Caroline hyde. Happy friday. The markets closed yesterday. It was a bit of a down day. They were looking at whether the in will raise rates september. China has destabilized things ringing around deflation and u. S. Stocks closed lower as retail sales pointed to the Federal Reserve indeed raising rates as soon as september. We are also looking ahead to french, german, and italian eurozone gdp. We have it all. Starting at 6 30 a. M. Gdp quarter comes out in the u. K. At 8 00 a. M. Moves we areig currently seeing in turkey. We are seeing some any things affecting the turkish lira at the moment. Record low if youre looking at it. Phenomenal drops versus the dollar. The dollar rising and the turkish lira falling. Are getting set for a second general election this year. Coalition talks between the ak party and the Opposition Party have collapsed and the Prime Minister which it lost the parliamentary majority back in june now looking towards yet another election. Lets look at the commodity space right now. Oil heading for its seventh weekly drop at the moment. But let continues. Continues. The glut Oil Continues to decline below that 15 50 level. We are talking about it once again on friday. The malaysian ringgit. We are again at the lowest level since 1998. Plunging the most since 1998. China helped spark this. The yuan divvy up evaluation. This is political instability crisis. The Prime Minister is dealing with allegations of financial irregularities. More,l bring you so much but lets focus on the Chinese Central Bank daily fixing of the yuan. It transformed into potentially a Global Market moving event after the devaluation on tuesday took almost everyone by surprise. Lets join david for our Market Report from hong kong. Now, we are starting to see that yuan stabilize. That is the First Time Since that that is the first time we have seen that reference rate rise a little bit. David it sent a strong signal to the market. In the u. S. , investors and traders were heating these calls for instability. They do not want to be on the other side. It wants a stable currency. Do not that against the pboc on that one. They fixed it a little bit stronger today so we are seeing a little more stable compared to tuesday, wednesday, and even early on thursday. As far as equity market are concerned, it looks like a normal day. Looking at these measures that , yields for volatility are back up, gold traded lower in asia. There is more calm in the market today. This is your spot rate coming it closed at 6980 yesterday. Price yesterday was significant. The First Time Since november that it closed stronger than the daily fix. That is the long lull that you have in todays trait. It helps that the pboc is coming out to emphasize that point. We are seeing a substantial, further decline. We are seeing a volatile currency come keep in mind that policymakers very much want to be under control. That is the story here for the remnant be. They do have ample reserves. Does seem to be behind us at this point. We are starting to understand this better, what they want to do when it comes to currency reform. That brings me to my other story. This is the big story in asia. The malaysian ringgit. It is the only asian country that is actually negatively explores exposed to oil. There is a political mess as well that you have to consider. If you want to see a currency collapse, look at this. At one point of the day, this fournge rate was at about point 0985. We are still at levels in 1998. We are still looking at the worst single they drop since 1998. At that time, they shorted the currency. There are a lot of other things to consider. At all the emerging markets in asia, looking at the currency things are looking a little bit better if you look at the indonesian currency and the philippine currency. It is friday. Equity markets are mixed. Flat, or a bit but a bit more calm. Caroline lets check in on the yuan now, in the past week, this is what you are seeing. A little bit of stability as david was saying that we have seen such a selloff. Biggest drops that we have seen. The biggest move to devalue since 1894. Since 1994. This is the dollar appreciating. 3 . Yuan losing some staying in asia, my next guest thinks that the maximum depreciation of the yuan compared to the u. S. Dollar will be still a further 3 to 5 . Thank you very much indeed for joining us this morning. Give us a sense of what you are seeing today. The fact that you are seeing the reference rate being raised ever so slightly higher the first time. Thingshe markets hand in , or is this the government trying to give some stability . That it is important to see what is the intention of the central bank. As we all know, the u. S. For a number of years wanted to reduce the value in currency between 2009 and 2013. The ecb and the bank of japan reducing the value of its currency between 2012 and 2015 right now. I think that indicates, in the case of china, what the market was surprised about was how stable and strong the currency has been alongside with the u. S. Dollar. I think it is up to the adjustment made by the chinese authorities it is not a surprising move. Caroline why do you think that it could lose another 3 to 5 . Is that the market acting . Wanted for it to remain strong against the dollar when otheragency that when asian currencies did not. Why will it depreciate more . Will that be the government talking or the market talking . I dont think that the government is sending that signal. What we are saying is that so thethe depreciation falling value to 4 , if we look versus therrencies u. S. Dollar, over the last 12 months, they have only averaged best it has fallen about 12 or 50 . 15 . I dontre to weaken, think that is a significant move relative to the rest of the region or the euro. We think it is plausible scenario that it could weaken a little bit more. I dont think that it is really a big danger to any other nation around the world because we have seen a lot of currency moves over the last one year or two years. Again in the euro and the emerging currencies falling by a long way. And then you talk about the ringgit falling quite substantially. Many currencies have fallen against the u. S. Dollar. If this currency is up falling by 6 or 8 against the u. S. Dollar, i do not think that it is such a significant event in the big scheme of things. Caroline you say it is not a danger to the other economies, talking about the malaysian ringgit, the lowest since 1998. China has not helped. I think you are right. The sentiment is not very positive in the region right now as far as asian currencies are concerned. Factor todditional weaken the sentiment of Foreign Investors towards asian currencies. The ringgit has been falling quite dramatically over the last 12 months already. Is in the final leg of its fall. Caroline is it time to buy . As far as asian equities are concerned, there are some very cheap markets. China is cheap, korea is cheap. As you know, unfortunately, Global Investors are not buying cheapness. If anything, they are buying safety, growth, and quality. We need some drivers, some positive drivers in order to make sure that the value market can be exploited. I think that the driver has to be some very big cuts in Interest Rates in china or cuts in the reserve requirement ratio in china which will flesh out the liquidity of the Banking System for china as well as the region. I think if that happens, perhaps these values value opportunities will stay dormant in the short time. Caroline thank you very much. That brings us nicely to our twitter question of the day. How much will the yuan devaluation affect growth here . European growth. We get a Second Quarter snapshot will chinaermany, affect us in the Third Quarter . Tweet me. Corporate news. Barclay, and three other u. S. Banks have reached a settlement with u. S. Investors. We have more on this story. 2 billion have been paid out from nine banks. There were already four banks that had little. Jp morgan, bank of america, ubs, and citigroup. Settlement, that includes hsbc, barclays, goldman sachs, the royal bank of as part of the deal that they have done with the lead lawyers of the lawsuit, they have now agreed to cooperate with them in their percent of in their pursuit of seven other banks. They can hopefully come up on your screen. European banks in the thick of things there. The accusations in terms of Foreign Exchange rigging. Were talking about allegations that they manipulated benchmarks benchmark rates. It was to help them make more money or lose less money. This is part of a crackdown against financial miscreants who fromccused from everything rigging benchmarks, to crossborder money flows. Caroline 5. 3 trillion a day market. Wide sweeping effects. Ist is even more concerning 2 billion is at the end of it. For the start, you are the other seven banks. Some will perhaps settle and there will be damages. In addition, you up the potential for other cases to emerge. In this particular rigging case, the lawyers are now saying that this is just the u. S. Customers. We are now approaching investors in asia and europe and potential he the settlements there could be even greater because we are talking about the global foreign currency market here. It is not just affecting u. S. Investors. The total, 2 billion right now, could be just the start which is what the lawyers are hoping. The banks in question declined to comment on the settlement from yesterday. No doubt, this story has not ended. Caroline it is fascinating to watch the stock market reaction. A love the update on the banking ues, coming up on countdown. It is decision day in greece where mps are deciding on whether to accept a third bailout agreement. We will bring you more after the break. Caroline welcome back to. It is 6 19 a. M. Here in london. Here the top stories. The yuan halted a threeday slide after the Central Banks reference rate rose for the First Time Since china devalued its currency in tuesday. It dropped the most in two decades. Since moderated those declines. The central bank intervened and signal it support for the currency. Five banks could reach a settlement with the u. S. Investors over claims they conspired to rig the global currency market. That includes hsbc, berkeley, and the royal bank of scotland. The settlement now brings the total currency agreement to more than 2 billion across nine firms. Greek lawmakers are expected to vote this morning on legislation the opportunity to unlock about 3 billion euros of aid. They need to come to a political agreement on this rescue passage package. There were live pictures from parliament in greece. They still appear to be pretty jovial after their allnight slog. Lets get more on this story. Rebecca christie is in london at the moment. You are about to jet back to brussels because the finance ministers are gathering. What do we think will be prominent in their minds . Rebecca today in principle is the day that they would feel the threeday deal for greece to access the 3 billion euros in aid. That would allow greece to show that it had done the milestones necessary to earn the money. This day has a lot of significance. The Greek Parliament probably needs to vote before the finance ministers get together. Caroline what time are we expecting . Rebecca meeting begins at 3 00 p. M. We will see how long it goes. Caroline we do know that tsipras has already been on the phone. Paving the way. What is greece having to do here . What does the bailout look like . There is so much else involved. Rebecca the imf put out a supportive Statement Last night. Even though they are not prepared to give greece more that, that is something will be discussed later in the year once people can look at how greece is doing under the new package. The imf has said that it does support greece and thinks it is moving in the right direction. The tough sell right now is the german parliament. Every vote takes place after all of the others. First greece both, then the finance ministers, then the germans will consider next week. If they can make the case to their taxpayers that greece is doing the tough things needed to earn the eight, things could move forward. That question is still unanswered. Rebecca christie joins us. Lets continue the conversation. Fellow. T is a research it is very good to see you this morning. They are still going. What do we think. Can tsiprasjority bring with him to get the spoke past . Passed . It is more complicated this time. This willyriza definitely be a consideration , thelso this official leader of the left platform, has already come out with his proposal of a wide movement. There is another problem in the opposition in that quite a few mps are willing to rebel because they feel that they do not want to take the political costs for this Program Given how mr. Have acted his party in this position. The National Consensus that we saw during the two previous voting, might change a little bit. Caroline do you think it will eventually pass . It will pass. With the majority. But i think it will have to look very carefully at the size of the majority. The eurogroup is probably being how theeful noticing great political personnel is behaving overall. Has a serious credibility deficit and it has a serious ownership deficit with regard to the program because, as you know, the Prime Minister has repeatedly said that he does not believe in this program. And so has a couple of his ministers. Heng to the eurogroup today, may he will need the biggest majority that he can get. There are the obstacles that i spoke about earlier. These andthere are splits. The left platform, there could be a new Political Movement being formed. What then in terms of election . How will tsipras gain back the vote and look like he is back in charge and able to push through this program . Does it call for elections quite soon . Managed tohas maintain has Political Capital which is quite amazing. Especially given the fact that he has made a complete uturn. This is probably the harshest memorandum that the country has to implement. He will either move to have elections in september so that felt the fullt effect of the memoranda. They haverporation not felt the full effect of the new taxes and the new sense of insecurity. That the left platform will not have the time to organize at the country level. But then, there is the october option. For theras would wait first review of the program, hoping that he showed and heible governance, would get back some sort of debt relief. However, he should be very careful with that. There is little appetite for the kind of debt relief that he is looking for. And we should see a lot more severe conditionality this time around. Caroline thank you very much. Research fellow at the hellenic foundation. Coming up on countdown we are getting a peek at the gdp. Please stay with us. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Caroline welcome back. News now getting breaking on the Second Quarter gdp figures. They are coming in less than expected. No growth whatsoever in the Second Quarter for france. Quarter onng 0 quarter gdp growth for france. You are also think just 1 growth if you are looking at a year on year basis. This is a poor reflection of the quarter on quarter levels and certainly a slowdown from the First Quarter. French economy is stagnating. Powell,o bring in david our Bloomberg Intelligence viewpoint and our guest host for the next hour. All, let us get your opinion. Stagnant. We knew france what the thorn in eurozone side, it continues to show that. Already, france is forecasting to be the weakest economy. There had been some signs of that. Industrial production in the eurozone as a whole was going to be a drag on the number. Saw invergence that we the indicators of Industrial Production coming in negative and business surveys indicating it seems like we now have some clarity that the numbers are weaker than expected. This has implications for the eurozone as a whole as the secondlargest economy there. Caroline are we expecting the eurozone numbers at kennecott p. M. To be lower . It could come in a bit lower. Points ofstill some strength in the eurozone including spain, accelerated 1 in the Second Quarter, we know already and of course germany, throughout this crisis has diverted from france. The german mean numbers will be poor but it does not provide a good start for the eurozone figures. Caroline what is your point of view. A French National living in amsterdam. Did you feel the French Economy was dragging its heels . In the summertime, everything looks great but the numbers, they dont look good, there is a form of silver lining. May the Second Quarter in the u. S. And in the global trade, there will be some potential upside in the quarters to come. A caveat to that is that all of the Third Quarter, we have the holiday. Risk ofis a undershooting the target for france in terms of gdp. Isnk goodness this surrounded by countries that are growing including italy and spain and also germany. It can provide some elements of euro, and the rest of the and let us keep in mind that consumption remains a good element into the French Economy. Is on theal element negative side but the consumer remains good. Caroline the euro not reacting in the slightest to this news. What is driving this . Is that the lack of reforms we are seeing an france . Why do we see such a sluggish growth here versus germany . Consumption has been strong in france. It is been helped by the slight decline in unemployment. What is missing in the puzzle for fren