The market, fear the market, follow the market, that is living to Deputy Governor of the bank said today. Do we fear the market, or trust it . Lets have a look at how we are seeing the rebound affect commodities. Up goes copper. We are also seeing oil on the rise. U. S. Supplies and it down for the Third Straight week. Up to 43 ais barrel. I want to focus in on currencies, we are seeing when dollar bounce back yesterday the market in europe was lower, but the u. S. Is actually having a come back. Were refactoring potentially when we might see hike. Aid hike fed rate to movehe dollar starts a little bit higher. The euro lower, having been up for them a percentage point yesterday. Bonds we are seeing risk appetites. U. S. Similarly, yields are on the rise. Money going into italy, money going into spanish debt as well. Lets have a look at some of the stocks hardest hit by china. Weekend,inese yen has has so has the Consumer Spending power. Turnaround, owner of hit,des, diamond felt they they rebound so. Though. Burberry is on the rise. Company beat analysts expectations. We will see Freight Companies feeling the pain. , the ceo sayson is a good thing. More experts exports will be going from china to the rest of the world. Nestle is up. Europe is starting to drive demand. Thyssenkrupp is also up. Up by 1. 6 , itax is in rebound from november 2011. All of this sparked by the news in china. Lets get to zeb. Zeb a bit of a relief rally across targets in the asiapacific today as investors take a moment to interpret comments out of the peoples bank. Lets take a look at the , fixing was 1. 1 . 6. 4155 right now. You are seeing currencies rebounding. The Singapore Dollar is coming off of the biggest drop since 2011. We had the bank of korea out with its decision to the china risk as they held rates at a record low. Across theks asiapacific are closely watching this move as they go forward. Lets not forget the Federal Reserve in washington, how that will impact it. On equities rallied today, extended merging emerging markets. You are seeing gains, a nice healthy move, building on its gains. The in hong kong, here are key movers, technology is the key focus. At a time when their rival, alibaba is under pressure, 10 sent is powering ahead. The travel and leisure stock are under. Ssure lenovo missed out lenovo missed out on investor concern that its Growth Strategy is not moving fast enough. Jonathan lets recap, the peoples bank of china dropped its reference rate for the for third day, lowering by 1. 1 . The central bank came out swinging against allegations of competitive devaluation. Where nick beijing is standing by. Another day of cutting the reference rate come are we out of the woods . Has devaluation hit the lower limits . Question thes the last couple of days, how low would you want to go. They seem to to have made that clear. Of the trading session, suddenly it swing back it came backow after being low. They came back today saying a 10 evaluation would be nonsense. It looks like this 3 area is what they want. They are sticking to the claim that they had said they you on was out of wack with Market Forces. This was a one off adjustment. U. S. , there the , are youn delaware focusing on the yuan instead of the japanese yen . Nick when you look at export numbers from the weekend, the exports to japan were down 10 . Exports to europe, down 2. 5 . The big issue here is we are getting a sense for what the pboc means. The last few days we have questioned their intentions, now it does appear they will say, we will give the market a role, but when the market behaves like thep, which is what governor said today, we will intervene to bring it back. We are starting to understand what the pboc had in mind with the depreciation. We have had other news, tragic news from tianjin, an explosion in a chemical storage site that has caused multiple fatalities. Can you give us an update . Nick we now know that 44 people were killed. The death toll rose from 17. This shows you have seen the ,evelopment of the tianjin port it has expanded, this will highlight safety concerns. It is now the 10th biggest port. It is a city few people have heard of. 15 million people. It has become a gateway for northern china. Commodities,ther we are seeing some of the explosive that pardon the pun, explosive growth. Jonathan we will keep you updated throughout the morning on bloomberg tv. Lets go back to the markets. We are joined now by james bevan, he helps oversee 10 billion in assets. Brutal, as adax, cio how busy have even . What one wants to do is see what real changes have been fundamental. The big question is what is going on with china . Are we seeing bad news or good news . , it is aews is competitive devaluation. You cannot generate real reform in the trade system. , i do not see the right that currencies may have. Within the regional context, we should expect to see the Singapore Dollar falling in, because that devaluation to maintain trade is required. I think it is important to see what else china will do to generate growth. We know what we need to know what that agenda is. Good Quality Companies can justify high pricing. There is plenty of potential, think about what has happened to the average u. S. Household. There are spending less than they were last year on motoring costs. We are questioning whether that economy will benefit. The u. S. Economy is beginning to move forward, other than the hydro problem. Jonathan we have been waiting for that fray while. For a while. To bring it back to the last two days, a loss of purchasing power, if you believe this is about competitive devaluation, you are worried about a real slowdown in the chinese economy. Not so much this morning, but as far as you are concerned, if this is the trend, does it ring mean a prolonged risk off face phase . James i think we will have slow growth. Run Quality Companies decent margins, strong earnings revenue, those are the the companys that will see a significant shift up and pricing. To layn are we about the duke deflation trade a q1 . James i believe the deflation risk should take one back to the bond market. I do feel that downtrends our progress. We will see Central Banks led by the u. S. I do not think the u. S. Will tighten rates until next year. In that environment, i think it is way too late to support bond markets. They are sticking with team september for the first rate hike, they say the china impact will not move it. Goldman sachs is now saying the peoples bank are going out in front of the Federal Reserve, do you give any weight to that argument . James i do not think the factors are connected. I think they recognize devaluation was on the cusp. The timing is surprising. Anticipated to resolve its foreign debt. The hong kongom authority earlier this week that said it has been carrying on. The ripple effect, we will take a look at the battered mining sector. Greecesigs in, biggest bailout as a payment deadline looms. Nestle tops estimates, but will china jeopardize longterm growths. 1. 5 . X is up good morning. Jonathan good morning and welcome back to bloomberg tv. Lets bring you up to speed with top stories. Nestle sales growth beat grewsts estimates, revenue by 4. 5 . Sluggish sales and china have led analysts to believe they will miss their longterm goals. There was an explosion in tianjin last night. Ay the blast killed 44 they say the blast killed 44. Dropped itsral Bank Reference rate for the third day. They lowered the rate by 1. 1 . The peoples bank of china said that the moves represent a genuine reformist agenda to give the market a greater role in setting the exchange rate. The move has been controversial. Here is what some of the guests have had to say. Depreciation, devaluation, whatever you want , is a necessary step to maintaining the health of china as unwelcome as the timing is, especially in light of the weakness in emerging market. This is probably the beginning of a new era where to allowpotentially full Market Forces to determine a factor of rates. We may not be there yet, this is clearly the most important step in that direction. Jonathan so possibly a new era for china. Bad week for some stock sectors, we have seen a little bit of a but from commodity to luxury, nothing has been spared. Chinas slowdown has had a big impact on the Biggest Luxury Companies dependent on sales. Lets get to elliott. Elliott as you say, very few sectors were spared. Those particularly hit were luxury goods. Lets start with luxury goods, were talking about burberry, hugo boss for example. Today,e seeing a rebound not enough to make up for the losses, but certainly something investors will appreciate. So interesting thing is not much, yes, they are luxury goods , and these are two of the Luxury Goods Companies or whom as the smallest portion of sales. Is problem noted by analysts that it is not so much chinese and china will be consuming fewer luxury goods, but the fact that most of the luxury goods purchased by china is actually done overseas. Less inare spending europe, they are spending less. The euro has been weakening. Perhaps it is worse news for the u. S. If they were as reliant on chinese consumers as europe. Its lowest level since the initial public offering. The big problem for the commodity exporters is not so much the devaluation, they were already feeling a pension as a result of a slowdown, the big concern there is the slowdown will continue. , when you havet commodities going through these cycles, we are seeing a bounce back in oil, copper, and iron ore, you talk about commodities going down to a 13 year low, some people might be inclined to think that perhaps were at the bottom. Jonathan thank you. An ugly few days for many mining stocks. Lets bring in paul to talk about it. He is a Mining Research analyst. Paul, i was reading your latest research, you look at the dividend yield, higher, higher. It tells me that these guys will cut their dividends, or the stocks are too cheap . Paul i think it depends on the quality of the Balance Sheet. If you look at the highest quality names, probably rio tinto, the reaffirm to their dividend last week. They have plenty of headroom, they are generating organic cash flow, it looks secure. It looks cheap. Perhaps bhp, and then you start walking down the deck, one of the problems with glencore, it is the highest gear in mining, but it is also financially. We see glencore underperform when they come under pressure. Jonathan james, when we talk about extraction we talk about energy, when we talk about miners, we talk about who can manage iron ore. Absolutely think those companies have the quality to test this out. I think there is a difference for investors between the base metal players and the integer Sector Energy sector. It worries me that we will get a carbon tax to deal with Climate Change agenda. We are also having increasing competition from energy storage. I think the outlook is gloomy. I think the longterm outlook for metal is excellent. I am fascinated by glencore. I am looking at the terminal, you are the most bullish analyst on glencore stock. That thereyou think will be numbers coming out of glencore next week that justify the price market. Paul we are looking at a tricky market. We have metals close to the bottom of the cycle. What happens with the base metal prices recover . At the moment we are not close to recovery. The demand growth will continue, the depletion rates will too. It is an equilibrium position. As soon as we get a recovery in demand, we will see the leverage to that in the base metal prices. , we willike glencore see that sort of response. Immediately it looks tough. Jonathan talk to me about the trading business. It is meant to be up to weather the storm. The analysts are not expecting decent numbers. What do you expect, paul . You know what to put into analysis to get an output in terms of earnings. In the trading business, it is harder to do that. Put concernsially into the glencore numbers. We are looking at the bottom range. We are actually below the bottom range in terms of our numbers. The concern is that they will disappoint that. That is certainly being factored into the prices. I do not think we will get relief immediately. The question is, what is the fundamental value . I think it is somewhere north of one pound 80. Jonathan does the situation concern you . James there is an interesting tradeoff about the upside potential. If you want to make a lot of money, you have to buy the riskier stocks. For me, i am much less risky. It is clear however, those who t to make a lot of money not explosively. Jonathan paul, months ago we would talk about rio tinto eating taken over by glencore, we now looking at the reverse . Paul i do not think so. I think that possibility is remote, to say the least. Who knows where the cycle will lead us . It is a reflection of how the relative commodity moves. Jonathan are the in a position to lead is rio in the position to lead . Paul if you were to take copper and say that would be the place to increase exposure, that would speak to further consolidation. However, the track record is not great. Fore is a reluctance investors to see rio tinto use their sheets in that manner. Jonathan thank you very much. Coming up, german lawmakers drag their heels and withhold greek bailout support. Will greek recent have to turn to another bridge loan . We will talk about that more after the break. Good morning. Jonathan good morning and welcome back to on the move. Lets get you up to speed on stocks. The 5100 rebounding, we are up 8 10 of 1 . Europe, a solid rally, the dax is up 1. 5 after the biggest today route since november 2011. Lets lift the lid on the stoxx 600. Caroline lets look at one of the biggest winners, it is none tui. R than to a it is a europes number 12 or one two or number operator. They are being more profitable because they are making holidays. Aerall, Second Quarter saw uptick in profits. Growth laterto see this year. They are managing to beat expectations. Is driving upky 7. 5 . We spoke to the chief executive, he has been realistically thing at china, he says this is a positive. He says overall this will mean more experts coming from china to the rest of europe, that is more profitable for the bottom line. Overall he feels this is a positive step. Off and wets were know the reason why, overcapacity. They are seeing dampening on freight as we see trade wayne off. Overall they are managing to beat which were pretty poor expectations. They also had the 1 billion buyback. Thhile, this in group up 37 . Pp is this is a company having to rayna back spending to boost their bottom line. No longer a steelmaker, they also make elevators. Jonathan thank you. Lets get to politics. Greece and their parliament is set to vote on the bailout today. The deal hits turmoil in germany. There are reporting resistance. Us, what for joining are we expecting from the vote . That is about it. In the voteting today, or maybe tomorrow, the pro european parties have already pled pledged their support. We are on the lookout for how many lawmakers will oppose. 2530 lawmakers are in the cards. Some say the number could go up to 40 or 50. We are basically looking to see how the Prime Minister had in mind. We are pretty much closed to the end of the series as we know it. Jonathan as far as youre concerned, there is another debate, the end of the syriza party as we know it. A lot of pressure coming from berlin, even more him a dragging their heels, some might say. Do you think we will get the german resistance that does push back a potential deal . I do not think so. It is a matter of saving political space in germany. I understand germany and their case,ns, i think in this greece has succumbed to the pressure. I do not think the rest of the european nations will fall desk will feel comfortable with germany pushing back on the deal. Next week and we will have to see how things unfold. Jonathan final question, i like to look at the data, one of the pm eyes it was the ugliest pmis of the ugliest i have seen, i am looking at figures, what is that looking like . Keep a close eye , the International Aid program is based on certain calculations. If you have large deviations on the actual numbers, then maybe the creators will have to visit some of the measures agreed, and maybe alter, especially the measures that greece needs to undertake. Lets hope for the best. We do not have anything really bad coming up. That gives leeway to greece to and probably today have the worst behind us. Much. An thank you very it is always a pleasure to have you on the show. We are back with a chief , james, one ofer the biggest red hearings, democracy, the risk to the whole of europe, is that true for the rest of the year . James i still worry about the greek change. There is still no talk about longterm debt graduation. That i still think there is a 30 probability that we have a grexit. Jonathan the risk was this would energize spain. That result will look different. Was stale data when they try to categorize what is going on in europe. When i look at italy and the reform agenda, i am impressed. Im surprised italy has stepped up, it will be ultimately beneficial to shareholders. Jonathan what can you tell me about data . James i worry about the micro data in the company results. I think we will see better results in the italian banks, technology companies, and the carmakers. Calm come and, collected. Will to come, nestle separate from europe. Earnings per nestle. Jonathan good morning and welcome back to bloomberg tv. Lets get up to speed on the top stories. Chinas central bank dropped its reference rates. They lowered the rate by 1. 1 . Theught says it gives market a greater role. Tianjin had an explosion last night. An official said the blast killed 44 people. They say the largest of the blast equaled a 2. 9 magnitude timber. Lawmakers will work on a package of reforms for a bailout. Germanys Government Works on , they say a bridge loan might be an option. The eurogroup is set to meet in brussels tomorrow. 41 minutes past the hour here in london, lets get up to lead lets get up to speed on earnings. Nestle had an upswing in demand from europe. Elliott water and nutrition are doing well. Their soup business is also showing promising signs of life. Their organic sales growth is beating estimates. The company is reiterating its outlook for the full year. We have seen the shares rising. It