In the ambitions are finally over. Investigationinal into allegations with a third party consultant. It is half an hour into the france is oneand to look out for in the futures market. It is lower. A 10th of at percent. There is a rally in japan and more gold as well. What get you back to bloomberg first news. An increase in stimulus more likely. Bank retains its negative Interest Rates. Theave been reporting on it same as the sfo. The referendum result that is according to the car transaction date. Overall market expenditure up. A savaging from the critics. Has broken records to have the biggest all this weekend ever. The opening pushing the studio to more than 1 billion so far this year. Day, 2600 journalists and analysts in more than 120 countries. David lets focus on the key dates today. Chinas exports remaining sluggish. Deteriorated to 12. 5 . Big o to hong kong and get behind this data. What are the Key Takeaways from this number . It is a soft number. The import side of things we are seeing their which doesnt bode well for the economy. At the same time there are some caveats. Exports are holding up quite well. Quite nice. Or is cheaper priceser for commodities brings down the imports as well. When you figure a 22 drop, some of that might down be down to the commodity moved in prices. Chinas economy remains. Guy give me some numbers on the imports. Essentially, and a lot of it is reflecting the correction and commodity prices. We need to remember the big fall. Some demand. We see imports from korea down. In some respects it speaks global demand. Surprising impact under a week demand for sore. Under the pbc question i guess it is a debate. Theres a view coming out of beijing that rates have been cold enough. Credit to where the economy needs them most . Targeted stimulus scheme to try to get the money rather than wasting ammunition on interest. Great stuff as always. Thank you very much. Lets bring our guests out of hong kong. He managed manages 3. 4 billion in assets. Good morning to you. What is your take . The chinese economy is really getting tos death struggling to gain traction domestically. The imports are falling a lot faster than the exports. I think it is time for the authorities and china we should look forward to a quarterpoint cut in the Interest Rates. Thelar to what we saw in First Quarter of this year. Then it abated in the second quarter. Guy the authorities are seeming to signal they dont get the bang for their buck. That there is enough liquidity in the system. What does industry Monetary Policy mean when it comes to the pbc . China they have been gradually easing. From the chinese point of view if they inject too much liquidity and you get a bubble which gets bigger. So it needs to be more targeted. So much so far much of the credit expansion it is going to the Bigger Companies which are not very productive. I think it is much more about coming out of the shadow banking and into money is falling through the banking side of the equation. Caroline seems as you want more targeted, fiscal potentially. Bloomberg is seeming to appreciate. How much will authorities allow this depreciation continue on the export numbers in the longterm . I think the Exchange Rate is always on the cards. I think it is going to be a gradual process. Its not that chinese exports are not compatible. Economy is in a sure growth slow growth there is little that the chinese exports can respond to right now. The current surplus has continued to be quite robust. All those indicate that there is devaluationa sharp in the u. N. That is a slow transition. Lot as thexpect a process continues. Where are the capital exports in china . Also the fiscal side theres a lot for the chinese to continue to celery that. The budget deficit are quite low to the rest of the world. Again, they have room to probably increase quite sharply and i think over the coming weeks we will see that is how they will respond. The monetary conditions are not that tyra now. They are quite relaxed and loose. They need to be loose even further. Up next, payrolls pushing deep dollar hide. We will discuss what it means to ae said in a possibility of and the possibility of a hike. The u. K. Has opened a investigation into fraud, bribery, and corruption. This is bloomberg. Caroline welcome back to on the move. A cloudy day here in berlin. 5 . Futures market up now, lets get up to speed with the Bloomberg Business. The sfo has opened a criminal investigation into allegations of fraud and corruption. Cooperating with its the South African discount retailer offering 64 per share. The deal creates the largest betting company. Really wants the jet founder to head the Retailers Online division as part of the deal. The move could help walmart challenge amazon. That is your Bloomberg Business . Asian stocks are at a oneyear high after the smi hit the 14th record of the year. That is after july payrolls by 250,000s this is how investors reacted. Todays numbers are strong all around. Its a solid number. Its a solid report. This month has shown some good games. People thought it would be around expectations. We are surprised. The recovery continues and the weakness we were concerned about inmate looks like it was a blip. Not only is a strong report, the equity market is trading good news as a good news and the western markets are behaving as you would expect. I think you still focus on global conditions. That is what is holding them back. Todays numbers tell you that theres a higher probability hike thiseds will year. I think going in front of an election is pretty difficult. 22 for september is still low. I would put it that 40 to 45 . Caroline lets get more Expert Opinion to side of the hellenic. The side of the atlantic. Thats what shows you the properly is climbing 47 for december. It is up from 37 . Should it be higher than 50 . Do you think youll be a rate hike before december . Shouldink the market really be prepared for a rate hike. The u. S. Economy is in great shape. The Capital Spending is really the only negative. Again, that is now stabilizing and it is showing the first signs of a little bit of a turnaround as well. I think the ingredients are in place for a rate hike. Ort likely december september. Otheri think the is the flow of the we have the brexit situation. And theook at the risk rest of the emergingmarket complex, we have had very good stability recovery. Hopefully that will stabilize. We will probably no longer hold it like it was the last couple of months. Guy lets talk about this event here. What is janet yellen going to say at that event . I think we should be expecting that the u. S. Economy is in good shape. We are getting a situation where the wages show the signs of picking up because of tightness pretty slack has been taken out of the labor market. This is the lead indicator that the fed normally looks at. I think a lot of the domestic guy is she going to give us a clear guidance at the end of the year we will likely get a hike . I think so. The market is waiting for some real solid guidance from the fed. This is probably the key. Is still below 50 . I expect it is going to continue to climb gently until we get to the jackson hall meeting. The fed couple of directors telling us about market underpricing. I think that the fed is guiding the market. We should of that into all caps relations. Thank you very much. Saying with this, minutes away from the open. We are we will look at the potential movers. This is bloomberg. Guy lovely morning. It may be cloudy and berlin, weve got a few clouds here. We will take the sunshine. Lets look at the stocks we need to watch. The anears that issue that surrounds the thirdparty been selling airplanes. It effects trade, finance. In some ways, this means that airbus and boeing are on a level Playing Field. Boeing was struggling with the Export Import Bank and now it appears that the airbus is struggling in europe as well. You can see how these two stocks are performing right now. The market is still stable but trouble is brewing. We could see german markets up a form the futures market. Interesting we have seen these two Companies Failing to raise money. In peru, a big round raised. Traded on thef midcap in the dax. It is spending big and getting in on mattresses. Is usingion is what it to acquire Mattress Firm. Lets talk about in a may. Lets talk about how the world is working. May in some of the Larger Companies have raise funding in the market. We should expect that to actually happen in the u. S. And the u. K. As well. That is what really encourages the activity. Ink there should be harder to it is a lot justify the activity. Guy were going to come back to that story. The market open is next. This is bloomberg. Guy youre watching on the move. Im got johnson. Johnson. Moments away from the start of european trading. Caroline has her morning break. Caroline hes climbed to a oneyear high. Is a september hike from the fed really back in play . The president of turkey anticoup protesters and says the Death Penalty will be back. An u. K. Has opened investigation into thirdparty use. Pictures see what the is. Friday a really solid session. Lets show you where we are going. These are the three main industries. Looking maybe to take if you points off. It is interesting to see how the airbus story filters through. There you see the cac is actually opening higher. The cac up by 2 10 of 1 . Caring one financials friday of 4 10 of 1 . Germany coming in with a revised number. Plus. 8 . That has been good. A real driver in terms of the markets. You see i. T. Also up 3 10 of 1 . A little bit less sobering on the consumer is these stocks markets. Y and european both drops, getting demolished in the united states. Equities are better did. He see the asian market rallying. Canadaons hold valuationsd hold can a valuations cann valuations hold valuations hold overall you saw their traffic numbers climb. Steinhoff just waiting for an opening price. Mattress firm holding in the united states. Oil is up off the floor. Airbus says the u. K. Front office has opened an investigation into fraud, bribery, and corruption. More, weve got the managing editor for global business. This is due to the export finance agencies earlier in the year. Is there a much of a surprise . How damaging could this be . We have to look at it at Different Levels heard operationally it is not that much. 7 . Us says only about no deliveries are in effect and that might explain why the stock is not down that much. , there is not disruption. A hugely, embarrassment for airbus. What it really saids sheds businessis how do you in some of the less established markets . You dont have the infrastructure so you rely on these middlemen. Nothing is illegal with that. The problem comes with airbus not fighting them properly to the government, to the regulators. Are not anyr there kickbacks and thats where the problem arises. That is what the fs so will be looking at. Guy who is on the hook for this . John leavy is the one who flies into the markets. Who is on the hook . D up thenk youve summe people who will face the tough questions. This is something that will play out over a long time. The average length is 46 years. Over withto get this as quickly as possible. Toughree men will face questions and how they do business and how they do business and how they do business and how they do in how they do business. They chasen is did deals at the expense of clean business and that is a question that will be asked . N stays injohh whatonch company is people are asking per how much longer do you expect him to be in the business . Wonder is this his last air show . Hes getting to an age where people might think its time to hand off the baton to somebody else, but in many ways he also seems irreplaceable inside the company and are googly the most successful salesman on the planet. He sold more equipment than any other human being. To follow him will be very difficult. We can probably see a gradual handover in the next couple of years unless there is a more. Irect link they been able to get out of these things in the past and it him orer really effected anyone else. Without knowing the results, i dont think this will effect his retirement planning. Guy boeing has had its problems and thats a totally separate issue. Can we extend this into the whole of the industry . You are trying to sell planes in one of the most difficult places in the world and its the only way to do it. Thats true. They both rely and similar structures. A proudly the u. S. Rules are much tougher than in europe and troubleng, theyve had getting export financing set up. The Playing Field is somewhat leveled out. , and this case the companies themselves, can step in themselves easily and guarantee these deals. Should financing dry up Going Forward we have been through ofses where 20 to 30 finances were needed to get over the line. Should we come to that again it will be a greater problem for some of these companies where things are cheap and readily available. Guy thank you for joining us on the airbus story this morning. Financing a deal is one of those big stories we have been talking about for quite some time. You is thatll to the cost of capital is so low. He said brexit has helped me. It has driven down the costs of financing. So cheap right now. Exit a world in which cheap. Ng is still it is available to the participants who really need it in order for the economy to grow. Conditionmain in that simply because we have a lack of Capital Spending. Industries,he main they are absent simply because they are restructuring that part of the economy globally, that is. So, creating growth is getting more difficult because a lot of the players are already indebted in a gets very hard to increase your growth when it is so high. All they can do is measure the availability of credit. Thes plentiful so should need for the Capital Spending cycle arise, it is going to ignite quickly. What theyre saying seeing is the early signs of destabilization. , trade andtime financing will be readily available so that anyone that wants it can get access to that very quickly indeed. It is not going to change for some time. The inflation is absent from the equation right now. Caroline if youre looking at , the u. S. Looking strong. Interestingly for the month of june, Industrial Production up. . W are you looking at the eu have you been worried . Yes, but remember it is going to be quite long. Probably another 2. 5 years as a minimum. We are not in a position to form a clear view, but on the consumption cycle and more important on the Capital Spending cycle, there is going to be some slowdown. I think the transfer of jobs into europe is a very longterm process. In that sense, i think we have a prolonged. Of uncertainty. Theres going to be slowdowns but nothing dramatic. More importantly, it shows the. Onsumption the first thing politicians have to do is to try to use some clarity in order to stabilize. That,lready seen signs of especially in investment banks. News and iy good think that the markets are quite stable given this outlook. Guy were going to talk more about central banks. Next, deja vu for japanese buyers. This is bloomberg. Guy welcome back. A stemless boost for japan may be around the corner. This, ahead of the upcoming review on the monetary view seems more likely. Themmary of opinions from july meeting earlier today. Going through the highlights from that. It is a summary. It doesnt identify the member in question but some of the highlights were one member said that the idea that policy is reaching its limits or could reach limits should be rejected. Another said that given the very germanic and powerful tool that the bank of japan has used in recent years than a more detailed acclamation of what the dojs thinking needs to be done and that is of course the review that you are mentioning that will take place the next meeting in september. Stimulus. More bets on moving away from Monetary Policy on the moment. Theres been some breaking headlines. The emperor relating he might a statement be thinking of stepping down. What does that mean for japan as a whole . Videoery unusual statement. Only the second one he has ever made. He was very careful not to use a timeline for when he might step down, but he certainly left that impression, saying that given his health, he was afraid that he may not be able to continue to carry out his duties in the same kind of way. Prince, whohe crown is 56 would take over. Very interesting. Re was no application avocation. Out careful not to say that say that. Wasnature of the dress about his thinking of unleashing at some point. Tokyo aning us out of what kind of policies do you expect out of japan . Japan has provided volatility. This is a really interesting. It has been getting lower and lower. That has been largely due to things that have been happening to the euro. But the yen has been one of the exceptions. It is getting crushed. Does that continue the japanese story . Ashok i think we should expect it to come down because the Global Financial system has been flooded with liquidity. Every time there is any height. Nd volatility you get a gain it is been difficult and a lot of the markets for the short side of the equation simply isause the tie of liquidity too strong. We have seen the levels in the uppity market continue to come down. We have seen them come down in the commodity market. I think it is a byproduct of what is happening. Central banksthe around the world. As long as we have a loose Monetary Policy, expected volatilities to come down even though the markets are still expensive. Of course, one of the big drivers is the change in corporate earnings. We have had different ones over the last 1218 months. That is bottoming out. Again, that is going to continue to help the volatility remained calm. Caroline we hear Morgan Stanley saying they want to for speakingy much with us. No more yield for foreign buyers of u. S. Debt. Of that story up next. This is a bloomberg. Caroline welcome back to on the move. Stocks have been in the green. The job numbers feeling appetite today. That is your out performer. Le