Topsyturvy trading going on. Bit daytoday was a little weaker. I didnt think it was that horrible. Kirilenko 14 jacob guy if you 14 . Caroline guy if you cant if you really think about how we got to that number there are mitigating circumstances but the u. S. Market essentially bounced back toward the close yesterday so we did see a largely positive and to the day. 5 could see we were up by and the average was up by a 4 10. The equity markets did not feel like they got knocked but they have had some bad days. Caroline and it is easier to see such volatility when you have volume 15 below the average of the past three months. House end it was the builders that managed to fuel that resurgence. Guy chance that everybody is talking about and i have read my third article now the producer pointing another when out this morning is this chart here. Post china seems to have got everyone thinking. It is basically equity markets continuing to rise but highyield credit on the way down and it is that spread their that has people nervous. That is what is maybe pointing peoples towards this idea that equities are as ever slow to react. China is adding into that. Girl the highyield is pretty phenomenal. Seen sinceve not 2010 and thats with a nervousness is creeping in. Guy credit much better at pricing the stuff in with a much better historical record. When the credit market starts waking up should equity markets do so in short order. Beoline should they following highyield credit downward. Give us your thoughts. Guy lets take you back to one of the main stories. Shockwaves are spreading from in blonde best bomb blast bangkok. The Tourism Council says it has already seen cancellations and all of this can only hurt and already slumping economy. Zap, we have obviously seen the condemnation of the attacks and we dont know what happened but the Market Reaction is clear. It is fairly clear and we are seeing the bought trading at intraday levels we havent seen since 2009. The stock market headed for closing levels we havent seen since 2014. This amid renewed concerns about security in the thai capital and across the entire country and it comes at a time of instability in the markets in general. Chinese devaluation has had an andct on Asset Classes thailand has been struggling in recent years with Political Violence so its own economy is already feeling the pain of reduced tourism and slightest a mistake manufacturing this is all weighing on the thai baht. Interest rate hikes in the u. S. Have been looming large in the background as well so this is certainly a black eye for thailand and a lot of Unanswered Questions today given this tragic and shocking attack last evening. Involvingtragedies humankind killing at least 20 people. What are the Thai Government saying about who is responsible. How serious is it taking this bombing . Affecting not only thai nationals but chinese nationals thatand filipinos to is why many are terribly worried about this because while we have seen Political Violence in thailand for years and even isolated bomb attacks they were focused on domestic issues generally targeted at a political rival. This one happened in the most crowded populated intersection at the heart of thailands tourist epicenter by the Grand Hyatt Hotel near the former Four Seasons Hotel near the central shopping centers. These are hugely trafficked areas by tourists. And the shrine. A major hindu shrine popular among tourists as well as locals. So the thinking is that it targeted not only domestic and Political Considerations but their foreign tourists. The industry that really keeps the economy afloat. We know the Prime Minister headed into a Cabinet Meeting some sense ofhave the actors involved but had no prior warning and they cannot rule out terrorism or anything. Are the forensic investigators have been unseen for much of the day trying to gather evidence but no doubt the death toll now stands at at least 20 people. More than 100 injured and we expect many more. We know that chinese and filipino tourists in particular. We understand that a japanese man was badly injured. Nations and the united have all condemned the terrible attack and hong kong telling its citizens that they should avoid all nonessential travel to thailand as result of his latest violence and income. Thank you very much indeed for the update. Caroline and its feeding into the tight bart. If youre looking at emergingmarket currencies you have to extrapolate some of the Business Impact of this. The largest selloff we have seen an emerging market foreign currencies. So talk about Federal Reserve raising rates all of this playing into emerging markets. Guy this is the question everyone is trying to ask at the moment. Is it going to overwhelm this week recovery . That is something that is going to play into this idea that the fed delays its rate hikes in the bank of england maybe needs to do the same. We are seeing a significant downdraft in currencies equity markets. Some big big moves and does that start to represent something that represents a clear and present danger to the recovery that we are seeing. That is something people will be talking about a lot more. J. P. Morgan analyst saying maybe this is in such a negative because it might delay the rate rises have been talking about. The lets focus back on the asian markets. Youre standing by and hong kong give us a sense of outside of what is happening in china land, what has been flowing through the rest of asian trading. Were certainly seeing most of the markets here in asia in the red. They were doing a little bit better before thailand came online. We have got the shanghai composite down by 2. 1 at the moment so a much more significant drop in what we had seen earlier in the session. The hang seng index was actually in positive territory. Up thosen it come pick h shares that investors had bailed out of. You mentioned the route and emergingmarket currencies certainly sing that in none other than malaysia as well. It is coming back a little bit today up by 0. 6 of 1 with india coming online in the last hour and a half. Jakarta is down by about 1 it is another currency under pressure at its lowest level since 1998. Still definitely seeing that weaker yuan in china playing into emergingmarket currencies and we have the rest of the region lower as well despite some earlier gains. I just what a show you some of the major stocks that we are watching today in the asian region. We have had chinese property prices out for july and they were a little bit better than what the market was. We are seeing a bit of a mixed picture coming through some of the Major Property players and china. Chentoalso lower also lower. By 7 . Ralia, this one up byhas been offered brookfield for 8. 9 billion to take over that company and one of the biggest banks in australia paying out dividends today weighing in on the overall fx 200 and then in japan this is one of the best performers in the asian region today. Its a machinery operator and manufacturer and has come out and raised its fullyear forecast. A little bit of a mixed picture but we are seeing some are coming through in the late session. Heres a quick update of the thai baht which you have been no doubt following closely. 35 against the u. S. Dollar and the Malaysian Ringgit as well which is what we have been watching the past week also still very much weaker against the u. S. Dollar down 1. 5 against the gray back. Yet another volatile session here in asia. Guy thank you very much indeed. Juliet running us up with what we need to know. Before talk more about that chinese housing data, i want to get you some details on bmw. They have news related to the blast. It is affected by it and has distribution that runs through that explosion. It is seeking alternatives to import vehicles through. It does say that a Vehicle Distribution Center has been damaged in that port and that is going to affect business. The stock has already been significantly affected over the last few weeks and months i the slowdown in china. It is a china play in some ways. Caroline and the devaluation fed in. But interestingly you putting out yesterday that note from barclays. Sharing that feeling that perhaps the market had gone to go far and how much they feel that china will hurt the m w and there is an amazing line saying even if bmw makes zero the stock is still worth more than it currently is. Guy just because it is a proxy. If youre to trade china bmw is an obvious way of doing it. China is very much front and center here at bloomberg. It has reported a little bit of a rebound. Shanghai and beijing looking a little bit more positive. Our chief asian economic correspondent. A recent turnaround. Is it too early to talk about . It is certainly a surprisingly upbeat number for once. It is interesting when you consider the prices came despite a dipping selloff in the stock market which we have seen with people worried what impact Consumer Confidence and the like. I guess it does indicate that the full rate cut is helping but to go cheer your question it will take some time to channel whether this is a deeply ingrained recovery. Will need to see that in the tier three and tear for cities. Seeingose guys start sustained prices maybe then we can say the Housing Market has turned. Caroline will we see anymore boost or policies to help boost housing Going Forward . Accounts all policy options remain on the table. There is a feeling that a slope socalled stabilization we thought was taking place has kind of been reversed. But the wider economy remains which includes the real estate sector. There is an ongoing degree of demand but there is still a long hold of inventory out there as well. So they will hope that the prices may drop buyers into the market but beyond that economists say you cannot rule out the Interest Rate cuts or further steps to boost mortgage lending. Girl thank you very much indeed. Will get a breakdown of the data you need to watch and why it matters to first up, u. K. Inflation at 9 30 this morning. Kirilenko and the Turkish Central Bank decision coming out at noon. Guy on timor to bring you as well. Justst over guy in over an hour, they bloomberg first interview. Caroline the battle of the breakfast. Lets look at what russian president putin has to do with european milk deflation. Coming up after the show. Course we will be dealing with the u. K. Deflation dilemma. The data is coming out a little bit later. We have some great guests coming up for you. Senduest who says we will over that goes negative before the end of the year. What impact will that have on the outlook. Have they underestimated the inflation slowdown. We will talk about that we come back. Caroline . Here are the stories in need to know this morning. Shockwaves spreading from the dirty bomb blast in bangkok. Tourisme the time council says it has re seen cancellations. At least 20 people were killed during the blast and rushhour yesterday. Caroline in a letter to parliament, looking schaeuble asked Wolfgang Schaeuble asked lawmakers to back. Despite the lack of commitment from the International Monetary fund. German parliament will vote on the bill on wednesday. Guy this is the first time in three years this has been achieved. The company halted Arctic Drilling in 2012 after the Obama Administration was prompted to revisit u. S. Rules for activity in the region. Caroline lets turn our attention to the u. K. Zero inflation. That is what we are likely to see when we get inflation figures this morning. It is a figure that will be closely watched by mark carney. Ultimately our objective is not to have inflation at 0 . Were absolutely symmetric and our job is to bring it back in the genitive of the community is to bring it back to that 2 target within two years. The bulk of the shortfall can be explained by the sharp fall in the prices of commodities and other imported good since last year. This temporary period of below arget inflation has provided welcome boost to to real incomes. The near term outlook is muted as i said and it would not be surprising if we have another month or two of negative inflation. Given the very substantial moves and oil prices and the changes to some of the utility prices as well we have seen big moves and oil and other commodities but also changes to utility prices. Guy lets bring in jamie murray also joining us is the senior u. K. Economist at capital economics. Lets start with you, what are we expecting from the data today and what will it tell us about the impact of low Commodity Prices in real thomistic inflation . The two things that will moose the inflation around today will be some clothing and footwear prices because this time is triggered to the timing of sales and the price of oil. We knew that diesel prices fell in the month and there may still be some to come from petrol. But these things tell you a great deal about domestic demand and that is what the bank of england needs to be concerned about. So they will be looking at services, prices and their focus will be on wages and productivity. Caroline what about the british pound as well . That has been interesting in terms of importing. We had a veryme significant fall in sterling the bank of england got it completely wrong this time theyre hoping for a slightly smaller effect than last time but yes it will be a driving dynamic. We think the effect will build. Outstocks will drop beginning of next year. How strong is u. K. Domestic inflation right now . Once you strip out the effect of lower Commodity Prices and import prices you probably get an underlying inflation rate of about 1. 5 but is still not small enough to suggest were back on track. I think that is what is concerning many members. Although we have seen a substantial improvement in the laker labor market and although it is growing at a strong rate we are not sing the move just yet. Caroline when do we anticipate to see that move and see inflation coming on track near that 2 level. They will be more confident that it will return to the 2 target sometime next year. I think we will see Strong Enough wage data by then to convince them that we will see the underlying inflationary pressures pick up but the economy still faces a big fiscal squeeze. Likely to see only a very gradual tightening on Interest Rates. Were starting to see productivity improving albeit from an incredibly low level but as it starts to Gain Momentum this idea that maybe there is a little bit more slack and productivity is improving, what is that do to the equation. It push things back a long way. The more productivity there is the more it grows. Productivity would probably push back the first increase. Thertunately, i suspect increase will be shortlived. Its happened before and it fell out again. Thatfar too early to say productivity is on a sustainable half and starting to increase. Caroline how much do we think mark carney is feeding into the external factors. Hypothesizingeen whether the fed will delay its rate rising on the back of china. We are not particularly exposed in terms of the chinese evaluation but how much will Global Deflation feet into that . It takes quite a long time for import prices to be really reflected. The reasons white thinks he has more time to leave Interest Rates on hold. In the minutes of the recent meetings have suggested that they are taking into account this weakness and Global Deflationary forces but really the key thought at the moment is that in the u. K. Economy itself it still isnt Strong Enough. To you agree with that jimmy . It will be Strong Enough in a year or sos time. And that is where they are supposed to be looking. I agree. We are not that far apart and when we think the first Interest Rate hike will happen but domestic pressure will be stronger than some are suggesting. Caroline when do you think mark carney will have to stop writing letters to George Osborne . It will be sometime yet but it doesnt matter that inflation is below target it is the domestic access that is aspect that is important. Is if the fiscal squeeze still in operation we will see that carrying on for a while. When carney first came in there was this tacit agreement that we would not see very aggressive Monetary Policy because the fiscal side was doing what it was doing. Think were likely to see a tightening on Monetary Policy and certainly more gradual in the u. S. And thats primarily because we still have a huge fiscal squeeze. The u. K. Economy may see the biggest squeeze in Government Spending than any other geopolitical economy. We will all start to see the Interest Rates to verge and that will all start to play out in the exchange rates. We have the chief executive coming on a little bit later. How much can the effect of an Interest Rate rise actually impact the level of spending here in the u. K. . If you look at rates in the crisis, subsequently subsequently they fell by lesson the base rate did. So it will be a lot more limited. When Interest Rates do start to rise it will not take too much pace out of the u. K. Economy. Debt levels are down and house owners have really deleverage in the past few years. Guy thank you very much indeed. Will betake a break talking with the co little bit later on the program. Guy it is 6 30 and london. Caroline the shockwaves are spreading from yesterdays deadly bomb blast in