Ago. Bond spreads really dissipating. One story to the whole week has been german strength. Euro sterling has been on a fourday losing streak. Down by about. 33 . Mark carney talking about a rate hike. The first rate hike in august the next year. That is still dovish. Mark carney is setting up that debate. I will get closer to the rate hike. Elsewhere eurodollar is in the trade to look at. 882, dead flat. That sets us up, lets get straight to your equity market open. The futures are pretty much dead flat. Paris went higher by about. 25 . Call it eight in the first couple of minutes of trading. We are dead on a 10 rally over the last eight days. Things get interesting in the european market. Lets give the asian market with you von yvonne. 3 yvonne a pretty good note year for asian stocks. Volatility has eased a bit. Now greece seems to be a little bit less of a concern. We are seeing Southeast Asia markets closed today on holiday. Chinese stocks rising the most than a week. Erasing all the losses we saw this week, what a difference a week makes. We just got these headlines, the chinese securities headlines core says they have money on tap to support stocks. We talk about billions of dollars. Very similar to how much was wiped out in value during that stock rout last week. The government still not done yet in terms of coming to the rescue. We still have 1 5 of the market to resume trading. We did see quite a bit of gains in tact. China rally tech. China rallied quite a bit. The unprecedented measures seem to be working at least for now. There is a noticeable change in sentiment with these additional funding possibly providing more liquidity support to purchase stocks. According to sources, securities of talking about if the news is valid, it could be enough to call me nervous investors. It may not be enough to see a huge aggressive surgeon stock prices. Still some cautious notes for some of the big money managers. 4000 has always been the line in the sand in terms of a stabilization of signal. Pretty close to that. A weakness in the japanese yen we are pretty close away from that 13 year high that we saw at the start of june. Jonathan great work. The japanese yen is in focus in asia. One thing were talking about is greece. German lawmakers are in dropping the Summer Holiday to have their say on greeks proposed aid package. Lets get more with our Bloomberg Team. Caroline hyde is in athens. Yonu tony i want to start with you. Officials and lawmakers disagree with the agreement then vote for it anyway. It goes a part of the German Parliament today some boasting his concerns over the deal. Does that mean he will vote yes anyway . Tony i suspect he will. The preliminaries have been very torturous and acrimonious. There has been a lot of rhetoric. When it comes down to it, Angela Merkel has rallied her troops her caucus, partly behind the notion if you like germany cannot bring down the eurozone. That doesnt mean that it is not fraught. She went before her caucus for hours at the end they had a test vote. And so 48 of the lawmakers would vote against the package. Jonathan caroline coming to bring you into the conversation the next hurdle for greece we got over a smaller one yesterday. We havent for the cleared it the ecb, when will the greek banks open . Caroline they did extend the bank holiday through until sunday. Begging the question will monday be the day . Christine lagarde, the leader of the imf saying she is thinking it will open on monday. It was still only be able to get 60 euros out of your back account if you are living here in athens. When speaking to the business holders, a few roads away the healthful shops, they will not get any more customers. At the Jewelry Store for three weeks he has had no business. She is telling me i cant afford to have a job that i want because i would not be able to afford to feed the child. These are the words and terrible stories we are hearing in the street. Many have been wondering what about that vote late on wednesday night. What about these hikes that everyone is now worried about. Are they coming into action . I just got my hotel bill. I got the food and beverage bill. 23 tax now not 13 . They are already implement a some of these changes. Inquiry on the street is i cant get any more cash out of the bank. What about these tax rises . It is turning up people even more. Jonathan talk to me about the worries of Prime MinisterAlexis Tsipras we talked the political separation in berlin but to be fragmentation and greece. Within the greek government, how does he handled the dissent within his own party . Caroline rumors have been swirling. Would we see a reshuffle of his cabinet . He has more than a quarter of his own Party Dissent against the bailout reforms. That was a few days ago, what then of the Energy Minister . Of the defense minister . Of the finance minister . Already the finance minister deputy has resigned. What about the other three . Some firings are on the table being reported by the germans. We could see heads roll in terms of his cabinet members. Eventually they will longer be on the cabinet. Sip alexis imris Alexis Tsipras is saying he will continue to act as a minority government. The question now is will be see Elections Come autumn . Jonathan great work. The Bloomberg Team joining us now for some political analysis. Were joined by Stephen Isaacs chairman of the investment committee. I want to get kneedeep in the politics first. The greek politicians voting for it even the lid of the they agree with it. I go to a quote Everybody Knows greece is bankrupt but no one wants blood on their hands for chucking them out of the eurozone. Theres that sum up what is going on . I think so. There were so many people grudgingly accepting it. This is a program that will have numerous reviews and cash releases overtime. That will be changes happening. This same problem and comes back. You have these people asked again do you want to release the cash . Or force them out of the euro. It is clearly just a temporary fix. Jonathan im looking at an eightday winning streak on the dax in germany at income percent. You missed out on that if you were to focus on greece. I go back to my quote that says i would love to be here in a couple years my fear is that i will be in a couple of months. Is that the way you feel . That never since will be injected into the market once more . Stephen i think we have to follow the policies. I think all the politicians indeed central bankers is to disown the deal. Everyone hates the deal. Everybody knows it will not work. When it does blow up, that is one scenario. I think more in the next of political extremism is my concern. We have had coups in the past. When the greek people were consulted and the parliamentary elections are just a couple years ago, it were pretty and fabric. They did not want this deal. Is a cool possibility coups a possibility . They will pass it because they agree that it was the bandaid at this moment in time. Jonathan you live and breathe the politics. Talk to me about the politics and how immediate the consequences could be. When you look at the situation to the last five days they have ripped up the script on almost everything. They have not done that over the last five years. Then bring the u. K. Into it, even though it was promised five years ago this would not happen. Talk to me but consequences. Raoul there are enormous consequences. It doesnt seem like they have paid any political prices. Greek politics is very strange. At some point, he has to pay a price. How long can he go on making these promises . I think of we have new, we will have to see what happens. In terms of the other countries it is a complete unwillingness to follow through on these kinds of promises. You look at germany, finland, the baltics, it will be incredibly difficult because they dont trust the other companies. Really, the further integration is looking incredibly challenging. That suggests we will be stuck in this middle way where we have huge unemployment and no real tools to do with the economic problems. You are stuck in this longterm malaise. Youre pushing one thing down and it is popping out somewhere else. It is a complete mess. Jonathan to build on this because spreads are tight no one seems to be talking about what is happening in the rest of europe. Also, there is a willingness to integrate. Also, it is allowed the arrival of those who can come through because britain and spain still stay tight. That is ironic. The message coming from the weekend was this is a huge slap in the face for the danes. Is that true . Stephen the ecb is planning to keep the spreads tight. But they cannot stop the politics of it. I think in terms of political fallout across europe, some get hurt. The people who are supporting that are they really going to be that bothered . That is greece, we are spain, we 12 of the euros an economy. We have much more leverage. It will be difficult. Other issues could arise. We can change the type of euro zone we are in. They want to make it more with this political union. Is there any hope of that now . All the reforms, that is looking very difficult. You have opposition parties who are already antieuro. They want to jump on this and say there is no hope of change the only hope of change behalf is to leave. Across the political spectrum you have a boost to the antieuro force. This plays into antidemocratic at austerity, all of those lines. It is a free pass. She was a germany is running the show, these countries have no democratic will the euro is of succeeding is succeeding our economy strangling our economy. Jonathan your world is running money. Other than the equity market in the dax search and things look pretty. I look at the euro sinking. How long does it stay that way . Stephen this is a tightening a policy. That is the german theory that economics has to adjust when you have a next journal shock. The greeks have been multiple external shocks. They have to adjust their wage rates, their pension rates. That is effectively a new policy. Tjer there was a new hope that proper Debt Forgiveness would be to a further debasement in the euro zone. It has not happened. I see this is rather negative for the equity market. We had a kneejerk reaction, and if you look across the atlantic. The s p has been in a range this is a tightening of euros on policy. Jonathan gentlemen, thank you very much. To open monday for basic services. Cant find basic services yet but i will give that a go in a couple of minutes. Thank you very much. Stephen isaacs will stay with us. Coming up on the show, propping up stocks. A week for Central Banks we hear from mark carney and the billionaire. Those stories coming up. Jonathan welcome back i am jonathan ferro. Lets bring you up to speed Angela Merkel will seek a greek bailout. The eu authorized a 7 billion euro loan. The ecb extended emergency aid. Shares in google jumped by more than 10 that is after secondquarter results beat projections. The companys new cfo will focus on reining in spending. A Chinese Agency will have funding available to support stocks. People closer to have about 3 trillion yuan on tap. The funding will be used to support brokerages. For more on that story, lets get to richard frost. 19 of total listings are still frozen. What is the significance of the yuan . Richard it is 480 billion u. S. Dollars. In underscores the desire of the Chinese Government to make sure this market is well supported. We know for trillion dollars dwarfing the amount, this is a huge a man of liquidity. We know from another newspaper that banks who committed to trillion you want to this fund yuan to this fund. More than 1400 Companies Since it was suspended towards the end of last week. About 900 of those have resumed trading. It was a bit of a mixed week. We had some very sharp down days. The news today certainly seem to help provide the market. We ended up for the week around 2 . I think the government will be happy with that. At one stage we were down 5 . Dont forget there is still 90 of the market suspended and trhehe amount that is resuming is a trickle at this time. Jonathan we were having a debate whether the rout that started in midjune would show up in the gdp figures. I am working out what the yeartodate gain was. We were up 32 at the end of q2. Have you crunched the numbers and work of how much that stock market surge actually added to gdp . Richard we know in the second quarter, it is about. 5 . Huge contribution to the financial sector. You imagine the amount of margin lending that brokerages doing. They have been reporting huge increases. That contribution has been massively known in the property sector sent agriculture. Some parts of the economy was lagging behind. Again, this is why the government is so keen for this rally to resume. Because of its central importance to how the economy grows. It seems to be a very round number. It is what the government would like to see the whole year. That is their target. They do officially meet their target. We know that is unlikely they would meet it at the start market continues to fall. Jonathan richard frost in hong kong, as always a pleasure to have you on the show. Lets bring back and Stephen Isaacs. Stephen, when i look at the china gdp running at 7 in line with the governments target, when adequate the numbers, i see a different story. A different picture of what is happening. Which story do i follow . The gdp, or the corporates . Stephen the question is why are the japanese authorities doing this . Why are they in a sense of complete panic . It shows up in the gdp figures that they want to use. A Strong Financial sector to bolster what is otherwise a faltering economy. As you said, look at chinese exports. Theyre going to the roof. The reason they are moving heaven and earth to support the market is because they are in a state of panic. They realized this is the great fall of china. This is but it harder than it looks like. Jonathan you think this is a hard landing . Stephen who knows what the figures are. I dont trust them. I think the property sector is really in complete disarray. That is when things get really nasty. When that stores up, which it has done completely, you have serious problems. We are concerned about this. Jonathan how does the commodity market fit into this . In isolation that is good news. The question is is it down there because of china . Stephen it is a negative feedback loop is what you are talking about. This is a deflationary global force that is destabilizing everybody but especially companies that rely on exports. They are exporting that around the world. They are chasing their tails to the volumes to be maintained. It is a very big concern. Jonathan final question, in that environment exporting deflation is set to get worse. Can the fed really think about hiking . Stephen i dont think they will hike. I think they are so walking a tightrope and still with new ones is trying to talk lower rates. I think the fed will blank. Jonathan Stephen Isaacs things the fed will blank. After the break, we are back. Equity markets and mainland europe just about in the green. The dax clinging onto an eight straight day of gains. What a run. Jonathan welcome back to bloomberg tv. Lets get you up to speed and equity markets. Just pulling back in touch with them by 11 points. The dax is clinging onto an eight straight day of gains. Having got about 10 up over the past 10 days. Switch of the board and check of the bond market. This is been a remarkable move. We would looking at a spread between german 10 year yields of 160 basis points. What a move lobo we are seeing tight. Down by two basis points. There we are, euro selling, that is the cross to watch. We stay there, a stronger pound the story in the fx market. It is been a week of centralbank speak. Sterling has been strengthening as mark carneys at the end of record low rates is insight. Yesterday we heard from mark carney and janet yellen and mario draghi. Mark carney it would not seem unreasonable to me to expect once Monetary Policy normalization begins Interest Rates would proceed slowly and rise to a level that is about half as high as historic averages. In my view, the decision to start such a process will come into sharper relief around the turn of this year. Janet yellen they are anticipating it being appropriate to begin tightening policy with inflation our objective. What we have said we want to have reasonable confidence before we tighten the inflation. Mario draghi recent developments, which reflect greater uncertainty, have not changed the assessment of a broadening of the euro areas economic recovery. It gradually increases the rates over the coming years. Jonathan three huge central banking names. I think it is safe to say two of them dont want minor druggies Mario Draghis problems. Governor mark carneys comments were a bit of a surprise. Very very dovish market. Was that the objective . He is very good at managing expectations. He was a one thing if he feels the market is getting ahead of itself then will reverse it of it goes too far. This is part of his style. He gave three criteria dont push him over the edge one must general economic conditions, one was wage growth the third one was the exchange rate. Jonathan a sevenyear high . A sevenyear low rather it could completely a race that sevenyear rally. Does he tolerate that . Stephen he did bring it in for a reason, he is concerned about that. Some data has shown a slight loss of momentum. There is an argument to say that the exports are hurting from this very strong pound. I think that is part of the mix now. If sterling is at 145 or 150 with the raise rates . I dont think he will. I think you will use that as another excuse to delay things. Jonathan when using the fed will blink, you say he will blink as well . Stephen they were all talking about their believe that longerterm inflation will start to take back up again. If were right about Commodity Prices and china being a new problem then inflation will stay. We are already at 0 in the u. K. Can a central bank reais raise rates when inflation current inflation, is so low . Jonathan we talked about this being called the loosest tightening in history is guys keep saying gradual limited. Can they maintain that ple