More than 25 billion come hedge funds last month. The biggest month redemption monthly reduction since 2009. Caroline we have cautious trading ahead of jackson hole. Federal reserve chair speaking tomorrow. Futures down 20 if youre looking at the euro stoxx 50 at. 2 moment futures down if youre looking at the euro stoxx 50 at the moment. I know youre good to be checking other assets. Manus into the calm before the storm. That is a part of the debate will have today. Repressed volatility. Is it qe at work echo stocks in the u. S. Lowest since 1994. Bloomberg dollar index at the top of your screen, up. 4 . We are shifting into they five of the dollar bid zone on that. Underneath that you got crude oil up. 25 . He had stockpiles again. U. S. Suppliers up by 2. 5 million barrels. Greenfield ceo says short crude at these levels, 50. Is it a moment of recovery or more pain echo pain . Growth will be close to zero this year. Olitics is the dominant theme i am or has a sword into 2014 at we have a iron ore has a sword get ready for issues in terms of supply and you are going to see a contraction in the biggest user, china. That is your risk radar. Lets get to juliette saly. Juliette, good morning. Juliette manus, thank you. Investors pulled more than 25 billion from hedge funds last month, the biggest monthly reduction since february 2009. Total outflows this year, close to 56 billion driven by mediocre performance. Hedge funds have faced nothing criticism over state costs and their failure to keep pace with it is a most time to short crude rally, the centuryold commodities firm which was the largest in dependent oil refiner in the u. S. Simon green shield says traders should short the vti crude should short wti crude. Former Uk Independence Party leader, nigel farage, appeared on stage with a rally with donald trump in jackson mississippi. Farage spoke of britains decision to leave the European Union as a positive example and urged Trump Supporters to get out to vote against the establishment. Next line establishment. If you want change, you better get out there campaign. Enoughg is possible if decent people are ready to stand up against the establishment. Thank you very much indeed. The issues we face here in america are similar to the issues faced in britain during their referendum on membership in the European Union. Juliette the death toll from the earthquake that hit central italy has arisen to 24 7 according to the countries has risen to 247. Its lend the centers it flattened the center of three major towns. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. This is bloomberg. Caroline thank you very much. Mark mobius says helicopter money for japan is on the way. The veteran investor speaking to Bloomberg News suggested that more action from the bank of japan could come soon. Japan is the leader. What japan is doing is having a global impact. The experiments that japan is trying will be watched globally. Japan is a leading indicator for the rest of the world. Engage in helicopter money with great care and reluctance. Of course if they do it to carefully, it will have the desired effect. Moreare going to be much circumspect and they probably will wait until the yen reaches 90 before taking action. Manus andrew parry is the head of joins us now. Mobius says the bank of japan was delivering. It will hold back until yen hits 90 before the evoke helicopter money. Andrew i think it is a big step to go farther than they have gone already. Helicopter money is an illdefined concept. It means flooding the system and more liquidity. The problem with the problem you have with these extreme how do you unwind it . People talk about the Immediate Impact of monetary policy. What is the endgame . It does work, [indiscernible] i do think there is this constant touching faith in the ability of the banks to turn it off and unwind it once these extreme actions have been put in place. Caroline how would you deem it has worked . Is it the year is it the yen weakening . Question. Is a grand for me, too many people are focused on asset prices as the litmus test on whether it works. The nikkei are the s p on the stoxx 600 going up. At the end of the day, mark mobius said japan leading the way it will if japan is leading, weve all got a very sad future. It is going to come down to economic activity. Manus we are trying to secondguess what the review is from the bank of japan. Ive got a chart for you in terms of dollar yen. One month volatility over one week volatility. It is slowing out. The volatility in yen is the personification of risk. In your view, it is possibly qe, more negative rates. It could change the invasion target. What would that do to dollar yen . What the you make of that . Andrew red herrings in terms of longterm economics. A lot of it is a justification of helicopter money is just justification of going to extremes. Intois beginning to move totalitarian Monetary Department policy where we are being coerced into a better Economic Future purely by more and more extreme monetary measures. The central bank feels they have to find some theoretical justification. When you step back and look at these commonsense terms, your lending to the japanese government for 40 years at one point, negative rates. Are these signs of a healthy economy . I do worry they are pushing it to an extreme where you might get an immediate shortterm reaction, yen might weaken, but what are the longerterm consequent is that we are left with. They could be if you move the helicopter money japan, then you suddenly get inflation soaring in an uncontrolled way. One good thing, you might get inflation to 2. 5 or 3 . If it was easy to control, Central Banks would of done that a long time ago. That is the challenge. Mental i suppose any but manus im sure anybody would be grateful to andrew parry from him as caroline we are talking jackson hole up. What is the fair chad likely to offer . Plus accrued outlook for the ceo of phibro recommended shorting the vti. Shorting the vti the plot thickens in south africa as the finance minister says he wont abate a police order to present himself for questioning. All this ahead. This is bloomberg. A glorious morning in berlin. Less glorious if youre on the back. Futures down. 3 on the open. Here is juliette saly. You. Tte caroline, thank shares in hp tumbled after hours. It is next profit of . 34 per share, lower than estimates of . 40. That is as the printmaker slumps struggles with a slump in demand for its products. Chinese investigators are invest imc has received inquiries from the related to futures trading and its shanghaibased affiliates. China has been cracking down on highspeed traders in the wake of last years market rausch. Monsanto has revealed it has withdrawn its application for it isproval and its over debate with the government on royalty fees. Monsanto said it is reevaluating its business in india after he cut to royalties. The company says it pulled the application last month because of regulatory uncertainties and ongoing discussions. Thailands National Oil Company says the Energy Market is increasingly oversupplied with prices falling and a new longterm contracts. It plans a new shopping spree. The company ceo told bloomberg he expects prices to head higher. For the rest of this year, we tonk it will be between 45 50. We will be planning to see the to 50radually going up to safety dollars in the next two years. It will be in the longerterm, maybe 60 dollars maybe 60. Juliette after they thatcted and multiple drug generates 20 of the israeli companys revenue. They were challenged by two rivals who want to make cheaper versions of the drug. A decision on a third should be reached next week. New zealand led the world when vote. E women the right to now it is claiming another world first, pizza delivery by drone. Dominos Pizza Enterprises has joined forces with usbased line operator thats flying robot operator flying robot operator it will Start Testing the service in new zealand later. Drones ining to use australia, france, the netherlands and germany. No pizza for you, manus. Manus flying pizza on a friday night. What more could you possibly want . A new paradigm. 2016 and economic symposium that kicks off in jackson hole, wyoming, today. One of the paradigms they are going to be talking about, investors are going to be listening for clues. The Options Market pricing in over a 50 chance of a hike by the end of the year. Uncle mickey since this week Michael Mckee since this report. Been holding have a symposium for 40 years and for 38 and for 38 of them, ceos bernanke laidben out fed policy. What is janet yellen going to do on friday echo she wants him to do on friday . She wants she wont say much. September 21. We have had bys chair sam fisher suggests the september meeting is life. Yellen might say that, but whether she suggests the fed is close to an interestrate increase is something we will find out on friday. Michael, bloomberg, jackson hole, wyoming. Caroline andrew parry is with us. What you expect to come from jackson hole . What do you expect to come from jackson hole . Andrew talking about the manner. In a positive possibly raising rates in the future and finding a reason not to do so. I think the fed is tentative about raising rates. I think it will always be. There was use the excuse of externalities as a reason not to do it. I know the fed is a political but they do have half a mind toward president ial elections later in the year. It will be a continuation of what we have seen the last few months, particularly if the ray equally the ray rice manus curious to know, we have the money market could volatility in the fx market. The difference between 30 year paper into your government bonds. And twoyear government bonds. The propensity to hike by the fed . I am not sure it is underestimating the ability to hike. What it is underestimating is the potential for shock. We got into a position where a lot of complacency is in the market. Investorswhere equity have been putting their money. Investors are starting to bet on the trade coming through and pushing up miners. They are putting up cyclicals and that is not reflected in the bond market. We mentioned that the japanese s equity line manus if Equity Investors are being pushed, i would counter would you just said. It it is interesting is a sort of same thing. If you dont believe in the reinflation, those yields on some of those sickle stocks are not going to be there and those cyclical stocks are not going to be there in the future. You can only pay a high dividend if theres underlying economic expansion. I do think there is more than just a search for yield equities. Thats equities have been equities have been yielding more than bonds for years. Point where it has to decide it wants to push the inflation the next policy initiative from government. I will believe that when i see it. [laughter] andrew wherein a Pivotal Point in the equity market. Is this a regime change . We are moving away from fears of stagnation and deflation. Now maybe the Central Banks the reflation, retrade helped by this goal largess is going to help. Caroline i see manus talking about volatility in the bond market. I see volatility in the stock market. We are seeing asian stocks trading at the lowest bound that we have seen in four years. Will that change post friday . Andrew it could very well the. I look at bollettieri it could very well be. I look at volatility. It tends to trend down in regimes we have monetary coercion, where Interest Rates are very low. Caroline how you hedged, andrew . Andrew it is trying to focus on socks that are not dependent on an account focus on stocks that are not dependent on economic outlooks. All remains optimistic. That is one of the differences in opinion that you get from the bottom up to the top down. A lot of macroeconomics, geopolitical concerns but you can find some interesting stocks from the bottom up, even in china were the outlook for growth is very clouded. Manus no one wants to spend money on buying andrew, stays with us. We are eight minutes away from the start of the trading day. We are going to take a look at the corporate movers. [indiscernible] stop and shop, keep shopping. This is bloomberg. Caroline 7 54. Minutes away from the open. That means were checking out some stocks. Check in on our hold it were talking retail and the dutch margins likely to push stocks higher, 1 or 2 is how much we could see climbed. Quickly changing tact. We are going to be looking at the german stocks. Lufthansa, the Company Striking a deal with some of its union members. A longterm agreement, relief. Manus well, those airlines could do with a little bit of relief given the summer they have had between terror and global issues. Coming up, it is the start of the year trading date. Stocks indicated for slightly lower opening. London down. 68 116. Where do we go next and and countdown to jackson hole . This is bloomberg. Manus good morning and welcome. This is on the move. On manus cranny in Bloomberg European 500 is. Alongside me, Caroline Hyde in berlin. We are moments away from the start of european trading day. Caroline global gathering at jackson hole, set to kickoff as investors seek clarity from the fed. Ready to drop. Saysetons mark mobius japan could be months away. And hedge funds clipped. A the report says investors pulled more than 25 billion of hedge funds last month, the biggest monthly redemption since 2009. Were running up for the open, futures pointing to a lower start to the trading day. Caution in asia trading. New volatility, the lowest in four years in terms of trading in asia. Lets have a look at how europe is expected to open. Futures ticking down, down for the dax. Earnings. Attering of but overall, we want to get a breakdown in terms of regions we want to look at, how we are impacted as the Federal Reserve janet yellen is likely to give some sort of hint as to where the market is likely to go, where the Federal Reserve is likely to move. Will it be cautious tones . Europe, downstern 1 10 of a percent, france tracking lower, u. K. Pretty low. Dax, always a the bit of a laggard, off by 4 10 of 1 . Keep an eye on lufthansa and nejra cehic, because she will be breaking it down in terms of yields of the u. K. Take it away. Nejra because of course as well as the equity market open, we have the gilt market opening right now. Lets take a look at the 10 year yields. We were at 55 basis points before the market open and we are pretty my still there now, just up one basis point if anything. Not a lot of movement at the moment, but we will wait for that to settle. Moving on to whats happening on the stoxx 600, you can see it set to break down. Its pretty much across the board. Consumer discretionary leading the losses, materials following closely behind, also down 5 10 of 1 and followed by health care. Telecom is outperforming at the moment, still off by 1 10 of a percent. Open, asart to this the futures are indicating. In terms of stocks we are watching, lets bring this up for you, starting with the dutch emerged last month, beating estimates in the second as cost reductions improved profitability in the netherlands. Operating income grew 8 to 335 Million Euros on average adjusted basis. It looks like we may be seeing some gains at the open. Event if we move on to play of, a special dividend 150 Million Euros will be paid on december 6, 2016. Some are calling it higher and it looks like its up more than 4 . P. M. In a pipeline remains healthy, continuing to focus on m a. Its also confident of strong growth in 2016 and beyond. Those shares are rallying on the comments. Crh finally, just wanted to show you this, seeing no real change in the u. K. Post brexit. It says that Brexit Impact is unclear for the mediumterm. It says europe is at the start of a long, slow recovery and sees the second half somewhat tougher in the americas. 2016s the tail end of 2017 before a return to m a. That stock is moving a little higher. Manus thank you. Breaking news for our viewers from fairbank, the russian banking institution. Second quarter net profit came in at a nice peak. The market had a number pegged at slightly less when it comes to net interest income. This is the real core of how to judge whether a bank is working. Income in that interest. Second quarter provisions come in at 97 billion rubles. Second quarter provisions coming in at 97 billion. Sberbank will probably rely on margins and costsaving. Always on thes cusp of questioning a russian recession, the price of oil. Lets bring in andrew perry from Hermes Investment. Sberbank is just one prism. The rapprochement between putin and erdogan, recovery in the price of oil, what do you make of russia . It has been a great name to own, because it is giving you such a play on the recovery in oil price and action it can take on its own part, the recovery in net interest margins. Its more ironic than it is of european banks. I think russia has surprised people this year. I think people have been and it is sort of an example of what has been going on in emerging markets generally. Earlier in the year everyone got phenomenally pessimistic, and of the world. The reality was it was never going to be quite so that. We are now at the end of the summer and things have turned out to be a lot easier. And now people are in a far more optimistic state of mind, of the problem is have they gone too far. Thats the key question for investors. Caroline talking of going too far, volatility crushed at the moment in terms of the emerging markets. Youre seeing how much one of the Biggest Exchange rates has seen volatility fall off the cliff in august from really significant highs to soaring much lower. Are we bracing ourselves for a significant, jarring action, if we see a move from the Federal Reserve . Its all eyes on the dollar. Trade weighted u. S. Dollars have been trading sideways for a year. The emerging markets are very dollar sensitive. Will bethe markets looking to see which way the dollar breaks over that trading range. Manus hold that thought. We have one of those lovely moments we