>> good news is bad news for chinese stocks. >> better than expected gdp data as a sign that beijing will back off. >> greece deal in doubt as the imf signals that it favors massive debt relief that after greek parliament votes on the bailout today. mark: all eyes on yellen -- she addresses lawmakers in washington as markets look at the timing of the first rate hike. welcome to "countdown." we are queuing up a busy data -- let's talk about what's

happening with greece first. a vote is taking place in the greek parliament, mr. sippers saying that -- mr. tsipras saying that he had a knife to his throat. this is one of the most exciting elements of the story -- the imf. it really favors significant debt relief for greece. this is what greece has been arguing. friday, we get the vote in the bundestag. how problematic is that going to be? we will talk to the river party and greece later on the program. how does it see this deal? we will find out a little bit later. we will assess it from a markets point of view -- this is euro-dollar. this hasn't moved over the last couple days as we start to factor in the idea that we could see the imf having a problem -- will that move up further? yellen was on the hill today. that will be interesting as well.

the other big story is very much what's happening with china. second-quarter gdp data beating estimates, policymakers stepping up supports. let's find out what's going on -- yvonne man is in hong kong standing by. yvonne bad news, good news? talk us through the market reaction. yvonne: good morning. we really haven't seen too much investor confidence in the stock market. we are snapping out of that 13% rebound we saw earlier last week, coming back from the lunch break in the shanghai composite down 2%. it has been led by the industrials, the utilities, and we are starting to see big losses here when it comes to those big movers -- it's talk about 24 stocks that went up 10%. you have close to 200, more than

180, firms that have been down today. here we can see consumer goods are down three point 5%, goods and services down 6% telecoms financials, industrials all in the red. pboc is talking about the sentiment -- after we had excited gdp figures, there was a lot of speculation that the pboc won't be stepping in to help stand this anymore. the fundamentals of the economy are seeing some slight signs of stabilization. i want to mention that the stock calls are down to 689, still suspended in trading this morning -- about 24% overall. a pretty volatile day here today. it is coming up slightly from the losses that we saw a earlier this morning. they were talking about how they still see value in china shares

and they expect the share price to rise -- there are some reports coming out saying that 60% of analysts surveyed expect the shares to gain the third quarter. guy: amazing. thank you. let's go to tom in beijing. 7% -- the market was expecting 6.8%. is this down to the stimulus that has then put in question mark can we believe this number? tom: i think there are a couple factors at work. firstly, this is the impact of the stimulus trying to cut interest rates four times now. the first was at the end of 2014 -- they made it easier for banks to lend and refinanced hundreds of millions of youuan. we are seeing infrastructure spending up strongly, and that is why we saw industrial output

accelerating in june. the second factor is a little bit harder to estimate. we think there will probably be a significant boost to second-quarter gdp from what's been going on the financial sector. the equity market is on a tear in the second quarter, shanghai composite raising very strongly. there was explosive growth in turnover, a huge amount of trading volume. in the first quarter we saw that passing to an increase in that financial sector. our suspicion is we will see that story repeated. the problem for china's government, then, going forward is to the extent that it was the financial sector bolstering growth in the second quarter, we have had a significant correction in the equities market and can it be sustained

into the second half of the year? guy: i guess that leads very on nicely to the question -- assuming that policy start to fade is that what we can expect? tom: that's not my expectation. i think the real economy remains quite brittle. if you look at real estate, which is the main domestic contributor to demand sales are up, but new construction continues to contract. if you look at export, we saw exports going back into growth in june, but low single-digit growth, and overseas sales was nothing to get excited about. the government's has two choices going forward -- they can ease through cutting interest rate in providing stimulus at home or they can ease by allowing the yuan to have a competitive

boost. so far, they have chosen the domestic channel. they have taken the view that allowing the yuan to depreciate will come at a significant cost in terms of risking capital. guy: i think we may have a small technical problem. anyway, thanks, tom. bringing us up to speed. let's bring it closer to home -- just when you thought you were done with greece, it turns out you're not. alexis tsipras starts a bid for a bailout, revolts within his own party, struggling to get off the ground as international officials asked questions about the financial sector. speaking on national television last night, mr. tsipras said he had only agreed to the deal with a knife to his neck. >> let me tell you the truth and

allow me not to paint a beautiful picture. the night before the previous one was a bad night for europe. it was not a nice that shall be remembered in the future where steps were made toward the value of european solidarity and democracy. the result of the euro summit and the result of the eurogroup was the results coming from a pressure put on a country and all the people who are in a democratic way. we need to go toward the wishes of the most powerful people in europe within circumstances of blackmail and suffocation. we had to terms on the table -- first, specific requisites or go bankrupt. there was also another version -- referring to a german finance minister -- but leave the eurozone upon an agreement. guy: alexis tsipras talking about the bad night in which he accepted demand for federal austerity to unlock the bailout.

will it get done? we will wait and see. he is trying to get it passed by the current government. there is speculation that we could get a reshuffle. our correspondence are on the ground with the latest. david, let's start with you. how is today's vote going to go? david: it will be a very compressed 12 hour period for the parliament to convene then we are expecting a vote at 10:00 tonight -- a very short. of time in which to get this plan through the parliament. this was his chance to make his case to the people for the first time to talk about many points of his plan specific taxes talking about raising the sales tax. he called it irrational but something he had to do -- he talked about pension reform and the retirement age. interestingly, he said that is something that we should have

done on our own. retiring at 50 is not a progressive policy. >> i think as soon as the ela and the financing from the ecb is back in the picture, which will take place after we vote for the new agreement -- >> so the banks are not opening this week? >> they will not open this week. they will open just after the ela is back in the picture. david: there's the economy minister talking to olivia sterns about the capital that persists. that is still a great concern to athenians. this is something that is still very much pushing down the economy. guy: let's turn our attention to what's happening in the wider story, away from athens. hans, let me bring you in.

the imf is making headlines -- is this a done deal? how serious are these concerns? do you think it will have a big impact in that german vote? hans: they are serious -- the imf is bulking of the terms that were set by the creditors. they are calling for a radical debt relief. the germans had always wanted -- it was always a requirement for angela merkel -- at the imf be at the table. the new sustainability analysis was out over the weekend. here is what the imf had to say -- "greece's debt can now only be made sustainable, with debt relief measures that go far beyond what europe has been willing to consider so far." greases debt -- greece's debt will soar to almost 200% in the next three years. it was projected that it will be at 170% next july and it will

only get worse and they need to do something about the overall debt relief. there are a couple suggestions the imf made -- here are a few. this first one could be palatable -- extending maturities roughly 30 years. that is not a simple extension -- that is 30 years plus a significant grace period. it would mean a fund from germany, actual cash going out the door, into greece's treasury to help them pay down the debt. the other one they have is deep upfront haircuts. that last 1 -- creditors and europe have been clear that it is not something they will go with. the imf held up the possibility that they will not contribute the remaining $16.4 billion, that they would withhold that. the irony in all that -- in

those late-night negotiations mr. tsipras was insisting that the imf would not be brought back into his country. there has been very harsh language about the imf and it turns out that the imf could be mr. tsipras's biggest advocate. guy: more twists and turns. thank you. that brings us to the question of the day -- given what's been happening, given the economic environment that exists in greece right now, did tsipras actually have a knife at his throat when he was forced to sign the deal? it is an interesting line that he delivered in his televised address. what do you do when the deal that was delivered -- is it ever going to be viable? give us your views and let us know. join us on twitter. coming up in a couple minutes we will talk about chinese gdp coming in ahead of forecast. investors not cheered, worried

about the fact that they may get less stimulus in this massive economy from beijing. we will talk about that when we come back. ♪

guy: good morning, it's 6:17 here in london. before the stories you need to know this morning. greases parliament will vote today on the measures agreed with european creditors on monday. the passing of the legislation, which is a key condition of the bailout, is unlikely to be blocks, but members of alexis tsipras's party could withhold support. this comes as the imf says greece needs relief "far beyond what european creditors have been willing to consider including deep cuts to the values of its sovereign debt." the bank of japan has held off from bolstering monetary stimulus.

it will continue to expand its monetary base of ¥8 trillion. the central bank also lowered its inflation projection for the fiscal year through march, 2016. that, of course, is well below its 2% target. >> copy that. we are at telemetry. [applause] guy: those are the celebrations last night at nasa mission control as new horizons reestablished contact after its historic flyby of pluto. the radio signal arrived at 6:30 p.m. eastern time after it had been out of contact for 32 hours. they collected measurements from the dwarf planet. the first batch of data will

arrive on earth later today, with images of pluto, 10 times sharper than the pictures sent back earlier yesterday. we have had further evidence that china's economy is stabilizing as it shall growth figures beat expectations. gdp was 7% higher than the year earlier beating economist estimates of 6.8%. exports were also up, suggesting government stimulus measures are beginning to take effect. let's get an analysis of that china gdp data, on what it means for investors. joining me now is the emerging markets strategist -- good morning, darius. the market didn't like it. darius: they did not seem to like it because investors concluded that we cannot hope

for massive further monetary stimulus from china -- there is no need to do much more now that the economy has stabilized. investors decided, ok, then perhaps the monetary conditions were tighter than we hoped for. at the same time, other markets reacted positively. the stress in the currency market in the form of higher options volatility has declined in the cost of insuring against appreciation has eased, as well. they see it as a return to economic normalcy s. guy: are they correct in that assumption? dariusz: most of the recovery of growth momentum happened in particular due to contributions from the financial industry motivated by massive rises in volume of stocks trading in the

last few months something that is not going to continue into the third quarter after investors got burned in the equity market crash. so perhaps there will be quite a bit of difficulty in maintaining the growth momentum in the months to come, but at the same time, it looks good across the board -- not only when it comes to services, but also when it comes to industry productions, investments, itand perhaps that will compensate for the decline. we remain optimistic that china will maintain good momentum overall and achieve its growth target for the year. guy: is that 7% a real number? is that something that is actually happening within the chinese economy? most people i spoke to seemed to suggest that the fed is probably the real number. dariusz: i don't think 4% will be the real number. perhaps there could be some distortion in terms of the

process, but i am thoroughly confident that they would not diverge from reality as much as by half, which is what your estimate suggests. i think looking at other indicators, such as fiscal revenue, for example, you can conclude that there is an upswing in momentum of the economy and that things are looking fairly good for china right now. guy: can i get your thoughts on what's happening in the employment market? this remains one of the central areas in which people are focused. do you think employment will start to drift lower? dariusz: it seems so based on the q2 data that the labor market is doing quite well in certain areas. there could be a risk in terms of employment in manufacturing, because that part of the economy is not doing too well, but the services sector is much more labor-intensive. this is where we are seeing most

of the growth in china right now. i believe that the employment outlook remains very good, that the government will almost certainly beat its target of creating 10 million urban jobs this year. guy: very briefly, dariusz what is happening with inflation? you need to take a fairly good look at the inflation outlook, to get an idea of what you think the real gdp number looks like. dariusz: it is a very diverse picture. on the one hand in manufacturing, we have die deflation. what i would like to highlight is that normally the gdp growth recovers very sharply to over 70% year-over-year. it is in positive territory, which is an important segment of the economy. we don't have to worry too much anymore that we are slipping into deflation.

that also means there is less need to cut interest rates. any further rates will remain stable for the rest of the year and only require reduction -- guy: nice to get your thoughts, thanks for your analysis. now let's go from what's happening in china to what's happening in the amazon -- not the amazon amazon. to celebrate its first 20 years, amazon is introducing a 24 hour prime day event. it is the same idea as black friday and cyber monday -- will it work? does it matter? caroline hyde joins us now. 20 years old -- that is quite amazing. how are they celebrating? caroline: it feels it can make more deals and sell more stocks, alvin eyes more e-commerce than

black friday. the numbers are pretty amazing -- it could soak $2 billion wo rth. in two sentences of their press release they mention deals four times. the caveat is that you have to join amazon prime. you have to do it for a 30 day trial. but it is all about boosting their users -- you can get the deals that include their own products -- the kindle fire, gift cards, other things -- headphones, tvs. but interestingly, also, the competitions are posted on the other areas of business -- streaming, video content, music content. you can listen to music prime and when gifts -- this is

about boosting their streaming subscribers. solenoid annoyed are other retailers that even walmarts are coming out, saying they will have premier deals. guy: you should sell books. caroline: did you know amazon was originally called? guy: no. caroline: kadabra. but apparently it was too similar to another country -- it was also called relentless. jeff bezos actually liked it. relentless.com still takes you to amazon. guy: why amazon? caroline: that was the original logo -- and a divided by a river. july, 1995, a small office in seattle posting very small profits. guy: thank you very much. coming up on "countdown," the

catwalks. lannett is making a comeback as one of the most fashionable fabrics. we will take closer look. ♪

guy: at in 6:30 in london. these are the stories you need to know this morning. we've heard further evidence that china's economy is stabilizing. gdp for the second quarter was 7% higher than expected. exports were also up for the first time in four months. people think the government stimulus measures are taking effect. greece is parliament will vote on the measurements by key conditions of a fresh bailout that is unlikely to be locked.

alexis tsipras's party could withhold support. the imf says greece needs really far beyond what creditors have been willing to consider. that bank of japan has held off from offering monetary stimulus. the boj will continue to expand the monetary base around $648 billion. they also lower the inflation projections,. let's get more on that boj decision. aaron scott joins me now from tokyo. we are getting further and further away from the inflation target, aaron. aaron: indeed we are. the bank, as you mentioned, trimmed its inflation forecast for this year and next year. this year, it was the fourth

consecutive cut since october of last year. the point being that the bank of japan has been ratcheting down at deflation forecast. basically, the economy isn't really going in the direction that the boj has been hoping it would. this is problematic for eventually could be problematic for governor he wroteiroda. guy: so what did they do next then? is the expectation increasingly building in tokyo that that will be the outlook? arran: first, keep in mind that what they're doing is quite powerful, when you compare it to what the fed has done. it is very strong. economists say yes, eventually it will have to ratchet up its stimulus. a majority of economists said bloomberg survey still expect an increase in stimulus quite a

large number expect that to come as early as october. that would be one year since the boj expanded its stimulus last year. the driver behind this is that the economy is just not picking up as much as the boj expected. it is a tiny fraction of the boj's 2% target. this is all confounding governor kuroda's efforts. guy: placed to get your thoughts, thank you. joining us from tokyo. there is in accord in iran over its nuclear powers. from praise to rallies and condemnations -- president obama said there was no doubt that the deal strengthens u.s. security. president obama: i have no doubt that 10 or 15 years from now the person who holds this office

will be in a far stronger position with iran further away from a weapon and with the inspections and transparencies that allow us to monitor the iranian program. for this reason, i believe it would be irresponsible to walk away from this deal. guy: over in tehran, iranians reacted with relief at the news of the landmark nuclear deal. assad rouhani -- hassan rouhani said it marks a new chapter. >> the page of the past 12 your period was accompanied by illusions of public opinion and has completely turned and a new chapter has begun. this new chapter opens on the basis that the solutions to problems in the world can have a shorter and less costly path. guy: unsurprisingly, israel has indicated that it will continue to lobby the u.s. congress to kill the deal.

benjamin netanyahu called the agreement a "historic mistake." >> by not dismantling a ransom nuclear program, in a decade this deal will give an unrepentant and far richer terrorist regime the capacity to produce many nuclear bombs -- in fact, an entire nuclear arsenal with means to deliver. what a stunning, historic mistake. guy: benjamin netanyahu. let's talk about oil prices -- about what is going on with the koran deal and how that will feed into the wider monetary policy. janet yellen speaks later -- many people will be paying attention. while we initially fell on the back of this deal, it has actually started to pick up -- we are now trading around 58.72. how will that feed through into

the overall story into how monetary policy develops from here? i think it will be a significant issue. janet yellen is going to be speaking a little bit later. remember, for those of us who have been around a while, we get the house first in the senate tomorrow. you used to see the difference but you don't anymore. we are joined now -- good morning, bob. let's talk about yellen and what monetary policy is going to bring to us. you have been fairly skeptical of those that believe that the fed will leave early -- what is the current thinking? bob: my view -- i think looser for longer in japan, loser for longer in the u.s.. for the u.s. and the house to change from september to december, they are pushing it back.

i have said that they won't hike this year and i don't think they will need to hike for at least a year. i think if anything, what happens to oil prices -- they will start to deflate again. i think we might be talking about a looser fed. guy: what do you make of mark carney's comments? he is talking about an imminent rate hike -- he seems a little more hawkish than will be last saw that inflation report. bob: i suspect -- i think the central bank doesn't need to talk up growth and inflation because they want to normalize policy. i think the reality is that qe is not the silver bullet. it doesn't fold anything. in some ways that is quite a deflationary factor. it encourages speculation and not real economy activity. guy: when the wage data becoming?

when do companies start paying their staff forward? there is a huge gap -- a long and historical story -- the gap between gdp per capita and wage rises. you kind of feel that is the missing piece. bob: i talk about structural themes, very deflationary for the world. debt, technology globalization. with karl marx, they talked about the wealth of the world being united -- the workers are the world are not united. companies can hunt the world for cheap labor. has a result, workers' pricing power is weak. i told 500 times the last five years that we have wage inflation in the u.s. -- what we tend to get is a bit of inflation in certain markets are age groups. that in the aggregate, when the participation rate is at

50/40, how are we going to get sustainable wage inflation? henry ford, back in the day decided that he was going to pay his workers a bit more. what he got was an increase in productivity. you think companies will look at it -- walmart is starting to do the same thing. people all start to figure out that if they pay more they will get more. i think we will see real wages go up. there at the levels of the 1970's -- the magic thing that made us forget about wages was debt. i think the only way we will boost it is to boost wages. initially, you are going to have to read about the returns out of industry.

the valuation in the equity market will probably have to adjust first. so far, all the gains of the recovery -- guy: thatguy: was the debt story, wasn't it? bob: but it hasn't gone away. in the u.s., total debt is up 30%. that is the underlying thing here -- that despite qe total indebtedness across the world and even within troubled economies continues to go up. that it's not working the way it should be. guy: last time i spoke to you, you were expecting to back down pretty hard -- what is it now? guy: in thebob: i think there will be a short-term bounce. there was an iran deal, there is bound to be some kind of thing

with greece -- and the chinese have got to respond with a magic solution. i think there may be more to go but for me august or october look very risky from a growth perspective thus from a marketing perspective. and i do think we will start to talk about the fed as a possible cutter rather than hiker within the next six months. i think also that the bank of japan's policy will be tied driven to the u.s.. guy: pretty much everything is. [laughter] guy:bob: particularly the dollar-yen rate. guy: bob will stay with us. bob is looking very dapper today -- linen is back in fashion. that is boosting demand and

prices of european linnen. most of it comes from the coastal regions, which runs from france's beaches north up toward amsterdam. karen conan went to have a look. karen: the blossom falling a few days he year -- these flowers are a rare sight. soon, the harvest from these flax fields will become chic shirts in mumbai are delhi. they supply 60% of the raw materials for the global linen market. >> it is a stressful. as we are evaluating the links of our linen. you can compare it to winemaking -- there is a vintage effect to it. some effects are longer, some are more resistant -- it is a little bit like wine. karen: his family has been

growing flax here for several generations. he and his fellow farmers in normandy are producing the most they have in a decade. demand for linen is booming. >> most of the flax is going to asia, china, india, may be 70%. 30% is going to europe. china wants to buy higher-quality because this is the best quality. karen: five years ago, the indian linen market didn't even exist. now it is going 20 -- it is growing 20% each year. as demand has helped to push up prices as much as 15%. in 2014, 1 man made the fabric -- the rent from lodi -- n arendra modi. >> he is the greatest ambassador for india's linen market. there are many fashionable

people from hollywood too. karen: demand has also been driven by new competent materials -- tennis rackets, guitars, helmets, and surfboards. and producers like pascal are ready to plant more seeds in response to the new popularity. karen conan, bloomberg. guy: those fields look pretty amazing when the flowers are out. there want to leave you with pictures of yesterday's bastille day parade. forces marched in the annual parade, showing the commitment of the country to fight extremism. always a good show. we are back after this short break. ♪

guy: good morning. it is 6:47 in london. let me talk about the stories you need to know. greece's parliament will vote today on a roth measures between european creditors on monday. the party of the legislation, a key condition of the bailout, is unlikely to drop, but made members of mr. tsipras's party could withhold support. the imf says that greece needs " relief far beyond what european creditors have been considering, including deep cuts to the value of its sovereign debt." >> copy that. we are in telemetry. [applause] guy: those are the celebrations from last night at mission control. they established contact with a

historic flyby of new horizons on schedule. the signal came through after new horizons have been out of contact for 24 hours. it took pictures and collected measurements. the data will arrive later today, with images of pluto that are 10 times sharper than the pictures sent back earlier yesterday. we have had further evidence of china's economy stabilizing as the rishel growth figures -- as official growth figures come in higher than estimates. exports were also up for the first time in four months, suggesting that government measures are beginning to take effect. let me take you back to that greece's story and the key vote in parliament today. how will it go? let's get an inside track. david is standing by.

david co.david: if you could walk us through what is in store. >> normally, it takes two days. this is going to be one day. it is going to start at 10:00 and end at 6:30. then we will decide -- david: have dinner? [laughter] >> we will organize this -- we will start around 10:00 and finish at about 6:00 in the morning. david: talk to me about how close you think this will be. your party has thrown support behind the prime minister -- do you think it will be widely supported? >> yes. it is not about how much support it will have -- it will pass

with more than 200 of 300. the question is how many of the governing entities will support the bill. that is a question for the prime minister. david: speaking with people here, many have expressed optimism that the kind of coalition we see here will lead to more collaboration and a different kind of government. do you think that will be the case? haris: the prime minister has said that they will try to push through and stay the course with the current government. obviously, he doesn't have the full support, and he will at some point lou support. it is going to be a game of chicken up to a point. he will try to cajole us into supporting the difficult bills with the opposition vote, and him governing the rest of the bills. i don't think this is going to

work -- there has to be some kind of political bill. you have to face the music at some point. david: if he intends to say in office he wants to see these reforms implemented. there won't be any snap election -- he will stay in power. haris: i do think elections -- he will have to stay the course stay the prime minister. i'm much of the government can. he will have to support austerity. that's what's in the cards. david: is your party pushing for that, for some shakeup at the cap level? haris: no. it is just that our judgment is at some point he is going to lose support. david: let me ask you about a few parts of the plant -- alexis tsipras spoke about something you know well. on behalf of the greek government, we heard about broadening the base, about raising the bail taxes.

do you think that will work? in light of what you know about how the tax system works here how people have paid their taxes here, is it possible to have that kind of reform? haris: it is possible -- it is a half-baked reform. david: how do you mean? haris: they really should have gone to two rates. this will not have the effect it would have, but still, it is a step forward. what we need to ensure is that we take the whole system putting it in ways that raises revenue not just from a rate hike but also we need to get -- raising the sales tax on food obviously creates problems for low incomes. you have to increase help in the segments. david: thank you very much --

good luck today. that was a member of the greek parliament, looking forward to a long day -- well over 12 hours. back to you. guy: thank you very much. bob is still with us -- there are so many issues with this deal, and the imf is on point suggesting some of the major ones. the fact that debt sustainability has not been addressed makes this really problematic. bob: look, i didn't want to say this on this program, but this is another fudge. frankly, it is shameful. that doesn't help the greek people. the reality of the eurozone is very simple -- you can't have a monetary union without a fiscal union. that is the reality. you have to pay up front or through the back door.

frankly this privatization plan -- the different people voting on it -- there is nothing here that is good for greece. i am imagining you'll be back in athens for a couple months. guy: i have my linen jacket. [laughter] if the imf walks away, how will that be? bob: it is kind of collocated, but ultimately greases a paid out member of the imf. the imf would have an obligation to help as much as the eu would have a humanitarian obligation. in reality, the imf is correct -- greece needs proper debt relief if it has any chance of becoming a sustainable space. the risk otherwise, what does the program leave? guy: politically, it could get very difficult for the country. bob: but if your germany, it's

not just about germany -- you might be saying, if greece gets a deal that is good for greece, perhaps the italians perhaps the french may want a piece of it down the road. guy: as you bring up that point -- my first thought go straight to the fact that we got very close to greece leaving the eurozone. i wonder now about the convertibility risk about whether or not this is actually a currency or whether it is -- bob: it is a fixed exchange rate mechanism. this to draghi, as much as he says he will do whatever it takes, cannot commit the eurozone's fiscal unit. as much as he may personally be a federalist and believe in the project until national parliaments are willing to give it up, this issue will not go away. greece is just at the first and. guy: plenty more still to,. stay with us. coming up, burberry is reporting

in a few minutes. we will talk about china -- how will the slow down or stimulus impact burberry's bottom line? ♪

echo good news is bad news for chinese stocks. investors take today's duty pay through the sign of beijing that just beijing will back off it's plan. dimethyl sick -- the imf signals it favors -- all eyes on -- the chair a justice washington at the sign of a rate hike. ♪ guy: good morning. "countdown welcome to." -- welcome to "countdown." the imf is saying that massive

debt relief is required. the chinese state is interesting to -- interesting. u.s. market yesterday positive. despite the fact we saw weak retail numbers. that was not really expected. the number four june was -0.3%. we have a lower oil price, but the u.s. consumer is not saving -- is not spending. that is an interesting indicator. you've had a fourth day higher for u.s. markets. the chinese story is not to be ignored. it is pretty front and center. gdp beat estimates.

tom orlik is an beijing. yvonne let us start with you. take me through this good news is bad news. yvonne: a better-than-expected gdp figure. it looks good for the economy. we're starting to see signs of civilization. there are some investors that are tried to go against all of this and say looks like it may not come to a rescue. there may not be additional stimulus now that things are looking better for the economy here it shanghai down about 4%. continuing to tumble here. the hang seng down about 1%. we're seeing small gaps tumbling in the china index, as well as the chinese companies you can trade here in hong kong as well. to give you a bigger picture here, he you've got 689 stocks

still halted. 24% of the market. you have 790 stocks and exchanges that have down -- that have downed 10%. a lot of read here in terms of vectors. telecom down. blue chips down 6.75%. and bigger picture. we're seeing things in terms of what is going to happen. blackrock -- expect share prices to rise. stock prices not having an economic impact. we have mohammed l on area and -- soft landing dynamics. the rocket collection is impacting the third quarter, but it is not going to derail china.

shares down or present in shanghai. -- shares down 4% and shanghai. guy: 7% -- better than anticipated. talk us through how much of this was stimulus. what exactly the stimulus did. >> so there are two factors behind the 7% figure. firstly, substantial stimulus. a first-rate cast at the start of -- three more rate cuts following that. reduce the debt burden on local governments. all of that has an impact. second -- second factor, second quarter was a very good quarter for the s&p market. we saw an explosion in trading

activity. that has been very positive for the financial sector. equity brokers. china's banks. that is had a positive conservation to the financial sector which we are seeing reflected in the better-than-expected gdp numbers. the issue for china's policymakers is what happens next? the equity market boom is over. the markets corrected significantly. wherein c trading volumes coming down as well. -- we are going to see trading volumes coming down as well. guy: tom, right stuff. yvonne man running us through the markets. i want to bring in news from burberry. the retailer -- this is the

chance over the last six months they are coming out and saying the low single digit sales are likely to decline in asia. they are still having problems in asia. in terms of the wholesale number , down a low single digits. the retail comp number was slightly better cared the overall story in asia is going to cause concern. i want to show you the chart. that is easy six-month chart. that is the decline. the last three days investors of business stock into this number coming out. you can see that process continue. that is the number. certainly investors have been on

the forefront of burberry coming in today. he is still with us. 7%. really? >> i know -- i think most people know to take that number with a pinch of salt. different people have a different view. my view is i'm divided by two. guy: i've heard a lot of people doing that here it bob: -- doing that. bob: maybe we are seeing the same people do that. clearly in a state driven economy, if you are pressing a stimulus button, -- if i pressed his button, gdp slightly goes up. in china, maybe it is different.

i think the other comment i've heard a lot it will not have an impact on the real economy. to me that is nonsense. hope point -- the whole point was to get people to spend money. the other route to growth is drying up. we are getting tougher. we just chilled the bank of china. -- we've just killed the bank of china. a lot of companies are involved. they are going to need to raise cash flow. they could be dumping goods on the west in the next six months. guy: that is the disinflation that is going to be through. bob: we will feel it. crude oil.

i think it will trade lower. you got these two powerful winds blowing to the economy. guy: that lead you back to what we were early -- what we were talking about earlier. bob: that is a great number in the u.s.. the consumer has to come back. pretty much every analyst was telling you that u.s. consumption will now face off. people are being stupid. 20 years ago, the u.s. was a massive quarter of energy. now the u.s. in theory could be an exporter of energy. falling crude is a hit to the economy. it hits texas, oklahoma, all the states. ultimately, the u.s. will become more energy efficient. when you're driving a car doing

3235 gallon, and does not matter -- 30 to 35 per gallon, it does not matter that much. i do not expect anything different from the past. things are getting better. we will be having this conversation. she has to talk it up, because if you think about it the u.s. is overdue a recession. we have an election next year presidential election, which is going to be nasty. it has been quite toxic already. the feds 10 not to want to act -- the feds tends not to want to act. guy: what is the ripple effect

when the fed comes to the conclusion that the raising rates is a bad idea echo bob: -- bad idea echo bob:? balko multiply, people are going to start to realize that trend growth under u.s. is true. the kind of jobs creation that we are trying to achieve is not going to take off. the disparate race -- the two spatial rate is not going to be there. the number of people working is as low as it was. this is a problem for the economy. the global issue is the dollar. the market believes the fed is not going to hike. the dollar should be. that is going to be a big problem for japan. whose only countries -- whose

only other source of growth is export into the u.s. that is going to be one of the key moving prospects of this year. guy: stay with us, bob. coming up, the greek prime minister says he had a knife against his throat when he made the bailout deal. we have the parliamentary vote coming through later. we will talk about that. i want to get your thoughts on this. because he has a knife to his throat, the question we are asking is did tsipras have a knife to his throat? if tsipras did have a knife to a stir, who was holding it? that was an interesting -- a knife to his throat, who was holding it? that was an instinct question. take a break. -- that was an interesting

question. take a break.

guy: eight: 15 in frankfurt. these are the stories you need to know. the bank of japan has held off. the doj will continue to expand --the boj will continue to expand. the central bank also loring inflation. -- also lowering inflation projections for the year. >> ok, coming up -- [applause] guy: celebrations last night at the new horizons -- as the new horizons spacecraft reestablishes contact. the radio signal came after new

horizons took pictures and collected measurements. the first batch of data will arrive on earth later today. we have had further evidence that the china's desk that the china economy has been stabilizing. the gdp for the second quarter was higher. the estimates worth 6.8%. greece is desk rhesus parliament will vote today -- greece's parliament will vote today. members of prime minister alexis tsipras is party -- incomes as the international monetary fund

's that is far deeper than -- mr. tsipras spoke on prime time tv yesterday. he had only agreed to the deal with a knife to his neck. >> let me tell you the truth and allow me not to paint a beautiful picture. the night before the devious one was a bad night for europe. it is not a night that shall be remembered in the future. the result of the euro summit and the result of the eurogroup was the result coming up -- coming from pressure put on a country and people. we remain to go toward the wishes of the most powerful people in europe. within circumstances of blackmail and suffocation. we had to -- leave the eurozone. there was a third version.

referring to two wolfgang schaeuble. guy: mr. tsipras speaking last night on state television and greece. what is next for the country? david powell joins us now. david, let us talk about this 60 billion fund that is designed to sell off state assets. we've all been following greece for some time. let us face it, greece has not -- greece doesn't have a great track record. how do we get from where we are to appear? david: that number appears to be realistic. today, about five years later, there pulled less than 4 billion.

guy: talk about what could be sold. nice land just north of athens therefore they could sell that. david: there are three primary assets the greek government could sell. bankshares the problem is they are probably close to worthless. the government state and banks -- the government stake in banks . the banks closed, the value has probably nosedived. they have stakes in corporate assets. the problem is selling corporate step desk selling corporate assets in a depressed economy.

-- selling corporate assets in a depressed economy. the greek government owns it 70,000 pieces of property. it is difficult to attract foreign investors, because there are a lot of regulations. there are legal disputes on who owns the property here it -- property. the greek government isn't really sure of what it owns. there is a lack of information about this land registry. guy: we have issues with the imf and the 50 billion fund. you wrap this altogether, we got a deal which the markets are teaming is done. david: i think the market wants to see a great deal. the market is realizing -- the only thing the markets tracked

to figure out how far the countdown will go. is it a couple of weeks or months? i guess we will figure that out. i guess it is more likely a couple of quarters. guy: how quickly do people figure out that this is not going to work? david: the analysts will figure that out. i think part of it is consumption in the creditor countries. they can go back to their voters now and say listen, we can go into finance themselves. probably the average person asks fewer questions. guy: services point--tsipras's point is their turn to hoodwink -- at sign bob: the date -- bob: debt is unsustainable.

the solution that seems to present a nice reality but it doesn't. guy: the ecb coming up. bob: the europeans are hoping we have an agreement. i do not think it is going to last. guy: you'll be back in athens perhaps by the end of the summer. when you wrap this altogether and you look at the imf line on this does the imf numbers make sense? they are talking about gdp getting up to 200%. by go that is -- bob: that is why the imf has renewed his call

for a haircut. they assumed only 2 billion euros for privatization. they give you an idea of the large gap between the numbers the imap is talking about and the numbers the euro creditors are talking about. guy: the imf has a less invested interest in this. people like juncker do not have expectation. david: the haircut interesting -- the haircut is instinctive you got to stick around other mechanisms that are going to work. guy: is a massive haircut unsustainable? it has to be dealt with.

is the imf -- if you cannot deal with currency, is the only way to deal with the solution is deal with that debt? you're dealing with the evaluation. things that are normally not in the imf playbook. david: they will help make -- echo -- guy: this comes down to the greek government cannot produce -- bob: it allows people to blame other people. the greeks have an alibi.

zippers has an alibi. when it all blows up greece will not be up to deliver we'll have to start again. fiscal union is the only option. guy: does it make sense when you run the numbers? bob: i think we will be here for quite a while discussing greece. a lot more summits ahead of us. guy: let's wrap it up there. think you very much indeed. -- thank you very much indeed. weighing in on questions today. question of the day, is super saying he had a knife to his throat when he had to go with this deal. as i've already indicated, the better question might of been who was holding the knife to his throat when he signed the deal?

we are going to take a short break. your -- you're looking at live pictures coming to you from athens. it is going to be a long day there as parliamentarians vote on the bailout story.

guy: 8:30 in frankfurt. the stories you need to know. we've had further the evidence that china's economy is a stabilizing. officials -- gdp was 7% higher -- was 7% higher than a year ago. stimulus voters are beginning to take effect. greece is economist book to give out today. greece securing a fresh bailout. alexis tsipras -- greece needs

relief. far beyond what european creditors have been willing to consider. the bank of japan held off from stimulus and trimmed its stimulation. they will continue to expand their base. central banks also lowered its inflation project is -- inflation projections for the year. well below the targets of 2%. we are just about an hour -- half an hour until the trading day starts in europe. i want to show you this. let us go to caroline hyde in just a moment. this is the fair value on where we are going to get -- mildly negative. that number has been passed

around a bit. we are heading for a flat open. lesson 1/10 of 1%. let us talk about the bond market. caroline hyde, all the details. caroline: is you're looking at german debt, costs rising. money that is coming out of germany. that signals risk appetite. today, selling off a little bit. germany selling that's later today. portugal going to be selling short-term debt. yields and not moving on the tenure. money just tentatively going into funds. yields not coming down. we have seen italian cost down for six straight days.

money going into the europe. hope that a great deal has been done. coming up by one ace point this morning. greece is selling short-term debt today. selling three-month bills. that comes at 11:00 a.m. -- 10:00 our time. it is all about germany this morning. back to you. guy: i can probably with a degree of certainty -- the option seems to be similar. we had 20 equity market open. another big market where can be watching, germany. be sure to tune in to bloomberg tv at 10:00 a.m. on the east coast. at the house it is the biennial

monetary policy report. it is closely followed. greek lawmakers are set to vote on a bailout deal today. one of the many challenges that we are up against. correspondence on the ground with the latest. hans nichols is an berlin. david: it is divided into two parts. the committee will be meeting at 10:00 local time. it going to 6:00 this evening. there will be a short break. parliamentarian spoke and said he expects this to go until the morning. it is a process that is good to take a long time. everyone was to have a chance to say -- everyone wants to have a

chance to say. >> [indiscernible] greece, germany and the new agreement. >> banks are not opening to later this week. next they will -- >> they will open when yeley is back in the picture. guy: olivia talking to the greek economist there. he was talking about the liquidity issue. banks close. a concern on the minds of the people is when are they going to open again? guy: that is the story from athens. talk to me about this imf line because this deal feels problematic.

hans: we on a collision course between the imf and germany. we had a official german reaction to this report, basically calling in the debt sustainability that all creditors are talking about for greece. he is saying you have interest payments that are not really reflective of the overall mountain of debt. the idea of a debt haircut should not be allowed because of eu treaty rules. it is a restatement of principles from germany, but it is an indication that germany will not give in to the imf. here's what the imf said, it cannot last night. they are pretty harsh on this idea of the mountain of debt that greek face does that greece faces. it can only be made sustainable through debt relief measures that go far beyond what europe has been willing to consider so

far. greece's debt will be put to percent of gdp and a couple of years. remember a couple of weeks ago, they had it down to 170%. here's what they are talking about. number one, you can extend the maturities due date you can have a -- you can have a 30 year grace. for some of the eu debt. the other idea, exquisite guess explicit transfers to the greek budget. the german budget would transfer money to the greece -- to greece. you had the idea upfront, haircuts. that will not be happening. clearly we have -- extending maturities and giving a long grace. . that is the way you could figure out a way -- there are

differences. germany isn't budging. germany always wanted imf at the table. now mr. tsipras has an ally. guy: hans nichols in berlin. these guys are going to keep covering the stories. it's thing companies -- and sting comments -- interesting comments. great banks are in a -- greek banks are in a official coma. they can survive. a downbeat line coming out of the bone this right now. -- coming out of the bundes right now. barack obama said that no doubt the deal strengthens u.s. security. >> i have no doubt that 10 years

from now, the person that holds this office will be in a far stronger position with iran further away from weapons. and with inspections and transparency that allows us to monitor the iranian program. for this reason i believe it would be irresponsible to walk away from this deal. guy: into ron reactions -- in toronto, reactions. a new chapter for his country. >> the page of the past 12 year. was accompanied by -- 12 year period was accompanied. this new chapter opens on the basis that the solution have a shorter and less costly path as well. guy: israel will continue to lobby the u.s. congress to try

and kill the deal. netanyahu called the deal a historic mistake. >> by not disbanding iran's nuclear program, it will give a richer terrorist regime the capacity to produce many nuclear bombs. in fact, an entire nuclear arsenal with the means to deliver it. what a stunning, historic mistake. guy: benjamin netanyahu, backing that up. it is going to be interesting to see how this impacts mr. obama's residency. he is going to have to address this one very carefully. kuroda is holding his news conference. the bank of japan has held off stimulus and a trend inflation. we will leave you with live pictures coming to you from tokyo.

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guy: 7:43 in london. 8:43 in paris. here is the news you need to know. week parliament will -- greek parliament will vote today. members of alexis tsipras is party -- alexis tsipras's party coming with full support. deep cuts to the valley of its sovereign debt. >> copy that. [applause] guy: celebrations last night. the new horizons spacecraft reestablished contact. the signal was right on

schedule. it came after new horizons have been out of contact for 22 hours. the first batch of data will arrive on earth later today including images of pluto 10 times sharper than those sent back yesterday. we've had further evidence that china's economy is stabilizing. gdp for the second quarter was higher -- was 7% higher than a year ago. suggesting that the government's stimulus is beginning to take effect. european equities start trading in 14 minutes. we head towards that open. we may get a positive open. up by 1/10 of 1%.

joins us now. let us look at the macro picture. how big a focus is is going to be? for my hearing, the speeches like him to differ that much. on the other hand, people are beginning to wonder when this first rate hike comes. >> i think that is going to maintain for the dollar. i do not see it come this year. it will strike a cautious tone. if you look at some of the data the scenario has been decent. the business infantry -- inventory looking ever so slightly. goldman sachs also downgraded their provisions to gdp. i do feel we are going to see any hike this year from the fed. if it does happen, it will be

symbolic if at all. the first quarter of 2016 seems a more likely scenario. guy: the strong dollar trade has been the trade. it has been what everybody's being saying. does the dollar still stand up? brenda: it is -- the last couple of days, and is not going anywhere. it hasn't managed to capitulate on that. i do feel we could see the dollar do a bit of a pullback. even looking at the macro picture, i do not think they are in a position to hike rates. i have been of the view that the u.k. could be a of the fed when it comes to hiking interest rates. whether or not they comes to

pass, remains to be seen. we are past the elections in the u.k., where as we are coming up on them in the u.s. we could see something from the u.k. this year. it would be very small and gradual in some bolick. guy: -- and symbolic. guy: -- brenda: we did see a move up higher. we need to see more detail coming from the u.k.. you do have headwinds coming from europe. a referendum next year. with everything going on in greece, that could flip everything around toward a yes vote. that could be something of an issue. i feel at the moment the u.k. --

sign guy: what our clients -- guy: what our clients telling you? brenda: a lot of people are coming around to the idea that the u.s. dollar is going a little bit over. for a while there, it was seen that september it was deftly going to happen. if not, then definitely december. as time progresses, people are starting to see, maybe not this year. maybe that will make a difference. it is looking a little bit tough at the moment. when speculation dies down, we could see it push a little bit higher. guy: brenda, thank you very much indeed. what happened yesterday with the retail sales, we're going to look forward to the main events.

i want to take you to our twitter question. did tsipras have a knife to his throat? the follow-up to that question is who was holding the knife? i think the knife had a very long handle. according to david. tsipras did not have an knife to his throat actually it was everybody else that had the knife to the third. it was actually the creditors. i think that is and is sing line as well. others suggesting that the guy holding the knife was alexis tsipras himself. very interesting selection of views. i think everybody did not come out of this particular good.

i do not think we are done with it just yet. as you work our way through to the market open that is one of the themes running through it. what is on mr. jonathan ferro's mind this morning. jonathan: i am fascinated by governor mark carney. things are getting a little bit boring for market, the greek situation was like a soap opera. then carney comes along and we are having this 2014 debate again. i think the sun critics will be thinking back to that mansion house speech in 2014 where he did pretty much what he did yesterday. the rate hike never came. what changed between may when he described the market crisis and in the last two months. what is changed? guy: brenda's point about the election is quite itching. it is not the political noise

now. maybe that is giving carney a little more latitude in his ability to think about that rate hike coming through. jonathan: possibly. his testimony to u.k. lawmakers. the mansion house speech when he was called an unreliable boyfriend. when you look at where the market was priced, we're looking at august 2016. that is way off. maybe that was the objective to get things to height up. uk's unemployment out just a little bit later. if he thinks we're going to get a rate hike soon, that wage growth needs to continue coming through. guy: inflation is not there at the moment. not in the u.s. either. the expectation is we're

knocking to see much inflation coming through. bob janjuah is it was here -- bob janjuah was here. jonathan: image you think what the objective is. when you look at the inflation data, the speech delivered by carney is today -- yellen tells us it is about the data, but the data in the u.s. has not been pretty. job creation has been terrific but it has not been a representative about what else has been going on in the labor market. where is the data to back that up? guy: despite oil trading, it has not and it is amazing. you are in a position where the lower oil prices is a negative for the u.s. economy.

it is a drag on gross rather than a stimulus like expected. jonathan: i think we're having this simplest the argument when you get away from record low rates just in case you get an a little bit of trouble and you have somewhere to go. bank of england has this thirst to normalize. people on the other side of athens says you have that hunger to normalize rates. guy: you wonder how long the market reaction today -- seems to indicate they were not do it for long. jonathan: it is not much of a market, is still suspended from trading. it is suspended from ipo. the bottom line is we have a gdp number with their own guidance. i guess their own guidance still counts for something. i think you should probably get

it pretty cheap. guy: did you see it? if you flip it the other way around -- jonathan: it has been a while. it is mark carney. guy: i am not entirely sure. john, thank you very much. mr. pharaoh will be back after the break. that pretty much wraps things up for countdown. -- but the more coming up. on the move is coming up. remember, will have that testimony from the hill in full. we're going to be thing attention to what she had to say. try to figure out what the fed is going to be doing next. i will see you next -- i will see you tomorrow. ♪

jonathan: good morning and welcome to "on the move." we are right here in the city of london, moments away from the start of european trading, let's go straight to be morning briefs. second quarter gdp from the world's second-largest economy comes then 7% above estimates. greek deal in doubt the monetary fund is set for massive relief, the parliament meets later today. the federal reserve chair addresses lawmakers in washington dc as markets wait for clues and for the timing of the first rate hike since 2006.

governor mark carney comments from yesterday will be put around that labor market data. we are creeping up to 8:00 a.m. the dax is flat and futures flat. let's get to caroline hyde for the open. caroline: we have to remind ourselves we are on the largest winning streak since april. 668 euros have poured into european stocks. similar moves and flop -- france. interesting moves in asia trades. china gdp figures beating analyst estimates. has the economy then helped by the stock market gains in the previous