Francine welcome to the pulse , l ive in london. Im francine lacqua. Coming up later in the program we speak exclusively to the zalando managing director rubin ritter as his company beat secondquarter sales estimates. Francine after that, we will speak to the rwe chief finance officer. Make sure you stay tuned for both these interviews. Manus a rare briefing has been held in china. As the central bank worst to restore calm following the devaluation of the yuan. Francine the currency experience its worst loss in two decades as the peoples bank of china says it would intervene. The Deputy Governor also in charge of the foreignexchange told the media respects the market, fear the market. He did not mention intervene the market. That is probably what he was thinking in the back of his mind. Manus indeed. And try to get some sort of market context. Class test. Lets talk to mark. Weve seen a little bit of a bounceback. Mark lets start with the dollaryuan. This is whatever one has been focused on. This is an intraday chrt. The chart. The dollar is up by. 3 . The gains in the dollar against the yuan are abating. he yuan was down as. 9 against the dollar. The dollar is up as. 3 . We have had a two day 2. 75 percent in the yuan, the biggest move since 1990 four. Yesterday slide was tempered by what some people familiar with the matter say was pboc intervention. The central bank intervened yesterday . Did the central bank buy . Did it sell dollars . Todays intervention was verbal with the central bank saying that is no basis for depreciation to persist. It will step in to control large fluctuations. The pboc seemingly drawing this line in the sand, according to a strategist at Standard Chartered in shanghai. So, the size of the decline in the yuan seems to be abating. What about the movement in a sian currencies . I was telling you about the Jpmorgan Asia dollar index. This measures the dollar against 10 asian counterparts. Yes, it continues to fall today. Yes, by. 2 . Yes, it is at its lowest level since 2009, but the slide is abating. As the yuan slide is abating. Of 1. 8 through wednesday was the biggest since 2011. Still, this index is at its lowest since 2009, but the decline, as the yuans decline, is abating. Very quickly want to show you the dollar against the south korean won. This is another currency that has moved wildly in the wake of this china devaluation. South koreans won today rising the most since 2011. This is fascinating. This is dollar won. The dollar falling. The korean won rising, the most since 2011 after the central bank kept Interest Rates at a record low and chinas currency site slide show signs of abating. The bank of korea says it will closely watch the impact of the yuan on the countrys exports and capital flows. But thats the impact of todays move in the markets. Francine lets get more with bloombergs enda in hong kong. In unusual move by the pboc. We are hearing from advisor saying that china still has room to influence the yuan. Nda we are getting something from the pboc. What theyre trying to do is manage expectations and not let the market believe they are going to, let the yuan go into freefall. But they will be there to intervene during times of extreme volatility, they will step in. That seems to be their message, the signal. They have not stated a red line or a target for the currency, but they want the market to know they are on the sidelines if needed. So, i think that is what the general gist of how people interpret it their Statement Today. Manus and everybodys trying to get to grips with how Much Movement the chinese want to see. Do they want to do it incrementally . This is essentially a managed devaluation. Is that a fair way to put it . Do we expected to go much weaker, 10 that some people are talking about . Some respects, we just dont know. It is a day by day process. We have not had exquisite guidance from the central bank. You might argue that Central Banks do not give explicit guidance but we do not know what the strategy is, either. All we do know is they are willing to give markets the greater hand and setting the valuation but they are not stepping away completely. Place. Is still in the intervened yesterday. They made remarks that seem to signal depreciation will not go on forever, or perhaps not even much further. We just dont know. We will have to watch over the days ahead. So i still say there is a lot of clarity absent from this debate. Francine what about the rest of asia . We saw some of the currency moves. Have they been talking about it much . Enda its obviously a huge issue here. Manyve not seen too exquisite responses, other than vietnam which widen their trading band. If you look at other Central Banks korea had its Rate Decision today. Their economies under pressure, their exports under pressure. But they did not cut rates. In fact, they did not signal there to, either. Malaysia whose currency is under pressure. Their Central Bank Governors said that they expect gdp to be on track. They have no plans to introduce capital controls. Right now policymakers seem relatively calm. But we are going to have to see how it plays out, and how far china takes the devaluation. Manus thank you very much. In hong kong. Joining us to give some context is the ceo and managing director. Elcome to the pulse. ecig and mediumterm, what china is doing is a good thing. Isnt managed you say in the mediumterm, what china doing what china is doing is a good thing. Is showing us that we are all testing the new regime. It appears to be a managed flow. Directed towards more liberal currency. And ultimately of the market forces. When you say market forces. They were not expecting such a big fall. Are they the victim of their own policies . Was it badly planned out, or is it one of the things that just happened . Niall it happens like that. Careful what you wish for. Liberalization of currency has been on the agenda for quite some time. Special drawing rights. I think inevitably once you change regime, the market will focus in on trying to test that regime, see where berries are, as we just agree, managed flow. That will be tested. Exchange Rate Mechanism in the european union. This is what happens. I think we will see an increase in volatility around the yuan. I think that is going to take quite some time to play out, before the market adjust to the new reality of people banks of to how the peoples bank of china is treating the yuan. Manus that action has consequences on virtually every asset class. Look at volatility. Volatility spiked higher in europe. If you look at these stocks relative to the volatility you saw in the United States of america. What will it do to the Asset Classes . Because, are they going to export deflation . Are we going to see more negative rates in bonds . Where do think it will play out the most poignantly . All i think that is critical. Volatility is coming back. Volatility has been extremely low. The whole financial repression narratives, if you like. What we are seeing in this case is peoples bank of china saying we want to be more market friendly. We manage our currency. The fed is saying we want to move boy from emergency policy settings and get back to a more normal central banking policy we want to move away from emergency policy settings. We saw a spike in europe. This is what we need to become accustomed to. Markets are going to become more choppy we expect more volatility. We have not seen it. Now we will begin to see it. What we are also going to see is some diversification across asset class performance. It could be quite a life a high level of correlation. It is difficult to create value. That is going to become clear as we proceed from here into the fourth quarter. Francine should we still try and figure out, actually, why this move happened now . It is awful for a lot of emerging markets. Is it trying to preempt the fed or is it the chinese worrying that growth is slowing more than they are expecting . Niall it is the latter and our view. Do the logic. If you want to liberalize or currency from a soft peg or effective peg mechanism, do it at a time when that helps. Youre going to get some appreciable value over time. I think, we look at the performance of the yuan relative sianhe basket of other a currencies, it has gained value relative to them. What is now thought to be a 4 drop relative to the dollar. That is really small change compared to how much the yuan has strengthened over the last couple years. Manus before we move on, emerges emerging markets. The asian currencies. The thai currency. Are they overreached . Have we overextended this . Is this a floor we are seeing in some of those currencies . Have furtherk they to go. It is on a casebycase basis. You look at malaysia. There are real reasons why the ringgit has been under pressure all year. It has to with Commodity Prices and me ongoing Corruption Scandal surrounding the ongoingnt and the Corruption Scandal surrounding the government. Some people have been drawing parallels to 1998. We are not envisaging this to be an asian crisis. The narrative has shifted. For countries where governments localeen poor, a lot of denominated borrowing, it will be an issue. Manus thank you so much for that hencine niall quinn, stays with us. Manus that brings us to todays twitter question. Is chinas devaluation a storm . Tweet us, join us. Francine here is a look at what else is on our radar. A have been killed in chemical blast. They happened at a Container Terminal following a fire ikna a store. The port city has become a gateway for shipments of commodity and goods. It is the home to manufacturing operations for airbus. Manus greek lawmakers will vote on a series of reforms today. But germany claims the plan is incomplete and is withholding loanrt, saying a bridge could be an option if the agreement cannot be reached in time for a payment to the European Central bank which is due next week. Stay tuned to bloomberg as we get those gdp figures at 10 00 a. M. London time. Francine switzerland has become the first nation to lift stations against iran. After the gulf state sealed an historic agreement with world powers last month to curb its nuclear program. Orpus news course newsc has lifted earnings estimates after being dragged down by lower advertising income. The publisher of the wall street journal and the New York Post is trying to boost digital and International Revenue. Readerscome, as increasingly gather news online. Francine how much of chaos created by the shutdowns banks and capital controls will be reflected in greek gdp figures at 10 00 a. M. . We will look ahead with our chief economist coming up after the break. Francine welcome back to the pulse, streaming on bloomberg. Com, tablet and phone. Manus another monumental day for greece. To parliament put today. This comes amid grumblings from germany about the plans. In half an hour we will get what we are expected to be a depressing set of greek gdp figures. David pollack joins us now. David, its going to be bad. We all know that. How bad is it going to be . We are expecting to see another contraction of. 5 the capital controls did not come into effect until the last three days of the reporting period, along with the closure of the banks print the worst of the damage from that will not be seen until the Third Quarter. That was reflected in the negative pmi number in the month of july we have seen. Francine talk to us about the rescue plan. Because germans have been quite a post. Is there a real danger of it scuttling the plan . David i dont think so. It looks like the momentum is there to be passed before the payment is due to the ecb. However, the germans have expressed resistance because the reluctant to buy into another plant if all the details are not clear. Troika who have this to makeon sure the details are there for the germans to vote on without too much left for guessing. Manus bring in niall quinn. How much bother do you take when you look at greece this to make sure the details are there for the germans to vote on without too much left for guessing. In the overall asset allocations . When you talk to clients, wheres the tipping balance . Has greece gone off the radar . L after we had the referendum which was a failed part of the greek government, what that the troika really had to have, has felt for a long time the greeks want to be part of the eurozone. In the main players want to have the greeks on board. Infrom our standpoint it is a nonissue. Francine how much to be read into the gdp figures that will be released on greece in 40 minutes from the . Is activity that took place before the third bailout was agreed. Probably the trough, while in ae is going to be miserable economic state for some time, things will get better with the uncertainty of grexit having passed. Manager of a greek business, you think i will not do anything until i know what the currency is going to be in three months time. They probably did nothing and the economy came to a standstill. At least we will see some restarting of activity in the second half of this year. Manus if greece does not features of heavily in the conversation, q. Wee. Is full locked in. There is a bit of growth in your. How has your perspective of europe changed in the context of growth in greece does not matter. We focused on the eurozone in the first instance. There has been some decent reform in italy. Maybe a bit of a wobble currently, but the renzi regime wants to make change. We have seen that. Spain has moved out a good distance as well. We have seen improvement in what would have been poor unemployment numbers, but an improvement in the employment figures in spain. The issue continues to be france, where there is beginning to be some Movement Towards reform, but it is always difficult to predict introduction the direction of that. You put that together with a strong United States and q. E. And we fell reasonably good about feel reasonably good about europe. We have been overweight this european the markets have performed well. We do not feel like were reasonably comfortable with the direction of the eurozone. Francine do you feel comfortable . The fed is about to tighten. That will have an impact on the eurozone. Then we have china. If they are doing something because the weak growth is coming out very soon, whic also explainsh the wek oil price, than it is bad news. The recentou look at drivers of growth, it has been domestic demand, Household Consumption as the fall of oil prices and the fall of on the plumbing has helped a bit. This is leading the recovery. Sense, in an a huge sense gdp is still below its peak. Sis it will not really take off until businesses start to investigate. If we look at it in the area of economy that has not done so well it is investment. Investors will be more confident and recovery before we see that take off. Manus just to come back full circle on greece. In 35 minutes look at the numbers. Two big issues. One is privatization. Im fascinated to know. This a big word, which we do not know what it means. When you talk to investors, does it remotely come up as being discussed asterisk, distressed assets . Niall it is beginning to come up with investors. I think there is real interest in the physical infrastructure in greece. Investors are very minded on global basis to get more access to physical infrastructure, t access robust casho flows. Moving away from traditional government bonds for all the reasons we now know investors are edges of all bonds. And private debt has raised a lot of capital in the last couple years, a lot of which is sitting on the sidelines. Indubitably some of it will go into greece. That is the focus of german authorities. Where is the control residing over the Privatization Program . I think there is an interesting subtext politically around this course. It plays into u. K. Politics as well. When you think about the pending referendum in the u. K. Which will be a source of volatility here, next year and certainly into 2017, what is the eurozone doing from a democratic standpoint and the domestic controller . What will be perceived in greece to be to mastech assets . That will be an to be domestic assets . Francine thank you so much. Stay tuned for those gdp figures. We will bring them at 10 00 u. K. Time. Scores of people are reported to as having been killed in two blast the chinese port of tianjin. That happened following a fire in the store of potentially hazardous chemicals. Lets get more with clement in beijing. Give us the latest on the situation. Clement the latest, 44 is the latest death toll. We have been told that, by people at the twitter website, that that, im sorry. We have been told the owners of the sorry . Francine go ahead. Clement we have been told that, sorry. We have been told that the owners of the factory that is apparently the center of these blasts has been arrested. Also peoples daily has reported an Emergency Rescue team, Chemical NuclearEmergency Rescue team has been sent to tianjin from beijing, which is about 120 kilometers away. To help in the rescue. So, fire is kind of still simmering from what i have seen. Latest pictures coming out of the city. But people the bears companies are trying to gauge what kind of damage a sack we has been done over the course what kind of damage has been done over the last couple hours. Francine we also have a new story coming out saying that shipment of iron ore have been disrupted. Clement yes, yes. Thehas come out to say shipment has been disrupted but they have stress there is no damage to their facilities over there. Also, other shipping copies like say thatve come up to they are unable theyre trying to gauge the damage here and there superficially, but there head count. Everyone who is employed is accounted for. A lot of factories in the area because tianjin is important part of the plan to develop the area around beijing. The port is one of the top 10 busiest ports in the world. It is a very important manufacturing importexport center. And a gateway to northern china. Manus do you have anything more definite on the cause . Clement um, unfortunate, right now we do not. But there is a press conference coming up in a couple minutes. We will know more. Right now what we know i