Falling for two consecutive days. Something jumped out at me earlier. Not the u. K. Bond market, which is barely changed. , like forthe u. K. Like sales posted the worst tune in almost a decade. They are spending more money on ledger activities according to the high street sales tracker. Consumers are more confident about their financial situation. They spend the extra money on eating out and going on holiday. Other data today, eurozone services, u. K. Pmi services, eurozone retail sales. Lets look at stock markets. They are down for the week. Equities headed for their first weekly drop in a month. The msci index on track for its biggest fall since march. European stocks are on track for their biggest weekly fall since may. Mixed start at the open. Tick tock, tick tock. Jonathan mark barton, thank you very much. That is the early mood in europe. Lets head over to hong kong. David ingles standing by. You, morning, i say to another chopping session in shanghai. Talk to me. Absolutely, jon. This story keeps giving. It is down of further 5. 8 . We are just about closing up shop for the week. Lets do a damage report. We basically put together the in somethingeeks like 2223 years. As these levels right now, 3686, close to 30 from just three weeks ago. The damage, i think we are roughly at about 2. 8, maybe 2. 9 trillion u. S. Dollars, roughly the size of the economy of britain. That is the Market Impact that has been wiped out. Stocks in this index, 900 are down at least 5 . It just gives you an idea of the scale of decline. This also shows that the chinese authorities, regulators, have put up several steps this week. Tuesday, a new one. Wednesday, a new one as well. They havent quite gotten this right. They are still calibrating what they do with this. Theyve managed to create a situation where margin debt can go north of 300 billion. Unwind, theys to try and smooth out the process. Obviously, it is not working. Argument,side of that if they hadnt introduced these things this week, things could be much worse. Let me show you where we are at this point. Back to levels of last march. Very interesting point coming from asia. They are coming out with some targets. Bnp, galaxy securities rather, they could be seen as falling back to 3000. It could fall to 3000, they say. Let me just end with another comment. Why havent these measures worked . They werent meant to spur the bull market. They were meant to limit financial risk. Back to you. Jonathan great work. David ingles joining us out of hong kong. Going to talk about china later. Greece, the banks, and stock exchange. Theyve been closed all week ahead of this sundays referendum on the eurozone bailout offer that may not even be an offer anymore. Our bloomberg poll is showing the vote is currently too close to call. Lets get the latest on the situation. Erik schatzker is in athens. Hans nichols is in berlin. Erik, i want to start with you. Not just our poll, but the polls throughout greece, the situation on the ground continues to bite. The difference between yes or no continues to narrow. This weekend is incredibly uncertain. Erik at this point, it is a tossup. We are in the home stretch. It has been a week since alexis tsipras, the prime minister, called this referendum. The greeks go to the polls on 7 00 sunday morning. It is a dead heat. Bloomberg sampled more than 1000 greeks to find out how they intend to vote on sunday. We found the difference between the two can be just 0. 5 . 43 of greeks we surveyed plan to vote no, which is to say no to the eurozone bailout offer. 42. 5 of greeks we surveyed plan to vote yes in favor of the bailout offer. 14. 5 undecided. Three Percentage Points of a margin of error. It makes it a statistical tie. I will point out that our polling also shows more than 80 of greeks want to stay inside the eurozone. Those people, those who want to vote no and also stay in the eurozone face a difficult choice. It is pretty clear, as you are going to hear, that getting back to the negotiating table after a no vote on sunday is going to be no easy matter for mr. Tsipras and mr. Varoufakis. Jonathan lets bring hans into the conversation. Ill bring the imf into the conversation as well. It is going to be difficult for greece to get around the table with creditors. Talk to me about the report released by the imf yesterday and how that impacts the Current Division between creditors themselves. Hans what the imf has done is stripped away this myth that you cannot have a third bailout package without some sort of debt restructuring. Look for syriza in the next 2448 hours, to say even the imf says we need a lot more money, but we need to restructure our debt. The imf is talking about 60 billion over the next three years. 36 billion would have to come from eu member states. Then you have to have maturities change from 20 years to 40 years. Heres the issue. The last offer from the eu, that 15 billion, that is no longer viable. Every finance minister and eu official has said that is off the table. In part because, you need to reconfigure everything in terms of how bad the Greek Economy is and how much more they need. The imf is assuming growth for this year is 0 . They are in recession right now. Theres no certainty that greece is going to have a 0 growth rate. Could be negative. Imf assumes 2 for next year, then 3 . That is remarkably optimistic. We talk a lot about polls. In germany, even if you have a yes vote or no vote, you are going to have a public that is fed up with greece. Here is a business newspaper. Heres the way they see what is happening in greece. Mr. Tsipras putting a gun to his head, saying, give me more money or else ill shoot. We also have new polling. They are saying 68 of the fault for the Current Crisis falls to the greek government. I would be remiss if i didnt hold up this. They are asking german voters what they should do. Should we continue to support greece with millions of taxpayer dollars . They want people to check yes or no. The only reason i was able to show you the front page, i would like to do it every morning, but sometimes there is nudity on there. Jonathan im not going to go there. Im going to keep this legitimate and bring Erik Schatzker back into the conversation. You see how this is playing out in the german press. Im interested in how this is playing out on the ground in athens. We are not seeing riots. As you go through the weekend, what is the kind of country we could wake up to if these guys vote no . We may find out as early as sunday night. It is in the final stretch. What you see happening now is campaigning. Campaigning by the no side, which is supported by the government, and campaigning by the yes side as well, although i will point out that from what i see, they are less organized. I have seen a lot of leaflets for the no side, not so much for the yes side. There will be rallies for both time,at 7 30 p. M. Athens 5 30 p. M. London time today. There will be more over the weekend. Sunday night, the polls close at 7 00 p. M. Athens time, 5 00 p. M. London time. It may not be that long after when we get an official result. An exit poll should give us a decent idea. If it is going to be a yes vote, which is to say in favor of a bailout package, you can count on the radical left and the and artists to mobilize in the streets. A at staket is here. Those were the people throwing stones and molotov cocktails a few years ago. They could be back at it. It does depend on the outcome of that referendum. Jonathan Erik Schatzker, brilliant work. From berlin, hans nichols. We are going to bring you live coverage of sundays referendum on bloomberg tv. Crisiswatch greece in on sunday, july 5. Guests for in our the hour. Yesterday, something happened. The ecb did something that didnt get a lot of attention. They expanded the shopping list. They didnt increase the qe program. We would have seen big moves in the market. Expanding the pool of assets, talk to me about that. Guest that is one of the reasons why we like the european Corporate Bond market. There is the possibility that they will start buying Corporate Bonds. Thati was actually was actually just part of their program. I dont think it was a response to greece. Jonathan coincidence . Ramin potentially. Jonathan does the poll and the referendum really have an impact on whether they exit or not . Surely, it is not that straightforward . It has a massive impact on the probability of grexit. We think with yes, the probability is Something Like 20 . If they say no, it goes up to 70 . I think there is a massive difference contingent on what the referendum says. Jonathan what it will come down to is that picture right there, live pictures of banks in athens. It will come down to whether the theis prepared to start greek Financial System with cash. Whether the greeks can get more money to recap the banks. You cant do that with the euro, you need a new currency. That is what it comes down to. At the end point, the ecb will be the one holding the gun. Do you think ecb president mario draghi wants to be that man . Ramin he has rules that he has to keep two. The terms of the treaties are very clear. He cant fund a government which is insolvent. That is very clear. I think his hands are tied. I think he will backstop the countries which are in the fold. If you look at the spreads on those countries, the market believes there wont be contagion because those are backstopped by the ecb. Jonathan you were expressing shortterm uncertainty, a selloff in europe with a longerterm call more optimistic. You did that through options. How has that developed . Option which a put expired on june 19. That was a great call. Nobody agreed with me in march. Now, we are saying people should buy long dated calls on u. S. Stocks. It is producing a fantastic entry point for that market. Ive actually made money through this greek crisis. Jonathan you are also selling a september perk. Given that we may see action heightening up, how confident are you around that . Ramin we have kind of cashed it in massively and gone for this call option, a long dated, basically a bet on earnings in europe. We think earnings will improve massively. In is optimistic and he will stay with us. Is he optimistic about china . The shanghai composite sees its biggest threeweek route since 1992. And, we will look at the potential fallout from sundays vote. And, bp pays billions. We will look at the record settlement over the spill. We will be back for more. Jonathan good morning and welcome back. We are about 18 minutes into the trading session in europe. Stocks are a little bit lower. The dax down by about 0. 1 . Have a look at the rest of the eurozone. Aboutc 40 also lower by 0. 1 . Some breaking headlines i want to get to from greek finance minister yanis varoufakis. We were talking about that proposal from the imf. It is a debt sustainability analysis. They say the country will need 36 billion euros from eurozone states over the next three years. Varoufakis calling the proposal music to his ears. He says, the troika disagrees with one another. Words, i dont believe it is too late for a deal. This is going to go on and on. For now, lets take a fiveminute break and talk about china. The countrys benchmark index suffered steepest threeweek tech line since 1992. Shares have erased more than two point trillion dollars of value off the benchmark. Lets get the latest from Stephen Engle in hong kong. He has been watching the moves and trying to keep up with what is happening in shanghai. Some questions about the governments efforts to control this. I asked whether they should lost whether they lost control. I guess we should ask whether they are trying to control it. Stephen should they be putting these backdrops in place . Basically, this is a confidence game. There are very few investing opportunities for the average chinese. These are the mom and pops. There tends to be a herd mentality. The regulator was out midweek saying, act rationally, urging calm, saying, dont listen to all the shorting china rumors that are out there. There might be more sophisticated investors playing and you are going to be burned. That is what has been happening. Despite all the different measures from the government, whether it was relaxation of rules, cutting of transaction fees, the triple Interest Rate cuts that we saw on saturday, the lending rate, none of that really stemmed the slide of these shares. Today, shanghai composite down 5. 7 . Shenzhen down 5. 3 . The peak was just three weeks ago today. This market down 28. 6 . Shenzhen down 33 . The regulator was out with some warning, premarket today. They will lead an investigation on possible cross market manipulation. It will strictly punish those found to be manipulating the market through shortselling activity on the index futures. They did suspend the accounts of about 19 shortsellers for a month. Again, that is a very small number. That is probably not going to be reflective in any upside for the market. It was a vicious week. , wethan the word panic shouldnt throw that around loosely, but am i seeing panic selling and panic reaction . Say whati can just people have been telling me. From their perspective, the government, there was a little bit of desperation. Those measures were not putting a floor on this correction, or crash. I do have a quote from bernard. He says the mood is verging on panic. Extremely hard to calm a bear who is in a rage. Bnp paribas telling investors to buy shares of chinese brokerages, arguing that the government will do whatever it takes to restore confidence in the stock market. Bnp paribas says, buy brokerages. Im not sure anybody is taking advice to buy anything in this market. Jonathan Stephen Engle in hong kong, thank you for joining us. We are back with ramin nakita. It is not my job to make trade suggestions. Why would you want to buy chinese brokerages . Ramin some of the stocks look cheap and fundamentally valued. I think they are all kind of a hopeless basket case. But i think we keep away from that market. There are better opportunities elsewhere. We think europe is good and japan is good. The amount of risk you take for the reward you get would not be worthwhile. Jonathan final question on china. We wrote a lovely piece on bloomberg. Com yesterday, and the chart on it shows the market cap of the shanghai composite. We are talking about over 10 times greeces gdp. Going forward, this situation in china, when does it become risk off for Global Markets . Jonathan i ramin i think it is fairly selfcontained. I think the causality will go the other way. I think greece will probably weigh on china too. We didnt see such a big impact in em. Some of the em countries are actually the safe haven places. China didnt selloff as much on that debt. Jonathan lets talk about the fed and have a look at the u. S. The next job report for june. Some 432,000 people left the workforce. That sent the Participation Rate to the lowest level since 1977. Our guest weighed in on the number and what it means for janet yellen. I think this report shows that the recovery is continuing at the pace weve seen, for a while. We have to recognize that it may not be the case that you grow 4 , 5 , after a recession any longer. We are used to having recessions every seven years. Stan fisher and yellen are clearly classically demanddriven economists. The ground under them is shifting. It includes asset bubbles and their prevention. Junelike jobting numbers, no wage growth, i dont think they will move in september or december. Jonathan wages, wages, wages. Weve been doing this for six years. At one point do i sit here and say, it is not cyclical, and the fed can do nothing about it . Ramin the payrolls number was kind of disappointing. The Participation Rate was disappointing. There does seem to be extra slack in the labor market. A lot of people who are longterm unemployed, maybe their provider is willing to take a pay cut. Of course, this is a great story for u. S. Margins. They are much higher than europe. Europe is now catching up. That is the kind of lit side of the argument flipside of the argument. We are forecasting over 6 Earnings Growth this year. Actually, this is a good story for u. S. Equities. Jonathan the call for the first hike . Ramin we are still saying september. Jonathan with conviction . Ramin our economist has conviction. Hes been doing it for 50 years. Jonathan ramin nakisa, hes going to stay with us. Up next, we are back live in athens. Bloomberg polling data tells us the vote is to post a call. We will bring you the details live after the break. For now, im looking at equities just a little bit lower. Here in london, we are off by 0. 1 . The dax dead flat. 0. 25 . X down about downhanghai composite 5. 77 . The biggest threeweek rout in china since 1992. We will head out to athens again. We are back after this short break. Get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swifts music videos, interviews, and more. Xfinity is the destination for all things taylor swift. Jonathan good morning. This is bloomberg tv. Im Jonathan Ferro live from the city of london. Heres a picture of the markets across europe. The ftse 100 down by about 0. 1 . The dax almost dead flat as well. The big moves have been in shanghai. A lot of uncertainty as we approach the weekend. No one reallys nose what the outcome will be. Difficult, isnt it . Have a look at the Asset Classes outside of equities. In fx, eurodollar, 1. 11. Eurosterling, off the lows for the year. In germany, yields unchanged. Headed for the biggest weekly drop since march. We are down 0. 7 , 5 on the week. U. S. Rowing in the we will talk about oil later. Lets lift the lid on the stoxx 600. Jon. thanks, heres what i am watching. N offer,s rejected a saying it was too low. It lacked information on plans, particularly job security for its employees. They have said they can address these concerns and that the offer isnt based on closing minds, selling the stock business, or cutting jobs. We are seeing the share rise on that news. It is one of the biggest gainers on the stoxx 600. Another one creeping into that list is bp. It is up almost 1. 5 today. Yesterday, it gained 4 on the news that it reached a record 18. 7 billion settlement to settle all federal and state claims for the 2010 Deepwater Horizon Oil spill. It is a big number. It is the biggest settlement for a single entity in u. S. History. The number could be higher when you take into account other costs. A lot of it is likely to be taxdeductible. Investors probably feeling good about the fact that it looks like the work is over. Finally, tell a loyal, another oil