Everybody. I am anna edwards. The oil price on the move again, retreating once again down by 1. 3 . Where we are on wti right now, down 1 on the brent price. We have a chart that was that into context, a big move looking at the blue line, that is the wti price. Is the upside, three weeks ago we were in a bear market on oil. A bull market returned on thursday, speculation mounting at that point as to whether opec would take action to boost prices. The focus on the attention is the data out of the u. S. Over the last 24 hours or so, u. S. Data showing oils of prices increasing, inventory the highest in 30 years as we come to that driving season. Keeping oil very much in the center and the overnight trading session in asia. With that in mind, let us bring up the risk radar. As we said in the headlines, retreat in the asian trading session. We have the biggest drop in threemarket stocks weeks but really the focus of the market around the united states, putting the dollar index in there, relevant to the dollar and into emerging markets, just how hawkish will janet yellen be at jackson hole, wyoming . We saw mixed manufacturing slowing. We have the korean currency, as north korea does another missile test conducting another missile test. And we have a South African rand rebounding by half a percent, reportsy slumping i 3 , that the finance minister was going to be summoned by the police. We will have further analysis on that story. The balance today being driven perhaps by little bit of a turnaround in yesterdays move and comments coming from the Central Bank Governor. Let us to the bloomberg first word news. Here is shery ahn. Shery anna, thank you. Central italy has been rocked by a 6. 2 magnitude earthquake and a depth of 10 kilometers according to the u. S. Geological survey. The news agency has reported damage in the small town, about 140 kilometers northeast of rome. The local mayor told rai that people were trapped under rubble and have the town was destroyed. There have been no media reports of casualties. Oil has resumed the drop after data shows u. S. Stockpiles rose, keeping inventories at the years. In 30 this follow the jump in prices on speculation that iran may onport an opec freeze outflows to bolster the oil price. There is reports that tehran has reported positive signals on joint action. Ministerican finance gordon has received correspondence from official police units and is getting legal advice on the matter, according to a National Treasury spokesperson. The comments came after reports have grown, receiving a warning statement about possible charges related to tax agency units. Rand paul to the lowest level against the dollar in three weeks. The in three weeks. North korea,o firing a Ballistic Missile from a submarine in an apparent reaction to the souths annual military reaction. Seoul, sayingin the rocket flew about five kilometers before coming down in the sea of japan. The wargames are one of the largest ever, involving 75,000 troops. Threatening a preemptive attack in a response. The world bank is said to be doing a bond sale next week, denominated in the imf drawing. 31 notes will rise on august in chinas interbank market. According to one person for the dispatch will be a threeyear security with a face value of 500 million, about 700 million. It would be the first bond issue since the 1980s. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. I am shery ahn. This is bloomberg. Anna thank you very much. Let us check in on the life market action. Asiante sally has all the information. The oil price of determining factor, also concern really about how hawkish janet yellen will be on friday. Driving sentiment in emerging markets certainly. Juliette yes, absolutely. In fact, if we look at the emerging market index it is down by 7 10 of 1 at the moment, the biggest drop in about three weeks. And we are seeing stocks fall for everyone that rises, this is really going to be the market that is most affected, if the fed does move. Certainly, this concerned that janet is going to be as hawkish as Stanley Fischer and a couple of other fed officials were over comingt week, selling through in those markets today. If you have a look elsewhere though, we are seeing upside particularly in japan, that of course on the weaker yen, now moving further away from the 100 handle, 101. The rc mini k nikkei up by 5 10 of 1 of the moment. This also little bit of a moment in shanghai, although flat after the lunch break. Hong kong, which i really good session yesterday, down by 7 10 of 1 of the moment. Certainly, the energy stock having an impact. And in australia, we are seeing up by 2 10 of 1 . Of course the korean currency has been in focus today, after north korea fired that Ballistic Missile. We have seen the korean won weaken, down by one third of 1 in late trade. Just having a look at some of the stocks we are watching today, air asia and kuala lumpur is a big decline down by about 7 r . It could be quite hard for the airline to sustain earning momentum. Doing quite well in sydney, the first dividend for shareholders ands thousand nine. A record profit, and we spoke to alan joyce on bloomberg tv, certainly has managed to turn the airlines fortunes around. And looking quite good as well, as we see rubber prices at a twoweek low. Anna Juliette Sally in hong kong. Let us stick with the top stories in asia, Chinas Central Bank is injecting cash into the reverseusing 14day purchase agreements. For the First Time Since february, the funds were added as policymakers are looking to increase more expensive, longerterm funding to cool the bond market rally. For more on this story, we are joined by asian fx editor robin ganguly. What kind of signal, amongst all of the policy tools and others that the pc of the has at its disposal, what is the message they are trying to send . Robin this has been rather difficult to predict, more difficult than normal. Thought. Nct lines of the more ominous suggests that the pcob is trying to send a signal, no leverage to buy funds the logic of that is a 14day. Borrowing rate is far more expensive than a sevenday or overnight rate, so that would make it less profitable to buy bonds and ride the record bond rally we havent seen. The better interpretation is that the pcob is trying to balance money market rates, but has been using the sevenday rate is a de facto default on Interest Rate for a while now. Just probably expanding it over a period of it slightly longer oneweek, i think the latter argument does have its merits. Senseas not shown any that it is going to drive up revealng costs, or even the bond rally radically, so to speak. Anna with 10year Government Bond yields, they look quite high compared to some others, but of course they have come down there have seen the bond market rally, just as many other parts of the world have. Well that bond rally and as result of what we are seeing from the pcob. Robin interesting you should ask this question, anna. What we can take away from last year, the 10year bond rate rose, the most in a few months. That kind of reflects the nervousness in the market, as the bond rally is continuing for about 9. 5 quarters. There is a certain degree of anxiety in the markets, that regulators may do something to limit the rally, to cool the rally. I, taken in that context, think any slight indications of a crackdown, any slight indications of a cooling effort to drive bond yields higher. But at the same time, until the economy, the fundamentals of china improve, the rally will continue. Robin, thank you very much fx editor robin ganguly. Jane foley, see in Foreign Exchange strategist at rabobank. We had analysis from robin about signaling withs these 14date repossession interpretation, talking on the first one robin talked about, i have a chart that shows the 10year bond yields in white, compared to the cost of borrowing at 14 days, and the cost and just seven days, down at 2. 6. You see the rationale perhaps why the Chinese Government feels that if make us money more expensive and perhaps there will be less temptation to go out to use it to purchase Government Bonds. Put this into context for us, rates are higher than what we are seeing in the west. Jane they, are, and he. But as you pointed out they are seeing a significant bond market rally. Very much tied in to the markets, looking where they can get yield, maybe being forced out of developed nations into emerging markets. And we have seen this all over. There is desperation, the yield, that is one of the reasons behind this bond market rally, the officials in china are trying to staty calm. They really do need to control currency. And i think that is perhaps what they are trying to do, just trying to point out that people really should not get too excited. And that you Pay Attention to the fundamentals. Anna where do you see the currency heading from here. This time last year, we were focused on chinese currency, perhaps as a relief to anyone who wanted to take any kind of Summer Vacation we dont have to be, so jane again, the fact is a worry in itself. Everyone had so much focus on china, but this year we have seen is managers saying, well, china appears to have gone away or at least sunk into the shadows. And therefore, we can be bullish again and risky, etc. I would be very cautious come to the conclusion, because some of the worries we had about china at the start of this year are very much still alive. For instance, a lot of the fitness has been built around that. There is still of course the chance that that increases the possibility of a hard landing. And while i think yes, chinese concerns have gone away, we should be extremely cautious. And there is still the risk that china will try and use a weaker currency to stimulate their export growth and the economy. Anna there have been critics who said yes, ok, maybe chinese authorities have stopped growth, but they maybe have done that on the reforms that have been needed. I have another chart here jane, showing the size of chinese gdp compared to the u. S. And the eurozone. And a nice story in the eurozone, asking if they have something to be proud of, that it might overtake the eurozone as you can see fairly soon, china gdp getting very big. In the blue, it could become chinese gdp is tracked to overtake the eurozone. And as we go to the g20, some people argue it actually they have got room in china. That they did not have a hard landing in the chinese economy, look how we manage that. Jane i think it is too soon. Certainly, this is a phenomenal economy. There is no doubt about that. But when we think about some of this worrying signal, the buildup, i do think we have to be very cautious about mediumterm risk associated with china. Anna jane foley stays with us. More on other parts of the world as we go to the program. Here are highlights for the day ahead. We get firsthalf earnings from glencore and wpp, and at the same time the final meeting of secondquarter gdp from germany. Vice president vegas turkey, in the aftermath of a failed military coup. Meanwhile, the german chancellor Angela Merkel continues her whistle stop tour of the eu, ahead of next months brexit summit in bratislava. No turbulence, as australias flagship carrier post the best profit in the 95year history. We take a closer look. Bonding with brexit, is the vote to leave the eu turning up to be a surprise for some european debt markets. And brexits other big winners. Wpp a strong set of numbers and the top of the hour. All of that still ahead. This is bloomberg. Anna welcome back. It is 1 18 in hong kong. That is a live shot of hong kong, were the hang seng is down 8 10 of 1 , underperforming the rest of the asiapacific with a broader index is down by 1 10 the 1 . 6 18 in london. Let us to the Bloomberg Business flash. Here shery ahn. Central italy has been rocked by a 6. 2 magnitude earthquake at a depth of 10 kilometers, according to the u. S. Geological survey agency. The news agency has reported damage to small town, about 140 kilometers northeast of rome. The local mayor told r thatai people were trapped under rubble and half of the town has been destroyed. Pfizer has announced a record annual profit and the first dividend since 2009, the underlying pretax profit jumped 57 to 1. 5 3 billion australian dollars. The Ceo Alan Joyce told bloomberg he is positive on the outlook for the firm. Alan im actually very excited about the future, because there is so much opportunities in the pipeline for us with the delivery of the 787s, to change the network internationally, to continue the expansion of jets in asia, the growth in japan, vietnam, and here in australia. And with the program, if i am enjoying it, and the shareholders are continuing, i will continue in the role. Nothing is changing on that. Shery the chinese owner of new may bewaldorf astoria closer to a planned Hong Kong Ipo according to the people. Familiar with the matter, they have pitched a role in the Share Offering, one suggesting a deadline of this week. Two of the people said the include, operations as well as many of the overseas businesses. And that is your Bloomberg Business flash. Anna shery ahn joining us from hong kong. The u. S. Vice President Joe Biden visits turkey today following a failed coup attempt last month. Simin is it istanbul for us. Great to have you on the program. Joe biden in turkey, what is expected to be on the agenda . Well, he will be walking a fine line between showing somert and airing concern. U. S. Vice President Joe Biden will be the most important u. S. Official since the failed coup more than a month ago. And he will be meeting with president erdogan and the Prime Minister during his oneday visit to and car up. One of his main talking points will be the and tradition of gulan, who turkey sees as the mastermind of the failed coup. They have been demanding for over a month now that the u. S. Hand him over, but washington has yet to do so. And this has angered turkey even further. Also one of the main talking points will be the fight against the Islamic State in syria and iraq. U. S. And thend the nato allies have been working to fight against the Islamic State, but there has been some disagreement about who they should trust in the fight against the Islamic State. The u. S. Is working alongside the kurdish group, but turkey season as a threat. Anna simin, it looks as if turkey is starting on the subject, starting a major offensive in syria, is getting further comments about that overnight. What do we know . Simin yes, Turkish Armed forces have started bombing Islamic State positions in syrias aleppo province. And there are some media reports that ground special forces are also going in from the ground. Now, this comes days after a terror attack in turkish city on the border of syria. More than 54 people lost their lives during a blast at a street wedding. Anna simin, thank you. Live from istanbul. Jane foley, senior at extra just is still in the studio. Let us talk about emerging markets. Starting with turkey, a rate cut from the central bank over in turkey, even as inflation has accelerated for a third month in july. A complicated line. Jane perhaps the acceleration is from tobacco, and not in the core index, and from that point of view i think core index is better behaved. They have the Interest Rate cut when they could, very much anticipated by the market. I think looking forward, it is a very complicated picture looking at turkey, interesting we have such a senior u. S. Official visiting turkey today. Because there is this perception that after the failed coup it was rush of turkey turned to, not the west. Caps the reason why we are seeing joe biden in the u. S. , reversing some of that feeling. But we actually have Consumer Confidence in turkey pushing up. We see a big leap and Consumer Confidence, working to get political support, the Approval Rating for the president. It is interesting that weston investors are still very thectant to look into medium term in turkey. That is an issue given the current account deficit, given and ite tourism is down, is problematic for them. But as it stands, given the coup we had very recently, they stood up quite well. Anna let talk about another emerging market, south africa. We saw the plunge and the rand yesterday, concerns of the increase risks in the Prime Minister in the president. We have seen the way that the marcus respect gordon, when he was reinstated to sort of calm markets. This understandably spooked the market. We have the rand gaining poise this morning, but there was a big drop yesterday. Jane i think people really want to know why the police are involved in the finance ministers affairs. We need to get to the bottom of that. But as we see the market recovering little bit, perhaps people suspect that the market is, as you said, generally supportive of this market minister. We have seen a very much in the performance of the rand. But im also say that because of liquidity issues, a lot of liquidity in the rand relative to other market currencies, it is seen as a proxy for people who want to be invested, because they know they can get out relatively easy, too. And there is this general Risk Appetite for emerging market assets, you can often see the red performing quite well. I have seen a lot. And what the fed does is good to be a real big influence to what extent that extends the next few months. Anna we talked at the top of the show about questions being asked of the markets today, about just how hawkish janet yellen will be on friday, after we have seen a host of feds members being quite caucus. How do you think janet yellen will be . To leave the possibility of more cuts on the table. She has done that