expected to cut rates. that is what i will be watching for the next hour. dax futures up by 55 point. we snapped a four-day losing streak on a stock 600. we will be down 10% from those highs that we hit in march. caroline hyde has your market open. caroline: euro stoxx 50 rose, it looks as though 5100 is up. meanwhile, portugal is rising. weighing on investors minds is the resurgence in chinese stocks, only a 5%. think of a links that the

government has had to go to two in fuel buying in china. they are halting more than 50% of stocks in terms of being able to trade. there is a ban on selling if you are a notable stockholder, if you have 15% you are not allowed to sell. extreme is what usps world management called it. will we see more declines in china? let's have a look there seems to be a movement out of the havens. the japanese yen had been strengthening and now it is coming off of that seven-week high. the yen is lower, currently trading at 121.33. the dollar is slightly less en vogue.

the euro is trading higher. oil, a sudden slight rebound in oil. biggest us long in oil significantly this year, we are down more than 8% in terms of oil. china is the worry, it is the second biggest demand or. iran is a worry, yet another deadline missed in terms of lifting sanctions. we still see morgan stanley stock to saying they are set for a modest recovery and they are getting it. i will leave you with oil at 1.6. jonathan: the 5100 up. let's go to asia.

juliet, the shanghai composite index posted the biggest one-day gain since 2009 they had to do a lot to get that, didn't they? juliet: they certainly did. we have seen some big swings coming in on the composition. -- composite. a lot of volatility if you look at where we are -- opened. we had that slump, we were concerned things stabilized heading into the lunch break, after lunch we saw the buyers moving in on that 50% of the market not frozen. as you mentioned, a lot of measures have been put in place to try and stop these $3.9 trillion equity routes. we see half of the market open. we had high securities doing a share buyback of $3.5 billion.

here in hong kong, looking at a close of 3.7% higher, coming back from that big selloff yesterday. that's all the hong kong index at its worst level since 2009. elsewhere we saw a good movement coming across in japan up by .61%. pretty good outcome considering the pullback from iron ore. it has been about a markets in china and those shares in hong kong. let's have a look at the movers. hong kong exchanges up by 11%. still some of those of stocks that are exposed to mainland china coming under pressure bank of indications lifted on the shanghai composite.

a lot has been thrown at these equity routes it does seem like today we saw a little bit of a breakthrough certainly buying coming back into the shanghai composite closing out by 5.8% in what has been a volatile day. jonathan: thank you very much. let's bring in stephen, he has been watching the developments. brady leaders deploying a host of measures, but one sticking out, give us details. stephen: let's look at this. this is the authority coming in and saying we need to i don't want to say manipulate -- we need a recovery here. about half of the market -- a number of companies, mostly smaller have halted trading.

they have been cut in half, most of these are the blue chips which the governments are encouraging big funds to invest in. now we have the latest news where the regulators coming out and saying, if you are a major shareholder, if you own more than 5% of the shares, you cannot tell -- sell. you must hold it for six months. you have those stocks that have been falling not being able to be traded, now it is just the blue chips being encouraged to have large funds invested. you are creating a rally, which happened today. there were other moves banking regulators coming out allowing banks to rollover loans backed by shares.

they want to encourage buyback of shares by companies through collateralized loans. even the public security bureau the police in china, they came out with a statement saying they will be investigating what they call malicious shortselling of stocks in china. this is a trifecta, if you will of news from policy bodies in china to encourage the market and sentiment did improve. jonathan: you call it the market, i don't know if we can do that anymore. a lot of people say that about the european bond market, things are getting ridiculous. if i looked at the chinese equity market i would think it is falling apart, that is not happening. i look at the bloomberg monthly gdp tracker at around 6.5%, dare i say, while the equity market generates 10, the actual economy is doing ok. stephen: yes. i look at the window and i am in

the heart of shanghai, this is not an economy falling apart. the pace of growth is slowing down, it is coming from a different base. we are not going to get 12% growth rates anymore, it is not going to happen. the latest cpi numbers indicate yes, there is some demand starting to pick up. 1.4% up on cbi, still less than half of the government's target for the full year, 3%. inflation is tamed. deflation continues, deflation basically raises real interest rates that goes counter to what the government wants to do. generally speaking we have seen a bottoming out of the slowdown but now given the volatility of the market, that has thrown a monkey in a wrench if i want to mix metaphors. jonathan: thank you very much.

the short of a lifetime, that is what will gross call the opportunity in china. he tweeted that comment on june 3, a few days from ap close on a shenzhen index. since then it has fallen 30%. on german bonds, he tweeted that and then they had a record low. today we are at 60 basis points higher on the german tenure -- 10 year. on both occasions he did not take his advice. >> i have been very honest that the chinese market is a bubble. the bubble has been popped. to my credit, yes, that trade has been right on. even though we didn't do the trade. jonathan: let's bring in lieu --

lou cappelli. execution, execution execution you can get a call right next cute it badly. when you look at china, we can all say it was a bubble. >> first of all, let me say the evaluation for some parts of the chinese market is not externally high. some parts are in a bubble, but not all of the market. is important for us to see a stabilization in economic growth, i am not sure if we are there. we need to see more fiscal and monetary easing from the government. jonathan: why all the panic? 50% of the equity markets are spending. this is not a developing country, this is the second biggest equity market in the world, why are they panicking so much? >> this is just a correction

from an extreme a strong bull market. the trigger was the regulation of margin trading. now this is changed, when you have 70 people buying equities in a short time, there is a risk. the mac pro and monetary conditions are more important. jonathan: china seems to be addressing symptoms of a problem, not because of. -- not because there's --. as my colleague had written, in the 80's and 90's, japan always addressed symptoms. do drop parallels to china and japan? >> the reason was a huge buildup of private debt, we see same in china. what is really different is the bubble in japan is not

compatible with what we see in china. i also believe that the authorities in china have more control than they had in japan in the 90's. the situation is not as bad as japan in the late 80's. jonathan: what is the feedback loop? if these guys keep kicking the can down the road, when you stop big stockholders from selling, eventually you feel the pain. with the fallout of this decision? >> i don't believe this is sustainable if you are just german by a ministry measure. we need to see a clear commitment by the government to ease policy. we should not forget the inflationary pressure is big. we need to see more in terms of monetary.

jonathan: you have managed a lot of money, would you put any in china? >> we see some value in china, but would -- we would probably wait. jonathan: are you worried about? is a coming from the u.s.? >> it is more the lack of growth in the emerging markets. a potential rate act by the fed will not help. jonathan: overweight equities, where? >> japan and europe. jonathan: coming up, we will speak to paul after a four quarter trading update. then brussels, greek officials will come up with a plan. how could the greek crisis affect tank of england policy? we will discuss the snooze-fest of england decision.

♪

jonathan: good morning, and welcome back. let's bring you up to speed with some of the top stories. the greek of government has extended the nation's capital control through monday. alexis tsipras and his government rush to pull together an economic plan for the deadline.

the proposal may be their last chance to remain in the currency. officials all the u.s. economy moving towards conditions that would support an interest rate increase. they also expressed concerns about a risk coming from china and greece. the bank of england will announce its latest interest rate decision at 12:00 u.k. time. all economics -- all >> almost -- members of the committee will have to assess the economic and can -- impact of the budget. that is the top news, let's check out equity markets. it is a day of green in london. the 5100 is up .5%. the dax is up. we snaps the four-day losing track -- street -- street.

let's check in on the euro, a weaker euro. the german 10 year, yields higher. italian yields down 2.21%. other major moves let's lift a lid on the stock 600. caroline: one of the top winners, development, the biggest homebuilder is up 2.5%. of 11% for the full year. average selling price of a home is up 7%. they say they are expecting their pretax profit to be up 45% , well on track to meet their target.

the profit is the -- profitability to be 20%. meanwhile, the wind party a digital entertainment they have received 110 keeper share coming from gbc. canada's a mel is also helping with the deal. they are working together to year out how they can get a finalize deal. remember 88 eight is also in on the action, that is another company looking to buy the digital company.

this is an ongoing saga. meanwhile, balfour beatty is one of the worst performers today. britain's biggest builder serious concerns, mismanaged construction projects. they had an additional charge of up to 100 million pounds if they keep identifying issues. worries about the bt -- beatty. hayes is up 1.3% today. they did well in asia, europe u.k., and ireland.

i will let you dig into those numbers more. jonathan: i am pleased to say it is in the green. paul is a friend of the show, we are in the green, last quarter of the stocks got punished because the comparables were tough. i was digging through the statement this morning, once again, the fx impact away in on earnings. are you worried about that? paul: you have to focus on things you can focus on. it is good sales growth, it is better profit growth, and excellent cash. i think it is the uniformity that is aiding countries. jonathan: what i look at the breakdown, that has been stolid -- solid for a while come out when i look at the growth

numbers, the majority of the business comes from temporary highs. the smaller side is getting a stronger growth, is that something you continue -- you think will continue? paul: for us in this part of the economy we expect to see permanent growth about two times temporary growth, why? there are people who have not changed jobs, comfort will coming back into the market. things like campaign-finance, a cautious candidate market is stronger. the nice thing is the uniformity across the world. jonathan: we talk about europe i want to talk about the u.k. quickly and the budget announcement yesterday as you say, i strong sector has been construction. you see this headline about a living wage.

what the policies mean for your business? paul: i am not sure. you stand back, we had these in growth. you have to have economic growth to increase wages. you think about people employed by stores on minimum wage it feels like there will be more inflation. the retailers and pass it on -- retailers will pass it on. there are some real surprises in the budget. jonathan: the focus has been on a budget deficit you are saying we could see some strong wage inflation coming through? paul: there are two parts a euro pop -- a year ago i would be confident there would be wage increases, since then we have had oil prices go down.

i think we are seeing 2%. if you think it through, it is trying to push some direct cost across the company. is offsetting wealth by reducing corporation. businesses have to think about that. the real good thing is phenomenally competitive u.k. corporation tax. it makes u.k. a better place to do business. there are some good things. jonathan: to go to the other side of the channel to look across europe, the business has done well across mainland europe. as i sit here need deep in greece your business, and take me back to 2010, 2011, the

channels for what we you would call contagion in the market are different than the real economy what are you worried about? paul: in 2010, the job market was recovering it says all companies and candidates back into the bunker. i just think you could never create the same thing you did last time. we have been talking agrees for so long i personally think it will be irrelevant to the broader economy. in many cases i would rather focus on the bigger european economies the 98% of the gdp in europe. frankly for the rest of the euro, the economy seems good. we are the second largest recruitment company in spain. we are of the g2 percent in this quarter versus the prior, that is a lot of candidates.

the world made be not great, but i will make my life better. i will change jobs, i will get a pay rise -- raise. i think currently there are good underlying activities in europe. jonathan: my final question, typically you feel the pain first in your business, you also feel the economy turn first, as you to our europe, are you experiencing any change? paul: no. europe is strong. we have 14 countries growing. our european business feels well set for the next 1-3 years. jonathan: thank you very much. up next we head out to athens as the greek government rushes to pull together a detailed economic package, can the nation

convince european leaders this one is the real deal? we will discuss that after the break. equities up. good morning. ♪

jonathan: good morning and welcome back. we are 30 minutes into the trading day. let's see how things are shaping up. 5100 pushes higher 0.66%. of the big correction since the record highs of april, the stoxx 600 down 9.98% from the year's high before the open, a marginal gain yesterday, pushing the higher in the green. the euro, weaker this morning bond deals lower.

that is the situation across europe. the big topic as always his grace -- greece scrambling to put together a -- an economic package. alexis tsipras has until midnight brussels time to propose a plan. they say that greece cannot rely on special treatment, she also says the new program would require debt restructuring. >> we have always advised that the program walk on two legs. one leg is about significant reforms and physical consolidation as we have advised in the case of torture goal --

portugal lafayette, and iceland, it has worked. the other leg is the restructuring which we believe is needed in this particular case for it to have debt sustainability. jonathan: let's bring in 18 -- in the team. guy: we need to discuss the deadline the midnight deadline, what are the chances of greece making that? guy: i think they will make it. the question is in what form? alexis tsipras talked yesterday to the parliament about specific measures. what we understand is the letter he sent was better than the previous one, the tone has changed and become more positive.

you have seen that in some of the conversations coming out. there is also a recognition in athens that any program likely to be achieved is likely to be harsher on greece than the previous. the economy here is on his back as a result of which the numerator denominator equation becomes tougher for the economy. to second thing is we are talking about a three-year program as a result it is longer and probably needs to be more strict. that seems to be the understanding coming out of athens. will we get a deal? will be done? i don't know. there is a piece coming out of italy quoting draghi talking about it being difficult, i do not speak italian enough to know what he was saying, nevertheless i think it is being seen as a

50-50 call. jonathan: hans the ecb is one of the creditors, they seem to be more cautious, i am talking about others as well, including mario draghi. when you look at creditors, what have we been hearing? hans: creditors want to seize a specific -- see specific. yesterday they hinted they wanted a three-year program. they importantly said they would do prior actions. they would actually show something immediately as soon as early next week. they also wanted a opportunity. they wanted the opportunity to discuss debt restructuring. the comments are not that on. -- odd.

they were talking about how capital controls needed to stay in place until there was a agreement. if it gets ratified by the parliament, that is a longer-term proposition. what vitamin says is important because it gives you the sense to how germans field earned by the greeks -- feel burned by the greeks. you heard them talk about how leaving the negotiating table was a mistake. they say the greek government is not credible, and we and the creditors should take everything they say with a grain of salt. one other comment we heard from the finance minister of luxembourg, he is talking about the need to have debt restructuring, not write-down, but a restructuring. we have to wait until the night. -- midnight. jonathan: my question on a banks

and when they open is, never mind the controls being unraveled once we have a deal, even if we do have one, we could have capital controls for a long time and then you're talking about parallel currency still even if there is a deal because the process could take so long. when i listen to some of the comments from others saying an exit from the eurozone is the best case scenario not just for the short-term, but the next 1-3 years. it is hard to see even if we get a cam kick on sunday, that this problem will go away soon. guy: i am at the commerce station it is certainly hot here as well as, how exactly do we deal with the bat -- banks? is it possible to get them back into working order without issuing a parallel currency. there are rumors floating around about mergers of the banks. there is nothing confirmed.

we will wait and see what happens. there's no deal, ultimately the banks will have to shut down. then we have to start with new ones and recapitalize, probably with an alternative currency. we have to wait to see what will happen with the deal. maybe we end up in a situation where the collateral being applied to the ela is actually guaranteed by somebody within the eurozone. there are so many permutations. europe has a way of finagling the rules even ecb has a way of maybe finding a way to get around them a little bit, we'll wait and see. where there is a will there is a way. we will wait to see what happens this weekend. the banks will remain closed until then. jonathan: one more question to

you hans, i got to the referendum of the weekend, to the greeks and government supposedly the result would make negotiations easier, you live in germany, have -- how have attitudes hardened? is it harder to get an agreement to the german parliament now than last week? hans: yes. there is a feeling that greece does not understand that germany could be on the hook for a lot of their losses. politically it made merkel's challenge more difficult. if you buy the argument that merkel is willing to bend more than her finance minister i am notched her of that is true she will have a challenge. when you look at a populist press in germany, it has been whipped up. according to two people familiar with merkel's inking, she is willing to let greece go if they do not present credible plans. it seems like she is at that

point where is the credible -- of the plans are not credible she will go to plan b. jonathan: let's bring back in the chief strategist at as it management -- asset management. as you sit around the table at your institution and you come up with these grexit scenarios what are you looking for sunday night? >> i think now from what we know grexit is the likely scenario. let me say there are different scenarios, somewhere between a grexit and a different area. it is possible, but difficult. i think the only option for the greeks is to accept these -- except the deal.

they may be forced to sign something worse than they expected. jonathan: that environment, when you manage money you either invest or sit on the cash. what is the risking -- the risking? >> any outcome will be positive for european equities. if you have a deal, like we have seen in the past if there is a grexit but it is more orderly and germany support spain and italy, that could be positive. we have to wait, but the deal will not be easy and it will be not as good for the greeks. jonathan: when the relief comes where do i want to be?

>> you have to be positioned on equities, but also some type of bond especially in italy and spain. in the 30 year there is more value. jonathan: do really what duration? why so bullish on the long and? >> if there is a deal, this is the year you'll see the biggest rally. jonathan: you look at the equity market and we talk about whether we will get a correction, we can argue about it, we pretty much had an -- a correction doesn't make a difference? how much of a dent -- downside is the messy outcome. >> if there is a scenario like this, i think we can affect -10%

in the market. is there is a outcome, there is more potential for a correction in europe. jonathan: the bank of england and the rate decision. stocks high here in london. the dax up by 81 points. we're back in two. ♪

jonathan: good morning, and welcome back. let's get to your top story. in the u.k. we await a rate decision. shanghai stocks posted the air -- their biggest daily gains since 2009. over half of the mainland shares remain suspended from trading. major stockholders were banned from listing companies. minutes from the federal reserve meeting they express concern about a risk of from china and grace which has only intensified. millions of londoners are contending to the tube site as

they discuss a walkout. the mayor of london describes the action as divisive and unacceptable. meanwhile, the u.k. awaits a rate decision from the bank of england. let's bring in jennifer ryan. another snooze fest? it has been boring. i respect the bank of england, i do not think any investors respect the headline that drops once a month. jennifer: it has been our seventh year. there is a lot to the mdc to think about. to be fair, in august we could see be first split rate but since 2014. jonathan: do you think we could get another?

jennifer: not today. in august we could potentially see it. this time our survey shows solidly, no change. there is grease the budget, austerity measures, the inflation picture. jonathan: you get to the forecast from the bank of england, you see 2.6 2015, we like looking at forecast, but it is difficult. you talk about respecting the bank of england, hardly anyone respects some of the forecasts coming out. which forecast should we pay the most attention to? jennifer: i will not let you get away with that. we did a sophisticated analysis. putting together a league table of who is the best, most accurate on growth and inflation, bank of canada is number one, but their economy is

the least, located. -- complicated. that might be one of the big contract getting factors. jonathan: it is -- is that the process by which they make the forecast? jennifer: yes, they have been looking at their forecasting. there were lots of big misses during the financial crisis. big misses on gdp for all of the major central banks, all came during the recession. jonathan: who is worse? jennifer: bank of japan, but their economy is more complicated. it is an analysis of the massachusetts institute of technology looking at trade and exports it is one lens you can use to look at what central banks have to contend with. jonathan: this is fantastic, it is on bloomberg.com.

i will tweet about -- tweak it out. about 49 minutes into the trading the dax is higher. let's have a look at the euro a weaker euro, down 2/10 of 1%. yield higher in germany, lower in italy. brent is up 1.24%. we will round of the markets and tell you everything you need to know. a busy day ahead, not just for greece, stay with us. we are back in two. ♪

jonathan: good morning and welcome back. that is almost it for this hour coming up, a busy one. at noon the bank of england rate decision. all 41 economist surveyed expects rates to remain at a low. they do not expect a rate proposal to come until december. look out for the imf economic outlook revisions. the greek proposal deadline will

be at 11:00 p.m. u.k. time. the final deadline apparently is sunday. european leaders will meet to assess the proposal delivered tonight, and then apparently if they cannot agree, grexit. another deadline here in europe, apparently it is different. let's get to mark barton who has been digging into the markets all morning. he will bring you the markets throughout the morning. mark: i have ignored the oil slumped in the last five days we have been so fixated on greece and china. to be honest, i have ignored the slump in crude oil. i am putting that right now. in the last five days, through the close yesterday, crude oil, encased -- in case you missed it slumped because of for

reasons, grexit concerns, china stockmarket slump, nuclear deal with iran, and an expansion of u.s. crude supply. one man caused those for, the four horsemen of the apocalypse. he says this, are the fundamentals $10 weaker than they were two weeks ago? i don't think so. look at the green circle, oil fell nine out of 10 days. include -- a close to june 23 $61, yesterday it finished at $51. since peaking on june 10, before then, oil has also slumped, 16%. june the 10th was the highest since december the ninth.

crude has risen 21%, that is march the 11th, the lowest since 2009. it is down 60% from last year. the big question, is oil heading higher or lower? ubs says the slump will lose momentum because the plunge in china and greece's economic crisis will not affect demand for oil. jonathan: we have not ignored oil. china is another thing we have not ignored. i want to imagine a market in europe with 50% of the stocks suspended from trading and even the ecb coming out to tell the stockholders they are not allowed to sale -- so.

mark: 600 stocks fell by the daily limit. 1439 sellers were halted. when 50% of the market is halted, you will do anything to sell. yesterday 1300 companies were held on the mainland that locked up $2.6 trillion of shares, that is 40% of the market capitalization. it rose today, up by 5.8%. the government is battling to restore confidence. it managed it today, will it last? jonathan: mark barton will stay on the market for you. that is it for this hour, "the pulse" is next. they will cover greek unemployment and inflation. stay with us through the morning.

good luck for the rest of your day. ♪

manus: shanghai surge. stocks hit the biggest one-day gain since 2009. the chinese unveil more market boosting measures. midnight deadline. greece scrambles to pull a plan to keep the crisis-hit nation in the euro. contagion concerns. fears over greece and china. today's bank of england rate decision will discover whether carney has pulled an acute greek risk.