Will cover all the commodities. Caroline hyde in paris on a warning by the oecd, and Ryan Chilcote in vienna previewing the opec meeting. We begin in asia where Prime Minister shinzo abe has decided to postpone an increase to the sales tax. Delayed once, it is twice, and i am wondering if we will ever get it. Enda i think it just shows you how nervous the outlook is for japans economy. Japan has the biggest debt burden and they have been trying crying out for the government to do more to tackle debt. Minister day has had to step back again and surrender and say, we need to do more spending and try and get growth going. The economy keeps flirting between contraction and expansion. It is also interesting in terms of what it needs means for the bank of japan. We have already seen the reaction, a big gain in the end today as it takes pressure off Central Banks in the yen today as it takes pressure of signature banks. It shows you that japans economy remains on quite narrow footing. The dollaryen 109. The pm eyes look stable but they are stable around levels that are certainly not around what the chinese authorities would like to see. What do you see . Enda as to the stabilization out of chinas economy, it has freed a little bit after a rocky start to the year but there is no real sign of a big momentum for the economy. All the fiscal and monetary stimulus, they are a little bit disappointed because they are not getting any real traction. Lets see what the fed decides next week. If they do signal a hike, that will put downward pressure on the yuan and might trigger more capital, and china gets back in the game in a big way. I think the coming months are going to be more critical. Stabilizing but few really think that chinas economy is out of the woods. Jonathan janet yellen speaking in philadelphia june 6. A special thanks to enda curran. News, salesforce will be buying demand where, paying reportedly 75 a share. Salesforce is a very successful business. Their demand share is an eCommerce Company, 75 a share is right. That is quite a healthy premium over what they ended at yesterday. We are going to move to a warning on the Global Economy. Paris and go live to check in with Caroline Hyde for the very latest. They started these meetings with a bang, chastising them for relying too much on Monetary Policy. What is going on . Caroline it is fired up inside because this is a call from the oecd to get the governments to step up to the plate. They say Monetary Policy has done enough and all of you nations with negative Interest Rates, start spending. Stop shutting down the barriers, start opening yourselves up and boost trade. I spoke we have to the secretarygeneral of the oecd. , that isment today going at about 3 to three and a half percent. It should be at 7 . Credit is not flowing. The strong to Medium Enterprises saying conditions have tighten very much so they are not getting it. Caroline it is pretty fascinating on a day that comes the warning from the u. K. , the issues with the brexit, the risks they are managing about potentially leaving the eu. Foroecd cut their outlook growth in the United Kingdom and they are starting to worry about the commodity cycle. Clearly the oecd feels it is time for governments to start to work. David that is Caroline Hyde joining us from paris. Megan opec ministers are gathering in vienna. In a bit of a relationship repair mode given in april what we saw . What do we expect to come out of this . Ryan it is pretty clear, we talked to a couple dozen analysts can only one thought opec would take any action. The expectation is that they are going to leave it to the market and stick to the strategy from late last year whereby they sit on the sidelines and remove their production ceiling. Relationship building is what we can expect and the reason is that a lot of the opec countries think you should be a freeze on production. They went to doha thinking they should get that and they feel the saudis ran away with the show, even though everyone in doha had come to view a freeze. Interesting that on the one level we are not expecting any big news in terms of immediate opec policy here, but we are expecting to make some headway in terms of the x essential problems facing opec. Megan does everybody agree with the take on the oil market . Ryan no. The gulf countries are effectively saying, look at how the oil price has risen nearly 80 since february. That is because we are leaving this to the market. A lot of other country say wrong, that is supply disruptions pushing things up. There will be a pretty robust argument but at the end of the day, the expectation is that the saudis and gulf countries will get their way. Jonathan lets get a check on the market. May, very much about the Federal Reserve and renewed recalibrated expectations. We kickoff june with a very japanese thing. Prime minister abbe confirming confirming the tax hike will not happen until 2019. Significant yen strength. Dollaryen pulls back. 1. 16 , the by biggest oneday drop since april. It is risk off any see that in the fx market. The bloomberg dollar index which had its best month since may 2014 fullback a little bit. As we approach opec, brent crude and wti both trading lower, the fourth straight day of losses. Brent crude off by one full percentage point, trading at 29. Lets get over to Abigail Doolittle for some stocks to watch. Abigail one of the top stocks we are watching, alibaba. Investor softbank is going to sell up to 7. 9 billion of its 32 sake stake. In an effort to bolster the banks Balance Sheet, people think this could be the first of several reductions. Italian banks trading down for the second session. On the news that the bank of italy may ask the italian inject an lenders to additional 1. 5 billion euro into a bankruptcy fund. Shares are down 90 from their record peaks in the last decade. Hsbc may cut jobs among the senior high level Investment Banks in an effort to cut cost, consistent with a threeyear plan outlined by Stuart Gulliver last week last year. Megan lets get an update on what is making headlines out by the Business World. Break there may be a into the investigation into the egyptair plane that crashed into the mediterranean. Has picked up signals from deep under the surface, presumed to be from the black box. It appeared off radar may 19. France,or problems in rail workers have gone on strike and 40 of highspeed Rail Services may be disrupted. The president is trying to contain the unrest before the start of the football tournament. This has to do with labor reforms the president is pushing. Donald trumps pitching himself as an insurgent and privately telling donors he will not try to oust Republican Leaders in congress. He plans to keep Mitch Mcconnell and paul ryan. Quinn. Nnie david coming up, shinzo abes aboutface. He delays an increase in sales tax in hopes to boost consumer spending. , take a lookbreak at the japanese yens move today, seeing its biggest gains against the u. S. Dollar in five weeks. Jonathan this is bloomberg , i am Jonathan Ferro. Futures in the United States down, 72 points. S p futures up by 4 10 of 1 . The ftse 500 down one full percentage point. A twoday losing streak on the stoxx 600. Shining bright red on the fx map is dollaryen. We had a 111 handle earlier this week, the biggest drop since april, down 1. 2 . Do you see that risk off tone it tonee treasury market in the treasury market . Crude falls for a fourth day of straight losses. To japan, where it is the focus thehe markets where japanese Prime Minister has an aboutface, postponing the increase in the sales tax until 2019. Joining us is tom orlik. October 2015 was it, we were meant to get it then. Now it is 2019. Talk about the sales hike and why we may never get it. Large itdebt is so needs to come down at some point. Even very minor attempts to pay down that debt, the last two attempts to raise the sales tax were insufficient to plunge the economy into recession. Question then becomes, if you cannot make these minor down payments is there anyway you can get ahead of the curve on paying down that monster public debt . Into office,e came this was a major part of his Overall Economic plan. Does this mean he has to rethink his overall strategy . There weree came in, these three arrows everyone was so excited about, monetary, fiscal, and structural reform. A couple of years ago people were giving him credit on two arrows, not on structural reform. I think we have to mark him down again. The Monetary Policy arrow remains in flight. Megan this is what i find so notresting, we still do have any detail of where we are going to get this additional stimulus, whether they will look at elder care or childcare, two things that are been heavily discussed. Where can we see that boost . When are we going to get the details . Tom that is the key issue for japan. Yes, you can run an absolutely enormous monetary stimulus but will that stimulates be sufficient to stoke investment the faceonsumption in of the very well recognized fact about the demographic headwinds . The answer appears to be no. Jonathan japan dominating the headlines and at the beginning of the year it was china. Dollaryuan tom in the beginning of the year for china were two big issues, this mysterious silence from policymakers, not talking about plans. We got much more clarity and they told everybody what the plan is. The second thing which has changed his growth. Growth was still sliding at the beginning of the year. We have not seen it bouncing back that we have seen stabilization and that has reduced concerns the government is targeting a big devaluation. Jonathan the question will be how do we get strokes . We can do the bloomberg from space and it is the satellite imagery to get the satellite pmi to china, and that is the blue line. I believe it tracks thousands of factories in china, and that is a gauge that is not pretty of what is happening. How do you read growth in china . There are doubts about the reliability of chinas official data, concerns there is some kind of political aspect to the numbers. If you look at pmi data, it points to zero change in the manufacturing section and week growth in the services set. It is difficult to square that with 7 gdp numbers. Megan when we look at this possibly going down to 7 , what is the number you think could actually be running that would not make people so alarmed . Tom i think the thing that people forget about china is that uniquely of major economies, has significant policy space. Look at japan, next out on debt, negative Interest Rates. Hat is not the case for china the pboc can still pay Interest Rates, Government Debt remains very low as a share of gdp. We think the chances of a hard landing in china are pretty farfetched because the government has the policy to support demand. Jonathan can they cut rates and manage capital outflows . Tom that is the impossible trinity which concerns theoretical economists. China thinks they have managed to solve the problem by having controls on the capital. Jonathan tom orlik is in town and we will be seeing a lot more of him. David the ecb and payrolls numbers still ahead this week, but could the Rate Decision and jobs number turn out to be nonevents . Purcelli joins us next. Megan this is bloomberg , i am megan murphy. It may be a short work week for the u. S. But it is still a big week for global markets. The ecb meets to review its Monetary Policy. Friday, we get the u. S. Jobs numbers for day. Joining us to discuss it all is tom porcelli. Tom, three big events coming up. What for you is the biggest event risk of this week . Tom i do think it is the payroll report. The ecb meeting, i do not think there is a lot of event risk. This is really more about fleshing out the details of plans that were already put in place. I think the payroll report is almost always the most important event. There will be some impact from the verizon strike but generally speaking, that is sort of where we are focused. Megan we have seen about 35,000. Tom 35,100 to be exact. Obviously to be stripped out when the fed is looking at the number, but tell us what number you are looking for. Tom we do think this number will be 155. We think the underlying run rate is about 200,000 and that is basically enough to keep the fed on course for raising rates in the junejuly window. Payrolls,icture on People Better start bracing themselves for the fact that we are in the midst of a slowdown in job growth. There is nothing pernicious about that. It is a natural part of an economy that has been in expansion for a number of years. Growth already slowing down. Two years ago we were averaging 250,000 per month. Last year we averaged 220,000. Megan if we are at a point where the labor market, why arent we seeing a faster pick up . Tom wages are accelerating. It is interesting we are talking nowoes talking about it with that has been a story since at least last year. Everyone has to understand that going from 1 to 2 is an acceleration. David put yourself in their shoes. What is the best cased, the most compelling case for why you should raise rates . Things are going ok now. Tom here is what i think people have to wrap their head around. This is on a tightening cycle. That is the wrong way of describing it. This is a removing of accommodation cycle. If it is true that neutral fed funds are around 2 , and no one knows were that market is with that number is, basically everything up to that point is still accommodated Monetary Policy. We are seven years into an pace. Ic expansion at a 2 should you be well north of neutral orwell south . That is where i think the debate could come into play but there is no question that you need to be removing accommodation. Megan tom porcelli, chief u. S. Economist. Ofathan the facebook vp global, to discuss the shift out of digital and mobile. That is coming up. Features soft. Okay, ready . Whoa [ explosion ] nothing should get in the way of the things you love. Get americas fastest internet. Only from xfinity. Jonathan this is bloomberg , im Jonathan Ferro. But a snapshot of the markets. I go to the fx market and a go to dollaryen. This is a much stronger japanese yen and the biggest oneday drop since april. A 111 handle earlier in the week, 109 at the moment. Weak, closingre lower. That negative sentiment from asia spilling into europe as well. The pm eyes globally the pmis globally the dollar index softer but look at the commodity market. We went through 50 last week and we are looking at 48 handles now. Wti down by one full percentage point. It is risk off in this market and it spilled over from asia to europe and potentially the United States. David here is what you need to go at the hour. Salesforce signed a transaction and will commence a tender offer for outstanding shares of demand. Gauges official factory remains slightly positive for the third month in a row, signaling improving conditions. The organization for Economic Cooperation and development warned the Global Economy is sinking into a selffulfilling low growth trap where Monetary Policy risks doing more harm than good. But go to first word with fine quinn. Vonnie california governor jerry brown has sent a message to democrats quit fighting over the nomination. He announced he is backing clinton and her lead is insurmountable. There is more pressure on venezuelas embattled president. Aey have come out in favor of recall referendum. Venezuela is suffering their worst recession in decades with everything from Food Shortages to electricity. They tried to rally support for her opponents in sundays elections. Her father is a former peruvian president who is in prison for corruption and authorizing death squads. Global news 24 hours a day 2400 journalists in more than 150 news bureaus around the world. Jonathan joining us is tom keene. We did not do this very often. Renewed uncertainty over the nomics, and a down move for sterlingyen. You have concerns about a referendum. Today, japan front and center. Tom it is stronger. You can look at it against any major pair but the idea is that we are not back to center tendency of what has been a stronger yen. Dollaryen, at 109, 106, 105 you get to see the tension clicking. Jonathan one thing you do really well is look at rate of change, and the rate of change to go from a 111 handle to a 109 handle certainly moves against kuroda. Tom and these are brutal moves. The acceleration in trend. Some of the moves today and the strong yen maybe the idea of the covering of trades. I get that idea, but the fact of the matter is we are nowhere near where we need to be. Jonathan it confirms probably the worst cap secret kept secret in japan, the rate hike in 2019. It is a fiscal stimulus because he is not going to implement it but he clearly has a lot of work to do. What does it mean for viewers around the world and Market Participants in the United States . It just leads to more uncertainty and that can affect particularly china. Adjacencies tose japan really begin to click in within asia. Jonathan the question i would ask, many governments around the world have missed targets. Many Central Banks have missed targets. Is japan any different or is this worse . Tom it is an artificial construct compared to most systems. The demographics are totally different. The sense of island nation makes it different, the cultural economics. The number one thing has to be the debt buildup and the oddity of how that debt was controlled by domestic dynamics for years. It is by