We are seeing greek debt selloff on prices falling in the yield rising 2. 6 . We are at 17. 25 percentage points. Money out of italy and spain. The fear is contagion. 2. 37 . We are up 11 basis points and a bit of a selloff. Back in 2011, 7. 5 here. Contagion under wraps by the ecb. The fact quantitative easing will be there. Florida to the safe havens of the United States and german. Flowing into the safe havens of the United States and german. Yanis varoufakis, the finance minister leaves him his greek exit out of politics. We saw the euro spike ever so slightly higher. Generally down. That is where we trade. Very quickly, a look at some of the stuff we could be keeping an eye on. Some of the periphery. Down by 4 . One of the most exposed to the italian sovereign debt market. That will hurt. Bcp as well. The portuguese lender is down 5 . An eye on rollsroyce. The engine maker said that are cutting a profit guidance, fouryear might be 75 Million Pounds last. Jennifer thank you. Periphery banks getting hit hard. East to hong kong with david. I whats well prerecorded it i might as well prerecorded this. Another shaky day on the composite. Talk to me. Day bank you could. David you could. A different result. They managed not to do it but they announced a series of measures on the weekend halting ipos. Da whatv we saw today was topsyturvyid in a percent higher. A percent swing down. What we saw today was topsyturvy and 8 higher. There was talk in the market especially the last 30 minutes to deploy some of that cash to prop up the market. We cannot concern just yet. What we can tell you is a a lot of these Bluechip Companies in china. They said they will be targeting and buying got heavily weighted stocks. Massive games. Let me give you the big three. The three heaviest weighted stocks. Petro china, the big 2 banks. Further down the line, further down, six 7, 8, 9 substantial. Whether it was a money back to buy government were speculating these will be targeted, this list lifts the overthrow market. That is not the case around asia. The worst day in five months. Nikkei 225, 16 billion wipeout. The worst case. Look at holcomb. 3. 5 down. Worst day since november 2011. A look at holcomb. A lot of risk ask a lot of risk appetite. Look at hong kong. Also the case of the dollar yen is back down. The dollar is stronger but the yen is stronger than the dollar. Let me end of the bond market here. Yields back down. Jjb the u. S. 10 year to give you size and scope. Jjb, 47 basis points. Jonathan david ingles. Back to the top store. Yanis varoufakis steps down proclaiming he will wear the creditors clothing with pride. First to you, guy. Varoufakis is out. It may get greece back to the negotiating table. Does it really move the dial . Guy it moves of the dial a little bit. I think a great deal. The rumor last week he would quit and he is done some kind of a deal with mr. Tsipras. We asked him if he will quit but he said he would. Turns out he was going to quit if that was a no vote as walk. The margin, it might make a different. I do not think in terms of a bit substantive points, it will make much difference. He has not been front and center over the past few wes. Few weeks. I do not think it will make an enormous difference. Who replaces them might make a difference. If there are a couple of possibilities. We will find out after the leaders summits. You should probably think of it the other way around pretty a who is the new guy will make a difference more than the old guy. Jonathan hans i want to bring you in. Merkel, hollande meeting. Listening to the reaction from germany that not softened their stand. The greece needs to get through the german parliament. Hans they have not called in the parliament back in session. Germany is on holiday until september 7. The kind of holiday that guy johnson deserves. Whats where here from the french is you need to have a conversation about the debt restructuring. The meeting is in paris and merkel is going to paris. It looks like the french is clear to me to open a discussion about debt restructuring. The finest minister said earlier that should not to be taboo. It is clearly the fridge moved toward mr. Tsipras and whoever his new finance minister will be to potentially cut a deal. One other note on what happens if you got a final deal, we need a number. You could have a sense of how much a debt needs to be restructured. The big question, you heard this from the mounties finance minister, how much a bigger is the whole because of the actions greece has taken the past week . How much is his referendum costing other european taxpayers . Other nations that kobe consider poorer than greece. Not just about debt restructuring but getting the Greek Economy back on track and wife a pretty have to price tag. There can be some sticker shock. Back on track and it could be a pretty half the heft price tag. Jonathan the buck stops, the end game with a ecb. How do they react . Guest the fact is all buck stops with the ecb is matter of fact. They are holding the reins. The liquidity. That would be game over. The ecb has always waited for politicians to calm of what the deal and sat in the meantime we will keep the greek banks afloat. To measure them enough collateral. Here we are with no probe rim and no deal at the moment. Here we are with no deal at the moment. What does the ecb do. What mario draghi will speak to eu lead leaders and the governing council will meet the later and at that point they have to say deal with get the greek banks and little bit more time, give the politicians more time . Has to be a close call. Jonathan right, i want to bring you in. We have to as the question on wednesday war open. So much Political Capital spent over the weekend. We have to ask the crashed in we have to ask the question. If i am a greek person they voted no, does my bank open tomorrow . Guy is that is probably the biggest question. How much money in the greek bank . How much money can they allow . All kind of rumors. The critical thing is when do the banks open. Mr. Tsipras was on state television and he was making it very clear how important it is. Alexis tsipras our immediate concern is that expedia opening of the bank for stability. Im clear the ecb understands and the humanitarian dimension. Jonathan dachshund guy there is no program, no deal. A long way to go before it can happen. The ecb to raise in the l. A. Keeping it on a hold will not solve the problem. Money flows out for you leaving their where it is will not resolve the matter. I have to say ive yet to speak to anybody over the last 24 hours who think tomorrow will see the Banking System reopen and functioning normally. Jonathan great job. The state of play across the euro as we begin another week of uncertainty for greece. Investors are sounding more fervor. Jpmorgan saying the best Case Scenario is a greek exit. Jpmorgan said quote for more, were joined by global strategist. Your reaction from barclays and jpmorgan, share your view. Guest yes, more likely than not. We have gotten down to hard lines about where negotiations with no. Can you have a meaningful debt relief deal or not within the euro area . If you have one for greece you have one for the future. That is a very political decision, a tough one. If you ask me to step on messiah or the other, you can do some if you ask me to stop on one side or the other, you can do something. Whats at the group voted for is bigger than that. What the greeks voted for is bigger than that. It changes the way the eurozone looks and feels. In that choice, the greek exit is probably 65 probable after this point. It is an understatement. I just really struggle to see how you get that kind of an agreement particularly through some of the national governments. Jonathan some say it as fluid as the note written before varoufakis step to down. When you look at the exit maybe more than john saying Prime Minister tsipras thinking it one of the pave the way toward making the deal. You have not been following the last five months. It is a pretty big hurdle here. Kit juckes it is clear in terms of the language between the two sides something had to get. Now we are talking and we can get away from some of the emotions. Is debt relief meaningful . The imf things another 60 billion euros needed over the next three years of new money. By the way, that number goes every day the Greek Economy stands still. A lot more money needed area you have to go around the table and say, we do not mind opening pandoras box as saying so with the principles of our Debt Forgiveness within the eurozone will change. Jonathan the imf says that. We know theres a difference between the creditors. Whatever they agree on together in brussels is what has to go to the german parliament. When i look at the very fact is quitting, seemingly the market forget jpmorgan the best Case Scenario for the market seems to be we are going to get a deal. Is that your best case . Kit juckes no, not my best case at the moment. I do not know if they think that. I do not know how many bullish strategist you get on your show. I will leave that sought thought. The euro is not just going to collapse. Bond markets are not going to collapse if you 60 billion euros from the ecb and whatever it takes and pretty powerful since first made. I do not think it alters the reality. The solution to this is more money for greece and Debt Forgiveness. Debt forgiveness. Monetization and do we get easing of Monetary Policy . Does it make me hurt joining fx strategists . Mno, it doesnt. Jonathan the final question for this part of the show, what does the ecb do . Kit juckes the ecb, if they play straight, the only thing they can do. I do not see how they can increase it that you lay without political gift. They certainly keep it at current levels and whether it takes us. The ecb does not want to be a principal actor. They want to the supporting actor in this game. Jonathan kit juckes will stay with us for Chinese Markets fail once again. A monster. What can at the market . Back to greece. Will a new finance minister make a difference . This very busy monday morning. Good morning. Jonathan good morning and welcome back to. Welcome back to on the move. The euro dropped to down. We are at 110. 54. Down by 0. 5 . Germany yields down by six basis points. Spread widely but not mark people expected. The italian 10 year is 3. 4 . Brent crude is up. Below 60 votes a barrel since april. Session bucks a barrel bucks a barrel since april. Cac 40 is lower. The dax in Frankfurt Germany down by 1. 2 . A look at shanghai, at one point over 7 and then into negative territory and came back up again. What a session again on the day in china. Share surging at the open on the shanghai composite. The government shores up to drive up fails to drive up a rebound. Richard frost with the hardest job in hong kong trying to follow the shanghai composite. Richard the market did not buy into the weekend, did it . More measures over the weekend just gone. Do you expect it to be higher . Richard absolutely. It did start out very, very strongly. 7. 8 at the open. It has been exhausting particularly told to do. [indiscernible] if the index fell more than five percentage point by the end of the day. The small stocks continued their decline. 2. 4 in the shanghai composite. That was largely made of the biggest state owned companies. Petro china, Agricultural Bank of china. All gaining around 10 . The recovery is probably accounted for most of the move on the shanghai composite. What is happening now is again, this Reputational Risk is emerging. What will and whats can the government due to stem we are seeing . Jonathan richard, as i go to the bloomberg. Com story the 1929 playbook and the chart of the shanghai composite versus the dax we know what happened when they put together funds to buy stocks. It carried on plunging moving south. What else can the government do . The question we explored last week is if they lost control. Does it look like they are losing or lost control . Richard well how in control were they in the first place. The big issue of why the measures are not working is the fast amount of margin debt in this market. Weeks and months, people have been telling us when people stop , it will be ugly. It has played out as people have predicted. Half of this margin debt, people are talking about 2 trillion yuan is unregulated. The regulator does not have control. A lot of this margin debt and the smaller companies, whatever the Chinese Government is doing for managers, they are now buying small caps. Four people leveraged up to buy these stocks, they are facing margin calls and having to sell their shares. It is hard to see how the government can combat such a vast amounts. Combine with her official figure of one trillion yuan and as a massive sum. That is not much compared to the margin debt in there. The government will have to work at how it will try to slow the deck unwinding. They are trying to do it by talking golf the market. Everything under control. By talking up the market. Web not seeing that. Jonathan richard frost, always a pleasure britt lets bring in kit juckes. Kit, questions we probably need to ask should they try to control it . The promarket credibility is absolutely shot. A huge blowup in the market. Down by 30 and as they little like they are panicking. It a little fire the authorities are. Would you agree . Kit juckes panicking, it is difficult that we have so many markets that do not operate freely around the world for european bonds, treasury. The range of markets where we have politicians and centralbank try to use them for policy purposes as opposed of letting them do what they do and funneling money toward companies and recycling money from investors. None of these markets are working normally. When youre playing with it, it gets incredibly complicated. I do agree, if your problem was excessive private sector debt in china then was that starts to unwind in various bits, cutting rates to encourage people to unwind it or coming back and asking people to please clue me in and by state come in an buy stay on shares does not seem like a shortterm fix. You may well just see more volatility. We are going to have to take some of the air out of the balloon before we are done in the form of debt. Jonathan kit juckes will stay with us. We will be live in athens to talk about the meaning of the resounding no vote. We are back after the short break. Get excited for the 1989 world tour with exclusive behind the scenes footage all of taylor swifts music videos interviews, and more. Xfinity is the destination for all things taylor swift. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount jonathan good morning and welcome back to bloomberg tv. I am jonathan ferro. This is on the move. 30 minutes into the trading session. The ftse 100, down by 0. 7 first that. 40 points lower. Compare this morning to last monday. The dax is down by 133 points. We are coming off the back of the worst week all the dax since april. Another violent session in china. Coming all the way back down. A series of measures taken a by chinese authorities to support equities once again. That is the question predicts switch of the board and the other asset. A weaker euro is at the story. Spreads are widening. Italy, 2. 33 . Brent crude, below 60 bucks a barrel. Down by another 1 after the biggest weekly loss since march last week on w2 crude. A reaction to the resounding no vote in the greek referendum. Out to the Trading Floor or analyst is standing by. Michael, i read your note where the ecb, whatever it takes. In the bond market, maybe not yet. Maybe that is the key line. Michael no, absolutely. Maybe want to avoid getting embroiled in what i would call political shenanigans. An economic mandate and it will be very hesitant to force a greek exit. Take your mind back to 2012 when mario draghi talked about whatever it takes to underwrite greek debt. That ultimately remains the ultimate test. Will eurogroup in the face of this no vote continue to underwrite greek debt . Jonathan a big call that the fed will capitulate and whatnot hike in 2015. One person calling for push back away from september and contributing that to the greek crisis. Does greece play into the fed . Michael a little bit. Take your mind to last thursdays payroll. Pretty much in line with expectations. More importantly, a downward revision of 48,000 and average Earnings Growth fell 2. 3 to 2 . Janet yellen suggested at the last meeting that the lack of Wage Inflation remains a concern. Again, i think unlikely will will get september rate hike. The greece crisis will feed into that narrative because of the political uncertainty. Theres also one lingering thing and what is happening in china and the fact we are single weakness in chinas equity markets and the fed will have to Pay Attention as well. Jonathan i want to talk about the positioning of your clients. Almost everybody i spoke with said we will get a yes vote and we do not. The consensus after a no vote is will will get a deal. Is it reflected in what you are seeing . Michael it is. I am skeptical we will get a dell. Yanis varoufakis resignation. The selloff we saw this morning did not take out last weeks lows against the dollar or yen. We are seeing some up. Some bluechip stocks. So buying and rollsroyce choice after the profit warning this morning. Investors are remaining fairly sanguine about the outlook going forward. Jonathan Michael Hewson see what. Lets continue the conversation and bring in guy johnson. A global strategist kit juckes. Guy, looking for leverage was a key part of the referendum. Still not getting the leverage from the bond market. Is that the missing link for the greek government . Guy i am not sure it is. I am not sure it will generate contagion. They have some leverage in now. I think it will be hard for them to turn around and go, were in a position where we do not want to take more austerity and the deal offered. And we think as a result of which we need to renegotiate and find some kind of better package. I still struggle with what the purpose of the whole thing was. To understand all it will do is entr