Companies later in the program. A warm welcome to countdown. , the yen onthe boj a merry dance this morning. Yen strength, up more than 2 . Here are the charts of the currency markets verdict of what the boj announced this morning. Yen strengthening following the announcement. Thesions culminating in buying of more etfs, dollar lending, but no change in the bond buying program. Some disappointment about the extent to which of the boj was prepared to act. Ify say they will do more needed, but say they will review policies today. Fixed income markets, 10 year , the biggestsing since 2013. Lets get to some breaking news. Inbev, out of ab organic Revenue Growth 4 . The estimate was 5. 8 . Volumes down, 1. 7 . The estimate was 1 . Those numbers look to be light in terms of the expectations. Adjusted organic growth also disappointing. They are talking about the sab miller deal, still see that closing in 2016. Because of the declining popularity of some of their brands, they have been pursuing this megadeal, spending the last 10 months pursuing a takeover of sab miller. When the pound drop, they had to increase their offer. A story overnight suggesting big shareholders in sab miller are prepared to accept the new offer. What theirt and see final verdict is when they have their board meeting. Swiss r ers from company. It is higher than the estimate of 605 million. This is the worlds against greekinsurer. Reinsurer. It had to pay out to primary insurers to help them shoulder that burden of events that have taken place this year. The Second Quarter net income better than estimates at swiss re. A quick recap from ubs. Of ubs, better than estimates. Pretax profit, net profit, and revenue number, but a 14 drop in profit. The ceobe herring from later in the program. He will be speaking to maus cranny in zurich. You can watch that right here on countdown. Lets tell you whats going on in the steel sector. Numbers breaking this hour. One point seven 7 billion a head of the estimate of 1. 51 anlion they are giving us update on cash flow and ineating forecast for 2016 excess of four foreign 5 billion 4. 5 billion. Lets get to first word news. Hillary clinton says america is at a moment of reckoning and belittle Donald Trumps claims that he alone can solve the nations problems. That the u. S. Can only advance when each segment of society and members of every group work together. A president for democrats, republicans, struggling, the the striving, the successful, for all those who vote for me and for those who dont. For all americans together. Haidi clinton took aim at wall street. Taxt is wrong to take breaks with one hand and give out think slips with the other. Ink slips with the other. Can neverwall street ever be allowed to record main street again. Parent company alphabets has beaten sales and earnings estimates thanks to the bringings business more money and better cost controls. Carsirm is investing and to health care as it looks for the next big thing to replace its aging yet still highly profitable ad business. An 18 billion pound project to build britains First Nuclear power plant in 20 years. The u. K. Government says it wont make a ruling until later this year. Operate 16 Nuclear Reactors in britain and is the countrys largest electricity supplier by volume. Global news 24 hours a days powered by more than 26 it 2600 journalists and analysts in 120 countries. This is bloomberg. Anna thank you very much. Lets get to david with the details of how the Asian Session is shaping up. Stocks in positive territory. The nikkei recovering quite a a bit. D were thinking of a quiet end to the week. Not what we are getting now. A few things before we get to the equity markets. Well go through each asset class to show you the impact the boj has had. Big pop in yields across the japanese Government Bond market. 17 on the 10 year. Up, not just way in jgbs. Dollaryen, almost a threefold yen swing. Markets reacting as they came out. They eased, but did not do this. We are now pushing towards 103. Nikkei 225 all over the place at the mercy of these moves in dollaryen. Now down a fifth of 1 . We are seeing a little bit of a recovery. Still poised for its fifth drop in the last six days. Asian markets with an uptick for the regional benchmark, but more stocks are on the way down. Judging by the moves we are seeing and the price action across asset classes, the market was disappointed with the boj. It is eight minutes past 1 00 p. M. In hong kong. Minutes, wend 20 have the press conference from the boj. Out thel be fleshing details of why they decided to do this and not that. Anna we will wait for the details. Thank you very much. Japan has decided to expand purchases of eds and doubled the size of the u. S. Dollar lending program, but will refrain from boosting the pace of Government Bond purchases that has framed the main part of monetary stimulus up to now. Great to have you on the program. What did we see here . What are the main takeaways from the boj for you then . In terms of actions the boj took, obviously we had the increased buying of etfs and the increase in the u. S. Dollar lending program. But i think the biggest news element was the fact that governor kuroda ordered an the effectiveness of bond Monetary Policy on the economy and prices at the next meeting. What that means it is hard to say, but i think it means that that it is taking, including its price target, as well as the policy tools it has , it basically means the next meeting will become a much more anticipated meeting than this one, which was also an anticipated one. Anna yes, it was. Maybe the fact they are assessing effectiveness, theres no shortage of commentators who talked about the affect negative and rates have on an economy. Where do we stand on policy outlook from here . Next week, we will see the details of the fiscal stimulus package. Last week, the overall figure was announced as ¥28 million ¥28 trillion. How much of that will be new spending, spent this year, and so on and so forth . That would change any sort of impact on the economy. Boj, governore kuroda always likes surprises, but it effectively means that he has pushed back a decision to the next meeting in september or later. As you know, the bojs arsenal is limited. There isimit concern, rather, that the boj is already buying too much etfs in the market as well as jgbs, so he has to play his cards carefully, which he has been doing. It will of boj, again, be a big question over what they would do in september. Anna thank you very much for joining us. , seniort to our guest adviser at Credit Suisse. On set. Have you lets talk about japan and what they are doing. What do you make of this plan to assess the effectiveness of policy . I think you have to look at the relationship between the boj and the ministry of finance. If one looks at japanese Economic Data since boj moved to negative and just rates, you can put forward a case that says negative Interest Rates have had a limited impact on the japanese economy. What has been clear is that consumption has remained weak. Consumers are very concerned about the impact of deflation and the strength of the yen, particular he after brexit when the yen went through 100 temporarily. That has had a negative impact on inflationary expectations with the follow on on negative impact on consumption. The other factor is corporate japan is still sitting on a record level of surplus liquidity. The impact of negative Interest Rates has not encourage corporate japan to spend or increase investment spending, which remains subdued. The first answer to your question is boj needs to assess its it negative Interest Rate policy, because the evidence is the japanese economy has weakened and negative and negative Interest Rates have not had an impact. Anna some homework to do on that. You mention the monetary and fiscal stimulus interrelationship. Weve had the deputy Prime Minister talking about how they are going to be finalizing the stimulus plan. Aboute anybody forgot what the boj has said, the finance ministry making the point that this is only one of the arrows. If you look at what is happening in japan, i think there is a clear message from the boj to the ministry of finance saying our Monetary Policy options are getting exhausted. We can increase etf purchases. Yes, we can increase dollar loans, but the boj is already the biggest owner or investor in jgbs. Its Balance Sheet is 80 of japanese j gp jgb. Is Monetary Policy exhausted in japan . We are close to making that statement. Consequently there is pressure to take fiscal action. I think it has been largely leaked and the japanese media this week that we will see this Fiscal Program of close to ¥30 trillion. A component of that could be the development of an infrastructure bond market, and one thing you might see is because infrastructure has a strong multiplier effect, that is quite effective to reboot the japanese economy, and the World Bank Estimates that Infrastructure Spending can have a multiplier of five times. That is powerful. The ministry of finance is issue or are going to guarantee infrastructure bonds, and the boj says that as part of our Monetary Policy, we will extend our purchases into the infrastructure bond market. Does that qualify as helicopter money or not . If they dont need to be renamed redeem, that is helicopter money. Is that the distinction . The definition is very difficult indeed. I would argue that we are close to helicopter money in japan, particular he given the size of their talent sheet, buying program, bending program, purchases of eds. You could probably say purchases of etfs. If we go down the route of financing the ministry of finance in fiscal activities, that is helicopter money. Anna it remains illdefined. Giving usond yields the biggest increase since 2013. The government has said we are not expanding the bond buying program, and it had been expected they might do that. Where do we head on the bond yields and the yen . Decisive fiscal action next week, and i am working on the assumption we will, and if we have this interaction between the boj and the ministry of finance whereby the boj extends purchases into paper issued by the ministry of finance, particular in the infrastructure sector, then you would probably see the yen reverse back into a range of 105110. Ideally, that is what the boj wants. As the yenorget that moves towards 100, that causes quite Severe Damage for japanese exports. More importantly, it compounds the inflationary problem japan has. The headline data is clear. Japanese inflation is still negative. Up by 1. 76 this morning. Thank you very much. Ahead, look at the day french gdp figures for the Second Quarter. A growth reading for the nine states. The economy is expected to have accelerated in the Second Quarter, bolstered by a pickup in house spending. Finally, the European Banking Authority will release the results of its latest stress test. Thats what we have the look for it too next, brexit aftermath. Tooundup of what ceos have say about the Eu Referendum this week as they have been talking to us about earnings. O on, we speak to the cef the energy business. Then more on ubss beat. This is bloomberg. Welcome back everybody. A live shoct of hong kong. Looking betteron than the numbers would suggest. Lets talk brexit. Ceos have been weighing the impact of the Eu Referendum on their businesses. Here is a taste of some interviews. Entirely committed to the United Kingdom, our customers, our employees. All manufacturing will stay in the u. K. , no change. We expect the slowdown in the economy next year. The will have an impact on 2k advertising market. Was good news related to brexit, it is deftly that investors are back in the market trying to understand what to do. We wondered if we would see a slowdown, and so far we have not seen that. We have customers completing on their mortgages more quickly. The thing most important for us is that we keep trade conditions good. We are not saying we have seen the whole of the impacts the referendum result will have, so longerterm may be longer impacts on the market. No effects ong our credit book, flow of business, growth numbers, london in particular and britain in general is a growth market. Political uncertainties, nobody knows how brexit will play out. Early to say. Until article 50 is triggered, we will continue to operate in the eu and under eu frameworks. A whole host of ceos there. Coming fromof panic the Business World as to what they are seeing in u. K. Consumer behavior. The reason is because there is complete uncertainty when will article 50 be triggered and how and when will the negotiations evil. Could be having this discussion intothree years. As of today, it is quite difficult to say what will the outcome the, the endgame, because it is clear the British Government is trying to evolve what their policy should be. You have one fundamental point. 22,have a series catch whereby the basic tenants of the European Union our freedom of capital, people, goods, and there is still a lot of work to be done, the Free Movement of services. That is a work in progress. We British Government says want Free Movement of capital, goods, services, but not people. There is no middle ground here. Anna we were having that debate. You mentioned the debate could take two years. Doesnt seem to have been resolved. Big issue is payments to the eu budget. If we look at norway and switzerland, they pay 800 million year olds a year to the eu budget. Pays 10 billion. Would it be politically acceptable for the u. K. Still the to make a significant contribution to the eu budget when the referendum says we are leaving the eu . Tenants off the key the leave campaign was that money would be spent on health care. That was part of the campaign. Whether that hands out that way is open to debate. Anna you have been talking to government agencies. What sense do you get as to how quickly policy is being shaped, or how quickly the bodies are trying to work out what they actually want from this deal . To polarizerting into two options, neither of which are satisfactory. Option one is a variant of what canada and norway has, whereby there are trade deals done with the European Union. There is some freedom of movement, freedom of movement of goods and services. The city of london is very anxious to maintain that financial passport whereby Financial Services can be marketed freely throughout the European Union. Anna i want to get your thoughts on the pound. This is the pound against the dollar, the worst performer out of the g 10. Where do they had from here . In a Technical Trading range of 130130 five partly because sterling is oversold. Having said that, with the bank of england cutting Interest Rates later in august, probably qe expanding, and current account deficit not improving quickly, then i think sterling goes lower and i think the target of 120125 is realistic. Anna thank you very much. Ceo come back, the . C sv anna welcome back. Heres a live shot of tokyo. Dollaryoung, 103. 46. They then had been searching against the u. S. Dollar. More on that in a moment. Lets get to some breaking news. Numbers coming through them son. F a cash sonofi their Second Quarter business net profit, 1. 6 8 billion euros. Broadly in line, it seems, for that business. They are evaluating all options for the european generics business, which sounds interesting. They are talking about a new round of talks to the more productive. They are ready to move quickly. They are talking about financial discipline, remaining disciplined on medivation. This is a business they are trying to get hold of which would bring a cancer drug into the sanofi house. Renew theirg to cancer portfolio. The Company Meeting estimates and talking about financial discipline. Lets get to Caroline Hyde. Shes got details of the trading day. Caroline thank you very much indeed. I know youve been showing a glorious chart of the significant spike in the japanese yen. On my bloomberg, im showing you have the again is compared to the rest of the fx market. All the major currencies. It is the performer. Have a look on my screen. We are up about 1. 7 . Significant outlier compared to the aussie dollar. It really is the performer. The bank of japan expands one of its three monetary stimulus that tohe etf. Upping ¥6 trillion. No quantitative easing. No extra bond buying. Lets have a little look for what is going on in terms of the volatility and the anticipation of this decision. We saw volatility spike higher. The highest since 2008. Phenomenal moves. Orange spike on my screen, the highest level since 2008. Really does put into perspective the amount of hope for more stimulus coming into this Rate Decision and the fall afterwards and the reason we are seeing such a move in the fx market. We see the nikkei holding onto gains. Topix as well. Lastly, ive got to show you the commodities market. What a fall we are seeing in the oil market. This is the worst month in a year for the oil market. Almost green, currently, wti crude. Weve seen it collapsed in the past month because of growing inventory base. On the bloomberg, you will see that in the month of july, we are seeing it collapsed. Biggest monthly decline in more than a year. Rose fore inventories the First Time Since may. Surpluss plus the not helped by libya coming on stream. Back to you. Manus anna thank you very much, Caroline Hyde. Lets catch up on some breaking news. Edf, firsthalf net income, 3 billion euros. That has beaten the estimate. This is the board that approved the final investment. We got bad news last night. The government in the u. K. Put a slight roadblock in place. Lets get to daybreak. A new edition of daybreak is available on your bloomberg and your mobile. Take a look at some of the stories making it into this edition. Weve got a lovely animation of governor kuroda. He is scratching his head. Perhaps scratching his head today as well. Weve heard from boj. They have expanded etf buying, but not bond buying. We saw the yen surging on that. European Bank Stress Test is another story daybreak is covering. Were going to see 51 thanks put through the mill tonight. The 51 of the regions biggest banks will probably reveal italian lenders as the weakest link. The European Banking Authority releases those results 9 00 you time. It is not a pass or fail experience. You just get grades, some guidance on how strong the Capital Buffers are these businesses. The third story from daybreak today is on tech earnings. Alphabet and amazon beating the street in the technology sector. The google parent shares rose after saying it squeezed more money from its mobile user base and improved cost control. That is going on on daybreak this morning. More from governor kuroda at around half past 7 00 u. K. Time. Lets talk about french Utility Company engie. Profit fell as Energy Prices dropped and warm weather curved heating demand. Joining us is the cfo, Judith Hartmann. Great to have you on the program this morning. Give us your thoughts. Clearly the commodity price have impacted your business. Where do you see them heading . Give us your assumptions around gas and oil. Judith we did have an impact in the first half. Not surprising with the volatility you are seeing. In comparison with the guidance and the end of last year, we are relatively back on track. We do believe there isnt going to the any major impact at this stage. We are hinged mostly. Pricese the commodity going to do over time . We do believe theres going to be the oil price coming back up. The question is when it is going to happen. We are quite confident. You have heard about our strategy to reduce exposure to commodity prices. We are well on track there. In three years time, i think it is going to be an easier conversation. Anna trying to reduce your exposure to expiration and production assets. Talk us through how those conversations are going. What kinds of conversations are you having about selling those assets . It is several assets were looking at. What we have laid out in a to reduce recall our merchant exposure, exposure to commodity prices. Weve gone through our asset base. We are the biggest Global Private electricity producers. We are in every place of the world. Some of contract it is covered by contract. Some of it is exposed to the market. The other big piece of our business is e p. Already 40 ofed the 15 billion disposals that we are planning to do over the next three years in the First Six Months here. We are very happy how this is going. We are in talks in several places. It is always hard to talk about ongoing m a, but like i said, good traction. 40 already announced. We are very confident that we can execute this plan. Anna are you selling your australian assets . Theres been reports that you could be selling 2. 5 billion australian assets. Areth people know that we actively in the market, so theres always going to be rumors until we make some decisions. I cannot comment on ongoing deals. But im expecting a lot more rumors until weve completed our disposal program. Anna im sure there will be. Lets talk about your investments. Where specifically do you want engie to invest right now . Judith of course investments are important. We have a strategy moving to low co2 Power Generation. We want to continue our efforts in Global Networks and customer built as where we position that is second to none in the market. The first half, this is clearly the area weve gone into. Weve commissioned about 500 megawatts of low co2 Power Generation. We have made a number of very interesting acquisitions in the united states, in the energy efficiency, and in the storage space. Those are the kind of assets that you are going to see us go after. Then, the very sustained organic flow of projects in all of those three areas. That is also things the teams are executing on. Anna the macro environment means we have very low Interest Rates by historical standards. How much is that helping your business . Many Utility Companies using the opportunity. Are you getting a boost from these lower rates in europe . Judith absolutely. It has been helping. We have a reduced the cost of our debt to 2. 8 now, which is outstanding given our Global Platform and the fact that some of our debt is in high Interest Rate countries. 2. 8 is quite impressive. Were going to continue to look at this. Were not in all likelihood going to do a new bond this year , given the totals ive mentioned, given the cash coming in. But we are always looking at Liability Management to continue to improve the cost of our debt and taking advantage of the markets. Anna judith, thank you for joining us. The cfo of engie, Judith Hartmann joining us live from paris. Lets move on to u. S. Politics. Hillary clinton has accepted the nomination for u. S. President , becoming the first woman from any major party to do so. Clinton struck an optimistic tone, making a call for unity. So lets be stronger together, my fellow americans. Lets look to the future with courage and confidence. Lets build a better tomorrow for our beloved children and our beloved country, and when we do, america will be greater than ever. Anna Bloomberg Politics reporter Kevin Cirilli has been there all week. Kevin, how was the speech received . Clinton looked to unify the democratic party, including some of the disgruntled Bernie Sanders supporters. Several are upset about her more moderate position in supporting the transpacific partnership. This is something senator sanders opposes. They are also a little upset about her selection of tim kaine as a running mate. Largely this was a wellreceived clintonwith hillary making a pitch to independence and moderate republicans. Lets take a listen to what she had to say. Thisu didnt hear any of from donald trump at his convention. Spoke for 70 odd minutes, and i do mean odd. And he offered zero solutions. Kevin Hillary Clinton clearly trying to make that contrast with donald trump. Anna thank you very much for joining us, making that comparison. Kevin cirilli joining us from philadelphia. Ubs reported secondquarter profits that slipped by 14 as Wealth Management and Investment Banking generated less revenue. If youve been wondering where manus cranny has gone, hes been talking to the ceo of ubs. We can bring you that in just a moment. Lets recap what weve heard so far from ubs. You can get all the details as they break. In terms of what we heard earlier on, pretax profit of 1. 4 9 billion swiss franc. Very much ahead of estimates. Against the4. 2 First Quarter, 14 , that is moving in the right direction when weve got stress tests for the Banking Sector in europe coming up later on today. In terms of where the analysts fit on the stoxx, we had 11 buys , 15 holds, and nine sells. The stock is down 28 year to date, versus the sector, down 29 . Lets hear from the ceo of ubs, Sergio Ermotti. Sergio im very pleased with the strong quarter. If i compare it to the Second Quarter of 2015, we. We are up. Very strong results across all businesses. Manus the First Quarter, the phrase was paralyzing volatility. His 2016 going to be a year where weve got to get used to subdued activity . Sergio it looks like there is very little visibility about the near future on all fronts. The economic, geopolitical, and clearly this is translated by client risk aversion. We can measure it in terms of Cash Holdings. In the u. S. , the declared Cash Holdings is up to 22 , which is the highest level we have been seeing for a while. It is a challenging environment. Manus what is holding the clients back . We had brexit, geopolitics, and negative rates. When you talk to client advisors, what is holding them back . Sergio you just said it in your question. All these issues are holding thisinvestors and at stage, our job is to stay close. Many of them want to be extremely conservative. Therefore we are not pursuing a strategy of pushing clients to take on risk they dont want to take. Manus talk to me about the Investment Bank. You got fx, rates. How did that perform versus the equities business . Sergio the equity business had a very tough year on year comparison. Last year we had a fantastic first half of the year. This year is a more challenging environment. We were very pleased with our performance in the u. S. Got veryher side, we solid results in fx for the water. Good level of activity, particularly before the brexit and after the brexit vote. Manus volatility, the real move in markets, fx, is that going to be the cornerstone . Sergio not the cornerstone on its own, but im very pleased with the level of efficiency in terms of d clement and anditability deployment profitability. Manus do you think there is an option, a possibility for opportunity for the clients with brexit . Sterling has been crushed. Property values are under pressure. Sergio theres always opportunity, but we need more clarity about what kind of form take, andt vote will then people will be able to evaluate where there are opportunities. There are also challenges. Not only for the u. K. , but the entire european system. Manus the key thing for you is the passporting right. Is that the only key risk you focus on . Risk in terms of having to find other options on how to operate. We have a high degree of flexibility. We have strong local presence in europe, in frankfurt, in luxembourg, and in other cities in europe. Would be able to adapt and apply resources if necessary. The outcome could the that the u. K. Retains access to europe. Manus you are a headmanned at the Investment Bank and the germans and french are knocking at the door. If the Investment Bank needed to redeploy, would switzerland feature . Sergio it all depends what is going to be the future of switzerland. At this stage, switzerland has the same issue of passporting. There is also an opportunity in the near future to develop. Froms the latest news monte paschi, what are yoyour intentions . What do you want to get involved with them . The bank has issued a press release. We do not really comment on client activities or specific transactions, so i have to stop the statement at this level. Manus would you consider participating in Capital Raising . Sergio this is our breadandbutter business to help clients to financial transactions. In general terms, not only for that bank, but in general, this is our business. We would evaluate any opportunities. Manus Sergio Ermotti delivering his secondquarter numbers. If paralyzing volatility was the hallmark of q1, subdued is the hallmark of q2. The issue is this. For a long haul of subdued activity and mark prophet has dropped. Subdued activity . Profit has dropped. It is down to some idiocy as he is. Syncracies. Idio if you look over the First Six Months, this was the intriguing part of the conversation both on record and before and after, this 40 million swiss francs of net new money. The war chests are filling up. One of the challenges for ubs last year was to push away cash. Were sitting there going, were not going to do anything with this money. That is costing ubs money. What weve got now is a net inflow of approximately 40 million swiss francs. If and when this subdued by the way, it does not sound as if we are going to see relief reprieve from this subdued client activity anytime soon, but when that comes, then this is a bank that is potentially primed. I had a fascinating discussion on brexit. The germans and the french are knocking at the door in terms of reconsidering what you might do in the event of the United Kingdom losing passporting writes. Ts. Righ employeesabout 5000 in the u. K. Huge new building and presence just right around the corner from our offices in london. What would brexit really mean . Ermotti, it is still very much the unknown unknowns to quote donald rumsfeld. In that perspective, brexit is still very much an unknown for this bank. From the client side, the opportunities that it may present, presumably this is a bank with the cios and client advisors are looking at the demolition in sterling. It sounds as if weve moved up from the record low volumes in the First Quarter where profits dropped 64 . Maybe one can say theres a little bit of light relief in these numbers. Lets break the business down a little bit. Wealth management, 518 million swiss francs. That was a miss on the subdued client activity. There were strong net inflows in asia. Wealth management, america by the way the 40 million swiss franc is a common vision of america and europe. For the pc banking, the swiss business, the best since 2008. That bolstered the numbers overall. I would say a sense of relief and subdued is probably something that could be welcome. It could have been a lot worse. Back to you. Anna thank you very much. Manus cranny speaking to Sergio Ermotti and giving us a round of of the takeaways from the numbers. Ive got bob parker of Credit Suisse with me in the studio. Lets talk about this sector. Bernstein,note from talks about what they see as weakness in Wealth Management. Margins were down four basis points. Bernstein calling that a three basis points miss. The focus for this bank has been Wealth Management. That is where they want to do well. Bob whether the strategy is a good strategy or not, and frankly i think their strategy is very clear indeed, but with investors taking very little risk, and all the surveys at the moment, whether it is europe, the state, asia, all the surveys are very clear. Investor risk positions and positions in highmargin products are very low risk indeed. That means, number one, that margins are on a downtrend. Managers may be able to successfully capture new client assets. Obviously there is a fight for market share. That obviously is at the cost of lower margins. I think the Wealth Management business is a very attractive business longerterm, but the big challenge is maintaining those margins. Anna what about the contrast weve seen between european banks and u. S. Thanks t in the Investment Bankinggf side of things . Bob the bottom line is that the american banks structured and i think were very effective in terms of capital usage. They restructured very quickly. Arguably the european Investment Banks have been very slow and late. I think that is reflected in market share. Youve seen a quantum leap in u. S. Investment bank market share. The interesting question as an investor is, youve got european banks which are very cheap, american banks which all this cheap. I think the earnings Power Generation of american banks is more powerful. Anna banks are cheap in europe relative to the broader market. This is valuation spread versus the rest of the market. The spike, 2009. Are you buying this sector . Bob i think it is too early. There are a number of challenges for the european Banking Sector as a whole with the stress tests. Andtal raising nonperforming loan problems, there are still big problems in italy. The eurozone is about a trillion of nonperforming loans. Anna we will see how that has shown up in the stress test. A kurodagain surges as disappoints. The bank of japan expands purchases but refrains from boosting Government Bond buying. Unity inlinton urges the face of a moment of reckoning as she accepts the democratic nomination for president. Together,e stronger my fellow americans. Lets look to the future with courage and confidence. , but and upbeat for ubs profit falls 14 in subdued client activity. Want to bethem extremely conservative. Therefore we are not really pushing clients to take on risk they dont want to. Anna next, barclays, results dropping in the next minute or so. We will be speaking to the ceo in 20 minutes time. Welcome to countdown. Lets get some breaking news. Getting numbers out of sony, firstquarter operating profit. They are talking about the dividend they are going to pay 2016, fromst half of sony. Forecasting ¥80 billion of fullyear 2016 net income. Previously they were forecasting ¥80 billion fiscal profit. No change seems to be the message. Net income for the first half, ¥21. 7 billion. Analysts had been looking for a loss in this quarter. We will wait to see the breakdown of the first half and the Second Quarter as this company is facing difficulties posed by april and slowing demand weighing on the business. Looking to see how the company has been managing the slowdown. Trying to sustain user growth in its games division. No change to the fullyear outlook statement. They are cutting their Sales Forecast to ¥7. 4 trillion from 7. 8 trillion. Lets get to barclays. Weve got those numbers coming through now. , 2. 063alf pretax profit billion pounds. The core pretax increased 19 for the first half of the year. They are talking about first half common Equity Capital ratio increasing to 11. 6 . Second quarter numbers coming through. This is slightly more uptodate. Second quarter adjusted revenue, 5. 79 billion. That revenue number for the Second Quarter looks to be ahead of estimates. One of the Big Questions when we speak to jes staley is about transporting lights for the Banking Sector in the u. K. Bank has been bringing through a number of strategic changes. Theyve been moving away from various parts of their business in asia and africa to focus on the u. K. What will the u. K. Consumer or the u. K. Economy be doing . How is the Investment Banking business performing . Events very crucial to this company. The stock is down some 30 or so since staley took over. Just getting a few more lines coming through. In 2017 noncore costs as 400 million to 500 Million Pounds. This is a company that split itself into. Isporate and International One part of the business. The other part is barclays u. K. That was created to comply with the new british laws requiring the separation of consumer and Investment Banking businesses. Also looking for the gain theyve made on visa europe, commercial real estate. Profit, 2. 3 6 billion pounds. We will be speaking to the ceo of barclays, jes staley, about these numbers. Industrye onto another where we are getting numbers coming through, the aviation sector. Getting numbers from iag. They tell us operating profit is 550 Million Pounds for the Second Quarter. Profit, 709perating million. The outlook, they say Free Cash Flow in the 1. 5 Million Euros range. 74 of their expected thirdquarter revenue. A number of headaches. The brexit story posing a number of headaches for the sector. On the day after the brexit vote, we heard from the company that fullyear growth would fall short of their gain. Also a headache for them because of the weakness in the pound. The weakening in the pound means u. K. Receipts are worthless when transmission when translated into euros. Key question around the Terror Threat to europe as well. Hence the comment they are making about reservations, trying to give us some sense of the visibility they have and how booked they are into the third quarter. About where all of this builds for the european open. The start of European Equity trading, just an hour away. We are expecting to go higher. 0. 8 . The handover from asia, a fairly confused one. A slightly negative picture asian equities session. Things were improving, then the tokyo market started to improve. We are waiting for details of the fiscal stimulus. Breaking news and expectations for the market open. Haidi lun has the bloomberg first word news. Haidi Hillary Clinton says america is at a moment of reckoning and has belittled Donald Trumps claim that he alone can solve the nations problems. Clinton said the u. S. Can only advance when each segment of society and members of every work together. I will be a president for democrats, republicans, independents, the struggling, the striving, the successful, for all those who vote for me and all those who dont, for all americans together. Clinton also took aim at wall street. It is wrong to take tax breaks with one hand and give out pink slips with the other. And i believe wall street can never, ever be allowed to wreck main street again. Googles Parent Company of of it has been in sales and earnings estimates thanks to the business bringing more money and better cost controls. The firm is investing in new areas from cars to health care as it looks for the next big thing. Global news 24 hours a day powered by more than 2600 journalists and analysts. You can find more stories on the bloomberg at top. Anna thank you. Lets get the latest Market Action from asia. David ingles has details. Confusing when you look at the top line. Let me flesh out things for a bit more clarity. Japan is closing up shop. The reason it is being pushed up is the resurgence across financials in japan. Gains across the big one. Nomura, 12. 5 . Banks, brokerages, financials, what that led to was this swing the last 90 minutes or so in the tokyo session. Upbasically ended the day 0. 6 . This is really where these details become important, what the boj did do and did not do. Leavingdown to the boj the policy rate unchanged. They refrained from taxing the banks for some of these excess reserves that are stored with the central bank. These gains are despite the trend down in dollaryen. Very wild swings. 103. 63 at the moment. We are weakening as we approach the Boj Press Conference in about 20 minutes time. The overall handover that you guys are getting from asia, very confused. Japan on the way up, but mostly a negative tone. Anna thanks very much, david. Tying up some loose ends on barclays, adjusted pretax profit, 703 Million Pounds. Missing estimates on the Second Quarter adjusted pretax profit. Lets get back to the japanese story. It has been dominating the moves. The boj has decided to expand purchases of etfs. It will refrain from posting the pace of Government Bond purchases. Our tokyo bureau chief, Kazunori Takada joins us from tokyo. What did we see . What are the things we talked about last hour . Was this pause for thought that the boj is suggesting, a review of lucy so far . Kazunori they increased the amount of etf purchases and expanded their u. S. Dollar funding program. The biggest take away is the fact that corona ordered a review or assessment of the effectiveness of policy on the economy and prices at the next meeting. I think it just means that everything is going to be up for auction in the next meeting. Todays meeting was one of the most highly anticipated meetings that we had and it basically means the next one will be even more anticipated. Anna planning to review the effectiveness of policy. What could that policy look like . We to hear from governor kuroda this morning. Kazunori exactly. Im not sure how much he will give away. Kuroda plays his cards very close to his chest. I think what the assessment means is they are going to assess everything in the policy. In thed be a chge price target one of policy options they have taken so far. It is hard to tell. Next week we will have the announcement of details for the fiscal stimulus. The Prime Minister announced the overall size, ¥28 trillion. Some of the details will be more important. We have to see how much spending is coming this year, which would impact the economy. Boj will means, the have some time to consider, and the september meeting can revisit the issue again. Anna thank you very much for joining us, Kazunori Takada, our tokyo bureau chief. U. K. Chancellor Philip Hammond said britain needed to get on with brexit during his recent visit to the g20 in china. He also said it was time to explore new opportunities. Could this include possible trade deals . Guest is the city of london policy chairman. Mark, great to have you with us. The line from barclays s aying they are wellpositioned. We will talk about china in a moment. Does that reflect what you are hearing from the city, that institutions dont see a need to change their strategy . Mark first of all, there are very big differences between institutions. Their strategy is not going to be greatly affected one way or another. There are a smaller number, but predominantly the bigger institutions, they are analyzing all the options at present, what the various options would mean. Anna give us an idea how much this passporting question really matters to the city. We hear from businesses about how much it matters to them. How many jobs could be lost . If passporting writes for the u. K. Or lost . It is not possible to say that at present. Theres a lot of confusion about passporting. People say they are passporting when they are merely trading. If we lose passporting, what would need to change is to mark change . Some work was done before the referendum. A lot more is being done now. We need to assess the value of passporting. That work is being done now. It is a lot of detailed work but it is being done and im sure later in the year were going to see a direction of travel from the government. Anna does london feel the threat from rival locations . Can the city of london continued to be europes preeminent Financial Services of . It faces challenges from dublin, amsterdam, paris, and frankfurt as well. Mark london will be the preeminent Financial Services of for europe. It faces competition. That is partly why london is so successful. Not just from european sectors, but hong kong, shanghai, singapore, new york as well. It needs a bit more certainty before it can work out how to adapt. Bob anna have you seen any solutions that make you think this can be worked through . For example, some people talking about using existing businesses in dublin as a way of getting access to the single market. U. K. Businesses talk about regulation versus european. Are there clear paths ahead for you that need to be explored or is it a blur . Mark theres a number of paths. They need to become clearer. Some banks can work with passporting. Some can work without it. Some can make minor adaptations. Toe might need to move jobs other parts of the European Union. They would rather keep what theyve got in london, but if theyve got to expand somewhere else in the European Union as well, so be it. We are determined that london will remain the preeminent sector. Anna are you hearing that those plans that were threatened are being followed through on . Jobs moving to new york, not just rivalry with the rest of europe, are the following through on those pledges . Mark i dont think people are getting threats. They were giving an honest assessment of what would happen if britain left the European Union. Im sure those plans are being worked out now and the regulation would require them to be. But nobody wants to press a button until it is clear what the new relationship is going to be. That relationship will be such that the vast majority can stay in london. Theres more work to be done to analyze what is possible within the existing arrangements. It was not worth doing too much work before the referendum, but now it is. To keep thist ways business in london. It is very expensive to move business and the other centers dont have the attractions london does. Anna are you getting any sense from Central Government as to where this is heading . Are we coming down to the u. K. Industry being a real priority for the government and having conversations with german exporters on the other side . Mark theres a huge amount of work going on at present within government and within the industry of fully evaluating what different options would mean. Many other industries are doing the same. Ive no doubt finance is a priority. Others might see pharmaceuticals as priorities. The government has to look across the piece. What might suit finance might not suit other sectors. Anna you were in china recently with the chancellor. How attractive is the u. K. As a destination now among chinese investors . China talked in strong terms about wanting the u. K. To stay in europe. Mark i think the reaction in china was surprised that the decision had been taken, but the chancellor said britain wants to be chinas partner and i detected no different view from the people we talked to in china. London remains very attractive. There is no Free Trade Agreement of substance between the European Union and china now. And all. More can be done with china. We are seeing interest from chinese investors even now. Anna mark, thank you so much. Good to see you. Mark boleat from the city of london corporation. Barclays reported secondquarter earnings missed analyst estimates. The market was looking for my hundred 85 Million Pounds. Lets get more on the numbers with the ceo, jes staley. Great to have you on the program. Thanks for joining us. Lets talk a little bit about the unit, the houses, the businesses and assets you are trying to sell or mind down. That seems to be one of the areas you missed estimates. How will the profits and losses from that part of the business develop from here . Bank, ourd a core Transatlantic Bank that did very well in the Second Quarter. The second part of our strategy for this year is to accelerate the closure of noncore. These are assets like our Retail Banking presence in europe, Wealth Management in asia. We want to accelerate the closure of those businesses. That is what increased the cost line. As toe the market color how that is going to progress, right now the market expects us to spend in noncore about 1. 6 billion pounds. We are telling the market that in 2017, that expense number will go down 400 million to 500 Million Pounds. We will stay over one billion pounds of expenses in the noncore businesses. Anna can i ask about brexit as well . This is something i spent some time talking to the city of london about. How important are passporting writes the barclays . Jes our Investment Banking franchise is very important to us. It is part of our core vision and strategy. We will continue to prosecute that vision and strategy. Following the brexit vote, we did one of the first euro bond issuers for a Railroad Company from germany. We did the first big ipo coming out of europe for a privatization in italy. I think barclays presence in europe is important for barclays, but also for europe. I would add, in this whole brexit discussion, as recently as last month, we had to completely reengineered the vehicle constitution of our business in the united states. We are currently in the process of completely reengineering our banking presence in the United Kingdom to meet the rules. We have to create a new bank called barclays u. K. Tousting our legal construct execute our Business Strategy is something that we are getting pretty practiced at. Brexit will be another issue that will require us to adjust how we do business in europe. Im very confident, because of the value we bring to europe, that we will find a way together with the British Government so that barclays can remain an important presence across europe. Anna certainly a business dealing with a lot of changes. Lets talk about the lower for longer Interest Rate environment. We heard from voice bank yesterday. Are you going to have to close branches as a result of this . Mark lets see what happens. I would interpret comments made by Governor Carney i think Central Banks around the world are beginning to question the tradeoff of zero to negative Interest Rates in terms of generating Economic Growth versus the danger it poses for the Financial System. We have 50 basis points of base rates. I think weve got a long way to go. See how the bank of england reacts to what is coming in the economic numbers down the road. Right now we have a great net interest margin. Ifhink we will be fine theres initial pullback of 25 basis points. Negative Interest Rates are a major challenge to the Financial System. In the u. K. In particular, we are a long way away from that. The united states, still the largest economy in the world, the economy appears to be accelerating. The conversation is, will the fed raise rates this year . Dont underestimate the impact of rates rising the u. S. Is places like japan and europe. Anna we will see how long a divergence can last. Preferred the bank of england did not cut rates . Commentm not going to on the policy of the bank of england. I think they have done a very good job trying to assure the market that weve got a safe, liquid, functioning Financial System in the u. K. My hope is that a bank like barclays, rather than being part of the crisis in 2008, now we are seen as a place of stability. We are open for business. We are extending credit to Small Businesses and consumers. We want to work in cooperation with the efforts of the bank of england to minimize the Economic Impact of brexit and be on the side of our customers and clients in great britain. Anna american Investment Banks have been doing well, european Investment Banks less so. How does that look to you at barclays . Mark i invite all the analyst to look at our second order. 9 returned a nin on equity. That is one of the strongest in the Investment Banking industry. Ourke the performance of Investment Bank. The Investment Bank is a critical part of our vision. I think we performed very well. Anna thank you very much for joining us this morning, jes staley, barclays ceo, talking to us about brexit and their numbers, the rivalry across the atlantic as well. That will do it for countdown. On the move is next. A look at the futures suggests we will be higher. This is bloomberg. [hip hop beat] olympics 2016, let me get you on my level. So you never miss a moment, miss a minute, miss a medal. Why settle when you can have it all . Soccer to wrestling. Track and field to basketball. Fencing to cycling. Diving to balance beam. All you have to sa is, show me, and boom its on the screen from the bottom of the mat, to the couch where you at . Show me the latest medal count xfinitys where its at. Welcome to it all. Comcast nbcuniversal is proud to bring you coverage of the rio olympic games. Anna welcome to on the move. We are counting down to the european open. Im anna edwards alongside Caroline Hyde in berlin. Kuroda orders and assessment of policy effectiveness after leaving the key bond buying target unchanged. The yen surges in disappointment. Next bank for banks. Ubs beat after private slides. It is a miss for barclays