Tom keene and francine are off today, it being labor day. Manus lets get straight to the bloomberg first word. The head of japans Central Bank Says new ideas are not off the table. Declined to rule a new initiatives today. The bank of japan is reviewing its policies to see if they are effective. And japans of china are leading today as tensions rise in the east china sea. They will talk on the sidelines of the g20 summit. Byan has protested patrols chinese warships near japanese administered islands. North korea has testfired more missiles. They fired three Ballistic Missiles off the east coast of north korea. South koreas president criticized the north for what she called provocation. Putinn president vladimir has continued agreed to continue talks over a ceasefire in syria. Secretary of state john kerry said the russians walked back on a part of the agreement that was agreed to earlier. For the first time, chancellor in aa merkels party lost state election. Her popularity has plummeted since her decision to allow large numbers of refugees into the party. The speculation is that steve she will still run for a fourth term next year. This is bloomberg. Much. Thank you very lets get some breaking news. Some data from the eurozone. Coming retail sales through. 1. 1 increase month on month. The retail sales year on year, 2. 9 . The estimate was for 1. 8 . This follows weakness in the competent pmi numbers. An hour or so ago, we got that, but it was still expansion. Manus you know what is amazing with all of the data coming through . We will talk about the u. K. Data in a moment. Brexit, what brexit . That is the caveat. Put the pound up there because we had our data as well. Record jump in the u. K. Purchasing managers came in from a sevenyear low. You have cable in the middle of your screen. The dollar is down. The composition is down. Composite is down. Dollar is just that little bit softer. Everything is on the table. Is he going to you turn on negative rates . The market has raised. Net long position onions are the are the mostn since 2008. You have Swedish Krona im getting my currencies mixed up. [laughter] manus the ecb this week, carney in front of parliament. The Swedish Krona is strengthening against the dollar. Anna it is going to be a busy old week. Markets in asia were a bit acrid looking. They were focused on what the fed would do with the latest jobs data. It was the disappointing data from the u. S. We had a stock rally running out of steam a little bit, as we go into europe. The u. K. Stockmarket underperforming quite considerably today. The bank stocks have been quite a wait on that index weight on that index. We will bring off that number and we have gold in there. Manus we bring you all sorts of measures of volatility. One that weve got is bond market volatility. Have a look at this. This is bund market volatility. Up she goes, down she goes. The smallest bandwidth of volatility in the bund market since 1991. I wont ask you or our guest where they were in 1991. Two thirds of the german bond market is beyond the reach of the European Central bank. Will mario draghi do something . Anna 1991. Manus i was trading pork bellies in 1991. Anna thats exactly what i was thinking about. Joining us for the hour is James Foley Jane foley. Great to have you here. Lets talk a little bit about what we have seen coming out of the g, what caught your attention. Ande has been a lot of news bilateral talks taking place on every front. Jane one thing that really stuck out with me was the mention of the gini coefficient. There was a mention that this has extended beyond the warning up to seven. This is really, really timely. , you take theeen u. S. Election, the lead up to you go toion if europe, we see far right, far left, we see unhappiness over the weekend in germany, too as the spanish Prime Minister pointed out this weekend, there is a rise of unhappiness that is perhaps based on income and wealth inequality. We have seen that come through in politics. The g20 are recognizing this position, where wealth inequality is seen as populism and a movement away from establishment politicians, which is affecting a large part of the world and this is a really big topic in the world. Manus if we look at g20 and the side conversations, shes in and abe. Ijin ping is this the moment when the penny dropped that there is a stagnant acceptance . Jane for many economists and politicians, that is the message for the last five years. We have been talking about secular stagnation for quite a long time. Manus a lot of them did fight back against that. Jane well, maybe. But you look at this year and a big discussion as to whether or not the government should be using fiscal policy to stimulate growth. It is the recognition that policy is being used. Supporters are moving away from establishment politicians and it makes it much more difficult to do structural reform, which could potentially help to soothe some of these issues that we have. Anna we want to get your thoughts on many subjects. We will put that on hold for the moment. We are going to talk about where Interest Rates should be in the United States, get your insights on that. We are going to talk about brexit, much more to come. Jane foley sticks with us on the program. Manus ample room for further easing. Those are the words of governor kuroda. He is keeping his options open, everything on the table. We are going to talk japan, growth, and the boj. Cranny. m manus alongside me is an edwards. Francine are having a wellearned break. According to people with knowledge of the matter, the final vacancy on ceo jeff baileys Management Team would be filled for the Investment Bank chief position. Billion mario draghi is trying to alt is trying to is tryinge altice to overhaul. Samsung may spend up to 1 billion to replace all of the galaxy note 7 phones that were found to have been able to caught fire and exploded. That is the Bloomberg Business flash. Anna several bilateral meetings happening today on the final day of the g20, including a meeting between Prime Minister shinzo abe and president jane xi jinpi. Manus what are we expecting today. Just let me start with some breaking news out of the sidelines of the g20 summit. We are just hearing that Saudi Arabias Energy minister will be making a significant related to the Energy Sector in about 20 minutes, from his hotel. We dont have the details of what that will become a we are just hearing from a source that the announcement will be significant. This comes as saudi arabia and russia agreed to Work Together to ensure oil market stability. That after the deputy crown prince of saudi arabia met with the russian president , vladimir in, in hong joe on sunday on sunday. Gzhou on sunday. We are watching for what comes out of that talk on sunday. Another key focus is, as you mentioned, the meeting between president shinzo abe and from minister shinzo abe and president xi jinping. That is happening this evening. We are looking at that closely. Given that this is the last day of the summit, we are going to be hearing from president xi shortly with a wrapup statement. Anna . Manus . Shery, think you very much. Governor kuroda says new ideas are not off the table. He made the comments about the bojs current review of the policies. Governor kuroda a lot of people say that trade brings about unemployment, particularly in the developed economies and more mature economies. That is just plain wrong. Trade accounts for a very small percentage. Manus that obviously was not mr. Kuroda, but the essence of what he said was that he rejected the idea that there would be a reduction in the scale of Monetary Policy. However, the market was somewhat disappointed. Affectsey is with us, strategist at rabble bank fx strategist at rabobank. In my underestimating the japanese . , the market went negative for his Interest Rates negative with Interest Rates. The market has been very skeptical about whether japan could go anymore. There was quite a big backlash politically against those reports. Consumers were saving more in order to get to the pension at the end of the line. There were reports of a big glut in the sale of safes, at the time, with people moving into cash. With respect to quantitative easing, a third of all that spending the market was saying, people arent going to be wanting to sell it with all of this supply. Anna what do you think is next to the boj . We heard earlier the boj may not be expected to go further negative down that rate road. They are focusing more on assets, buying other stuff. Jane i would agree with that. I think the political backlash against negative rates is there. I dont think you can go further with the negative rates for now, at least. Interesting, though, with the etfs, it is Something Like a topfive owner of 82 of the shares. Even that, people are beginning to say, hold on, at some point, enough is enough. For now, i think they will extend the Bond Buying Program in some form. Manus lets talk about the yuan. We have the actual trading volumes and the daily reference rate. Every time we see a rally, every time we see a rally in the yuan, the market does not believe the ability im being subjective that thes it fair market does not believe the ability of the boj to suppress the drop in the yuan . Jane i think thats exactly right. If you consider the chinese economy bad loans in china are now at record levels we have had stimulus this year and through previous years through debt creation. The market as skeptical as to whether or not that can be extended sustained. The market is looking at what else is there that can stimulate it and keep it going . Currency becomes the alternative. Anna you think they would want to see controlled depreciation from here of their currency . Controlled being the operative word. Jane this is the real tricky situation. Another way to argue it from their point of view is that theyve got low inflation. , they go back a few years had very low inflation. We saw a significant depreciation of the euro. We saw the yen depreciate, as well. The renminbi was being dragged out at the same time because of the u. S. Dollar. The chinese are now saying, enough is enough, weve got to allow our currency to sit. Anna thank you very much. Jane foley stays with us on the program. Coming up in the next hour of bloomberg surveillance. Manus we have admin shane from shing from bnp paribas. This is bloomberg. Welcome back, everybody. Im anna edwards with manus cranny in for francine lockwooaa and tom keene. Lets get to u. K. Politics. May has had 50 days at number 10 during which she has done a deft job of obscuring her vulnerabilti. Es ities. Erabil the suggests that she is in a honeymoon period. We have jane fully from rabble bank rabobank. This is the political story. Taking our time to work out what brexit means. In the meantime, the data in the u. K. Is really bouncing back. Jane it really is. We did see some of the weakness right after the referendum. That was an overreaction. That immediate data was an overreaction. Whatever way, even if it is an overreaction, it is a relief that we have not seen this aggressive weakening of data in the last six or so weeks. We have seen improvement in manufacturing, construction all looking better. One thing that i would be very concerned about is the indications on the and on investment. While retail sales have been good, the construction industry, etc. , etc. , there has been survey data on investments. That is a good indicator of mediumterm growth. Manus one of those soliloquies of investment is the japanese warning at the g20, who weve invested heavily in your country, make sure you get a good deal. Intimating about the brexit. , iman fx perspective still tempted to ask you, do you sell these rallies in euro sterling . Do you sell these rallies . The is saying that a similar recession will be avoided in the to the im referring services number, a record jump. Anna that is shown in the chart next to you, isnt it . The pound bouncing. Jane whether or not you sell the pound really depends on your timeframe. If you were a mediumterm investor, you should be really cautious, indeed. We know that there are going to be difficult times. We know that article 50 has not been put in place. We know that there were a big question marks about immigration. We know that if the door is closed to immigration, that could have a negative knock on for some businesses. Anna jane, think. Jane foley stays with us. Manus lets check in on the price of oil as we had to break. We are waiting for the imminent announcement from the Saudi Oil Minister. We are getting a big boost from that expectation of that significant announcement. Rating at 49. 30. We ratcheted almost . 10. What will the saudis say . We know the russians and the saudis are in strong conversation. Anna they already talked about working together for oil market stability. This is bloomberg. Im a man is criminal. In edwards is with me. Were talking about having a deal. Reduce Prime Minister theresa may comic key promises made. Imigration proposals made boris johnson, now secretary. Told allow people to move the u. K. If they have sufficient skills. In spain, more pressure on caretaker Prime Minister. Rivals hardening their opposition. It could be forced into a third election in september. Turkey said Islamic State has lost all territory along the border with syria. Socalledom the caliphate from the outside world. Syrian rebel allies launched an against them last month. A vote on the future of chinese roles. A seat in the city legislator for the first time. Record number of votes. Hong kongs biggest election since the prodemocracy protest two years ago. After the g20 summit, president obama will meet with south asian leaders. Trying to assure the may trade agreement can get through congress. The white house still can make a strong case for the economic rebalance of the region. Than me 600 journalists and analysts in more than 200 countries. This is bloomberg. Anna Russia Energy problem lost 80 of the value over the decade. Vladimir putin said he is happy to leave the longtime ceo at the helm. He spoke with bloomberg editor john mikel wait in a john mikel wait in an interview. If i look at a company like this, in dollar terms, it is is worth lessom than 1 5 of what it was 10 years ago into it has fallen from the top. You have had the same manager running it for 15 years. Him anotheren fiveyear contract. What i am saying is you are not as tough on the Business People running the oil side as you might be on the other people. Do you think why have you put up with this . You are a famously efficient man. Pres. Putin this is an obsidian obvious fact. The russian economy. Russian energy. Does is part of the Russian Energy system. One of the gazprom functions is to secure safe passage for autumn and winter maximums to supply companies. Gazprom valuation this absolutely does not worry us. We know what gazprom is worth and will be worth in the coming years, despite for example the development of sarin gas shale gas in the United States and other regions of the world. Pipeline gas will always be cheaper in gazprom is increasing its exports. Look at gazproms reports, especially for the past few months. Sales are rising. I am certain this will be case in the teacher. Why . Because in the near future, development of alternative energy, when you look at the environmental demand, there is tosource other than natural us. As well, perhaps there is Nuclear Energy but there are efficiencies here and there are opponents of Nuclear Energy. Country, the russian federation. Carries all the functions it has been assigned. That the management has been a sign. Of course there are issues and problems, we see them. But i know the gazprom manager is resolving these issues and the interests on the world market. , fully, that well is another question. Many say it needed to be more flexible. Changed theld have price depending on the current state of the economy. It is not even like trading oil. It is a separate business. This means that producing structures must assure they can sell at that price. Russian president Vladimir Putin. Saudi arabia and russia have agreed to Work Together. The two biggest crude producer stopped short of offering a proposal. Saudi arabia could be coming shortly from the g20. Froming in now a reporter bloomberg in moscow that has been working very hard on in interview with president put in. Good to have you on the program. His opinion has lots of good things to say about gazprom. That is right. What we heard from the synod there was sort of a very russian interpretation of what capitalism into companies are about. When we asked him very directly how can you tolerate this . How can you tolerate a manager with an of the company over 80 drop in the sharp this but to slip that is not the point. The appointive gazprom is to oversee if you like russias Natural Resources and in this civic case it is gas reserves. Be very loyal and they have been together for a long time. You have two things combining haired together and certainly there is no sense from president putin that mr. Millers job is in any jeopardy whatsoever even though there might be other changes going on in his inner circle. He seems to be safe. Thatdent put in doing interview, we know what gazprom is, what it is worth and he does not really care what the market thinks anyway. That is exactly right. Yes. Or president clinton, shareholder value is not necessarily for president putin, shareholder all is not necessarily something he cares about. It was suggested in the course of the interview they are looking to sell more of that next year but again this is the purpose of these companies is to really sort of bolster or support president clintons concept of what makes concept ofutins what makes russia a great company. Thank you, john. The mark ciba stone upon in that discussion in terms of the kind of man you