Thisfficial chinese pmi, is where the distinction is drawn. We can consider it grateful for a little bit of calm. Anna a little bit of stabilization preg20, better than estimates, better than the july number, but not convincing everybody. Manus it has not. Let us take it off. What we have here is the insurance against default. Every single month, every single month for the past five months the market has been adding 2 billion over the past five months, the biggest increase in 59 countries throughout the world. You can say to me , just around 152 basis points, still only 8 probability that china will default. What im trying to say there is momentum. A carriage of travel for default insurance. Anna not the people expecting the Chinese Government to default, but is very few ways to hedge chinese exposure, and if this is on the rise that is of interest to the markets, especially ahead of the g20. The risk radar, positive data that we have had out of china, released the official reading boosting the dollar today. That is up a little bit. We also had a recovery in nonmining australia, helpful for the economy. The dollar index fairly flat, down just a touch, the first time in seven days. Manus jobs day. 180,000. To invoke the september rate hike, they never behave themselves never turn the way written up. Of 6 10 of 1 . To be there it has risen by 7. 5 , and you have rising stockpiles which knocke the price lowerd. And saudi arabia, of course not boosting output to flood the market, before the opec meeting. Sort of a carrot stick with that man. Anna the analyst who said that investors keep running from one side of the boat to the other, will only or not get some kind of output deal in algeria, the in focus we already september. Let us to the bloomberg first word news. Here is Rosalind Chin. Rosalind republican president ial nominee donald trump has reiterated his pledge to build a wall on the southern border of the u. S. And is in mexico the bill. He says he plans to increase border patrols and will deport any illegal immigrants. Earlier, he met with mexican president neito, where a range of topics, including the war, were discussed. Dillman recess has become the second brazilian president to be impeached in three decades of democracy, guilty of bypassing congress, on Government Spending a charge she denies. She will be replaced by Deputy Michelle temer, to end of the worst recession in years. Recommending the Federal Reserve raised Interest Rates twice by as early as march. The market does not expect that kind of monetary tightening even by the end of 2017. The billionaire moneyman spoke to bil bloomberg. Again69 months, do it realize that capitalism, cannot really do well, it can survive and not do well with 12 Interest Rates or negative Interest Rates. Rosalind china showing further signs with the official gauge, rising the highest level since 2014. It came in at 50. 4 estimate of 49. 8 the july data suggesting temporary weakness due to flooding the country, according to production cuts over the summer. Is promising not to flood of upcoming opec talks, the minister says market is saturated and although the kingdom has ruled the need to do so, he does not see the need to. Saudi arabia is pumping near record levels as it tries to preserve market share. And a singapore as reported the first case of a pregnant woman with the zika virus. Health and environment Officials Say 24 new cases were identified yesterday, taking the total to more than 100. The Health Minister says more are expected to emerge, and the government has urged all pregnant women to undergo tests for zika. Global news 24 hours a day in more than 120 countries, you can find more stories on the bloomberg at top. I am Rosalind Chin. Anna Rosalind Chin, thank you for the update. David ingles is standing by. How is it looking . David well, little bit less sluggish, very sluggish at the start of the day, not exactly a full riskon. How do you describe it . Meandering around, if you will. What we have seen this week , fairly consistent on thursday, you have 12 developed markets keeping them from going off a cliff. Mostly japan today, hong kong. But one thing consistent as well, if you look at emerging markets across asia, that has consistently been let go ahead of the jobs report, just showing you the amount of caution that no one is taking any risk ahead of the jobs number. Obviously, if the fed does hike rates of course that will be the first bunch to go. A lot of people telling us that. That is the story. On a quantitative note, you guys were talking about pmi data out of china, south korea imp reported. Hardly a bellwether for any economy but macau, but a surprise increase there of 1. 1 . Fx market, nothing of note. Have a look at dollaryen, where we have been trading the last 103, very critical level. The red line at the level moment for dollaryen. Let me just bring up chinese currency ahead of the 20, the meeting happening this weekend, a lot of people saying this chart let me bring it up this is where we will be before sunday. 658, 670 might be the limit here, before the chinese would hardly want this to be the topic of conversation during that meeting. Very quickly, what is happening in the bond markets, the long end of the curve in japan selling off. We are getting yields, 10year negative. Highest level on the 30 year since august or april. Manus, anna . Anna david ingles in hong kong. Let us talk about the official factory gates numbers, rising last month to the highest level in two years. Kevin hamlin joins us from beijing with analysis. What do the numbers tell us . Can we say anything about how the economy is stabilizing . We have the official data and the other data as well . Yeah, i mean it is good news for china. And new orders and output were strong, which bodes well for the month ahead. The problem is that that stabilization was driven by the property sector, by infrastructure and buying more credit, and is so that is kind of building a potential problem for the future with regards to the burden of debt. The export orders and unemployment were both still weak, and i think that points to the underlying struggle of the economy is facing, with weak external demand and anemic external demand caused by the burden of debt. Everybody in these remaining three months of the year going to debate how the economy will do, how it will grow, the target . Are we any closer to that debate between the hard landing, soft landing, what kind of numbers we are going to get . Kevin i think it is difficult to say. I mean, the government is already dialing back support, new measures announced recently to regulate shadow finance online lending. And big cities are rolling out new measures, some to reign property speculation, so these have been big drivers of the recent stabilization, and given that those will face more headwinds Going Forward, i think the path Going Forward looks a little bit on the bumpy volatile side, i dont think many are seeing a hard landing on the term, does the grinding down of these forces. Anna kevin hamlin joining us. Head of as ah, strategy at canadian bank, good morning to you. Talk about the chinese story, caught in limbo. Might mean Less Government support, and the bad it might say the government will help rond. Going round and this question about how the chinese authorities manage this very tricky scenario. We we d have a relative weaknes, causing international concern. Of course with the g20 upcoming, something at the back of the chinese policymakers mind. I think we have to remember of course that the economy is planned to decelerate. Just a question of maintaining that slow and gradual path down to a more stable trajectory, that is a real balance in action. Looking at the pmi indicator, around the 50 level, still moderate growth and consistent with that glide path the decelerating economy, but probably still relying on the currency cheapening up over the course the next 36 months. Manus what is the scenario is that . Saying various stories there is intervention ahead of the g20, is the jobs report, talking more of the fed later on, is that were the risk is on dollaryuan . Is strong support on jobs with sort of accelerate the movie just do not want . There are always concerns when we have events, particularly in china where they want to maintain a very firm public face, they dont want to be seen facilitating external criticism, and we see that in terms of the chinese authorities managing the g20 itself, the physical elements. I think there is a risk into the g20 over the weekend, if we were to see an outside fund relief, that could added to the burden of pressure on the chinese authority, but one would suspect that the visible hand will make sure that the chinese currency does not move to significantly until the leaders have left comfortably next week. Anna the invisible hand. Do you spend your time looking at the chinese basket of currency, as the authorities would like the International Currency investor or International Currency analyst to do, or do you look at dollaryen . This is the contrasting opinion coming out of washington yesterday, praise for the chinese but also others giving words we will hold china to account. Is that the focus in the basket . Jeremy the chinese authorities tried to steer us away looking purely of the dollar, but the bulk of people looking at a particular relationship, as of course we move towards the president torres coming to a conclusion of course, dollar yuan very concerned about the argument from the u. S. Side of the equation. Could become a little more relevant. I think there is that dollar cross that is most relevant. But i think it is the case that you can look at a basket of currency just to see how the currency is trading on a competitive basis, looking at china versus the regional matters as well, to get a gauge of competitiveness. Manus a couple of different articles at play in terms of the pcob qe by stealth adding credit facilities, etc. This is the credit default for china, nobody talking about the fault in china, but that overcapacity people are adding default insurance at a fairly rapid click. Is that part of the conversation about overcapacity in china . Jeremy it is. And i think it is interesting that chart you pulled up, using that as a sign of concern, but if you look at the axis levels you say yes, we are seeing default insurance being added to but we are in the danger zone, just making sure the investors are putting on a little bit of a rainy day manus increasing in 59 countries, i think that is probably the more stable point if you look over the past five years, still not anywhere where it needs to be. Jeremy we look at things in a very sort of microcosm perspective, and we sometimes need to just row backwards and look at things and a broad historical theme and say yes, we are seeing default insurance the cup and there are issues in china, but i think those issues will create uncertainty over the short to medium term. We know the issues about the nonperforming loans, the Banking Sector for example, these are concerns that you continue to Impact Market thinking, but they are not something which is causing markets to be very nervous about the situation really blowing in the shortterm. Anna interesting that default and china can flag up as people have a concern, because of the size of the economy, however comes a systemic risk. Manus everybody goes into these microcosm modes with china, currency, stock market, it is systemic. Jeremy absolutely true. In the context we have the pretext of 20082009 in the back of our mind, we are looking for risk, and china is an obvious one. If you are looking at a glass full, that is a key component. But it does have those systemic risks that are at the edge of market thinking. Anna jeremy stretch stays with us on the program. Here are some highlights for your day ahead. Manus manufacturing across the mainland in europe, collating whole. E eurozone as a at 9 a. M. U. K. Take time. Followed by figures from the u. K. And payroll. Anna u. S. Initial jobless claims also at 1 30 p. M. U. K. Time. And an hour and a quarter after that, u. S. Manufacturing pmi. Manus the rate debate bill gross calls for two rate hikes as soon as march. We have more from the bloomberg interview, coming up next. Anna and the red line on brexit negotiation, theresa may spells out her limits on immigration. Anna have an hour later, we speak with the finance director about the earnings outlook at the u. K. Approaches brexit discussions. This is bloomberg. Anna welcome back everybody. This is countdown on bloomberg television. 1 20 in hong kong, hang seng outperforming the broader market. Let us get the Bloomberg Business flash. Here is Rosalind Chin. In electronicss have fallen after the company said shipments of the note seven smartphone will be delayed in korea. For further testing and quality checks they have been catching firewall charging. 3. 9onic has raised billion. In the at ain fiveyear notes yield of 0. 9 and the rest in sevenyear securities. Mitsubishi is the only issue or to sell more than 4 billion worth of bonds and a single deal this year in japan. Cofounderped after Evan Williams says he will have to weigh all options concerning the future. His comments come as twitter comes in acquisition target, growing more slowly than expected and the stock is down more than 70 this year. Leaders in the Banking Industry blocking people from lower income backgrounds, that is according to a report by a government advisory body. The social Mobility Commission says half of the city of londons bankers are educated, even the less than 7 of pupils to private schools. And that is your Bloomberg Business flash. Manus Rosalind Chin, thank you very much. Bill gross says negative Interest Rates are turning assets into liability, citing the capitalist system. Gross also says the policies will failed to produce sustainable economic growth. He spoke to bloomberg. Bill lota negative Interest Rates are a hindrance, as opposed the policy, and i will continue to believe in that. And i think that is the heart of the problem, the other part is that it is true fiscal responsibility has been advocated by many governments, and we need some good old keynesian stimulus. Anna bill gross is also recommending that the Federal Reserve raise Interest Rates twice by march. Bill by 25 basis points in september, 69 months from now let us do it again, come one. Let us realize the capitalism cannot really do well, they can survive a not do well, with 0 Interest Rates, or negative Interest Rates. Manus jeremy stretch is the head of fx at canadian interest bank. Do you think that is a provocative thought . The market take two hikes . Jeremy going back to we had the last rate hike from the fed, back at the end of 2015, of course the fed had a prescription of four. That has been conveniently blown off the table over the intervening months, now that to assuming well, we could see one hike before the end of the year, waiting for the idea that it is more likely to be september than december, but nevertheless one hike is coming. But what how much of the trajectory . I think we can see a slow trajectory toward degree of monetary tightening because in the context of what bill gross said, effectively zero Interest Rate policy. And of course we are about a labor market essentially at full employment if you listen to some of the speakers a look at the data points, and of course we have become accustomed to the equity markets being continually stimulated by ongoing liquidity. And i think that is a drug that perhaps has been rather overdone. Anna making the point that gdp is 3 , and if we get employment job growths number of 150,000, if you cannot hike rates in that environment, when can we . Inflation is a thing he did not mention i suppose, holding the fed back . Jeremy obviously, the fed does have a twin mandate. And when you listen to some of those comments from boston yesterday, talking about the twin goals of the fed, and rather more on the double cap, now also coming around to the idea of some of those unintended consequences of having ultralow rates for too long a period. But i think that is a scenario the markets need to be considering. We have seen obviously the fed finding external reasons not to hike rates, when perhaps they should have been moving a little i would say faster but moving more preemptively. Anna to see capitalism cannot function well at the zero bound or minus rate, is their sympathy of the fed for that view . Jeremy in a sense, looking at Central Banks and we are purely datadependent, of course the need to see data. But there is some degree of sympathy, but we are seeing a great Monetary Policy experiment conducted a number of experiments, boj or wherever. The negative rate story will actually be the panacea of the capitalist system. Manus going back to the speech, he warned of the commercial property bubble. And if you think about this time last year were worried about oil market and the impact on balance sheets, here we are with the fed governor warning again, back to the property bubble of 20072008. Jeremy that is sometimes the problem is that we dont necessarily learn from history, we think we learn them but we them. T part of in a certain sense we have seen unintended consequences of the flow rate scenarios in terms of bubbles once again being built up, and of course investors who are looking to generate returns, and if you cannot generate returns from purchasing those riskthree assets in terms of you have toonds, look at other asset classes. That does make additional bubbles. Anna jeremy stretch stays with us. Up next, looking to algiers. Saudis cedi will not flood the market ahead of the opec meeting later in the market. Manys, we had a big group, down 6 yesterday. Up little bit this morning, half a percent. This is bloomberg. Manus it is just on 6 30 a. M. In london. A beautiful shot of the emperor alice in tokyo. We have a little bit of news breaking across a bloomberg. Q4na numbers talking about sales falling, looking like conveyed estimates. Down 2. 7 7perations billion euros. Point imate was for two 8, broadly in line with the profited number. They are citing chinese decline as part of that negative makes, also citing difficulty in korea and in travel retail. , fullyear sales that number looks to be a little shy of the estimate. But the back story here of course is the business facing problems in china ever since the ed down government clamp giftgiving. And the vodka seeing slower sales in recent years, why they went on a bit of a buying spree, buying up faster growing brands like the gin. And also increasing midmarket sales. Manus the glass . Anna midmarket sales in china pushing those, the sort of highend, really more difficult. The reason the china story is important because a third of the revenue or around that number comes from asia. That is the Pernod Richard story. Manus let us take up on the chinese came. That ricard discussion is the personification of china. Looking about daybreak, a new addition on your terminal and the bloomberg, you have to hop into. China factory surprise the highest in two years, stabilization and manufacturing august,0 point fall in of from july 49. 9. Purchasing and quantity prices all down, but it was the surprising index which was little bit more disconcerting. Private business came in at 50, down from 50. 6. In china, there is push and pull in but those numbers. Anna the next tory daybreak is covering is the bill gross recommendation that they rate hike twice. The market does not expect that degree of monetary tightening. He was talking about the first hike coming in september if we get 150,000 jobs created in the month of august and the latest jobs report, but the market is not expect that. The work function does not show that expectation right now, but he thinks due in september, and again in 69 month. Manus i like that idea. Waking up to janet yellen saying let me have it. Cfi in the u. K. Comes up in the u. K. Literalness morning. What are the signs, if any of the brexit impact, the pounded down near 12 . We had someone telling us yesterday that negative Interest Rates are already in the crisis, sterling oversold. Anna we will move on to that subject. Talking more now because theresa may has set out the first of a redline brexit negotiations at a cabinet meeting. The uk Prime Minister said he wants people coming to britain from the eu, suggesting she is willing to leave the Single Market to do so. Manus the cabinet also decided there is no need for parliamentary vote before triggering two years of former talk. We have jeremy stretch from cibc. Parliament will be allowed to have a debate, but not allowed to have a vote. May seems to be going for ending the Free Movement of people, prepared to leave the Single Market to do so. Its a money to the wrong hat . Jeremy it does seem the case that the brexit years appear to be winning around the cabinet table, and that theresa may who did campaign for remain on a lowkey basis perhaps was rather more skeptical of the european project then perhaps her official position and vote would suggest. And it does look as though this immigration argument, which is obviously one of the key themes behind the Winning Campaign in impetus to providing her policy debate, irrespective of the fact it could come at the risk of Single Market access, which is going to be potentially damning for the u. K. , not just for trade relations but the effect it could have on the Financial Sector has for rules. Anna and look more like a hard brexit the perhaps markets have allowed themselves to think over the summer from the meeting yesterday, no parliamentary vote, the fact that the scottish and welsh in the Northern Irish not be allowed to block this bespokely, it will be a solution. And yet the pound is that 131. Jeremy i dont think anything we heard yesterday really changed too much. I dont think anybody but thought there would be a parliamentary vote on article 50, because then the dynamics would change. Came out and said there would be a parliamentary vote on triggering article 50 that wouldve been binding, and you would see the presumption of the heart brexit diminishing quite substantially. Now we already know the markets are essentially record short in sterling, and there is a huge amount of negativity in the price, and if we see slightly better manufacturing numbers this morning there could well be a little bit of a short. I think that is the question we are seeing at the moment, huge amounts in the price, and ensuing political uncertainty. Yes, i think we will are timidly see sterling go lower, but not surprised will see a short squeeze. Anna the language does suggest a sort of tougher brexit in terms of our trading relationship then maybe some have anticipated. As you said manus manus a unique relationship. Anna and not offtheshelf like canada or norway, but a positive outcome for those who wish to trade goods and services, no reference at all for the Single Market. Jeremy i think the one thing we have to remember are the politicians who make political soundbites, and that is rather to the mechanics of the negotiations and the results. I think that is one of the issues we have to remind ourselves of, when we see Angela Merkel and theresa may meeting together, joint press conferences should not necessarily be believed in those press briefings because of course was happening behind the scenes. But i take the point i think there are certainly some hard stances being adopted here, at least in public. Manus and doubt from Goldman Sachs on the terminal today saying that really only when article 50 is invoked and we begin to understand the level of pushback from the Franco German axis that we will see the pressure reassert itself on the pound. 1. 20, talking about . 90 to the euro. Is that one position to sell into these rallies, and if so would you agree that article 50 is really when you see the pressure come through . Jeremy the are kind of in the phony war, we saw the first phase of the vote. Now the sterling taking we have not seen the capitulation in the data that some might have seen. But i think ultimately we will see a very lackluster economic environment playing out in early 2017. But i think it is true that until we actually get the timing of article 50 and then we see how the land really well lie at that particular juncture, that is really the Tipping Point as far as that performance. Anna is it possible that any weakness really waits . I know we have seen survey data looking weak, business is holding back on investment but anything to do with the consumer is holding up, and my that continue to be the case until next year until we see the triggering of article 50, until we get this pushback . Jeremy i think the consumer, those working the Financial Sector are very mindful of the fromications of the risk brexit. But if you are an individual outside of the london bubble and dont have the immediate brexit vote, your spending patterns may have been a little bit concerned of ely after the vote, if you were on the remain camp. But that does not necessarily immediately impact spending, only when you see questions about employment over the medium run that will start to risk Consumer Spending and expenditure, and that will start to weigh on the gdp presumptions. Manus jeremy stretch stays with us. Anna asian stocks are reversing earlier losses, oil price on the rise by half a percent. I said earlier it was down, 6 in three sessions. It was down, but up today. Let us check with Ryan Chilcote on the details. Ryan i wanted to get off with the hang seng this morning, up by one half of 1 , rose by more than 5 last month, one of the bestperforming equity markets the month of august. And if you take a look at this chart you can see from may 19 rising 7 . The question is should you continue to hang on to it . A good ride so far. But one thing we learned last hour is that macau casino gamblingrose, sometimes means good news for equity markets. Another watch today is for currency. Here we have dollar declining against the yen, breaking the best strength for the dollar in several months now. An interesting ride for the dollaryen, falling as much as one third of 1 . Japanese stocks by the way up on the back of the weaker again this morning. This is the random wrubel, suggested by the short rand against the ruble. Russia hasurrencies, more on oil than the others compared to south africa, having said that oil is doing better. The big issue here really is diverging political risks, not so much in russia but lots in south africa. Had you been shorting the rant you wouldveuble made 7 last three weeks. If you continue to short the rand you can target 10 over the next six months. Three charts for you, interesting day. Manus back to you. Manus saudi arabia is turned increase its oil storage in japan by about 2 trillion someone according to who said he would announce the details of the deal by the end of the week. Anna let us bring in Tracy Alloway in abu dhabi. First day of the month, lots of people returning from holiday to the desk, going to have to gear up for a big september when it comes to oil markets. Talk us through what is ahead. Tracy yet, that is exactly right. Not just oil markets by the way. A whole host of political and Macro Economic things coming up, including the u. S. President ial election and Interest Rate announcement from a major centralbank, nearly every other trading day. Really a big month. In my neck of the woods, everyone focused on things that move the price of oil. On that front we do have the big opec meeting coming up the end of the month. Even before then, we have the primary Capital Markets gearing back up coming back to school. And everyone seems to be getting ready for the historic ipo of course of saudi. On that front we do have Bloomberg News reporting that japan has agreed to increase its Storage Capacity for saudi andian crude in okinawa, that should help strengthen ties between the country ahead of that announcement. Really everyone sort of gearing up and getting in line for the big ipo. Manus tracy, the day to you. The saudi minister saying he is not going to flood the market ahead of the opec meeting this month. They are already pumping a maximum im sorry a record level. Not maximum already at record high level. But hardly a Benevolent Branch to the market. Tracy well, that is exactly right. On the one hand, i feel that saudi all not flood the market to preserve market share should be seen as a positive for crude prices, but given the current status quo which is saudi pumping at an almost record pace it is not necessarily good news. The Energy Minister also said he was not worried about a slowdown in crude demand, so really the potential for a continuation of the status quo is hanging over the market. And ahead of that opec meeting we had a lot of confusing signals about whether or not we could get any semblance of a some againfreeze, all to play for as you would put it, manus. Anna bloomberg executive editor Tracy Alloway, dilma;s political demise. Resellakes over them after the Senate Impeaches doma recep. Manus we speak to the finest director of hayes about earnings and the outlook for the market as you can approach is brexit discussion. Anna and chinas factoryanna gains, we go to beijing for the unexpected rise in that manufacturing dates for china. Bloomberg. O manus it ismanus a city that never sleeps. Not when i am there. There you go. It is a lovely shot of new york. Up on u. S. Equity futures. Oil lower than yesterday. Let us get the Bloomberg Business flash. Lets go to Rosalind Chin. Inalind manus, shares electronics have fallen after will beung note 7 delayed and south korea. Following reports of headsets catching fire while charging. Panasonic has raised 3. 9 billion in the biggest bond the nonfinancial company in japan this year. This is the fiveyear yield note, 0. 11 . And tenure security. To sell moreers than 4 billion worth of funds in a single gearless in japan. Evan williams said the company had to weigh all options concerning the future. His comments come as twitter is an acquisition target. Revenue growing more slowly than expected in the stock is down more than 70 this year. Banking industry blocking people from lower income backgrounds, that is according to a report by a government body. The social Mobility Commission says half of the city of londons top bankers were educated at two schools even a less than 7 go to a private school. Y in 10 went to nonstate schools. And that is your Bloomberg Business flash. Anna Rosalind Chin in hong kong. Seth hasdilma grew lost, about to appeal the decision that has seen a replaced by her deputy, michel temer. Manus he plans to and the worst recession in eccentric. We are joined by a reporter who has been following the story. Thanks for joining us. Look, what will be the main challenge for temer Going Forward . He has the currency exonerating on the upside, what are the main issues as he takes the office . There are many challenges ahead of him now. And most of them are related to the approval of the measures approvedays can have in congress in order to get brazil back to growth. And it is not clear how strong of a coalition he has in Brazils Senate and the lower house. Advantages fory him to approve the response like the Pension System reform. Framework foring Brazilian Companies to hire new workers is expected to be reformed as well. These are very key elements that are expected from the administration, and it does that seem like it will be easy for him to sustain this support necessary. Anna how much of a mandate for change does he have . What kind of popularity does he attract in brazil . Ipe that is a good point. He is not seen as a popular president. He used to be the Vice President mas first anddil second term. But he is not seen as very charismatic, very popular president. Actually, a recent poll by one of the Biggest Research companies in brazil just show that he has basically the same level of approval that dilma had in april, when the whole impeachment process started officially in brazil. And that is close to 50 or so, resilient that think his administration has been very good so far. That is very low. Manus let us see what his mandate holds up in both houses of parliament. Joining us from dubai. Jeremy stretch is head of commerce. Atew regime, new politics play. This is the personification of the brazilian real, down against the dollar. Dollar up. Real is down. Is out. This is the best performing currency of 2016. Does that momentum sustained . Jeremy because you moved down those sort of levels we saw the beginning of the month. I think the question then the platformoes really layout and that comes back to this question of political support, yes, we need to see the fiscal house put in order. That is a real Tipping Point. Probusiness,be but the ability to push through that process. The 1. I would just pick up from your correspondent who was talking about not particularly charismatic president , that is the necessary the worst thing a world, because when you have someone who is charismatic you want to take the opposite direction. I wouldnt hold that as a criticism. But taking the fiscal house in order, that could be the sticking poin. We might see the rialto little better. But the opportunity just to see a little bit of a correction may 50,moving back into the 3 prior to a lower risk. Anna a lot depends on the Global Growth story. I am fascinated that within six hours of the impeachment results, temer was in china. Going to the g20, but that really focuses the mind on the links that exist between the global economy. Jeremy you could argue it was a convenient cover story to be open go to the g20 in china, but clearly those economies are integral and have been building up very substantially, certainly during the commodity super cycle or the chinese were looking at forging great relationships with brazil. So i think the relationship between the two is significant, will become more significant, but more about the fiscal house, that will be the real challenge i think for tmer Going Forward. Looking at Global Growth starting to remain or continue to push ahead, helped by china not having a hard landing we were talking about earlier, but i think that will help to alleviate some of the financial stresses in brazil. Manus there is a question i know the keeps you up at night, the South African rand against the ruble . Politics and commodities at play, the reprieve we have seen, onemonth fall and dollarrand and in the ruble. And it really is commodities, a relief for the russians, political nightmare for the South Africans. That kind of spread, is that something worth playing are just too idiosyncratic . Jeremy it is relatively idiosyncratic. Manus i know you think about the rand. Jeremy the rand is a currency i short, and there are inherent problems. The question becomes what is to gain . And that leaves you thinking about the highyielding currency, those that have commodity components that can be looked at. So whereas you may historically look at the mexican peso against is much moret challenging because of the ensuing issues with north america. In that context it does open up the possibility of the ruble being interesting if the oil prices remaining relatively stable or moving modestly higher over the longer run, that does provide a little stability for the ruble. But there are those inherent russian issues, ukraine, etc. Bech means you have to nimble. Stretch, head of fx strategy cibic. Next, and and i the a conversation about swiss company. The outlook for the u. K. , all of that at the United Kingdom heads for brexit. Hard or soft, that is a debate. What is happening in terms of employment, in terms of wages, in terms of recession and the u. K. . London up by 1 . This is bloomberg. Manus china gains. The unexpected boost left asian stocks. The rate debate. Bill gross calls for two hikes from the fed as soon as march pretty says other Central Banks are addicted to negative rates. No fence sitting for trump. The nominee reiterates his pledge to build a wall along the southern border and send the bill to mexico. Countdown. Manus you are welcome to you are welcome to countdown. I am manus cranny. Anna numbers come through from hague. The brexit conversation and the broader growth story in europe. Operating profit is coming it 181 Million Pounds. Estimate was for 179. In line or a touch above. 173 Million Pounds against an estimate of 170 Million Pounds. In line there. Your numbers on net fees and dividends. Lots talk about in terms of the k growth story. In terms of the u. K. Growth story. Manus lets get into the futures conversation. Equities higher. Oil has turned around. Oil knocked out a lot of the august gains in the s p 500. London, paris and frank for up by. 3 as oil turns itself around. A higher opening across the range here in the European Equity markets. That takes is mostly into the risk radar. Oil, one of the top features. Anna we have the oil price and therefore you hovering around 45 a barrel. It is up. 5 . It has been down 6. 2 over the previous three sessions that three sessions. The saudis talk about how they do will not the saudis talk about how they will not boost production to capacity. They will not take it to full capacity. Manus the dollar has hovered around 96. 04. We are waiting for the jobs report, 180,000. Bill gross, the big story, the hangover from yesterday. Bill gross saying to rate hikes saying two rate hikes. The aussie dollar in there, 0. 7537. We saw the chinese data, pmi number better than estimated. Better than july. Not quite so good but strong. Peopleturing pmi giving comfort ahead of the g20. Here are the bond markets, 1. 58, unchanged on the u. S. 10 year. Manus lets get out to Rosalind Chin. Republican president ial nominee donald trump has reiterated his pledge to build a southern wall. He plans to increase border controls and report any illegal immigrants. He met the mexican president with a range of topics. The second brazilian president to be impeached and removed from office in three decades of democracy. The senate found her guilty her part in congress to finance party spending. She will replace two in results worst recession two and bill gross is recommending the Federal Reserve raised Interest Rates twice. The billionaire money manager spoke to bloomberg. Rates 25raise interest inches test 25 basis points. 25 basis points. Lets realize that capitalism can do well because cannot do well with negative Interest Rates or 0 Interest Rates. With the official factory gauge arriving in august to its highest level since 2014. It came in at 60. 4. Showed temporary weakness due to flooding in the south east portion of the country. Saudi arabia is promising not to flood the world with oil and head of the upcoming opec talks. Even ofgy minister says the kingdom in the near future. Saudi arabia is pumping near record levels as it tries to preserve market share. Singapore has reported the first case of a pregnant woman with the zika virus. 24 new cases were identified yesterday. The Health Minister says more cases are expected to emerge. The government has urged all pregnant women to go to undergo tests for zika. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top im Rosalind Chin. This is bloomberg. Anna lets take a quick look at the asian market session. We are up and little bit on the msci asiapacific. The math makes things look a little more negative. David that is the perfect way to describe it. We are entering the last few hours of trade. When you look at the regional benchmark, the msci asiapacific , it is a most the perfect split. You have 47 of the top 1000 on the way down to 48 on the way up. A small percent unchanged. For the weekend, we are on the fence at what is happening, really aimless stroll where you have one or two developed markets. In this case we have had either hong kong or japan really keeping us in the game. Southeast asia or emerging asia has really been sold off. These outflows have really picked up from last week, ahead of that a make or break jobs report. On friday. You look at the likes of the philippines. We rarely talk about this market. Seven Straight Days of decline. Indonesia is down by 1 . The data that has come through so far for today has been very positive we talked about the pmi out of china. You guys will be talking about that more. Of southports out korea picking up for the first time in 20 months. We had gambling intake for the first time weve seen increasing in 27 months. A lot of this is supporting the fact that this is the view that china is a stabilizing. Taking a look at this early set of data out of china, and they are saying things are proving things are improving. Currency markets, nothing much to note. Aussie dollar getting a decent did. Getting a decent bid. How china came out, there you are, that is your bid. Expected at these levels levels. Xpected at these that is what the banks agree on. Manus a little bit on those haze numbers. Joining us now, paul venables. Welcome to the show. On the first of september how does the world look to you echo i looked at your numbers, uks flat. Europe looks like it is unharmed. Run us through the numbers. Poco look at the desk paul look the outlook paul look at the outlook. With some percent growth. We have 7 growth. Wasbeauty of the business diversified. Very strong in europe. A continuation of 1 gdp, no shocks, a lot of structural growth opportunities. The first time we are seeing all the business is growing and strong. Along slowontinues a long, slow recovery process. Asia is a big tougher because banking in u. K. Got increasingly tough for the second half tough as the second half progressed. Looking at the year, flat please desk flat fees. Flat fees. Overall, good results. Excellent cash conversion. Eliminated debt in the first time in 10 years. Getting quite close to big special dividends. We come on the outlook and how things are faring at the moment. Anna getting close to special dividends. What does that mean . Paul the moment we get to 50 million in the bank, we get positive outlook we at 37 million in the bank with these results it whatever happens next cash well have a lot more. It is still cash generative good out of context, cash generative. We will be in special territory next year. Manus if we have a special dividend on the way, would you also look at acquisitions . Are you still squarely focused on organic build . Paul we have a good track record of acquisitions and we are phenomenally selective. Ive been here 10 years. Science took us into the u. S. It is about the 30 Million Pound level. Deaths therelated people related business will always be organic. It is a people anna how isess trading going at the moment for the u. K. Echo u. K. . Paul we expect to see solid growth. The strength is outweighing some weakness in the u. K. U. K. When i was on your show, we had about two weeks after brexit. Those were the worst two weeks. A shock full of a shop full of activity. After two weeks, that stops. We stabilize. Since then we have been stable. Thisve been stable during deal of time doing this deal this ceo ofuring time. The positive for me having to been there for 10 years and into the euro crisis, so far we have had the shot fall and we stabilize very quickly. Business,ee of your engineering, oil and gas and construction two weeks of a dip and then some reprieve. Are we over blowing the risk of recession in the United Kingdom . Given the indicators that you look at on a weekly basis, is that risk overblown . Paul completely it we had this conversation last time. This is not lehmans. The problem was the credit markets froze. You can get money to do anything. Most businesses were frightened about what they would survive it in that situation, debts would survive. In that market, you stop everything. Would survive. In that market, you stop everything. The likes of the consumer data that you saw is what we have been in one or two months time. Our indicators fell sharply for a couple of weeks. The positive is it stopped. Standpoint, is moot as soon as you go much above london, the rest of the u. K. Is almost as if Nothing Happened at all. Small businesses are continuing to do everything what we have seen so far is Larger Companies in banking and construction property being more cautious on the spending. The key when i am back here in october is what happened in september. The beauty of International Group is growth is exceeding any decline. Anna we dont know what brexit really looks like yet. Paul, thank you. Paul stays with us. More to come with him in a little while good medical a little bit of breaking news while. Manus a little bit of breaking news. Ceo is going to retire from the company at the end of this year it he has been at the helm and of this year. He has been at the helm for six teen years. For 16 years. Anna we spoke here on many occasions. Lets talk about china. The factory gauge unexpectedly rose last month at the highest level and was 10 years it ken wills has been going over the numbers. Good to see on the program. Doesnt it mean that china has turned a corner . Official pmi gave comfort. The unofficial pmi was not so, this was not so comforting was not so comforting. Ken the main headline number was above expectations did it was good news but we dont want get too excited, because expectations. It was good news but we dont want to get too excited because it was just above pmi. It has shown marginal improvement, but still has a way to go. There is a divergence in the numbers, because the Larger Companies are doing well while the smaller and Medium Sized Companies showed contraction. The headline numbers to give the government the policymakers a ,it of room for moving ahead throttling back a bit on the stimulus that they have been putting into the economy. At the same time moving ahead with reforms of state owned enterprises. Cutting some of the excess capacity, especially in steel and coal sectors. Manus 10, thank you so much. Stay with anna and i could we got more to come. Stay with anna and i it we got more to come. Stay with anna and i. Weve got more to come. Anna welcome back. This is countdown. It is 2 18 if you are in hong kong. Heres david ingles with the Bloomberg Business flash. David lets talk about reporting fullyear profit. It beat analyst estimates on improvement in spain and the u. S. Profits from the current operators rose to 100 23 billion euros. The country also forecast growth of two to 4 this year. Shares and Samsung Electronics have fallen after the company said shipments of its note seven smartphone will be delayed and south korea for testing and quality check following reports they have been catching fire. Biggest bond sale by nonfinancial company in japan this year. It sold half in the 5year note in a yield of. 9 . The rest in seven and 10 year securities. Tosubishi are the first sell more in a single year this year in japan. Shares of twitter jumped after the owner said the company has two way all options concerning the companys future. It comes amid speculations that they are in the position target. Forecasting is growing more slowly than expected and the stock hit down 17 . Erest of the quiz him lower income backgrounds according to this report by a government advisory body. The Mobility Commission says half of the city of london are educated even though less than 7 pupils go to a private school. Tovate equity or pe went nonstate schools. That is your Bloomberg Business flash. Us is paull with venables, finance director at haze. Paul, brexit, the impact on your business, germany is one of your huge markets. Europe is it is an incredible market for you. Has there been contagion echo what are the hallmarks that youre looking for . Paul so far that is not been one side of thats one side of contagion at all so far that has not been one site of contagion at all. We expect to see strong doubledigit growth all over the European Market in the next quarter and beyond. We are well set for the year. I try to paraphrase what i see going into germany and france. This is almost an amused view as to what have you done . They are looking at their own business. Clearly there will be some businesses that might decide in u. K. Twoputting halt on new investments. We are seeing nothing in europe so far. I see no reasons why we will see any contagion. You only stop doing things in your business in a market, if you see an impact. German consumers are not going to be impacted by the fact that the brits have decided to leave europe. We see nothing so far. I dont next i dont expect to see it in the next year. Anna go back to school in september from theresa may and our government about what brexit really does mean. On immigration, from yesterdays meeting, immigration does seem to be a redline. If immigration it seems curbing immigration is a path of the brexit conversation and a priority. How do does that sit with a business such as yours . Paul there is not much impact on our business if we we do whitecollar recruitments it were doing skillet we professionals doing skilled professionals. The key for all of us is clarity. It is clarity for exporters going outside of u. K. Can i do that now . Do i have to wait until i know where the terrorists are . Are they going to be any terrorists . To dance have they got to cut any costs . Have they got to cut any costs . Will give wand that us clarity, but we know the funny one the phony one is. Back to the biggest shock has happened. We are blocked from doing something. I see nothing so far that would suggest that. Manus that depends on the passporting discussion. We will cover that for go to the pound is down 12 . Good news for your bottom line. What does that mean for your bottom line. You. News for paul we dont hedge and we are not going to. Today, saying we got solid growth. We said if we retranslated 181 million at the current spot rate, it goes up white 26 billion pounds it goes up by 26 billion pounds. It gives us a good hedge. We are going to have some weakness in the u. K. If youre only in the u. K. , that is one issue people where in 33 countries. Australia just about get back above the u. K. Profit terms. It is a benefit in having a diversified business. We are not dependent on anyone country or currency. Anna you do whitecollar recruitment in the Financial Services industry and all of that taps into in london is the question. Talking about london and Financial Services sector, how important do you think it is for the city that we maintain passporting rights for Financial Services . Is that your citation . Paul is that your expectation . Paul weve already seen a number of banks set up small operations in dublin. I was in dublin in may. There was a big presentation at citibank. I happen to be in dublin that day. Congratulate the citibank for opening an office which has 10 people in it. The key part is can we continue to do the type of business we are doing today . We start with this discussion is an obvious one. London is hardest hit because of the banking. That is the tough because of lots of levels, lower Interest Rates, costcutting. Construction property, we have already had the increase. Etc. E high prices, we should not be surprised about the weakness. When im here in october or january, have we seen some of that reverse, because some of the sentiments we have begin to see we have begun to see pick up. We did our cost reductions last year. We are back to that clarity enabling to do sensible things. They will find a way of maximizing probability. Manus we will find out what those rooms involve after article 50. Great to have you with us. Anna Program Director at hays. That is it for countdown. A quick look at the futures at the start of the european equities day thats equity day. Guy johnsons next. Guy welcome to on the move. 7 30 in london. We are county down to the european open. Here is what we are watching. Mobile pmi data. Chinas gauge has hit its highest level since 2014. We are going to venue the numbers out of europe, including postbrexit manufacturing. How big will the impact be . Banks disrupted. John cryan calls for the ubs chairman takes to the stage in frankfurt. For will his solution be european Banking Sector