economy stuck on hold, inflation sliding, unemployment unchanged, but a slight uptick when it comes to business sentiment. willsia airlines new ceo step up in the middle of a restructuring after the twin disasters of 2014. do let us know what you think of our top stories. follow me on twitter at that hashtagse #trendingbusiness. let's get straight over to steve for the latest. we are having a continuation shaped recovery in china. 50.0 is the line between ,xpansion and contraction optimism and pessimism. it is still on the borderline. month,50.1 the previous so a tenuous recovery at best. services outperforming expectations, nonmanufacturing pmi at 53.7. the previous month was 53.1. 53.7 is a robust number for it has been the strength of this economy. banking, telecoms, new technology, while the older economy, coal and steel production, traditionally manufacturing, they have been struggling. with this recovery, we have seen the sub indices show some weakness, especially on the jobs front. that is what we will have to dig into. we will see whether hiring will be picking up. months, hiring was tepid because of the stuttering pace of the chinese economy. recapping, official pmi for manufacturing coming in at 50.0, in line with expectations. it is the fourth consecutive month of 50 or above. get pmi for services and manufacturing and about 45 minutes. that represents smaller, private sector enterprises. rishaad: thanks for that. right, shenzhen and shanghai coming online in 28 minutes. no trading in hong kong, establishment day. we are having a look at reaction to that number out of china. aidi: it is something of proxy in absence of the chinese market being open. very sensitive to happenings in the chinese economy, not much movement, a bit of an uptick for the aussie dollar. it is up about 3% in june despite that brexit selloff in the last few days. aussie dollar holding steady, as is the chinese manufacturing gauge. take a look at the yen, starting to strengthen again in the friday session. 102, some stability and risk by yesterday, but we did have that survey that was surprisingly up beat given it covered a time of in or miss, but inflation numbers showing pressures continue to travel sideways. thet of questions over what boj can do next. broaderok at the markets, singapore, malaysia, and taiwan. very strong rally coming through, a recovery rally being extended. the nikkei 225 up by 7/10 of 1%. austrian shares close to session highs ahead of the elections tomorrow. keeping and i on what happens. there is an expectation that if we stay with the status quo, then the liberal party prevails. this is what we're seeing, gold miners extending gains for a third session. -- thereis still some is still some safe haven demand. some of these commodities names doing very well in the australian session. beach energy one of the top decliners. is up, southeast asian markets turning a little by .2 5%.taiwan up there is some optimism for increased forms of easing in europe. the ecb is considering loosening rules on bond purchases. mark carney speaking yesterday, oversting easing will come the next couple of months, but the focus is digesting those numbers out of china here. rishaad: thank you. japan releasing a list of data as well. david is having a close look. this: let's start with indicator out of japan. pages back to back, you can get it on the website of the , at sense ofpanies what business conditions are like. it is better compared to the first quarter, not quite to the levels of last year. than expectations, in line with the first quarter when you look at the large manufactures index, which covers 1100 companies. takeaways, exchange rate assumptions could be the hind -- behind. 111.41. was 117, and we do understand some companies are budgeting at 105. 6.2% rising.diture small manufactures index falls. japan arestries in enjoying a better outlook? have a look at some of these sectors with highest business confidence. i won't go through each one, but to summarize, services sectors are doing better than manufactures, large companies are doing better than smaller companies. is that now the thing we have had inflation data, and no improvement to speak of. it's not going in the boj's direction, is it? david: it's not. the target is 2%, and it is going in the opposite way, the third month in a row that youation has fallen when strip out the sales tax and the effects of fresh foods. -.4%. looking at it is worse compared to the first quarter -- april, rather. my mistake. to put that into context, it is not all that bad because you have the jobless rate, 20 year low. full employment at these current wage levels, but that being said, you're not getting the wage increases ideally. prices are falling, so sweet spot, if you will. much.d: thank you very we will be looking at that story throughout the show. tweet us your thoughts at @rishaadtv, include #trendingbusiness. some other stories we are watching for you today. rosalind: the u.k. could see rate cuts in the coming months. with the u.k. reeling from market turmoil and political of people since voting to leave the european union, mark carney said the u.k. economic outlook has deteriorated and policy easing will be likely needed over the summer. he said officials will not hesitate to act to stabilize the economy, but warned that there are limits to what can be done with monetary policy. >> monetary policy cannot immediately are fully offset the economic implications of a large negative shock. the future potential of this economy and its implications for jobs, wages, and wealth are not the gifts of monetary policy makers. these fundamentals will be driven by much bigger decisions by much bigger plans that are being formulated by others. takata tumbling after u.s. regulators warned that 300,000 vehicles from 2001-2003 should have airbags replaced immediately. tests show faulty in fighters have a far greater chance of rupturing. wereodels affected recalled between 2008-2 thousand 11, and 70% replace. ta has recalled more than 1000 cars around the world whose airbags can explode violently, sending shrapnel into the cabin. gearing up for what could be the biggest ipo in two years, sources say the bank could do so by september. the bank has more branches than any other chinese lender. china postal could raise $8 billion, the biggest ipo since alibaba in 2014. rishaad: thank you very much. looking ahead on the show, mixed martial arts is one of the fastest-growing sports in the world. our next guest is telling us about the latest pmi numbers and what it says about china's attempts rebalance its economy. ♪ >> welcome back. first word headlines. britain's political drama has turn an unexpected page. boris johnson ruling himself out of the race to be prime minister. to replace been seen david cameron, but said he is not the man to unite the country. has thrown his hat into the ring. he said the u.k. will prosper now after leaving the european union. taking for responsibility for a toxic leak from a still plant that killed millions of fish along vietnam's goes. ask forrman of formosa forgiveness and a recording. the company agreed to pay $500 million in compensation. fish over the dead triggered protests, saying vietnam should choose between their seafood industry and the steel plant. to buyould be in talks title music. -- tidal music. talks are ongoing, but a deal is uncertain. sides a spokesperson is anger talks have not been held at apple. comes as apple recently revamped its subscription music service. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: right, having a look at this data earlier, china's main factory gauge, 54 the fourth straight month. let's analyze the figure. number that shows we are not expanding or contracting, right there in the middle of all that. what did you make of this and what does it tell you essentially? >> it means that things are still holding up. that, i think, is a reassuring message for the market. there has been some concerns a mini are going to have cycle where things start to deteriorate, but so far that has not happened. that is because we are getting more fiscal stimulus this year compared with last year. stickierimulus is because a bigger budget deficit and bond issuance. rishaad: we'll get another version of this and about -- in about half an hour. that is showing contraction. is it a good thing that it shows contraction? isn't it playing into what the government wants? as we see with the numbers when it comes to the producer price figures, which have been in recessionary terrain for 48 rid of they need to get inventory overhang and excess capacity as well. ofthere is an element downward pressures on growth because of the restructuring they are doing. last week, they announced another big restructuring for two big steel companies, both state owned companies. that will weigh on growth. an element of poor global demand, and that is not changing anytime soon from here. right, they justified the use of more fiscal stimulus, at least in the near term. rishaad: many people have talked about the shockwave from ittain's vote, and that hasn't killed some central banks to cut rates. why doesn't the pboc do something on the monetary side? will.think they we are looking for more rate cuts this year. this point int at time to exactly quantify the impact of brexit. things are still so much in flux, but i think it is fair to the longer uncertainty drags on, the worse it will be for business sentiment. worserse it gets, the investment will be, mattering a lot for asian exports as a whole. there are these potential risks that we don't now -- know how to quantify just yet. act, thenc wants to they should ease policy. rishaad: what did the data tell us now? we look at nonmanufacturing pmi, the service side, argue arguably closer than the manufacturing one. >> that is a fair point. if you look at services sector , it seems like there are some downward pressures there as well. you should not be completely surprise. overall, economic activity is a mixed bag. we still have these downside risks you need to protect the economy from. even from a services perspective, if we are not -- we are not completely out of the woods yet. rishaad: you can be an absolute cynic about the data that comes out of china, right? even if you are, you will get conflicting signs. we have the beige book the other day, and the manufacturing pmi today, inflation numbers -- they don't paint a unified picture, do they? >> it is a huge economy, right? there is the cyclical side, restructuring of the therecturing sector, and are some green shoots in the economy, but others may not recover in the next few years. on the whole, we are seeing a mixed bag. i think sentiment is quite any goodso i can't see justification for dialing back stimulus just yet it does not mean they should just use stimulus. the restructuring and reforms are also important. rishaad: also, private investment. that is not going well. that is one of the reasons why the economy is not getting traction. you look at private investment, there are two big factors behind the decline from 10% last year to 1% this year. the first is the manufacturing ,ector is not doing well special equipment, electronics, can indications equipment, that is a problem for asia as a whole. has anufacturing sector dominant position in this part of the economy, so that is not doing well. the other driver for the decline is that we have previously some so-called quasi-fiscal investment which the governments are supposedly responsible for, but they get financed on the private side in the form of private business, and this is now getting financed officially on the fiscal book, so they shifted to public-sector investment. is another factor that contributes something like a third of the overall decline. duel, that leaves the rest to cyclical factors. rishaad: as you mentioned, structural problems. our structural reforms taking place in a meaningful way now? balance.a tough on one hand, china once to grow. on the other hand, they want to contain the risks from leverage. i think that what this means is they have to take a gradual approach. taking an active approach, exposing banks'bad debt, doing restructuring. this is going to be a 3-5 your quickut, and it is not as as a solution, but i think it allows them control and allows them to get stability, which is another important objective for beijing. rishaad: thank you so much for coming in. malaysian airlines third ceo in two years. we would hear about his turnaround strategy. ♪ airlines willsia have a third chief executive in two years. peter bellew will assume the top job after two disasters in 2014. ?hat does this mean they are right in the middle of this huge restructuring, aren't they? it's good news for the carrier in the midst of a so expect himn, to execute the rest of the restructuring put in place by the outgoing ceo. he has already cut thousands of jobs, cut a, scrapped long-haul destinations. the goal is to revive the carrier, which was racking up losses before the two plane crashes. said malaysia air is on track to return to profitability, so it is now up to him to get to the finish line. appointment is significant. he is a foreigner. reports have suggested that there were calls for a malaysian ceo. that is not to be. he is the man who will steer the carrier forward. rishaad: has he ever run an airline before? >> that's right. that's pricey -- precisely why some in the market are concerned. he has never run an airline as a ceo. he has 20 years in the aviation industry. directorth ryan hair, of flight operations, overseeing more than 300 planes. director ofmanaging an airport in ireland. he is familiar with the turnaround plan. so let's see if he is the right man. rishaad: thanks a lot for that. china's postal savings bank and what could be the biggest ipo since alibaba. that, and alsoat having a look at what is going on with the markets, a public holiday in hong kong, but we do have business as usual across most of the asia-pacific, shanghai, and shenzhen. it is back to business and about 2-3 minutes. ♪ get ready for the rio olympic games by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. ♪ rishaad: a look at our top stories, china's manufacturing treading water, the pmi fell to 50, the dividing line between improvement and deterioration. as for the services side, continued improvement. the official cage rising to 53.7. asian shares continue the global equity rebound, almost where they were before the brexit plunge. heading for its biggest weekly gain since april. the latest economic data from japan underscoring the challenge the prime minister faces convincing workers -- voters -- that his policies are working. consumer prices on the way down and household spending declines, all undermining efforts to revitalize the world's third-biggest economy. corporate confidence and unemployment remain unchanged. some breaking news out of south the nikkei manufacturing pmi data coming through. it was 50.1 in may. 50.5 in june, showing expansion. get reaction of that, but let's have a look at the open in shanghai. there's no doubt about it, it is central-bank rhetoric helping to underpin this extended rally. is nothingis morning to write home about, inflationary pressures in japan, a survey surprisingly better than expected. had south korean trade numbers showing some hang onation, that pmi onectations -- bang expectations. shanghai opens up 10th of 1%. the nikkei 225 up over 1%, leading gains. a little bit of weakness from southeast asia. that china open, we will be set a littleyuan, bit weaker today, the pboc moving things around when it comes to the yuan. down by 3%, a huge move for the chinese currency. techn stocks up, led by names, tracking gains in the u.s. session overnight in terms of the regional look, a regional rally extended, up for tens of 1% for the msci asia-pacific. sectors oil and gas, crude searching for the third day, gold advancing. oil prices seeing the best quarter since 2009. financials up by close to 1%, consumer names as well, and industrial metals tracking gains overnight. beenurrency space, we have watching dollar-yen closely given the data delusion coming through from tokyo this morning. it hasn't moved too much, but strengthening just a little bit. we have fallen under that 103 handle. what a month it has been for the yen. it had the biggest gain in that month since february, up 6.8% against the dollar. the biggest gainer against the pound. a quick look at the aussie dollar and reaction to that chinese data, still not moving very much. the aussie also seeing gains of 3% in last month. rishaad: thanks. right, our top story, fresh economic data will make a grim reading for japan's prime minister with a week to go before an election. way down,rices on the deflationary terrain, household spending declining as well. there could be some light at the end of the tunnel, some confidence in manufacturing. this is mostly bad news, was in it, with at least one ray of sunshine perhaps. >> yes, mostly worrisome news. down, therices were core consumer prices, excluding fresh food, they were down after being down in the previous two months. the survey of business butidence did hold steady, 95% of those responses came in before the brexit vote, so it is hard to see that will likely hold up. that is a quarterly survey. thing that continues to be good as the labor market, unemployment held steady at 3.2%. there is a very tight labor market. what does this tell us about the likely responses from the bank of japan? the drumbeat for easing is increasing. there is a meeting late in july, and the economists we were speaking to this morning said they think easing is very likely now, much more likely given the surprise trend is not showing any gains. prices are where they were when governor corroded began his easing campaign in april 2013, so there is no price gain here. with the stronger yen in recent anths, and in particular percent in the last month, you start to see the effects, the benefits of that week yen policy that had been flowing through two exporters. those are starting to abate as well. there is a lot of pressure on the boj this month. does any of this look like it will turn around soon? that is the thing here, isn't it? >> yeah, that's the question, what can happen. the economists we were speaking to said they don't see a driver for growth here. yencially with the strong really affecting exporters, so they don't see this happening again. that's why we will see pressure on the boj and the prime withter's administration the election and the aftermath of the election, where it looks like his party will profile -- avail. rishaad: thanks. let's check some other stories, oracle order to pay $3 billion after a jury found they failed to comply with a 2012 court order. it decided to bail out. oracle said it will appeal against the verdict. rio tinto giving away at stake in a pop in new guinea project. transferring its 54% holding to an independent trustee for no consideration. shutteredas been since 1989 because of local unrest. sell threereed to ball carriers to a consortium led by china. the ships are expected to be delivered in august. the consortium includes icbc. cdc. sources say postal savings bank of china is preparing for an initial public offering that may be the biggest one since alibaba. what are the numbers here? rosalind: it could be worth about $8 billion. was $2514, alibaba billion, so quite a big difference. in some ways how lackluster the market has been. sources have told bloomberg that china postal savings bank has filed an application to list in hong kong. is pretty widespread in china, more branches than any chinese lender. of 17%,o at stake raising $6.8 billion. investors were institutions like j.p. morgan chase, ubs, and the canadian pension plan. rishaad: you mentioned it has been lackluster. how bad is it? has beenquarter described as the slowest environment for globalized ipos. second quarter did warm up a little bit, some billion dollar plus ipos coming in. so things do seem to be an proving. isever, deloitte said it revising down projections for 200 billion kong to hong kong dollars, $26 million. at the end of march, it had forecast more than $33 billion. so it is saying that that number will decrease in the months to come. however, they are saying there possibility that companies could continue to turn to hong kong for ipos because of the backlog in applications on the mainland. rishaad: right, let's talk about what we have coming up next. packing a punch, the company promoting mixed martial arts across asia. ♪ >> it is 9:44 a.m. in hong kong. these are your latest first word headlines. hong kong marking the anniversary of its return to chinese rule. pro-democracy groups have promised demonstration today. the are unhappy about candidates to succeed being put forth by china. u.s. auto sector enjoyed record sales last year, but 2016 may not be as smooth a ride. analysts are backing off forecasts as brexit may compound the chance of a slowdown. most are expected to see year-to-year gains, honda taking a lead with a jump of 9%. sales are expected to fall at general motors. now set gearing up for a close encounter. be reachingll jupiter in the next few days after a five-year journey from earth. its mission is to hear through the clouds and map the planet inside and out. if it fails to decelerate, it will slingshot pass and disappear into space. half hourlanned a engine burn to put juno into orbit. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: ok, looking at the japanese bond market. the rally still continues, yields keep falling. the five year yield has fallen to another record low, -.325%. ,wo-year yields also dropping -.31%. that's what we have at the moment as this rally continues. we see those fields under further pressure. response to that inflation number earlier, more signs of inflation for the japanese economy. that's the reaction on the fixed income markets. , boomingtial arts across asia. one company is closely associated with its success. it has become asia's biggest sports media company and the biggest promoter of this fast-growing sport. our southeast asian correspondent has more on this. >> you know what? they have huge plans. a $1 billion valuation, and they are betting on 4 billion people in asia. he joins us this morning. huge plans. >> our game plan is to ipo in a few years. i would say within three years. asia's largest sports media property, 118 countries and a billion homes around the world. events and 11ve different countries in asia and will increase our footprint over the next few years. >> what has contributed to the phenomenal growth you have seen in such a short time? look at north america, there are several properties,-dollar nfl, major league baseball, in nba. in europe, the same thing. in asia, there's nothing on a pan asian bases. there are 4 billion people in asia and no sports media property, so that was my initial big picture thesis. asia has been the home for martial arts for thousands of years. japan,and judo in thailand -- you can't be a major player if your are not in china. 20 evans lasthold year? you had two. yes, china has been a challenging market for us, but we will be making an announcement in the coming weeks that will make it easier for us. china is a strategic market for us. we are opening a china office as we speak, hiring like crazy, doubling the headcount there. i think we have some growing have 4-5 events, including one this weekend and china, but we will rapidly scale up. >> what we you do differently? >> we will have a partner, a strategic partner. it will be huge. unfortunately, we have not officially signed until next week. ufc has failed to get into china. what makes you confident that you will succeed? >> we are the first organization to put an event on in china. it was about learning the ropes. none of us were from china originally, so now we have chinese partners, customers, partners andst whatnot, so it will get easier. again, we will make a big announcement in the coming weeks and months regarding china that will be a big surprise to a lot of people. >> the target is to hold 52 events. is there such a thing as fighter fatigue or viewer fatigue? i see the opportunity to become a part of the daily fabric of asian society and daily life. every week we will be broadcasting a live event from a different major city across asia, tokyo, seoul, korea, bangkok, jakarta, etc. when you put live events with a live broadcast, there's no sport on a pan asian bases, and yet martial arts has been here for 5000 years. we want to celebrate and ignite the fan base across asia in a mainstream way. >> how quickly are you growing your revenue? percentages.it >> that is from a low base, or do expected to continue. it will continue. our internal two-year forecast, we will be hitting nine digits within 18 months. apart from china, what are your expansion plans? i hear that india is coming up. has wrestling, and there is quite a big martial arts history behind it. asis not as mainstream china, but india is a nation of warriors as well, so i see a lot of potential there, 1.3 billion people. there is a lot of potential. >> what challenges do you face as you expand the business? >> hiring world-class talent. we have never had a sports media industry in asia. >> by talent you mean -- >> executives to run the business, video production, the lighting and sound, sports marketing. >> it is also about the fighters. there are some critics who say the fighters in asia are not as good as those in the u.s. >> i think you could say they are not as well rounded in the ground game. don't believe everything you read on the internet. asia is the home to martial arts. so there is no question that asians are the best. this is what is also exciting about being asia's largest sports media property. you need global appeal and global relevance. that's why the export ability of our product has been widespread across the world. people want to watch the real stuff, and it comes out of asia. we are the home of martial arts. >> when will you be a global player? >> we are already the second-largest organization in the world. ufc is number one, and we are a close number two. i see an east versus west duopoly playing out. is always going to be a western counterpart and and eastern counterpart. often times the eastern counterpart ins of being larger than the western counterpart, alibaba versus amazon for example. >> good luck. there you have it. mma in asia. rishaad: thanks a lot for that. chinese news, purchasing managers index. this is the nonofficial one. contraction,gest economists were looking for 49.2. that is in contrast with the official figure of 50. ministerstralian prime feist to hold onto office, how tight is this weekend's election battle? we are certainly looking at that one. ♪ rishaad: australians go to the polls on saturday. with the split down the middle between the ruling coalition and the opposition party, it has -- a marathon eight-week-long campaign. the prime minister in a helicopter, a potential prime minister and i high visibility vest, and a treasurer with a football, it must be a election season with no photo opportunity going unexplored. there is something different about the 2016 election campaign. ,th the deficit growing wider this is about who can tighten the belt the most and create the least pain while doing it. key figure. is a to protectsing public services, even if that comes at a price. >> let's be clear, both sides of politics will be in deficit over the four years of the ford estimates. that it will not have the same degree of fiscal contraction as the liberals. our plans rejects vicious cuts to health and education in the short-term. >> the 10 year economic plan was mocked by the government. was riding zoolander an economic plan, this is what it would look like. promises, unfunded omitting any indication of how they can pay for the promises that they have made. >> when malcolm turnbull sees the prime minister's office, he promised to explain to our strains why tough economic decisions are needed to get the budget back into balance. a key measure was a cut to the company tax rate, intended to promote jobs and growth. strong gdp and employment figures have helped his campaign. polls show both parties in a virtual dead heat. it is likely the malcolm ,urnbull government will return making reform difficult. right, economic data out of japan. the survey was marginally better than expected, but it was the inflation figures that put an end to the boj reaching its target. we have yields for japanese record lows. to ♪he five-year ♪ >> from our studios in new york city, this is "charlie rose." charlie: we begin this evening with the terrorists attack in turkey, three suicide bomber is injured over 40 people and injured -- killed over 40 people and injured over 1200 people -- 200 people. the prime minister ahmet davutoglu said that isis was responsible. >> these three people captured just before one of the blasts tour through the main airport. and one attacker is captured in these shaky images come after being shot down, riding on the ground before in