could take a view that inflation is a risk, especially because wage inflation has been increasing and that could feed into consumer inflation. manus: this is a fascinating one, which is about treasuries and inflation related. tips have returned nearly 7% this year. the bond markets however, have returned 5.5%. so, the market -- everybody is talking about how the market is very much behind. what i find fascinating is the dollar. i just wonder, is the market slightly further ahead than everybody assumes? >> i think you are right on that. the inflation expectations from the market are higher than maybe what the fed thing iks it is. the fed often talks about data and being data defendant. there is a lot of data out there that would suggest there are inflationary pressures in the economy and for the time being perhaps, they are choosing to deemphasize it through their decision-making. manus: the dollar is down for the fifth day in a row and we have nothing that sense the end of july -- and we have not seen that since the end of july. but in terms of momentum, that is something that the fed will be appreciative of. >> yes, the weaker dollar will actually help the picture. it is early days to see that momentum feeding on itself. we have seen elevated levels in the past couple of years. it is still early to pull the dollar value, but it is something they are watching closely. manus: we have a lot more to get through mouhammed choukeir, stay with us. 9:30 u.k. time, retail sales. give us another snapshot of the british economy. then, three hours later, we get the ecb policy meeting. and then angela merkel will hold a working dinner with donald tusk to discuss the agenda for the eu's summit. coming up on "countdown," nestle reports the first half earnings. we will help you digest the numbers. and we have seen a big drop in japanese exports. 0,'re live in tokyo and at 6:3 we will get an indication as to how the french economy is faring. this is bloomberg. ♪ manus: breaking news now from the world's biggest ports operator. we have the first half revenue numbers, $2.1 million. that is up from last year, up $1.9 billion. what it comes to capital expenditure, that will remain unchanged for 2016, this coming from their announcement. so, dp world remains unchanged at $1.2 billion to $1.4 billion. when it comes to the net numbers, it is also up on last year, $557 million, up from $364 million. so, no sign of global slowdown in these numbers thus far in terms of what we are getting. the ceo expects performance to improve. theormance is similar to first half going into the second half. when it comes to nestle, and they give you some of the updates. organic sales come in at 3.5%. the market was looking for a number and let me double check my notes, a number of 3.7%. so, that is a miss for nestle on the first half of organic growth numbers. really, what the market is most concerned about there is in terms of the fastest-growing food categories in the u.s., that is where they want to be focused. those of the top lines. a miss on organic growth, and maintaining their top lines for 2016. a challenge for nestle has been a weaker pricing power. schneider came in and he is the head of a nutrition business. that may well play to the direction for nestle going forward. so, waiting for a few more lines to come through from nestle, but the top line is, it is a myth on organic sales. 3.5% and the market was looking for 3.7%. 3.7%ull your revenue was and let's see if they stick to that for this year. now, let's get to the firs bloomberg business flash. reporter: 7% of the workforce will be eliminated. the ceo says they are moving away from traditional hardware. savings will be invested in new businesses. onco's ceo will be "bloomberg go" at 2:30 p.m. u.k. time. this is according to people with knowledge of the matter. he london-based bank is speaking about $400 million for exclusive access in a deal that aims to complete by dear end. they have declined to comment. posted a first quarter profit that exceeded estimates, but that came in the on the back of cost cuts and asset sales. the ceo expects the smartphone business to turn a corner next year, as they ramp up marketing in the u.s. and china. that is your bloomberg business flash. manus: i just wanted to tell you the details coming in, in terms of nestle. the sales come in at 43.2. 3.5% on their overall levels of organic sales. the margins are a little bit higher, 15.3%, versus what the market expected, 15.2%. the organic growth will be in line with 2015. pre-cash flow at 3.3 billion swiss francs. that is up some 41%. along with that, the margins. they would appear to be just a little bit better. the operating profit is $6.6 billion, versus the estimate of $5.7 billion. foreign exchange has impacted these numbers, knocked them by 2% off of their sales. i would hardly call their pricing power roaring and returning in a ramp that way, but the headline is a banner headline on missing organic sales. let's focus on japan. we had a decline in the exports, the most since 2009. let's get straight to tokyo, where we are standing by to break down the numbers. the yen is up 20% and the exports are down. so, is it a currency story or a global slowdown story? numbers,looking at the i mean, it is both of those things. global demand is obviously weak, and that is affecting shipments. it is down across the board, even places in china and the u.s., where the yen has not fallen as much as it has against the dollar, the yen strength is affecting exports. on the other hand, you can still see massive increases in tourists coming into japan. the strong currency is affecting some sectors more than others. if you look at historical numbers, japan's exports have recovered from where they were in 2009. even though the yen was weak in 2014 and 2015, export growth was not amazing. that would suggest that what is happening with the japanese exports is not totally correlated with what is happening with the yen. manus: kuroda is looking at it through the prism of the bank of japan. but it is a challenge for abe in that the exporters hold a great deal of political sway and this is the very essence of whether people will say abenomics has been a success or a failure. i mean, a stronger currency is a challenge. >> right, and we started the second quarter exports with net exports subtracting from growth. and should be big investors the economy and should be adding to japan's gdp growth and they are not doing any of those things. they are cutting jobs, not hiring new people, not investing in the nation, and not adding to the nation's growth. this is a challenge for the government, who is tried to get them to add jobs, wages, and more investment in japan. so, these numbers continue to cause a problem for the government. manus: james, thank you for breaking those numbers down. in mouhammedack choukeir. when you look at the drop from these export numbers in japan, james was saying it is a double-edged sword in terms of global growth and the yen strength. how disconcerting is it to see these numbers from japan? >> this is terrible, essentially going away from everything abenomics is trying to do, stimulate growth in japan. and kuroda has essentially chucked everything at the economy to try and stimulate it. it is not something that they have not done before and they will do it again. it is necessary. manus: i am given to understand there are constraints, limits they would be prepared to tolerate in the united states. where does that intervention trigger happen? >> in terms of levels? manus: yes. >> it is already proving to be painful. i would not be surprised if the number is around 100, or maybe down from the number. so, from that perspective, they are looking at it and thinking, "this is not a number we can tolerate." the question is, will they make a move politically? manus: when i look at the rba and new zealand, currencies are not you know, the cause and effect, those traditional relationships are no longer really holding up. i just wonder, how much impact would be intervention have? this is the fx market, almost baiting the bacnk of japan to intervene. >> there is a risk that it would not work. in essence, they have indirectly try to weaken. in the end, that has not worked. maybe a direct intervention could lead to the result we need. manus: i love this one. the international monetary fund channeling richard nixon, gerald ford, and jimmy carter. let's take a look at the wages chart we got from mohammed. this shows the underperformers of wages. wages rose by .2% at the end of march. we have not seen it break above .7% since 2003. the imf was it just that if you get an incomes policy going and intervene, tell your producers and exporters, "give the lads and lasses a pay raise." would that be radical for you? that is not the third arrow of abenomics, that is communism. >> it is intervening in the marketplace. that is something that they have pledged to do. maybe going into the wage dynamic is the next thing he needs to look at. but the bottom line for us is clearly not working. they need to do a lot more because they have got the mandate to do that. manus: wrap that up together for me. are you bailing on japan? or are you hoping they will do something right? will you allocate to japan? >> for us, the political amemics economic that arc dynamics are there. for us, there are opportunities within the japanese market against this backdrop. manus: i am finishing with this. we have less than one minute here. four of the major banks have been selling to the bank of japan. we are running against the buffers. we are maxed out. maxed out. >> this is why the central bank is is an corporate bonds. they are only using 25% of the stock market, which is astonishing. they are intervening in everything last the class, not just government bonds. manus: stay with me. we have a lot more to get into. mouhammed choukeir stays with me. up next, breaking down brexit. inflation was higher and jobless claims were lower. take a look at the u.k. retail sales. at dollar-yen is trading 100.06. this is the work. ♪ avtk"0 manus: welcome back. it is "countdown." french unemployment has come in at 9.9%. that is down from 10.1%. the unemployment change has dropped by 74,000 in france. and the unemployment rate comes in at 9.6%. so, these are dramatically better than what was in dissipated from the french in terms of unemployment numbers. some people have been using words like "stagnation with " with regards to france. you can see a definite shift in terms of these unemployment statistics. so, those are better than anticipated numbers coming through from the french statistics bureau. let's take a look at daybreak, setting up your day ahead. it is on your bloomberg. here you go. have a look at this. i love the pictures. it cannot get any clearer than that. down the middle we go. the fed, divided. the minutes from last night. a couple of voters wanted to raise rates, but there was a lack of belief that inflation was going to be facing them in the whites of the eyes. of inflation is causing them to hold back and they think if they need to act, they think they will be able to in plenty of time. we have been talking about the japanese exports for quite some time. they dropped quite aggressively into this particular set of numbers. he saw exports dropped by 14%, the most since 2009. the yen has rallied by 20%. and if you look at where th chinaey dropped the most, was down 12.7%. in europe, they declined by some 6.5%. the third part of the daybreak main headlines this morning would fall into cisco. yesterday of course, we were todlining this piece up 40,000 jobs -- 14,000 jobs to 15,000 jobs could go. this is approximately 7% of the workforce. they are expected to go. chuck robbins is the ceo of cisco. he joins the team on "bloomberg 2:30 today. minutesral reserve speculated about the rate hike in 2016. we now have the chart of the hour. yousef: leave it to the markets to change things in a dramatic fashion. we were talking about the relative strength index, showing that the em rally that might have been reaching his last phase and the market was overbought. now, put that aside with the latest fed minutes coming in. that is reporting sentiment across the board. all of this chart on your bloomberg. you have the line in blue, your emerging-market currency index. then, the yellow, our benchmark emerging market index. both have been gaining. south african rand, leading those gains on the currency front. we also saw the south korean yuan stabilize, and then have the biggest one-day drop in two months. also, the philippine peso, we had the numbers out that beat expectations. on the whole, the currency index is on track for a 1.7% month to date gain. but the question will be whether they can continue pushing forward in light of the ongoing market turbulence. manus? manus: thank you very much. what would happen to em if we got a rate hike? let's bring some of the and who can help us put a perspective around this. it is mouhammed choukeir. a relief rally likely have nothing for many years. how do you look at em in terms of allocating more? >> emerging-market equities is an undervalued as a class. there is value in the asset class. what led to it being very challenged in the last couple of years, are some of the em stories in russia, brazil, and some of the headwinds around higher rates in the u.s. this rally is now starting to realize the value that exists with any emerging markets. whether it is turkey going into a tailspin or brazil with its impeachment process, politics is always surrounding the story. if the fed goes for the hike, and bullard seems to be the fresher opinion, so to speak. what would that do to em? is it really shift the dial? >> so, the expectations of a rate hike two years ago would have created huge levels in emerging markets. today, there is a huge surprise because people are expecting it at some point, whether it is this year or early next year. the expectation is now there. it is now a question of the value in the underlying market. manus: let's switch our attention to u.s. equities. we just popped up over 50%. we have dropped back since then. i think that one might possibly be just a little bit of a fresher version of that. fundserm equity hedge are the most bullish. 22.7%, the is higher than what we have seen for a while. do you love this rally in the u.s. equities as the long short hedge funds? u.s. equity fund is an attractive place to be for multiple reasons. it is counter to what you see from the hedge fund positioning. if you look at analyst expectations for earnings, they have been pretty battered over the last couple quarters. it is going to be skewed, at least in terms of probability to the upside. that continues to be the case going forward. there is too much pessimism surrounding earnings. manus: yes, too much pessimism surrounding earnings. i look at 78% on the profit projections and 58% on the sales. what change is here? surely, i would love to see that switch. aggregate, the big sector that will ship that is the oil sector, or the energy sector. for now, we can see a stabilization. we have seen a strong rally in the last couple weeks. manus: will that rally hold? >> they could see to it self. there are moves in saudi arabia and the u.s., creating stability. they could stabilize at these levels. manus: the unemployment rate in france has dropped to the lowest level in all must four years. -- in almost four years. this is quite impressive. that is pretty stunning for the second quarter. this is telling me something i did not quite expect to come from france. the european equity markets theever, are not exactly favorite for global investors. could this activity be sustained? >> yes, we are seeing improvement in the unemployment picture in france. but that the unemployment rate in france. if this continues and we see other strong data across the european continent, then european equities could sustain a good rally, especially given that they are undervalued right now. manus: the other market that one analysts are saying could cause one of the biggest political risks is in italy. i am curious to that your thoughts. we are paying heavy and hard to protect ourselves in italy. it is costing us the most for those three-month options versus the one-month options. how do you look at political risk in europe? unemployment is improving and france. >> the political risk in italy is quite high. it is not just the constitutional referendum later in the year. if one of these banks, which are very fragile, fail, there could because the glances on the ground. that could cause some for the reports across the continent. but a lot of that is in the price, especially in european banking stocks. a lot of the is expected. it could be skewed for a positive surprise, rather than a negative one. manus: i will take a positive surprise from anybody that wants to give me one. stick around. it has been a week of mixed post brexit data. u.k. inflation, that moved a little bit higher. today, we will discover retail sales are defying the shock of the eu referendum when the data hits the tape at 9:30. also, we will get an account of the ecb's july monetary policy meeting. so, let's start this conversation with the pound and with brexit. wondering,'m just is there anything out there that can turn the pound around? i want to show you this chart because it reflects back to yesterday when we had the unemployment data. and we had a little sort of a squeeze back above the 13.2 30 level. but the question is this, retail sales, it is only beginning. it is only the start of pressure in the u k, isn't it? >> yes, and when you look at the behavior and the pound, you can expect over the next 12 months, if negotiations turn sour, you will see a big drop from 1.30 down to 1.20, or even further. nestled take place very slowly because it is on the backside of other data -- this will take place very slowly because it is on the backside of other data. this is essentially what we are starting to see in the behavior since the brexit referendum. manus: there is another cracking piece on the brexit today and this is the ftse 100. this is the record we set back there on the far left. we have had a few dips and tragic moments. the pound is down. we are a couple percent away from that record high. piece on technician the bluebird this morning, the market sniper. he is standing against the crowd and he says the ftse will travel 7300, the direction of travel. you will get in there by 2017. asian major analysts say the ftse 100 will fall by near 9% by the end of this year. bullish on ftse? >> we are contrarian in our approach. we would say actually, there is a strong chance that the ftse 100 continues to rally from here. we are not overly bullish on equities in general, but we still think there is value for medium to long-term investors. so, from that perspective, we have a sizable position in the u.k. equity market. manus: where do you favor the most in terms of the u.k.? is it all about currency related exposure stocks? or, is it more export-bases stocks? how do a look at the biggest opportunity? >> for us, it is essentially looking at cash generative sectors or companies that are trading at attractive valuations. from that perspective, there is still plenty of value in the economy. the exporters will benefit from that perspective. we have some exposure to some of the energy and industrial speaking,ut probably it is essentially focusing on cash generative methods. manus: a couple of things have come out in the last 24 hours. albeit, 40 protesters outside the bank of england saying, "stop this qe, it is damaging us." the bank of japan, running into bondss of the available that are available to them. structurally in the market in the u.k., what are people saying to you about the limitations of the trifecta of the policy we have at the moment, which is corporate bonds, qe, and rates? are we at risk in the u.k. of leading a structural buffer? >> the quantitative easing, or the policies put forward by the central banks, are getting much more limited in terms of impact. now, the focus has shifted to the fiscal authority to take some action. or, if you want to take it back to the monetary policy, the earnings will left to them is helicopter money. that is highly political. manus: what is that mean in the u.k.? -- what does that mean in the u.k.? what that or could that be? we know mark carney is a man at the moment, adverse to subzero. >> sure, helicopter money is essentially putting money in people's pockets so they can spend it. rather than indirectly lowering the rates of borrowing so people are incentivized to borrow, you essentially say, "here is the money, go spend it." but that has risk because we have seen in history that too much money can lead to high inflation. but that is all that is left for them. manus: it is interesting, that a to spending money is a demographic challenge. in japan, the kickback against negative rates. here in the u.k., we are next in terms of the fiscal response from hammond. could that be in some form of personal taxation relief? we are looking for a reset from this chancellor. i am just wondering, the magnitude of that reset. what is it take? >> i would not be surprised if there was a big reversal and the policy in the u.k. this will have implications across the economy and we could actually see it turn the other way, especially in the backdrop of the negotiations around the brexit, which is fiscal easing. but there is this period of, l et's begin see what data comes out over the next couple of months. if things are not as bad as people anticipated, perhaps they will not have to do much. manus: thank you very much, mouhammed choukeir. "countdown," nestle misses the estimates on sales growth. and the fed minutes show they were divided on the views of raising rates. we will hear from james bullard. and the yen puts pressure on japan's exports. we are live from tokyo as the trade slump deepens. this is bloomberg. ♪ manus: it is the city that never sleeps. it is 1:49 a.m. in new york. the features are unchanged, but still, a divided fed. better bids and the dollar offered. donald trump shook up his campaign leadership yesterday wi. for that and more, let's hear from bloomberg's alex len. alex: donald trump made wholesale changes to the top of his campaign wednesday, pointing the consecutive chairman of the conservative website, and kelly m conway to campaign manager. his latest scramble of campaign leadership comes as polls show him sinking further behind hillary clinton, including in florida. paul manafort will retain his you try to tone down the bond that -- but he tried to tone down the bombastic candidate. declared, "there is no new donald trump." trump is losing support within investors. people in the market shows trump over clinton, down from a 53% advantage. in a bloomberg news story, we found that hillary clinton would greatly benefit from donald trump's tax plan, which would have cut her irs plan in half. americansagain, that often vote against their own economic interests. manus: a great piece there. let's get the business flash. rosalind chin is with us today. rosalind: cisco will a 5500 positions, 7% of its workforce. the ceo says they are moving away from traditional hardware, . they will invest in new technologies, such as cloud computing. allianz and axa are speaking about $40 million for exclusive access in a deal that aims to complete their ends. they both declined to,. -- both declined to comment. a surge in, and advertising helped profits beat analyst expectations last quarter. the sales price was enough to move ahead of alibaba on market value. posted ao first-quarter profit that exceeded estimates, but that came on the back of cost cuts and asset sales. the ceo says it expects its smartphone business to turn a corner over the next fiscal year as it shifts to hirgher end devices and has a larger market in the u.s. and china. manus: thank you. food for thought, at nestle, the swiss group reported that it has been battling inflationary pressures across the eu. the world's biggest food group did confirm its 2016 forecast. duncan fox joins me now. so, first-quarter -- sorry, first question i have to ask. have been recovered in any way, the noodles? >> yes, it looks like they are back. they had the problem in india and it took 5.3% off the overall growth the first year. so, it is very important that this brand is back where it should be. manus: so, that is rightsizing themselves. when i look at those numbers, the slowest growth since 2009, you said it is all rather uninspiring. >> very much so. is in slightly are battling deflation in the developed world. it is a bit of a balance. 2.5%.lumes are just dull, that is not what you would expect from a company like nestle. you'd expected to be better than that. manus: is this a company that is almost in the waiting room for revival? paul schneider has yet to sit down. he comes from an external hire. is that what we have got here? organic sales, which as you say, were uninspiring. we just in a waiting game? >> probably a little bit in the short-term. i don't think any food company has really shut the lights out because of the flesh and anywhere in the world. -- really shut the lights out because of deflation anywhere in the world. i don't think they will be major changes, but there will be tweaks. health and nutrition is nestle's tagline, so i suspect there will be a shift in direction towards that. manus: the u.s. is almost 1/3 of their business. is that back on track? >> it is improving. i am not sure it is beating the market growth rate, but it was way behind. they have reinvested in the business and it is starting to improve. areasose two key business that were problems for them, they are improving. manus: i suppose the key question, is this the strategy that you would think schneider employ? what is the most radical thing you have heard from the analyst community? >> most radical would be that probably, we would sell the stake and then do a big acquisition for johnson and johnson baby food. tous: analysts love speculate. >> it is obviously being bid for. manus: let's see what he delivers. thank you for the latest on nestle, with the slowest sales growth since 2009. buy your milk thky bars! oene and done. james bullard says one rate hike is all that is needed for 2016. that is what is coming up next. this is bloomberg. the shanghai composite is down by one .8%. -- by 1.8%. the dollarw 100 with for the third time since the brexit. ♪ ,l manus: officials were split in july i went to raise rates. we'll hear from james bullard. exports dropped for the 10th straight month in the biggest decline since 2009. to kicks offtried growth? nestle comes up short. reporting the slowest first-half years.rowth in seven you're welcome to countdown this thursday morning. i am manus cranny. we are waiting for the numbers to come through from kingfisher. we willas we get that bring that to you. let's have a look at equity futures. we're looking at the fed is divided. they are not sure if they should be that concerned about inflation. and concerned about global aspects such as brexit. equity futures are good. the yen is rallying and we have broken 102 the doctor -- the dollar. -- 100 to the dollar. total sales for the second quarter come in at 3 billion pounds. so that is the top headline from kingfisher. sales were up 3%. seems to be a little bit of a trend, no one is moving, no one is buying. there is list of moving and buying and more people doing their home improvements. you also have a red headline coming across the bloomberg terminal. this is standard bank, headline earnings rise 5%. in round terms, 10.9 billion. standard tank sees -- bank sees their earnings rise by 5%, 10 point 9 billion. going back to kingfisher, they have completed the sale of the qmaining 30% of the the and -- b and q. 4%.l sales at eight point the market had estimated 6.4%. those are your breaking news. let's have a look. -- wed is divided, the have not seen this run of losses on the dollar now since the end of july. is the more up-to-date perspective, it is a richer because -- retrospective group of minutes or is it deadly and closer. that we are who trumps who? minutes trumps deadly guest deadly trumps bullard. the dollar is off a quarter of 1%. that is more to do with the yen strength which is there in the markets, it is pre-much -- pretty much on. you are looking at a nice set of 1.7% predicated on the view of an easier fed [indiscernible] have a look. youths are lower, u.s. equity teachers -- futures are bid. german government bonds are negative .05%. we will get an update on the thinking of the ecb later on the day. rosalynn.ack to >> and a payment rate has dropped to its lowest level in four years. -- the unemployment rate has dropped to its lowest level in four years in france. the fed last meeting reinforced speculation that interest rates would stay lower for longer. officials were divided in july over the urgency -- over the hike. inflation remains and others want to go as soon as the labor market nears full employment. japan's july exports dropped 14% , the biggest decline since 2009 and marks the 10th consecutive month of shipments falling. chinese home price games have cooled for the month of july. prices rose versus 55 in june. that is joining some of the largest hubs and tackling soaring real estate values. australia's jobless rate dropped in july. on implement fell to 5.8%. that does -- the aussie dollar gained on the news. the head of ireland plus national olympic body was arrested for allegedly scalping tickets. arrested following a wider investigation into ticket sales. he was stepping down from all his roles in sports temporarily. powered by more than 2600 journalists, analysts, and more than 120 countries. this is bloomberg. s: juliet, dollar yen is where we are fixated here as london picks up. how is it on the equity story for you? juliet: a reversal of what we saw yesterday when they yen was retreating, this strong surge pushing back that 100 to the dollar level has said japanese equities down by 1.5%, the nikkei losing at that level. as you would expect, very weak movement coming through. dropping 14%,ts that was their biggest fall since 2009. a reversal of what we saw in the japanese equity market yesterday. that of analysts saying when is the bank of japan going to start to intervene? there was talk it would step in at 105 and the yen is searching -- surging past that level. and down by half 1%. another good day and new zealand, closing by 1%. still two hours of trade in hong kong but we are seeing some very solid moves. stocks on track to close at their highest levels since october. this is in response to some very solid earnings from some of the l whether companies in hong kong including tencent which has surged to a record high of by 5.6% in late trade. a little bit of a switch up of the asian market in late trade and i want to show you the very solid move we are seeing in the aussie dollar today. a response to that drop in unemployment up 7/10 of 1%. strengthen the japanese yen also the aussie dollar weakness in those markets today. thank you. that was the latest. the dollar have been dashed. there was a divisions of use over the timing of the next rate hike. just before those minutes were released, st. louis fed president james bullard stuck to his view that one move, that is all that is needed through the 2018. >> real gdp growth would just be about 2%. the on implement rate would stay about where it is. 4.9%. we have it at 4.7% over the next two and a half years. -- pcim mean pcn friction inflation rate, that would be up 2% over the horizon and the policy rate would have to be only 60 aces points over this 2.5 year horizon. nelson.et's bring in they had of equity strategy at ubs. we do not need any more rate hikes. the fed is divided. bullard is knocking it into the long grass. who do i focus in on more? >> you have to focus in on the data, that is what i would look at because that is will -- what will change the views. we have the election coming out of november so that complicates it as well. our view amongst our [indiscernible] is they will move in december at the end of the year because we do see the labor market tightening. it is not just the unemployment rate, it is the labor force participation rate which is one of the reasons [indiscernible] average earnings up 2% steadily. that is starting to show a little bit of tightness. manus: part of what they estimated in the minutes is we are worried about the longer-term and we are not that stressed about inflation just yet. it is a 50-50 coin toss in terms of wirp. we are over at the 50% level. the -- and you have 10 year government bond yields. just trading sideways, if you really want to be generous to the market at all. with the hike in december let's say we played out till then according to the ubs strategy card. do i go back to 2%? back veryt is moving quickly. you can see there if you go back to june we were down 10% around the u.k. referendum. this can move very quickly in terms of the probabilities. if you think about this global shock, this is something that has been allen saying what is happening in china and europe. and then of course we will have to consider the politics domestically as well. manus: can i ask you if you would be an advocate of, if we go for rate hike in december, the dollar is much better off, where does that put you in terms of your perspective for u.s. exposure relative to the u.k., relative to europe, relative to em? guest: the euro might strengthen about 1150116. people have in wrongfooted, everyone wanted to be bearish and that is not the case. the growth differential if you look like -- at things like relative pmi and between the eurozone in the u.s., it is coming back -- together for the first time in a while. we would see exposure for european countries if you're looking at european equities, we have been whining to buy exposure to emerging markets because that is where you are starting to see a turn. it is roundabout the end of the first quarter companies in europe with high em exposure start to get relative earnings and upgrades for the first time after 35 months in a row of down grew -- down growth. it is a shift. manus: you can hear the shock in my voice, the lowest unemployment rate in four years. that was quite a bullish number. guest: i think the eurozone is doing ok. it is steadily moving along quite nicely. that is key one. when the markets hit the low we were worried about china hard landing and chinese bank debt, what about the u.s. going into recession, all those concerns. q1 gdp in eurozone had to revise andnumbers up and the pmi's the economic indicators have been steady. europe is staying ok. it is not great, maybe 1%, 1.5 percent growth rates but it is not collapsing. all the stimulus is feeding through two slightly better data. dynamic,e other inflation or the lack thereof. that comes through through the next numbers we have -- the nestle numbers. a look at those, the slowest sales since 2009. if you want to think about it that is a personification of the global challenge. it does not paint a trend amend this -- a tremendously optimistic picture in terms of the inflation story. guest: it is true. well focus on what is the topline growth, what is the earnings growth and we forget that is nominal. no one says what is nestle's numbers in real-time. always looking at nominal. what we are seeing now is the fact that we are living with this globally low-inflation and in the eurozone has been for some time close to zero or partly negative on the numbers. this has been problematic for companies which is why when you look at margins, you look at margins, they are where they were in 2008, 2009. they cannot improve margins if there is no topline growth. manus: many people are saying and we will talk more about this in the japanese context when i am back is that comes down to a fiscal reset globally. guest: that is the thing. we have gone pretty far with monetary policy, maybe to the limits depending on which view you take and this goal interest. look at the eurozone. this is the first time in six .ears we have fiscal easing we are moving a little bit away. markets have tightened ahead of the fed who says the market cannot get ahead of the fed. japanese exporters are feeling the pain of the strong yen. how can the world third-biggest economy stand months of declines? we take a closer look. this is bloomberg. ♪ manus: it is the city that never sleeps. it has gone to 17 a.m. in new york. it is 7:17 a.m. in the city of london. we are wide-awake. higher? the fed is divided. is a street, is a good for equities -- easy street, is a goo it's good for equities? >> nestle has reported the slowest sales growth since 2009. missing analyst estimates. that is the world's biggest food company struggled to raise prices in the face of deflation spreading across europe. cisco will illuminate 5500 positions, 7% of its workforce. it is moving away from traditional hardware. savings from the job reductions will be invested in newer businesses that they expect to fuel sales growth such as cloud computing. check robbins will be on bloomberg at 2:30 p.m. u.k. time. shares in $.10 hit a fresh record high in hong kong trade. beat analyst expectations last quarter. take it pastgh to alibaba. the ceo expects this lossmaking smartphone business to turn the corner as it shifts toward higher-end devices and wraps up -- ramps up marketing in the u.s. and china. manus: thank you. japan's july exports have fallen by the most since 2009. shipments were down for the 10th consecutive month. let's get to tokyo. just how bad was this report? brian: we have seen in recent quarters that domestic demand has been very weak. we have seen fallen as companies can see their domestic markets shrink along with the shrinking population. hustled spending has been week because wages have not gone anywhere. now 10 straight months of decline in external demand is weak. we are heading by all sides in terms of the economy. the one thing the minister has is public investment and that has been robust and we expect that to continue thanks to the fiscal stimulus hot -- package. he has to act to take it from there. manus: what about the stronger yen? it is make -- making life difficult. up 20% on the year. is it a moreat or global slowdown story? guest: first of all it is pretty likeex because households the strong yen. we know they do not want to see inflation despite what the boj says. it keeps a cap on fuel prices as well. there are a lot of people who actually kind of like it. how strong is the yen right now? credit suisse put out a research report saying fair value is 99.7 which is where we are right now. we did have the vice finance minister come out and give a very mild dose of verbal intervention. he said if forex moves become too volatile that the finance ministry stands ready to act. even with the yen rising recently it has been a very steady, calm increase so anything but volatile. people in the market now are saying probably no action unless the dollar falls to around ¥95. we might see the boj step in and start selling the yen and buying dollars. manus: let's see when and if that moment of intervention arrives. thank you very much. nelson is the head of european equity strategy at ubs still with us. look at the export numbers. fairly tragic in itself but if i look at it from the broader perspective and we touched on this earlier, the fiscal responses the lever everyone expands. is that the best case scenario? can look at japan and the ecb together here. it is the negative rates and the impact we have seen on banks. feel to me that the difficulty we are getting and you could say the same in europe, the economy is getting weaker, therefore we will pull this big red lever which is more negative rates, that will be a problem for the banks, that might mean it titans and the economy gets weaker. seems to be not necessarily that helpful from that particular channel. when you look at the fiscal and you brought it out and think about japan moving that way the u.k., we have not seen the detail but it seems to be the case we are moving away from some of the targets on fiscal austerity. you look at the eurozone with elections next year in france and germany and holland and other places. that brings you to the fact the fact that maybe these politicians might want to start easing the purse strings a little bit to get growth going. manus: does that shift the dial in terms of allocation for you, do you go for the big based of potential benefits of the fiscal lever? >> it could be infrastructure or cement or building materials. those are some of the areas which we think could be interesting, we are overweight construction. we think those guys could be beneficiaries. it is not necessarily going to get global growth moving dramatically. it might just offset -- they have long lead times. the government has improved the project -- of the projects. plan andat the yunker that has been on the ledgers for a while. it has taken a long time to come through. eventually they spend the money and you get the benefit. manus: i want to show you this chart. three-month protection on your positions so you are paying up large. three-month options on the footsie -- ftse. they are the cheapest relative to the stoxx 600 in four years. this, citigroup says, italy is one of the biggest risks on the market landscape. brexit, this to plebiscite we have in the autumn time, would you benchmark it at that level of risk? guest: when you look at the problems in europe, spending around the banks and the -- you can focus on the italian banks and we saw the stress tests from the ecb being released now because we know there is no -- there is information involved but it was clearly some of the italian banks where there were more issues than a be in other parts of europe. the question marks are around that, you have the complexity of the banks. renzi has put himself behind and worrying foreign investors. u.s. investors have been egg sellers of european equities -- big sellers of european equities since we have seen this referendum and before that. they have exhilarated they're selling into what has been concerns about the u.k. referendum, politics and europe and banks in europe. those are probably their big concerns. a sense that get can continue? the other day we did a headline, it is up here today. does the dax -- does germany again stand out as a vanguard relative to the rest of its peers? 2.2% on the year. guest: germany is not italy. you have the contrast. you have a situation where massive exports, the stock markets are export driven. point we --o them the we made earlier. we saw him ask exposures change with a drag -- from a drag on companies to being a boost. fiscalis there the big response and whether cement is sexy. joining us this morning on countdown. next it is guy johnson and caroline hyde joining in conversation with jan and henry -- janet henry. equity markets are higher this morning. ♪ guy: welcome to "on the move." we are counting you down to the european open. here's what we're watching. divided and confused. investors take a dovish cue. will janet yellen change the tone at jackson hole? japanese exports plunge 14% as the yen flexes through 100 against the dollar. when does the boj move