At 4. 8 , premuch in line with expectations. 1. 8 , worse than expected. Retail sales are the weakest link in the recovering story in china. Than what the market was expecting. Property investment year to date coming in pretty much at 1. 9 . Versus an estimate of 1 . We also have the jobless rate coming in a tad better at 5. 7 versus 5. 9 . Which was expected by the market. Overall when you look at the economy, it looks like it is adding to signs the economy is picking up momentum. China probably will be reflecting in the rest of the world. Yvonne one of the key disappointments is still the consumption side with retail side still amiss in a negative fringe for a fourth straight months of 120 . About theuestions back half of the year. But the gdp is still the stand out. Take a look at the adjusted quarter on quarter. We are talking double digit growth of 11. 5 . The highest quarter on quarter at least nine years for china. This is how we are seeing things play out in the markets. Seeingike you are chinese stocks at least switch to the positive territory now. Csi 300 up about. 5 , but marginal gains. You have to wonder given the rally we have seen in mainland equities, has it all been priced in . Have we gone beyond the fundamentals . China and send jen as well, things are cooling down china and shenzhen as well. Lower by close to. 5 . Watching other assets. See how the renminbi is doing. We have been hovering around the seven handle, now we are slightly below that right now. Holding onto some strength. The korean yuan still seeing weakness. A press conference happening this hour. The bok already saying growth expected to be below projections they set back in may. Aussie dollar also under some pressure still. Digesting some jobless numbers out of australia. We are still hovering around the 69 sent mark for the aussie. Chinese 10 year yield up three basis points, 298. Reacting to positive news. Before we got lets take a look at commodities. Watching this oil story with opecplus. That panel supporting an oil cuirvurve tapering. Brent, holding onto gains. Copper futures getting more of a reality check under that eyepopping rally. Most commodities lower after some concerns eased on the supply disruptions in south america. Silver futures approaching 20. Gold futures back up a little bit. Not a lot of reaction on the china did it comes to commodities. Back to ourts get top story this hour. Gdp gaining momentum. Our next guest believes it is premature to conclude that chinas economy is out of the woods. Lets get announced from helen qiao, greater chinese economist at bank of america securities. Good to have you with us. It does seem like growth is gaining momentum but it is pretty uneven. What is your greatest concern . Helen you are actually right. The reason why we think it is not out of the woods is because while we saw the Second Quarter was a significant step up from the First Quarter, we are talking about annualized growth being at its highest, 57 . But the problem is this is uneven. As a reopening continues, we are seeing on the manufacturing side, construction, have clearly gone up very quickly. We can see the rebound has been coming fast and furious. But at the same time as you already indicating, you can tell we are not doing that well. In particular it shows within consumption, especially consumption of discretionary services. Probably still lagging behind. Within retail sales, theres only a small component of that, dining out. If we look at the broader definition, it should also include high Valueadded Services such as education, overseas travel, etc. But this component of consumption, i am afraid that it still lagging behind. So, between the two parts, consumption versus investment, we think investment has done a better job, but consumption still dragging their feet, especially the remaining services. Its probably very slow in recovery because people still hold a fear against going out and traveling. Services andime, general have been lagging. Im afraid those services, facetoface physical contact, are probably going to remain dormant for a while. That said, i have to say the Second Quarter data definitely shows the upside to gdp growth, and therefore i would say we will see chinas gdp growth coming back quite soon. For the annual firms, definitely up 1. 2 . But it is probably too early to say the Third Quarter in Fourth Quarter would be a much higher number than this. Just a headline reporting that xi jinping says fundamentals of chinas growth will not change. This is on the back of xi responding one in response to a letter. He says fundamentals is intact. But if consumption is a long way off from the peak that we saw, surely fundamentals are not really that strong. Helen right. I am afraid that is the case. The problem is if we only see the industrial side of the recovery without necessary the consumers demand holding up, i think that potentially will build into higher inventory. And potentially that could drag on later growth. At the same time, i think there are other worries outside of china. In particular if we look at the reopening in the rest of the world. I would say so far it is bumpy and uneven, especially in countries where we are seeing the second wave or first wave still continuing. It is hard to see how china can remain completely on its firm footing at a time when the rest of the world is still coping with a very deep recession. So i think there are additional factors over here in combination that will probably keep our monitor on china very closely focused on Services Within consumption, and we think that this will be crucial to see whether china will be able to hold on to its stable growth path and set a trajectory in the last 20, 30 years has been so robust that we think this year is probably going to be a quite challenging year. Yvonne i am looking at the jobless rate in china. That seems to tick lower about 5. 7 now. Its been pretty resilient, the headline numbers when it comes to jobs. Is that an indication of what we are seeing on the ground, or do you think in a way this is a positive signal that perhaps the demand side can catch up with the supply side soon . Moment, think at the the consumption weakness is probably not so much caused by concerns of job security or income growth. Probably bullet primarily due to peoples concerns about going out and keeping social distancing rules come etc. Rules, etc. So we think we are still in the honeymoon period. Elsewhere, you probably have seen a much deeper correction because of such concerns being higher. But within china i would say that the very fact that Unemployment Rate is still relatively low and well below the annual policy target level at 6 is definitely good news in the sense that it will ensure households have the spending power Going Forward to continue to spend, and probably push consumption to a higher level. The one thing i want to highlight is the fact that june is a critical time, as well as july. This is a time when College Graduates are coming into the labor market, and we have more than 8 million of them. And this year is such a tough theat has given companies have frozen their headcount. Fact that this number has been stable so far and hopefully still close to stable, may be the underlying situation, is very encouraging. But of course there is anecdotal data saying the underlying situation could be weaker than that. That is something we need to watch very closely. Thise you mentioned uneven recovery. Why do you think the pboc has been sending some type of message that they are talking about potentially exiting stimulus . Is that still premature . This ise think yes, probably too early to say that. But the policy complacency is already arriving from a couple of things. Number one, they are looking at the growth recovery, the numbers that fell already very much a short that the chinese economy has already rebounded from the very bottom. So the very bottoming out process happening so quickly, so effectively i think really gives them a lot of confidence that they do not have to people keep the stimulus in place much longer. I think there is also concerned about the potential consequences of putting into much easing measures so that afterwards, we would probably see buildup of higher leverage ratio. Given what they did in 2015 and 2016, and there was a very high ofel of river ridge leverage increase, especially from the household sector and recovery sector, i think that is of particular concern for pboc. And therefore they do not want to keep easing measures in place for too long. That said, i think the problem is that we do not think the second half is completely roadblockfree for the chinese economy. I think the very trouble we are seeing is externally, we still see the potential headwinds strengthening from the uneven and bumpy reopening elsewhere and we are probably not necessarily going to see such a strong boost to our export numbers, especially from the Electronics Sector and possibly medical supplies. If that is the case, than most of the burden will be on domestic demand to grow for the gdp growth. For domestic demand, consumption is not completely on its firm footing yet. So i think this is a bit premature to think about it complete exiting. Hopefully we can keep this relatively supportive environment for a little longer. But we want to highlight the fact that bond yields have already risen so much, and borrowing costs in general will be slowly rising as well. So this is definitely a concern. We need to keep in mind that policymakers in china hopefully would keep the overall stance for longer so people would be happy to spend and corporate would be happy to invest. Thank you so much for your great analysis, helen qiao. Covid19 continues to surge in the u. S. With california reporting near record cases and fatalities good nationwide numbers rose 2 with death stopping 136,000. Walmart is now requiring shoppers to wear masks in stores. With socalled Health Ambassadors at the entrance to ensure compliance. Their decision follows a similar moves by starbucks, cosco and best buy. President trump is indicating cooler tensions with china, ruling out additional sanctions on senior officials for the time being. It told the decision came before he signed the hong kong autonomy act on tuesday and is different from his combative tone he has struck in recent weeks. The bank of korea has let Interest Rates on hold amid signs the economy is slowly emerging from the coronavirus pandemic. The b. O. K. Held the rate at 0. 5 . The decision falls follows an improvement in Unemployment Rates and recent signs business and Consumer Confidence is improving. It also helps to curve a boom in property prices. Still ahead, casino stocks saw a bump after the easing of quarantine restrictions in macau, but as morningstar investment will take axt, we deeper dive into chinas gdp numbers and how it will set the direction for markets today. This is bloomberg. Is bloomberg. In our lets bring bloomberg team. Lets talk more about the gdp numbers. Seems like this was better than expected, at least when it comes to the headline secondquarter gdp numbers. Saw a bit of a spike in chinese stocks but we are heading back lower now. Yeah. I see that. Number the gdp headline is good. Basically it reflects the broader pentup demand. This given a clear upturn and pmi turnaround. Measuring consumption and bank lending and retail, railways, traffic. It shows a nice rebound in the economy. I see retail sales, the consumption data is not as strong as anticipated. This is a bit of a disappointment. But it is improving. The slump is getting less. Important it is saving the economy billions of dollars and they are doing it at a drastic level. Discount income everything going on. Support for a more domestic consumption stimulus. This rebound is really limited to china. See overnight we have very good u. S. Data on industry production. They all beat expectations. This week we had some good korean data too. Iner nations followed china their recovery. So i think in case of external recovery momentum in china will be maintained in the second half. I understand there is some risk from outside. This clouds the outlook. Unless we have broad lockdowns , n recovery momentum in china will recurrent will continue. Whopping 8 next year. Yvonne thank you so much for your insight. More one you can follow our markets live blog on the bloomberg. You can get a market run down in just one click. Is can find out what affecting your investments right now. Theinda still to come, Philadelphia Fed president warns of a 6 contraction in usd gdp this year and sees a fiscal cliff ahead. Our exclusive interview with Patrick Harker is next. This is bloomberg. Is bloomberg. The Philadelphia Fed is revising its growth forecast for the u. S. Economy, given a resurgent of the virus in hotspots there. Patrick harker gave us his outlook on the recovery. Patrick the Manufacturing Sector has not bounced back. We saw our last report last month. We are seeing some good news there. Particularly the city of philadelphia itself is from modly meds predominantly meds, and im concerned about those. Not just a large medical institutions which have lost a lot of revenue because of elective procedures, but also in the rural communities. Those rural systems have been hurt quite badly. What about the overall u. S. Economy . Now that we have seen this flareup across much of the country, are you advising your Economic Forecast . Patrick prior to this we saw a pretty big hit in the first half of this year, probably about 25 gdp in the first half. We thought it would bounceback around 13 in the second half commending around 6 down in gdp for the year and unemployment around 10 . We are revising it now because with the virus surging in the south and southwest of the country, we are very concerned about that. Until we get the virus under control, we cannot get the virus country back on track. You came up as an educator. How important is it to get the schools open . How important to the economy this fall . Patrick it is very important. But we have to do it carefully. Because we do not want to put people at risk. A childcare in business about half the childcare institutions, many of them are small. About half of them closed. Leastmaining ones lost at 50 capacity in remaining open. So this is simply if people cannot find care for their children or be able to get their children to school, they are going to have a hard time working. Particularly in the knowledge economy where peoples productivity is really their knowledge. If they are concerned about their children and that is weighing on their mind, it is human nature that they will be less productive. It is very important. We cannot do it in a way that puts the children or the communities at risk. Obviously a lot of risk for the economy that did not seem to be reflected in equity prices. Are you concerned about the level of stocks at this point and whether it is a state where we might be seeing a bubble that could pop and take the economy with it. Patrick the equity market, the stock market is a measure we look at. I also remind myself it is not the real economy. For me as a policymaker, i am looking at the signals coming from the real economy. Employment data, inflation data and so forth. That is my main concern right now. Do you think there is any role for the fed and perhaps controlling the rise of equities at this point . Patrick at this point, we had to act early and aggressively to help stem the damage from this unprecedented pandemic. So that was job one. Now as we start to climb out of this, hopefully sooner rather than later, we will address other issues. But we had to act to secure the economy and help save as much of the economic infrastructure in the country as we could. What more can the fed do . It was suggested yesterday you let the economy run hot for a while and explicitly saying you are going to let inflation rise. Is that a strategy on the table for you . Patrick we have been saying a long time the 2 inflation goal is symmetric, which means we should overshoot it. We are having a difficult time doing that, like all developed economies. Im supportive of the idea of letting inflation get above 2 before we get any action with respect to the country. In newa it is 10 29 york. Karina new zealand inflation slowed in the Second Quarter following to the low end of the target range is the covid19 lockdown stalled of the economy. Consumer prices fell half a percent from the march period. They launched qe to support the economy. Infection numbers continue to rise. Stay undera will General Community quarantine until at least the end of the month which allows most businesses to remain open. Tokyo has raised its virus warning to the highest level, and new zealand is preparing for a new infection surge. China says it is ready to take action against the u. S. For ending hong kongs special trading status. Beijing says the law violates International Legislation and is a gross interference in its internal affairs. The Foreign Ministry says if the u. S. Proceeds with a stance on hong kong, china will take appropriate action against american individuals and entities in response. The Trump Administration is preparing to impose visa restrictions on some huawei employees or chinas abuse of human rights against muslims and other minorities. Secretary of state mike pompeo says Global Telecom companies are now on notice that if they work with huawei. It is not clear who might be targeted or how many. While mostly symbolic, it is the latest attempt to limit huaweis reach. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Mitchell. This is bloomberg. Still ahead, a lot to tell you about. Japan currently up 35 after its ceo said it is on talks on oled investments. We will bring you details on that as we get them. We also have the b. O. K. Governors saying global uncertainty is rising again on virus concerns. We had the b. O. K. Keeping its rates steady at 0. 5 . The governors saying global uncertainty has risen again. Of course the focus for the what. Is keen to know measures they can deploy, perhaps unconventional measures if the economy were to worsen. The rate isays lower bound. Yvonne we also have a press confere