Numbers. Will get through the markets in just a moment. 106. 2. Is that it is below expectations. If you look at the difference. The 108. 5 that we were expecting. Down with some of we break it down with some of the numbers. Ceos expected future revenue the future is at 100. 1. It might be a little bit of postbrexit. It might be a little bit of august lull. It may have an impact on fifas money. Ifos janet yellen speech will be taken live at 4 00 p. M. London time, a specific index come i put in there because volume in asia, you can see overall stocks gained volume volumes are 30 lower than the previous month. Brent crude, 49. A good measure to see where that is at 138. Lets get to the bloomberg first word news with nejra cehic. Nejra the death toll from the powerful earthquake that hit italy yesterday has written to 247. It is according to the Civil Protection agency. Flattened that hit the center of three ancient towns. There is fear that more baby buried in the rubble. Investors pulled more than 25 billion dollars from hedge funds last month, the biggest monthly redemption since they were a 2009. Either estimate said total outflows are close to 56 billion. Hedge funds have faced criticism from clients over seed costs and their failure to keep pace with benchmarks. It is almost time to short this years crude rally. The commodities firm that was once the largest independent oil refiner in the u. S. He said that traders should short wti crude. Members of opec will probably not cut outlook month informal meeting. Nigel farage appeared on stage at a rally with donald trump. He spoke about britains decision to leave the europeans just the European Union as a positive example and urged Trump Supporters to get out and vote against the establishment. If you want change, you better get your walking boots on. You better get out there campaigning, and remember, anything is possible if enough decent people are prepared 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. Nejra global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. I am nejra cehic. This is bloomberg. Francine im confused, i thought nigel farage was against foreigners coming up and talking about brexit. Then he shows a in the u. S. Of janetre quite ahead yellen speech. Analysts are expecting analysts analysts are expecting hawkish comments. As investors take to the sidelines, pimco have criticized Central Banks medications. Just centralbanks Central Banks communications. The chair has not come forward to convey we have a mixed message. My guest this morning, luca paolini. Great to have you on the program. They keep coming in. I am confused as to what the market is expecting from janet yellen. Luca i think theres a lot of confusion about what the fed is going to do because the fed is split. You are different views and the market is not convinced, because we have some indication that growth is picking up. Hugelly we dont see this pace in terms of inflation. Francine do we have too much over communication expectation . Is a difficult in these Uncertain Times for the fed to clearly say one rate hike before december before december . Luca the fed is discussing special change with the inflation target. There is confusion about what the economy is doing, but also the longterm goal for the fed for the feds are. Francine you dont think they will hike before the next year . Luca at think it is possible if this strong growth in the u. S. Is confirmed. I think september is very unlikely. I think december is possible. We have to wait for the next you months to see this kind of data. Francine september unlikely because of the u. S. Election . Or likely because you do not see enough strength in ways growth . Luca i think ways growth is actually picking up and i think they are not convinced about the timing of the hike because of the election, but also because we dont have enough evidence that this acceleration growth is real. They want to wait for more evidence. Francine i want to bring you over to my bloomberg terminal. 30 yield, to your spread on treasuries. Going back to levels that we have not seen since the financial crisis at what does that tell us about how fed up bond markets are . Luca it tends to be very cyclical so it is normal that there is some sort of flattening at this stage of the cycle could what is surprising is the lack of any inflation premium priced into the curve. Maybe it is too early [indiscernible] this is tsipras first the lack of inflation premium. Francine inflation has been compounding every centralbank are around the world. Luca if you look at core inflation, the last month, [indiscernible] that. Rket was missed growth was if growth accelerates and inflation remains around 2 , i think we may have some kind of and the market. Growth indicators are not missed in the u. S. Francine if they wait to hike for the fed and janet yellen weights, that they will have to if inflation picks up they will have to hike more rapidly. That will be more damaging than a reversal if the hike in december . Luca the risks that you have on s p, you have a melt up scenario. Oppositeorced to the and that will be more problematic. Decisionwill be a good but we have to wait for the next two months. Paolini next, luca stays with us. Tune in tomorrow for special coverage of the jackson hole economic symposium. Also we do know that governor kuroda will be there. He is arriving tomorrow night. Stay with the pulse. Plenty coming up, including is helicopter money about to take off . Will enforce the bojs hand . Attempts. Er the coup well bring you an exclusive interview with the Prime Minister as the countrys tries to stabilize the economy. Can brexit see a tech exit . Will talk talent in a postbrexit europe. This is bloomberg. This is the pulse. Lets get to the Bloomberg Business flash with nejra cehic. Improvedst reduction stability in the netherlands. The dutch firm says operating Income Growth rose 18 . It has a 6500 stores around the world and annual sales exceeding 60 billion euros, mostly from the u. S. Shares at hp tumbled after hours. A forecast that those short. Expected profit of . 34 per share lower than estimates of . 40. It struggled with slumping demand for its product. New zealand led the world when it gave women the vote and introduced inflation targeting. Now it is claiming another first, pizza delivery by drone. Dominos Pizza Enterprises has joined forces with the usbased flying robot for the worlds first commercial drone pizza delivery. The company says it will Start Testing the service in new zealand later this year and is also looking at using drones in australia, belgium, france, the netherlands, japan and germany. That is the Bloomberg Business flash. Francine the government will act in financial markets. We wait earnings from china construction. Lets go straight to hong kong and speak to francis chan. Francis, great to have you on the program. Forhere stuff were waiting in these results that may link back to the fact that we are concerned about the Financial System in china . Investors will focus on the trends of China Construction Bank and its peers. If we try to refer to the industrywide nonperforming loan ratio, released by the regulator, we see a moving trend with the ratio seizing to rise seizing to rise in the Second Quarter. We can also draw a similar conclusion to the technicality of the major bank in china. Quickly, what are the other risks for these lenders . Are they able to manage them . Francis the chinese banks are facing a squeeze. Cuts. Xed Interest Rate the banks are reprising, their departments are lower. Their deposits are lower. Less a lesser worry. Francine lets get more with luca paolini. Luca, when you look at how the fed should view china or we should view china. We had this horrible turmoil almost a year ago. January was not great. Now we have concerns about shadow banking. There are things that concern us but nothing is coming to the forefront. Doesnt mean it is more stable . Afterwhat we see in china this stimulus in the first part we see a decline in terms of growth and supply. I think it is difficult to expect easing. We will go back to this downtrend in terms of growth which will put some pressure on the fed, because this will be problem for growth. It is more of a risk than reality. China hasrobably in only happened. Francine they can deal with growth. They can deal with the dampening of growth in china. What they cannot deal with this volatility, something much more ugly we could be a financial crisis hike event in china. Are we there . Uca were still in the past the Chinese Authority has not been them to communicate what it wants to do. It would not be a huge surprise if there is another policy mistake that could trigger a risk off kind of market that would force the fed to fuld. That would be a bigger risk than a sharp decline in china. Francine the linkage between china and devaluing the yuan and inflation is one that we try and follow. How big is that linkage . It is difficult to get inflation up, can we blame it all on china . Luca you cannot. Deflation is not a bad is china as bad in china as it was. Has been a huge Deflationary Force in the global economy. There is no change. That is been the case for the last year. [indiscernible] francine where do you see the best returns . We talked about the theory also about possibly raising the inflation target. On a daytoday basis, what does it mean where did he want to put your money . Luca equities, if you think about earnings momentum is improving. The markets are not a little of risk on francine or the u. S. . Luca europe, we will see a lot of risks. U. S. Is still expensive. It is much better to be not invested in japan. In emerging markets were climb japan, where we luca the level of the yen is so high that it will force a response by the Central Banks. Francine a response that will be what . Luca theynd it will find a way to expand the monetary stimulus. Market will dose quite well because [indiscernible] francine what is the one thing people misunderstand about japan . Luca the fact that the country time fortakes a long this to be successful. We have to be patient. We should not forget that japan is the only country where there is a government which can implement the reforms that are required. Francine luca paolini stays with us. Up next, helicopter money on the horizon and it could drop in japan as early as next month. Mark mobius, we will bring you that interview. This is bloomberg. We are beginning to think about what ammunition they have. Ok, letsreaction is go for helicopter money. Lets get money directly to the hands of consumers. They may want to try that but i think they are scared the effect might have of very high inflation. It could get out of control. I would expect that they will try that. That will probably be the next step. Japan is the leader in the sense that what japan is doing is having a global impact. The experiments that japan are trying are being watched globally. So in many ways japan is a leading indicator for the rest of the world. I think they will engage in helicopter money with great care and reluctance. If they do it to carefully, it will not have the desired effect. Francine that was mark mobius on helicopter money in japan. Can the policy help with japans other big problem back on the aging population. Well take a look at the chart of the hour. The Unemployment Rate is 3. 2 , one of the lowest. The white line is the Balance Sheet that boj has. , this isee more qe gone up. Unemployment has gone down. It is a structural problem they relate to the fact that it is an aging population and they have no immigration. Lets get more from luca paolini. When you look at this chart and you like japanese equities. They have been undersold so much. You are expecting more from the boj. What in this chart that can tell us about the issues that japan has . Luca the potential growth in japan is low because you have activity in extreme levels. With this is telling you is there is a structural issue. You dont solve the problem in the longterm i printing money. Longterm by printing money. A change in tax incentives. That is the story about japan. It is stagnating and the central bank is trying to push above potential. Francine does helicopter money do expect you can argue we have seen a little bit of helicopter money already. You expect checks to be put through the door . Luca i think it is too early. It is not an economy that is falling apart. This is the kind of thing you would do in a big recession. Japan is not in a recession. I think it will wait. They will come up with something new. View. My francine is europe coming desk is europe becoming more like japan . Is europe becoming more like japan . Luca if you look at japan, the gdp is better than the u. S. This is the kind of publishing come all of the numbers are lower. It is not an economy in a terrible situation. In europe, i think that is a risk. European banks are making money. There are some exceptions. The backing system in europe is positive. Southern banks and more solid position. I dont think the europe is like japan. There are more political risks but it is a more it is a better position. Francine luca, think so much. Up next, turkey wasted time. We will bring you an exclusive interview with the turkish Prime Minister. We go through some of the currency moves. This is only seven weeks from the coup in turkey. This is bloomberg. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Francine welcome to the pulse, live from bloombergs european headquarters. I am Francine Lacqua could lift it to bloomberg first word news with nejra cehic. Nejra the death toll of the powerful earthquake that hit central italy has risen to 247. The magnitude six tremor struck in and was felt in rome. It flattened the center of three ancient towns. Slippeds is sentiment companiesnd time are still weighing the consequent is of brexit on future demands. The u. K. Acting as germanys thirdlargest export market, we could demand their have the potential to stamp out put in europes largest economy. The spanish in the Second Quarter. Output grew by better than thecast 0. 8 , keeping companies the countrys pace alive. Investorsrt says pulled more than 25 billion dollars from hedge funds last month, the biggest monthly deduction since 2009. Total outflows are close to 56 billion driven by mediocre performance. Hedge funds have faced criticism from clients over steep costs and their failure to keep pace with stock market benchmarks. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. I am their change. This is bloomberg. Francine markets slower this morning. Lets head to mark barton. Mark stocks falling for the first day. The stoxx 600 down. The last time was august the fifth when it rose over 1 . That was 20 or so days ago. Our hold was one company, they live was another. It is forecast to boost the second half profits of joining forces after Second Quarter profits Beat Estimates as of cost productions improving profitability in the netherlands. Shares of by 1. 3 . Treasury twoyear notes, the cheapest relative to 30 year bonds since the start of 2008. Thanks to a large space of hawkish comments from various been officials as we of weight as we await Janet Yellens speech tomorrow. The yields is poised for its highest growth in two months, 75 basis points. Is Interest Rate expectation the blue line is Interest Rate expectation. The 30 yearm yield spread against the two year yield. The extra yield on 30 year bonds onto your notes has contracted the48 basis points, smallest premium on a closing basis since january 2008. The peril that carry trades that demonstrated in this chart returns on perry trades have tumbled from the highest in the year. According to this ubs index which has fallen to percent from 2 high in august fallen from its high in august. Francine in south africa. Beware the carry trade. Francine i am sure my grandmother said some things similar. John kerrys visit to turkey has been greeted by snubs. And next was interview with the countrys Prime Minister, we ask what the future holds for futures for turkeys relationship with the west . U. S. Erica turkey in the have a deep rooted relationship. The u. S. Has existed for 200 years. However our relationship has developed only since 1950. Our closeness turned into a Strategic Partnership in many areas such as the economy and nato. The u. S. Has strongly supported full eu membership of turkey and they defended us against eu member states, some of the eu ministers have slightly shifted their attitudes toward turks the toward turkey after the failed coup attempt and they started to make different statements. Finally, they realized the truth. Today they see it better. Francine that was the turkish Prime Minister speaking in an exclusive interview. Lets bring in jonathan ferro. John freire. John, welcome. If you look at turkey, we manage of it but the fact that joe and he is greeted by lowlevel officials means a lot. Right, the optics do matter. Uncomfortable quite amusing footage. [indiscernible] president erdogan set their stony faced. That is going on. Jimmy unhappy extremely unhappy. You look at what happened yesterday in northern syria, we did a first significant engagement. U. S. Is a big par