Welcome to countdown. We are encroaching on ¥100 to the dollar but we are keeping a close eye on where this next leg in the dollar goes. Is this a yen strength story or is it a dollar weakness story . I would contend this is now more eight dollar weakness story. The fed is fading. The dollar is down for a third day, the lowest since brexit. The last time they posted a trade below 100, that was post brexit. That thehown 80 odd yen will touch 100 in the coming months. It looks quite sneakily as if it might get through today. Mulls theams possibility that 2 inflation targets are no longer really that relevant and they are not welding not working. The flows in dollaryen over the past hour have been significant. They are hitting record levels in model funds and they are filling in the asian session. Keep an eye on those. Lets look at the risk radar. Little bit lower as well. You have the dollar index down for the third day in a row, the lowest since brexit. Atan equity, which you have 140. That is on the currency side. , 45. 5 is where we are. Holding above the 45 level. Open free talks if necessary. Nigeria more scathing. Gold is rallying again. I think more to do with the fed and the dollar story. You are seeing a little bit of a move in bar gold. Derek lowe bar gold. Yesterday in Central Bank CutInterest Rates for the second time in four months. The rba argued that it would increase gdp. San franciscos had president is calling for a new way of central banking. He argues that rates have not stimulated or stalled the economy. The feds policy of targeting lowinflation will no longer make sense. Russian equity has closed at their highest levels on record. The rebound in oil prices has lured investors to cheapest areas. Big investment banks with European Headquarters in london was start the process of moving jobs from the u. K. That is according to people briefed on the plans drawn up by four of the biggest firms. The u. K. Will lose passporting rights. Donald trump has laid out his plans to defeat i. S. And prevent terrorist attacks on america. In a speech, the nominee said he would halt immigration from countries with a history of exporting terrorism and implement an ideological Screening Test. Time is overdue to develop a new Screening Test for the threats we face today. I call it extreme vetting. I call it extreme, extreme vetting. Our country has enough problems. We dont need more, and these are problems like we have never had before. Jill biden has called Donald Trumps rhetoric a threat to u. S. Troops. A campaign for Hillary Clinton had bite innia trump sharply criticize biden sharply criticize trump for condoning Cyber Attacks against america. He has asked russia to conduct Cyber Attacks against america. Even if he is joking, which he is not. Even if he is joking, what an outrageous thing to say. Haidi global news 24 hours a day, powered by more than 120 countries. You can find more stories on bloomberg. Manus . Manus lets get to davidday en. Dollar yen is heading towards 100. To me, it looks like we have the hallmarks of a wall of money going there. Take it away on the markets. David lets get started there. That is what pushed the nikkei liff. Ally off a c this is where we are at the moment. We saw a steep drop. We hit the session low yesterday which bounced back. Once we went below that level, it triggered a lot of losses and that is where we are right now. 146. The last time we were at these levels was on july 8. That is when it went down to about 100. That seems to be where your support level is at the moment. Is it a strong yen story . Is it a strong yen or is it a weak dollar story . Biggest percentage mover in asia currently. You look across the asian currencies. The dollar is getting sold off as well across the asian area. That is also seeing strength into that currency. Have a look at where we are for the kiwi dollar. Strength going into that currency. Roughly speaking we are looking at a weak dollar story. It is fading. Fx. Is the story across watch dollaryen. That is your support level. Currency up, equity markets have been doing this at the markets. We are looking at weakness across developed asia. We have seen weakness across developing markets in south east asia. The nikkei getting pushed off a cliff in the afternoon. At this level, down about 1 . We are a little bit off session. Hour left in trade. One of the markets you want to watch out for, hong kong and shanghai. Stellar day yesterday. A little bit over at the moment, perhaps why we are seeing consolidation right now. Manus . Manus thank you very much. Equity and currency markets. The latest notes from the rba. Lowerhow that inflation and a cooling on highpriced concerns were fundamentally behind their decision to cut Interest Rates for the second time in four months. Joining us to discuss this is michael. Trait to have you with me. The rb says it wants growth. Others people other people see that as an enviable position in the first quarter. There are a couple of factors at play. One of them is if you can grow faster, use Spare Capacity more quickly, you get a chance of generating some of the inflation that everyone in the world is after as well. That is part of it. Australias growth figures are flaccid to some extent. Growth export going on now, soon ore, andural gas, iron coal. They bring about 1 to growth and you have about 1. 5 population growth. You have 2. 5 before you have even opened your eyes. A cap same time on databases, incomes have been declining in australia. Part of the push for growth is to try to get growth that people feel, people actually recognize rather than looking good on paper. Manus as you said, you blink and you have already got the growth. Lets talk about the central bank. Currency ist the also an issue for them. I was always given the impression that Central Banks did not necessarily target currencies. They have not had a good run of it, have they . Michael no, no. They are quite capable about that. Try to stick to the International Agreement that they will not directly target the currency. It is understood that the Services Industries that they want to take over from mining are better when it is a bit lower. The truth is for australia, 1. 5 Interest Rate i our standards is ridiculously low. Standards,d world it is still attractive. The forces in australia allpowerful. Japan and europe at zero and negative rates. The u. S. Hesitating about raising rates. I think the rba has not said this, but what they are trying to do is grow before depreciation. They are trying to discourage it from depreciating and making things tougher on the importcompeting industries. ,anus it is a tough job michael. Thank you very much, michael heap. Lets bring in my guest host for the next hour. Seniorredit suisse advisor bob parker. I love that line. Blink and you have 2. 5 growth. This is the issue. Here is the aussie rate. Down we go. The currency is not playing ball at all. You say it is comfortable. Bob absolutely. When you compare the yields on 10 year government bonds with jgbs, we still have 10 year jgbs close to a 10 basis points. We are still in a range of 02 25 points. Manus 1. 84. Rate. Ou have a near2 japanese capital flows and. We compare 10year australia with european bond yields, we even have spanish yields close to that as we talk. That trade is driving capital flows into the Australian Dollar. That poses a problem for the rba. Although they are cautious in what they say, they are clearly very uncomfortable with the. 77. Alian dollar at that positive kerry could drive the Australian Dollar carry good drive the us trillion dollar higher. The differential is still there. Manus where could that momentum take the aussie dollar against the dollar . Bob put it in historical perspective. We came from a high of close to dollar was grossly overvalued. Down to a low 70. We have retraced to 77. I think we may edge of towards 80. I would be surprised if we edge much more above 80. Against the u. S. Dollar, i think would bel shortterm technically overboard. I also think those investors who went into the Australian Dollar in the low 70s will be very tempted to take profits at that level. Manus lets talk about the trade relationship. There is a symbiotic relationship between china. This is ecp. To australian relationship show the trade relationship with china. It trumps Everything Else in the world. I understand the rebalancing story. Fundamentally, the stability story in china, it is certainly a big blow, potentially a big blow for the aussies. Bob two questions there. The first answer is the data on china, i think, is reasonably clear. I. E. We are still going through this longterm operation in the chinese economy. No second half of this year annualized chinese growth of close to 6. 5 as we go into the first half of next year, i think annualized growth close to six point 25 . That longterm slowdown in china is very clear. With that longterm slowdown, the demand for commodities eases and the rally that we have had an critical commodities for , onealia, like iron ore has to challenge if that can be extended. The somewhat negative outlook for Industrial Metals and those in the iron ore, copper, and other Industrial Metals is a factor in the deceleration of the to seller factor in the deceleration of the a strong and economy. Certainly i think we will get less than 3 growth. Manus back to one of my main headlines. Numbers. Iting for bhp a 6 billion loss is what we expect. Losswill be the first since the merged company. 25year low for medals at the start of this year. Is there anything out there from what you hear . Maybe we have passed through the eye of the storm in terms of writedowns in metal, writedowns in oil, or do we have more pain to bear given the china story you reflected . 99 i think we are probably through of the major writedowns. Clearly the last two years have been extremely painful for the industrial metal companies. What we are going to see today is cleaning out the covered from these major writedowns the these majorm writedowns. Those middle and Commodity Companies have low cost basis because they are reducing in over devalued currencies. That is the case in south africa where it has recovered in recent weeks. We still have a super week South African rand. If you are a producer, be it gold or other materials, your cost is very low indeed. Where you have those low cost basis, south africa and russia, that provides support for corporations. Manus lets get you set for your day ahead. We get the official u. K. Data in data. Ly cpi and ppi there is the june house price index. Half an hour later, the cw survey zew survey out of germany. Coming up, the brexit postmortem. Is it too soon fourweek pine to feed two to higher prices . Crude reality. Talk of reviving an outlet wpi above 40. Can it really happened . Waitopper market likely to on firsthalf numbers. That is all to come. This is bloomberg. You are manus looking manus at a rather gloomy victoria harbour. My future role in life. A weather forecaster. It is 1 20 in the afternoon in hong kong. Something to brighten your day. Haidi lun. Has held talks with combination the would create the largest supplier of industrial gases. The nbc has halted shares over in its gear company over potentially manipulative transactions and concerns about the identity of the person in control. Neuromamas value has quadrupled to nearly 35 billion. Morgan stanley is being targeted for a 2 stake. According to a person simply with the matter, the hedge Funds Investment is valued at 1. 25 billion. Berkshire hathaway boosted investment in apple and the Second Quarter when the stock flipped. Berkshire raised its stakes by 55 . 15. 2 million shares. That is your Bloomberg Business flash. Manus haidi lun with the latest. Lets talk about cpi inflation data from the brexit. It comes out at 9 30. Investors will want to know if filtered through to consumer prices. U. K. Data coming fast over the week wednesday. We have the latest rating on the jobless rate. Thursday, retail sales was the latest gauge of u. K. Finances. That is released on friday. Chief advisorthe over there. When we look at the rapid data that will come through, this is the inflation data, the numbers expect a 12 drop. We will add about 1 to the cpi. How hot do you think the bank of england will allow cpi to run before they balk . Bob as you saw from the statements, when they cut interest, they reintroduce quantitive easing, the message is clear indeed. They are concerned about lending by the banks, which they want to boost. They are concerned about the slowdown in the economy and a revised their growth forecast for 2017 down to 0. 8 , a grievous growth report as reports before that were at 2 plus. The inflation target frankly is a secondary order. What is going to happen, your question, what is going to happen to inflation with the decline in sterling. I think there is a high probability that sterling will decline further. As we going to september or october, i would not be at all lowrised if cable is at the 125 and sterling close to 110. Further sterling weakness i think is likely. I would have argued that if one looks at the euro or cpi numbers, assuming Commodity Prices trade sideways, i would have thought there was a high probability of the euro cpi as we going to october will be close to 2 . That is a little that the bank of england will be very comfortable. Manus it is an enviable position for a lot of other Central Banks but the rest of the population did not necessarily vote for structural fundamental change. The curve is the flattest and eight years. Aboveget that kicker inflation, what would that do to our gilt market . Therelt market is saying is virtually no growth for the next decade in the u. K. Two observations. This is an observation which is relevant to a lot of markets which are being hit by qe at the moment. Quantitive easing is driving yields into negative territory. If cpis at 2 , we have 10 yearguild at 8 . Gilt with the impact of qe, with the expectation that the base rate could be cut to zero sooner rather than later, i think it is inevitable at least that 10ne or two years year yields stay at 2 or lower. Manus Corporate Bond buying. Theres a . When you think about the bank of over the six years, the ecb is inexorably higher. This is the policy where you may see a bigger force to come. The just to quantify it, impact of the ecb Corporate Bond buying program is reflected in spreads and investment for Corporate Bonds in euros are close to 60 basis points. That is near a record low for the euro Corporate Bond market. Theously the size of Corporate Market in sterling. It is less liquid and catching firepower from the bank of england. Corporate spreads tighter. Do they need to do more . Practically they could not do more because the paper is there to buy. Manus stay with me. We have a little bit more to get through. Up next on countdown, talking trump. The day would not go by without it, would it . Is it time for the candidate to move on from the negativity . The results hit the tape at 7 00 a. M. I have a conversation with the ceo. Have in the afternoon, we an interview with bhp billiton ceo. Another manus glorious day at the sydney opera house. Manus there you go. If every day was like that here, how wonderful life would be. The extra raiders dont care. Dont care. Ders we have a new edition of. Aybreak available on bloomberg lets take a look at the front page. What is making the headlines. It is the cover story. It is all about the reality what post brexit spirit of is happening with inflation in this country. Data all set to drop at 9 30 this morning. That is the First Official since ourselves out of the european union. That data will hit at 9 30. We are waiting for billys numbers. 8 15will, between 7 15 and paris time. Expect the mining giant to post its fullyear loss since 2001. Can the momentum in iron ore really hold it up . Not according to my guess, bob parker. Had the run ony iron ore. Andrew mackenzie joins the team a little bit later on bloomberg go. Finally, a debate in a very real debate. Suggested the u. S. Central bank should consider raising or abandoning its 2 inflation target. Japanese stocks are lower this morning. The yen is surging to a threemonth high. We are so close. Appetizing we close to ¥100. Weakness ineing japanese and chinese stocks. The index overall pretty much unchanged want to show you emerging markets assets first. They are hedging for the longest winning streak since april 2015. A nice day of gains, heading for its highest level since july 2015. That means valuations are at their highest in 15 months. They are in overboard territory. It makes the question, how much further does this rally have to go . If you get into it now, are you too late for the party . Currencies in part driven by a higher oil price, even though we have seen it come down a little. Wti above 40 a barrel today. A little bit weaker today. It is above its 200day moving average for the first time in a year. 18 though this has climbed from a january low. It is still down 40 from last years peak. That said, the large share china high cap etf is also down. You mentioned the yen, manus. I have it here. Dollaryen. The yen approaching 100 per dollar. This after we have seen a third day of dollar weakness looking at the bloomberg dollar index on the lower expectations of the fed rate hike. Those expectations keep coming down and down. Ofre is an 89 probability 100 per dollar in the coming months. That is according to calculations by bloomberg. We are seen yen strength, dollar weakness today and with that weakness we have seen gold move higher for a second day. Gold in general has been performing well in this low Interest Rate environment. Manus thank you very much. Perfect explanation in terms of the market. Oil is holding above 45 per barrel. Lets put this