Welcome to countdown. Onat a 6 00 a. M. In london this wednesday morning. Today was a day of commemoration in Hong Kong Thomas at least for the beijingbacked authority to the 65th anniversary for the peoples republic of china. Demonstrations against chinas influence in the city continues. They call for the citys chief executive to resign and a successor to be democratically elected. They spend another night on the street undeterred by both thunderstorms and statement from authorities saying their demands wont be met. For more, we go live to one of the protest sites in hong kong shari isoomberg news standing by. Whats the mood like there today . Right now, it feels a bit relaxed. People are resting under their umbrellas. This is being called the umbrella revolution. Last night protecting them from the rain and today the sweltering sun. The mood is pretty relaxed at the moment. They are gearing up for a long day and it looks as though it is organized but there is a system. People have been supplying protesters with watery and crackers, anything to keep them going. The number of people given to publice because its a holiday. Weve already seen families coming out with children so we are expecting more people to show up. Already, behind me thousands and thousands of people. Protesters sitting on the ground. Shery, we heard from the chief executive this morning. Whats the reaction to that we are you are . Right now, we are speaking about a more relaxed move but earlier in the morning when they were giving out a speech on chinas national day, he was holding a ceremony and said one country two systems would benefit hong kong. People were not very happy but it was border tense. One country two systems will not work if china interferes with the elections coming up. They want to beijing to drop plans to set candidates for the hong kong elections in 2017. They also want him to step down. They are willing to wait here in the process all around hong kong until they see some kind of. Esponse from the government midnight tonight hong kong time is the deadline for the response. Shery ahng news live from hong kong. Theets take a look at markets in asia. David inglis is in hong kong looking at the effect this is having on the markets. Good morning. Lets keep in mind that hong kong and china both having a national holiday. Thats why we are expecting a lot of people to go to these protests. Lets get back to the markets. We do have some of the other major markets up and running in asia. With opening a little over some kind of list midmorning. 110laryen shot up above since midsummer. Its not been doing too well. We are still down. This is released from quarter by the boj 10,000 japanese firms. Generally it was good, better than expected. The headline number was 13 and we were only expecting a reading of 10. If you look across these other industries, some are doing better than others. We were just talking about the japanese yen. The general assumption right now im a lot of these companies is 104the yen to be at 100 now. 110. E at it does benefit the exporters but it also does the opposite for those who import a lot. Among those who have the lowest in business sentiment, papermakers utility, Petroleum Companies in japan. We also have another piece of data coming out today, chinese pmi. Really, it was nothing special. 51 point one still showing expansion, more optimistic than pessimistic, but no change really from the previous month. It was just a tad higher. If you do compare that to the median forecast, steady as she goes in terms of the chinese economy. And it is is shut golden week. The big stories were following are the ongoing protests. You were talking with shery, a 10 minute walk from the bloomberg studios in hong kong. David inglis joining us there from hong kong. , its ipo day for zalando europes Biggest Online fashion retailer. It has been priced at the top of as range valuing it as much five point 3 billion euros. They kickoff one of the biggest german sales in almost a decade. International correspondent hans nichols joins us from berlin. This is one of those bellwethers. Theres obviously a healthy appetite out there. Just how going to see healthy the appetite is among investors for shares in European Online retailers. In the case of rocket, they are in everything and international. Focusing on the european side of the equation, we know what happened with alibaba in the 40 pop. If profitup even has not been there. Rocket seeking to raise one. 4 billion euros and a little bit thenthe line, zalando, and tell a columbus later ron. They are just fashion but they think of themselves as fashion, tech, and retail. They started out as a flipflop company. 16 brothers invested have a stake. They will be priced about 21 euro per share. We will see how many millionaires there will be if it really pops, taking off like zalando. The brothers may be worth one billion euros after today. S, you read through the prospectus. Good for you. Theirs their arguments of ambassadors . This is a tough space, isnt it . Its a tough one to win. One, growth. Increase in look at whether growth has been going back to 2011. At that point revenue was about 500 million euro and now they are up to 2 billion euro. You are talking about 40 potentially 60 profit margin. Look at the entire fashion industry just in europe and its around 450 billion euro, a massive market. What slice of the pie will zalando get . Will they be continuing to grow . They are only in 15 countries, mostly european, and most of their profits are in the german speaking countries. They go,ee how far what their expansion plans are. We will get a look at investor appetite and i might buy you a pair of flipflops. Form always in the market a pair of flipflops. Hans nichols in berlin. Cranny. Del you wear flipflops. Why do you get the special flipflop treatment . Email. E sending him an join the conversation on flipflops or anything else on twitter. Flipflops Something Else in other parts of the world. We will let you tell us what they call them. We willd to the break, have more on the strong dollar and what it means for the markets after the break. Stay with us. Welcome back. I minutes cranny. News. Ow for some company a german privacy regulator ordering google to change the way they handle personal information. The authority is the state of hamburg or during the tech giant to limit how they can use data to find out customer personal preferences including marital status, sexual orientation. The company has been ordered to modify its privacy policies or users can determine how their data is used. Ebay will spin off paypal to create two separate companies as they step up the use of smart phones and computers to pay for purchases. An independent paypal will be worth 47 billion aced on the valuation of rival companies and alliances with retailers and other financial firms. S fromtrying to axicces Mainland China seeing restriction amid protests at hong kong. It was an accessible for some parts of the country according to a group that monitors internet censorship. Currencies,anies to the u. S. Dollar just had it strongest quarter from 2008. For more, lets bring in senior fx strategist from commerce bank. The doves are not attracting much attention as far as the u. S. Dollar is concerned. Risk tolerance is to the upside. Even though people think its a going higher, it could go higher than people think. With kind of interesting for me at least is if you look at what the fed is saying compared to the market expectations, the short end of the u. S. Yield curve, its quite obvious its being very in place at. Look at the fomc projections themselves, theyre basically saying it is by summer 2016 that rates will be one point 25 . There is scope for a pretty aggressive correction which will lead to a broadly stronger dollar from here. You psych this sort of slow, gradual move by the fed. Small . So you do not have that ratcheting effect. You think we will get a timesheet 2015 and rates a punchy 201 . From a yield curve veryective, it is complacent in my opinion. If you get a good market positioning, literally we still have a very large dollar short position until july of this year. Remember. We are coming from seven years of having a very, very structurally weak dollar. With every other Major Central Bank still renting money, its hard to avoid the conclusion that the Dollar Strengthening of the dollar index which is above 70. It any figure above 70 means an asset is overbought. Its trading at 86. Its been above . 70 august. What is that telling us now . Weve had an aggressive correction but its been for good reasons. The two sides of this equation, its pretty clear to me now the ab, their key target is Weaker Exchange rate. We can forget about that. With the data weve seen from the u. S. , its pretty much clearer a perfect storm is building for eurodollar. I would not be surprised to see a trade there by yearend. Looking ahead to the ecb meeting, italy cutting its growth forecast. They are pushing back its balanced targets. Could a weaker euro be enough to help turn around economies like italy, structural reform being much talked about . Whats the medicine here . Talking about it is one thing and doing it is another and thats the problem with the eurozone. We talk about making tough choices. Thats been the case for a long time. In italy, this is a country thats basically had no reform for about 30 years. Certain they will help. Rate cut was perfectly aimed at the Exchange Rate itself and its been successful thus far. The question really for now is certainly if you look at the inflation data we had yesterday at 0. 3 , very low levels, its quite clear that the markets are starting to price in quantitative easing from the ecb which we think could happen in the first half of next year. Theres a story this morning that draghi is trying to to buyge his cohorts into junk bonds. Ae headline like that is pretty hard sell to the germans and even the north europeans. Is that what we need to happen . What type of asset cap Security Program do we need to shift the momentum . The initial Program Announced could be a pretty successful program. You can accuse the ecb is many things but not in action. They are out there trying to do what they can. They are not moving forward with quantitative easing. You might be a little slow but they do eventually do it. The key problem here in the eurozone zone is the banking system. Cap this credit Mediation Program and it could be successful. Is there more scope to have the ecb surprise us to the downside . The we have had so much in recent months. We are just getting abs details. Itthat would by and large be. We will have to see what the uptake is in terms of the decisions. To be fair though, we did see it was rather poor. Peter, stay there. More on the currency markets. We will talk about the yen. The First Time Since august 2010. Peter kinsella, senior fx strategist from commerzbank, staying with us after the break. Welcome back to countdown. Im manus cranny. Still with us, senior fx strategist from commerzbank, peter kinsella. The yen weakening below 1 10 of the dollar, the First Time Since 2008. Of me. Very unfair its traveling lower. A lot of the yen has already come out. Where are we . What happens next . Its not just dollar yen but euro yen as well. Are i. T. Dev very different trades to look at. There are two very different trades. Wire we seeing the yen weakness and why now . Recent ecb easing that we saw, risky assets and you saw that lower yield little bit. More to the point, if you look at most of the more recent japanese data, Second Quarter gdp etc. It is still at quite low levels. Doj may be forced to do even more easing. Its kind of becoming a bit of a oneway trade. It is very easily doable, i would say. Thats pretty much where we are going there on that trade. Can we talk about where we are on russia . People familiar are suggesting that the central bank may be considering capital controls if it continues to intensify. Do you think its likely . Its unlikely shortterm. The capital outflow it is slow during q1. About 70 billion shed. My assumption would have been they would have done it then rather than now. Capital outflows do not seem to be that significant. The sanctions you seen him posed are actually starting to have an effect and thats pretty clear. Its becoming very expensive on a one or two year tenor. Likewise it is basically inverted. They are getting close to a recession. Its a pretty difficult combination in russia and the ruble as weak as a reflection of that. You talk about the dollar side of the equation but what about emerging markets with the asset class . From august and in every major currency down against the dollar in the last month. How do we trade emergingmarket assets . Is got to be selective, to be frank. Currently it is underperforming and when you see Commodity Prices fall. Thats exactly whats happening. Lira, they are the obvious underperformers and thats been the case. Is not touestion become too bearish on them. Thats what the easy thing that comes to do. Remainder of the corridor, we will have more of a dollar bias and we will see a slight underperformance. Any favorites . 1130 are trading at around to 1160. I think the west turkish lira could move a little higher. Peter kinsella, senior fx strategist at commerzbank. U. K. Supermarket chain facing stiff competition from the discounters. We will tell you how they are fighting back next. You are very welcome back to countdown. Lets look at the fx market. The Asian Session is over. Dollaryen and we just had a conversation with commerzbank. Nexteady for 120 in the few years. Dollar yen just getting back to the 110 level. Euroyen is the other part of that argument. It seems to have dissipated in importance. Lets have a look at the aussie dollar because its a 12 punch. Have a look at this chart. Levels that we have not seen since january of this year. Had overall Dollar Strength and missing estimates this morning coming in at 1 10 of 1 . The market was looking for a number and again the momentum building here, bloomberg strategists have said get ready for aussie dollar that could get. 8545. O about that would take us back towards. 8660, the january low. That is the bloomberg strategists lviewview. Jeered by protesters after arriving at a National Day Ceremony marking the 60 fifth anniversary of the formation of the peoples republic of china coinciding with a sixday prodemocracy protest. Hundreds of thousands took to the streets once again last night in hong kong demanding that his replacement to be democratically elected. Earlier this year, italy had predicted 0. 8 growth but now sees gdp shrinking by 0. 3 percent. Renzi has also pushed back his inance target as they remain recession. The cdc has confirmed the first u. S. Ebola case in dallas, texas. He traveled from liberia and arrived in the u. S. On september 20. He is now being kept in isolation in an intensive care unit. Governor hasl bank been speaking to bloomberg tv and the are warning that the near zero Interest Rates in developed markets may distort prices without any real gains. Weve had ultralow interest point, it onlyme goes so deep in terms of asset to getand any attempt out of this has an immediate effect on asset prices. Its a price that we are willing to pay or to get going, but if real activity is not responding as easily to monetary stimulus because of other impediments of infrastructure change, you may have the distorted prices without the gaining. Sloww the sainsburys down. We look at sales of the uks secondbiggest retail chain have slowed more with Bloomberg Intelligence reporters. We focus a lot on dave lewis, the tesco ceo who has only been there for one month but its easy to forget sainsburys ceo has only been there less than two months. Going to have some pleasing samestore sales numbers, is he . The expectation is for a drop of more than 3 , the worst unadjusted figure ever possibly. Even in the dark days in the early 2000s when they were getting like for like increases harshly because inflation was higher. That was one of the big problems, overall food prices are barely moving up and possibly falling. You are running up and down the escalator trying to get sales increases. We know its a story about the discounters. I was amazed to read a statistic that more than half of u. K. Household now shop at aldi and little. Why is a gaining such traction now . Obviously one thing the quality as well. Most people are now convinced that the quality is good enough and this is one thing thats really frightening the supermarkets. They all have these budget rants which were originally there as a discount fighting brand but the quality of those brands is often not as good as what little or aldi has in their mainstream product. Some people are substituting that. It is not just one part of the shop they are discounting but every single part of this. Back netto, bring the danish jv. You have mark sand spencer simple stores, sainsburys, in t he tube. . Hat will it do for sainsburys what does it add . They cannot directly fight the discounters but they think theres room for another chain that would be slightly different with much more fresh fruit orientation than perhaps some of the others. They will try to do it in an area where sainsburys is relatively weak, mostly in the north of england. They hope it is taking shoppers away from their mainstream competitors well it will not necessarily hurt sainsburys itself. Whos in a better position, tesco or sainsburys . Is down to about 16. 2 . Whos in the better position to tackle all of these issues . Difficult to say. Tesco themselves have identified the fact that the very large stores of which they built so many in the late to thousands are particularly disadvantaged at the moment. People do not want to do the very big shop and they do not want to be tempted to buy nonfood. , in that sense, has more of what you say are the than size stores for today tesco has. Maybe in two were three years of income starts rising it will flip around. S Bloomberg IntelligenceCharles Allen. He will be back with us when we get the numbers at the top of the hour. This may be set to revolutionize the way that cannabis or marijuana is taken for those suffering pain. Elliott gotkine has this report. Aviv drug lab, medical marijuana is getting a makeover. It is moving to a new 3dprinted hot puffing device that will not get you high pot puffing device. It is