That is tomorrow. Manus you are welcome. It is monday morning, it is countdown. Pound, are net short the and they have been for many years. We are around 129. 20. We are near a 31 year low. Net position isnt short as short can be. Post brexit, the morning we woke up, 127. 98. 10 sayne dollar 1. 10 is on the way. We have been rising for five straight days, giving a little back. Parity is on the way by the end of 2017. Have a look at the risk radar. Oil on the move, gold on the move. Chinese stocks hitting a sevenmonth high. Not much owned, not much love. 39. 29. Real estate Property Companies are headed for the steepest two day rally in almost a year. We have more from asia. The Saudi Arabian oil minister mentioned last week in a statement action to stabilize the market. 47. Is trading above 50 is on the way, that is what the market is saying. We have had two days of negative positions. Thats a longs on gold have now dropped. A lot to play for in terms of this week. We will have a razorsharp focus on countdown. Lets get you bloomberg first word news. Tom mackenzie is focused in hong kong. Tom japans economy grew less than forecast in the three months to the end of june. Gdp extended expanded by annualized 2. 2 in the second quarter. The news comes as business spending contracted for a Second Straight Quarter and they struggle with a resurgent yen. The u. K. s exit from the European Union could be delayed until late 2019. They may not be ready to start negotiations as early as predicted. The brexit and International Trade ministries are still recruiting staff, making it unlikely that britain will invoke article 50 until late next year. London properties are taking longer to sell this month despite the summer price cuts. Homes in the capital are staying on the market for five days longer than in may. Moveeak to the right director at 9 30 u. K. Time. Of t evacuated after after initial reports that shots were filed. Shots were fired. Theorities have said that facilities have been cleared and no shots were fired. Hasleader of hezbollah cited donald trump for saying barack obama created the islamic state. His remarks revive the claim t from initially declared that trump initially declared being sarcastic. You can find more stories on the bloomberg at top. Manus of course, you are in beijing. Strong yen continues to weigh on the japanese economy. 0. 2 d quarter gdp grew year on year. Joining us now to discuss the data is bloomberg newss editor for japan. The key take away for you in terms of the growth story . Private consumption remained not strong, but remained at a growing pace. Business investment fell for the second quarter. The drag down on the growth number was net exports basically. Exports did not grow strongly over the three months so they undercut the growth. That is weighing on companies. They dont see strong domestic demand and they dont see strong overseas demand so they are cutting back on investment. Every time we see one of these chess pieces of the board come through, everybody immediately runs to what with the policy response be . I know we are in a policy vacuum in japan as long as the review by the bank of japan goes on. What will this chess piece due to that equation . James the thing to remember is preliminary data. The preliminary gdp numbers often get revised in japan up or down quite substantially. I think the bank of japan will wait and see what will happen with the revisions. They are also looking to revising wholesale the way that gdp is calculated. Japan,r the bank of obviously they are going to have their policy in midseptember. The government has already announced a fiscal stimulus package that has been announced by parliament yet. We will see revisions of these numbers and also the government will start spending. If that has the effect that the government claims it will, that will have a bit of a boost for thirdquarter gdp. Most of this data that came out today doesnt include much of the brexit affect. Whatever affect brexit will have on overseas demand is not really going to appear until the next set of numbers, which is due out in november. Will thoseney numbers will take time. Lets get into the markets now. Juliet sally is standing by. Global equities are near oneyear highs. Juliette the asian regional index has been trying to hang onto that one year high, but really that weakness coming through in japan having quite the adverse impact on the overall sentiment in the region. The gdp now missing expectations. We have seen quite a bit of fluctuation coming through today. You can see a lot of the weakness coming through a lot of the iron ore and also the paper manufacturers. We have seen some increase in terms of some of those other export companies and also in computers. Toshiba up. We have seen an increase on the market, its best gain since may of this year. We had some weak Economic Data out of china since friday. We are seeing a very solid upside in terms of equities. That is essentially as investors that theyt to bet will be coordinated Bank Stimulus coming through. In hong kong, stocks at a ninemonth high. That has been lifted by the oil story. Also, the Hong Kong Government reporting that its gdp grew at the fastest pace since 2001. Some very solid upside. The Australian Share market also seeing that boost, up for a Third Session in new york. Southeast asia is a little mixed. The weakness in japan weighing on overall sentiments. There has been a day rally coming through in Chinese Development companies. This is on reports or speculation that there will be a lot more merger tieups in this space. You could see a lot of these Development Companies hitting that 10 daily target. With an Freight Company 88 fall in fouryear profits. Stess mining, a newcre mining, a fall in its profits, and that is due to weak and gold prices. Joining me is the chief economist and managing director at gplus. Business spending down the second consecutive quarter, private consumption not great, that exports not great. Net exports not great. It has been an off system i think and offseason i think. The math has been kind of out of sync with the underlying growth narrative. I think the data highlights the fact that this is an economy that faces very sharp structural headwinds, which is in sharp contrast with the keynesian consensus. When you look at the publicsector liabilities, we looking seriously at the constraints of what policy can achieve. Public debt in japan, up 230 . When you look at the bank of related toets nominal gdp, more than 90 . An have to become particularly when it is in the middle of a deflating region. Manus you talk about a trifecta. You talk about structural headwinds and you talk about yuan against the japanese currency. If you say that the normal policy did policy response does not work is it helicopter money . The imf saying you need a nixonera response. That is to intervene and raise wages. What do you think of that . Lena we need a rebalancing of balance sheet. Seeing ins what were that this is an economy that is harboring shortterm growth, which is the reflection of longterm structural headwinds. Manus are you an advocate of helicopter money . What are you an advocate of . You need something radical to get japan growing. We should have started with helicopter money. What qualitative easing has done is that it has helped thelyside without supplyside and household balance sheet. Perhaps it is this rejection of Balance Sheets through higher spending power and real wages growth that has got to take us out. Manus we should have started with helicopter money. These are the trading relationships. China, the United States of america are the top participants in terms of the japanese growth story. In your notese were you say that the 18 rally in the value of the yen against the yuan is one of the real headwinds for this economy. Think the yen strength has been a sort of shock absorber for global balances. In the past, concern about the effects of a weaker yuan over a Global Deflation cycle, it is clear with a stronger dollar and the headwinds it represents or with respect to weaker commodity prices, it is clear that, this time around, rather than going to a stronger dollar, 80 of accretion of the yen against the yuan shows the constraints of the bank of japan policy. Manus should i be more preoccupied that shifts preoccupied by shifts in yuan yen more than dollar yen . Lena yuanyen is an important axis to this relationship to the extent that the boj will sit back and watch the yen appreciate without more stimulus as the market have been expecting this year. I think perhaps we really should be looking at the constraints, the time that japan takes strong monetary response. Manus i want to show you the misery index. Not because we are miserable on countdown on a monday morning. But the misery index in japan is near its lowest level since 1995. You begin to understand the real misery of the sales tax hike. It should possibly have a little bit longer. Lasta 33 year high time we had the most miserable level in japan was in 1981. The japanese are happy with deflation. Moderatelyyment, priced bowl of noodles, life is good. That is the mindset that shinzo abe has got to break. Lena to the extent that we are all looking at those concerns about monetary and fiscal policy we had just come out of a debt crisis in the eurozone. It wasnt that long ago that we were concerned about the withive feedback loop sustainable debt levels versus relatively anemic real gdp growth. Japan might look like the future for the rest of the world. Concern here that we really do need to look at more supplyside structural policies across the world in order to bring productivity back. Manus lets see what more stimulus might still come. Tomorrow, we get the first hard data of the u. K. s post Brexit Economy with july inflation figures. Wednesday, the minutes of last month fed ratesetting meetings. Account of the latest ecb policy decision. Saying that it would respond to the brexit recommend a with restraint brexit referendum with restraint. A capital injection for the cashstrapped group. Plus, budget bus stops. How a few with a secretive family how the feud with the secretive family behind the aldi Supermarket Chain is coming into view. Manus it has just gone 6 20 a. M. This monday morning in london. 1 20 in the afternoon in hong kong. ,961. Ang seng trading at 22 along with the Global Equity markets come at or near a one year high. Lets get the business flash. Shares in japanese tv maker sharp continue to search. A purchase of the company was approved in april but was delayed by chinese antitrust proceedings. Sharp shares have risen by about one third over the past few days. Approval from shareholders to buy out his Property Unit for 4. 4 billion. The approval clears the way for hong kongs biggest ever private deal. According to estimates compiled by bloomberg, the bank of japan is on course to become the number one shareholder in 55 nikkei listed firms by the end of next year. The central bank is already a topfive owner of 81 nikkei firms. It happened after the boj governor almost doubled his buying target last month. It is part of an Unprecedented Campaign to revitalize a stagnant economy. Isvate equity firm kkr reported to be making a play for peppa pig. They are looking to buy entertainment one, which owns the preschool cartoon character. Entertainment one has already rejected an offer from u. K. Broadcaster itv. Manus thank you very that, Tom Mackenzie. This week is going to be the first round of hard data in terms of economic numbers since we had the brexit. It includes inflation, retail sales, and unemployment data. Atnk of england sees the same time he surveys and estimates have mostly pointed to the decision to quit the eu prompting the downturn. A trifecta. I love that word. Inflation, unemployment, and retail sales. How bad is it . Lena brexit has caused the of. s enviable growth format aaa reserve currency, house assets, all of that, to come to a stop. A month and expectations, going to pass through a weaker housing crisis, which is a shock to a consumers balance sheet. A much weaker pound, the doubledigit appreciation to a 31 year low. That will have a knock on effect. The question is, can sterling weakness result that 7 gdp current account deficit. We are not in the 19th century anymore. The 21st century u. K. Economy is services dominated, capitalintensive. It is not as Exchange Rate a lasting as it may have been Exchange Rate elastic as it may have been in the past. Manus they went for bond buying, quantitative easing. What was the right mix in your opinion . It was too much time to talk about the rate cut and quantitative easing. It is all about credit easing. The easing in terms of the liquidity ratio for banks. All of that amounts to a very powerful stimulus. Manus the demandside is there. Lena you hit the nail on the head. When you have that large current account, or external deficit the u. K. Economy, in the words of governor carney, has been relying on foreigners to fund its growth model. This is no longer possible, hence the sterling collapse. The fact is that sterling has been a shock absorber. It wont be enough. They have to do more. Manus so, downside on the pound. People come in here and say 1. 05. Some are saying parity for eurosterling. We are at the beginning of, i think, sterling weakness still. We have been trading speculative data. Now we are starting to see some hard data. The risk of the recession is going to start materializing. That impulse will remain there for the sterling in the market psychology. I think what is important here is, and less we are looking at stronger Global Growth and stronger Global Demand for u. K. Services and goods compared to the period when the uks current account deficit was being built up, when the global trade trend was close to 88 Global Growth today is close to 2 . We have to work that much harder to support Global Demand. And lest we get stronger Global Demand for u. K. Services, we have to look at domestic demand correction. That will mean a recession. The question is how far and how long. Manus how deep will at recession be . The bank oft think england stimulus has been an out. I think it will last at least three quarters. Manus up next, headache for kuroda. Is the bank of japans stealthy takeover of the nikkei just inflating a bubble . Avtk0 gone 6 30has just a. M. In london. 1. 29. Yen, a beautiful shot of the emperors palace. The day begins with daybreak, available on your bloomberg and your mobile. If you want to understand this is a marketing mans dream. This is what olympic gold looks like. Usainas hussein bolt, bolt, the first athlete to win the 100 meters three times. He ran it in 9. 8 seconds. That is the very personification of bringing home the gold. Next story up, back to finance. Back to brexit. This is theresa may. Her ministers looking very happy there. The brexitt won campaign sitting right beside her. Article 50 may not be invoked until 2019. New departments will be set up eu,andle u. K. s exit of the which will not be ready if theresa may invokes article 50 in january of next year. The situation is described as chaotic. Finally, we focus on the pound. Already the worst performing currency this year. It did come under more pressure this week. A trifecta of data. Inflation, retail sales, unemployment. Started,st getting some say, on the downside in the sterling devaluation story. There must be a capitulation for mark carney and the bank of england. Dontrse, Central Banks focus or target currencies. They would never do that. Asia shares are near a oneyear high as Rising Oil Prices are bolstering. If you are glass halfempty, you might look at the mnti and by 0. 2 . S off we are seeing some losses on the topic today. Halffull, are glass you will focus on the fact that we are holding near a oneyear high on the msci asiapacific index. The shanghai composite has actually jumped by the most since may, to a sevenmonth high amid speculation that takeover activity will pick up. Also, of course, there is the oil price. 50 oil insight. We are looking above 44 a barrel on wti. This, after wti posted its biggest weekly increase since april last week, amid speculation that we might see some kind of stabilization of markets at informal opec discussions next month. Money managers as well increasing their bets on rising crude prices by the most since january. Looking at sterling, i know you have been talking about it this morning. One of the bestperforming g 10 currencies today, although one of the worst performing this year. It reached a onemonth low earlier. Evidence were going to get on how the british economy has performed postbrexit. The next positions in blue. Hedge funds and other speculators have raised their net bearish wagers on the town. This is the most on record. Manus lets get to tokyo now. We have had a disappointing set of gdp data. How does that transfer into the equity story for you . I think the story is really that the economists got it wrong rather than the numbers were disappointing. Three months ago, we were talking about the numbers. I said that the growth was coming predominantly from the fact that it was a leap year and the numbers were failing to adjust for that. It seems to me that people have failed to adjust for the fact that the leap year effect is not coming in every quarter. If you then remember that what we had in the june quarter was a large earthquake, and actually we have done quite well bearing that in mind. The First Quarter numbers were an evenup, producing higher place to compare them against. They warned bad numbers, and if you look at the profits of the quarter, they were pretty good. Manus with that in mind, less of a need for additional stimulus . Economics says we should have started with helicopter money. Nicholas i think there is very little chance that the japanese government is going to do helicopter money by the time talked about by bernanke. They have done it before in 1931 and the results were horrific. They are p