>> china contagion continues. the worst week for asian currencies since 2011. >> japan shrinks them. economics under pressure. >> backing the bailout. merkel makes the case for the deal. welcome to "countdown." guy johnson. hyde. caroline

asian currencies definitely under pressure. china's move last week really shocked the market. i think it continues to tell the story. saw. this big move we this is the move we are seeing here now. it is highlighting the extent of the move we are seeing it electrically show you. month. over the last you could see this they move for the u.s. dollar. the asian currencies really focus right now. caroline: we did an interview with morgan stanley. now there are 10 currencies. how much will we see?

have seen little change coming from the central bank. chief economist saying the government might well be there to steady the ship. guy: let's continue to focus on china. our guest is standing by in hong kong. .> good morning as you say, it is all about the yuan. we are seeing some weakness coming through from hong kong shares. the enterprise indexed has followed by close to 2%. foreigners are exiting out of chinese and hong kong stocks. it does make their assets less attractive. in and out of positive territory today.

it really impacts malaysian stocks. the worst performing in the region today. elsewhere, weakness from south korea. samsung shares on the cost be -- kospi. good movement in australia and new zealand. it is quite a busy day in terms of earnings reports. it is done really well today. this is where the deadly blast was asked week. -- last week.

we are seeing oil starks -- a stocks falling to six-year lows. and the chemical-based company's about to update investors shortly. down 6%. electronics in korea not doing very well. disappointed.one really dragging of the overall kospi. that is a health care stock in japan. i will show you all of the other currencies. perhaps it is going to be more currencies we need to keep an eye on. still falling heavily.

and there is another currency that is being impacted by the devaluation. 2/10 of 1%. a lot of fluctuation. guy: thank you for the update. caroline: keep an eye on japanese stocks. quite what happened. the announcement came a week after its biggest trading partner. how does the yuan devaluation add to their woes at the moment? morning.

it is making things much more complicated. we have seen exports in the country following the steepest in four years. we are starting to see that negative outlook. it is very weak. down 8/10 of a percent. mostly on the bad weather. it does not in line with the corporate rockets we are seeing in japan. telling these is companies the need to trickle some of these profits to employees. spending hasn't looked

too great. the economy is flashing the warning signs. you may remember we saw continuous confidence. inventories in the highest since 2009. they're adding more pressure to the manufacturers to cut production. nothing too great about it. reboot.d a caroline: give us a sense of what some commentators have called for. what does this all mean? will the seamer stimulus on hold? at this point he still

doesn't see a need for the new stimulus. there are contemporary factors. a lot of people are asking questions about the structural reforms. they have slowed down to a crawl. that will be the key to growth here. they are still thinking on this rebound chasing that inflation target. if we continue to see we consumption down the line, they will have no choice but to discuss the stimulus. caroline: thank you very much indeed. adjusted had by number

is not a big number. nevertheless, the cost of production is north of 700. it is coming down. trading stillgold well below that. still profitable mining gold. caroline: there was an interesting rally. generally it has been a downward trend. we look at it to a busy week. guy: they will vote on the bailout.

chancellor angela merkel says it .s still not an option >> with regards to the extension , we have room for more. we did extend maturities. it is oh is possible to do something else. -- always possible to do something else. guy: angela merkel. caroline: we will be watching that development.

they have a july meeting -- they have a meeting on wednesday. guy: it should be better. is that trading arm going to soft in the blow? we'll talk about that as the week progresses. we will look at the u.k. housing sector as well. caroline: we're not building enough. they're trying to make up for the lack. double for the past five years. why can't britain build more

homes? tweet us. guy: we will break on angela merkel's message and we will be talking about the reports out .here that she is hiring a hiring spree at the moment . ♪

.uy: 6:15 a.m. in london these stories you need to know. caroline: consumers and businesses cut spending and exports tumbled. growth.wo quarters of the scene of the explosion. the number of people killed has risen to 114.

for.are still unaccounted businesses have been severely disrupted. caroline: the wreckage of a plane that went missing has been spotted. toeam is heading to the area check the survivors. it lost contact with air traffic control. guy: back to greece. the latest greek bailout is that imf'sman lawmakers with role very much in question still. she said signal she's willing to to help inat police the bailout. hans nichols is on the story.

a defensive angela merkel. said they would do that. the member the last time she lost? she showed confident you get this through. on the reform, she insisted the imf will join. howis indicating here is you put the issue of debt relief. extensiongards to the , the setting of interest rates roomssibly have, we have for maneuver, just like we had in previous times. there's a clear statement that

they cannot allow another haircut. about 10 billion would go for bank recapitalization. she is delaying her trip to brazil. she says it is confident it will pass. he has indicated he'll support the package. we're looking to see how many defections she will have. she's not entirely confident this will work out. they insisted there are no guarantees. caroline: it has been a busy

time for angela merkel. spree? bit of a hiring hans: her office is looking tired drivers and household staff. they're looking for some civil engineers did we have a new i will like guy and to be angela merkel's drivers. this will be great. limits here. send me your -- no speed limits here. send me your resume. guy: i'm in. [laughter] is she doing some home improvements? what is going on there? hans: maybe she will do an extension.

just quite regarded. the civil engineer part -- we are not qualified for that. we want to be her drivers. caroline: we will give you that one. guy: barclays upgrading bmw this morning. i can't believe she just drives audis. she is the boss. you can decide what she wants to drive. that was hans nichols in berlin. caroline: let's shift years. let's get a take on the greek crisis. give us a sense of the groups we

will see jumped. concerned whenry . we have achieved progress since then. very fast.ve they decide to go ahead with a new program. this is a really positive surprise. us. are ahead of at the end of the day, implementation -- this was always the problem.

and the election? >> we believe he wants to get it done as soon as possible. beoline: how much will he able to depend upon the opposition? he has not been in support. have to explain this is the right path for greece. this is not a sustainable situation.

nobody is making the case for the reform. they are still trying to argue that greece is put under pressure. somebody needs to make the case that greece needs reform. agrees. now everybody we need somebody in greece to do it. everybody realizes greece cannot survive in the eurozone without the program. they cannot survive the eurozone without these reforms. guy: if there is any kind of problem, if any issue arises, a failure to implement even the most extreme measures that were imposed, ari back to stage one? -- are we back to stage one? >> this is the last chance for

greece. guy: even a fourth one we are worried about. or we miss something. this is an incredibly tight program. concerned if more a future great government tries to get away with things. this is why they came to power against the reader arms they are now having to swallow. that is part of the problem.

arguing --ey are they are a new party. they are trying to have a balance between the two. i'm just asking a question. i'm reading stories about mario -- if he starts doing it come at maybe i should start doing it as well. defaulting on great taper was always a case in only an extreme scenario of a grexit p it caroline: where would -- of a grexit. caroline: or would you even access this? is there liquidity out there at all?

>> it is about $33 billion. you can buy it. caroline: we're starting to hear angela merkel talking about extending the deadline. >> will most likely take place after. this is inevitable. guy: coming up, we discuss the priorities. we will have a nice conversation. see you after the break. ♪

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it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. caroline: welcome back. 7:30 a.m. if you arguing from brussels. guy: consumers and businesses cut spending's and exports 1.6% between january and march. despite the poor numbers, it was better than the estimate. caroline: the german chancellor angela merkel says the imf will join date greece bailout to help make it happen -- join the

greece bailout to help make it happen. comes as the lower house prepares to vote on the bailout on wednesday. the people killed in the blast has risen. 95 are still unaccounted for. caroline: more about that tragic situation in tianjin. it was a sense of what is the latest. >> their toxic materials where

government officials have that promised a swift investigation. we're getting a clear picture that there may have indeed been violations. guy: this is something the chinese authorities need to be taking seriously. >> it is raising a lot of questions of how this was allowed to happen. on one hand you have the act tianjin, veryhat few people outside of china know it existed. it become central to the government's plan to develop the north of china.

at the same time, there are a lot of questions it if you're going to love this place to grow so fast, where are the regulations and the control to mature some like this doesn't happen? the government will have a lot of questions to answer. it is quite a great guilt for the government to be answering. many businesses affected here in europe. thank you very much indeed. guy: it is unlikely we will see markets drive the yuan rate. good morning. action for the chinese over the last few days. your sense is they are not done yet? >> i don't think they are

anywhere near done. it is in very -- it is very important. managing risk for domestic demand. in the sense -- in the long term -- in the short term, the effect for the yuan on the foreign pipelinelows and the and the highlighting of the fact that asia is that a deflationary risk.

levels.e high debt there is nowhere in the market -- no worry in the market. are we going to see another 4% weakening? is it going to be more fiscal stimulus? >> it is very much going to be a function. china clearly doesn't want to see a panic outflow. it is running the risk of a very costly -- to support the yuan.

caroline: is that happening today? >> i think so. it will help train the markets. it allows the central bank to get some results from the rate cuts. more yuanope for devaluation. the implementation was more market-driven. bet is something that could savings. global there is a lot writing -- riding here that they don't make a mess

of it. [laughter] guy: trading books are being affected. -- you referenced what happened with the fed back in the financial crisis. think about it in those terms. q he continues to have a massive continues to have a massive effect. >> absolutely. there will be a huge rebalancing . it is a capitalist for the massive outflows. there's no question about it. it has been based on the valuable exchange rates.

i logged into the bloomberg terminal. he had his finger on the pulse. is the fed is looking at has come down. the five-year adjustment for inflation premium rate has come down in the last week. what is driving that? inflation? the global story? premium was a u.s. five-year yield and 10 year yield. the real interest rates has come up. there is more plausible explanation. there's a lot riding here. think the fed hike is on

the cards. caroline: do think a fed hike is land? >> i think so. -- is planned? >> i think so. there is a bubble globally and in exchange rate bubble bursting at the same time even before the fed interest rate is being -- it is hardly a reason to raise rates. you have a booming u.s. economy. caroline: thank you very much indeed. before we take it to the break, let's take a quick look at some airline news. a company that is not afraid to bet on china. it is equivalent to the dreamliner. we speak to the ceo about his

plans for the jet fleet. it will replace the current model. very expensive aircraft. seatsl be fitted with 297 40 more than the existing model. they're going from a really expensive airplane to a really cheap airplane. caroline: even wireless connection. and part of a 30 million euro project to the airlines entire airbus seats with wi-fi. >> we are all excited. we will be the third airline globally. we ordered those aircrafts a long time ago you'd almost 10 years ago.

we have been waiting for them for quite some time. we will put the aircrafts on our shanghai routes. caroline: stay with "countdown." next up, we speak with the chief after one company releases earnings. weigh-in on twitter. why cannot britain build more homes? twetet us. see you in a moment. ♪

guy: 6:44 a.m. in london. good morning here and here are the stories you need to know. caroline: defense economy contracted last quarter. businesses and consumers cut spending. exports tumbled.

ending at two quarters of growth . it was better than estimate. guy: angela merkel said she is confident the imf will join greece's third daylight and signaling willingness to make that happen. the lower house in germany prepares to vote on the bailout on wednesday. caroline: and visiting the scene explosion.jin people killed in the blast is 114. .5 are still unaccounted for investigators are try to confirm reports of the warehouse export it may have helped as much as 700 times of sodium cyanide. businesses have been severely disrupted.

guy: they are calling on the president to resign. elliott has more. very much on the ropes at the moment. ratings incredibly low. >> absolutely. it is a look like she will be impeached or resigning. we've got inflation at 9%. interest rates rising to try to curb some of that inflation. related tois scandal a oil company. her personal approval rating has .lumped on top of the you have people taking to the streets to vent their frustrations. feel that the buck

stops with her. caroline: we are seeing similar issues. there are political wrangling within malaysia as well. and a commodities slumped hitting malaysia. feeding into -- >> the parallels are quite uncanny. what the chinese hans: evaluating -- chinese yuan has done -- look at the real against the u.s. dollar. that is what has been going on. china is brazil's number one partner. number onee brazilian export. iron ore. it is being hit on the commodities front and evaluation front as well.

this is playing into what is going on there. fragile five. it was to suffer as a result of rising global interest rates. potential forout the troubled 10. brazilian real -- sorry. 30% over the coming 12 months as well. that will hit brazil as well. guy: how far through this

process? look at what is happening with the fed. .hina is doing what it is doing commodity prices on the fall but it could go lower you are we halfway through this for the global markets? how much further? policy has been easy response to our last crisis in 2007-2008. it was too much debt and too little growth. it would have exported at the same problem for emerging market . we have a global financial economy good too much liquidity. we have this under demand an oversupply. we will see this come through. we are nowhere near the end of it yet. caroline: what should we be most worried about? is malaysia or brazil the focal point? what other countries could we

see? linksre talking about the of globalization over a decade. when you have week level demand and a fall in global trade problems, this becomes follow. get hit first and get hit hard. but we're looking at here is a major migration. the recovery is a very disappointing one.

we want that restructuring. we talk about lost decades. 1980's -- elliott: we talk about lost decades. will this take it be another lost one? lena: i'm really a develop .arkets economist da thing.robably not a bad i think it is probably good where we think the double is good and volatility that. -- bad. i think there is a lot going on.

i think it would be healthy for those economists. on. let's continue we have got this amazing move. people have long memories. they have understanding what is happened in the past. went back into the territory. responsehrough the they are dissipating from the authorities. -- are anticipating from the authorities. reducee are no plans to during thatwe saw financial crisis in asia. they're not really taking the essential think -- banks where

they are. they might rigid is capital controls and hypocrites against the dollar. caroline: this is what it -- and pit it against the dollar. what -- wills is we see capital controls reduced anytime soon? this is what the market is panicking about. >> yes. we have a political scandal involving the prime minister and an investment company where billions in the form of a political donation. oil prices are coming down again. we have the yuan devaluation.

this has been a perfect storm. investors that they won't read reduce capital control -- won't reintroduce capital control. plans.re no to introduce capital control. some of us have difficulty believing it. guy: what is this doing internally within malaysia? how quickly hasn't translated to the quick -- to the economy? how have people reacted to this? are they stocking up on things? malaysia is a commodities producing company. you have got palm oil and rice and sugar.

parts thatchinery are important for companies. it is maybe those buying imported goods that would feel the impact. it does not really translating to the economy. the sentiment is that consumer confidence that lowered business sentiment. but the ringgit against the dollar is not having much on -- they are feeling the pressure. thank you very much indeed. , if the fed comment

is an aggressive, do we understand the implications of that? much of this is important to them? a: it is moving away from the timing of the first rate hike. it is the focus of the markets towards with the rate is. guy: it will be gradual. lena: yes, it will be gradual. perhaps a weaker global environment. they suggest if anything, that that right -- fed hike would be much lower. it will perhaps prevent a depreciation.

that could be the best news for emerging markets. caroline: thank you very much indeed. stay with us on "countdown." we'll be talking about house prices. ♪ ♪

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guy: chinese contagion continues. weekurrency, the worst since 2011. consumers and businesses cut spending in japan. guy guy: welcome to "countdown." malaysian currencies front and center. guy: we are not done with china yet. the fallout is continuing.

all kinds of stuff to do with the fact this week. but it is a china story. back to asian financial crisis territory. the malaysian ringgit is back. people are starting to expect a very significant response from the malaysian authorities, which is why we are seeing the parabolic. almost caroline: oil still playing into everything. interesting,ns climbing to the highest levels since march. we are still seeing consideration that there is going to be further to fall when it comes to commodities. guy: let's find out what is going on. -- let's go to hong kong. >> good morning.

it is a mixed picture in asia for the start of the trading week. we do have some good gains in china. the shanghai composite has been in and out of positive territory, but volatile again. we have seen gains of .7 percent. the hang seng index under pressure. it is down by three quarters of 1%. we have been talking about the malaysian ringgit. the weaker currency playing on the malaysian stock market. it is the weakest performer in the region, down by 1.5%. also seeing some weakness in india, singapore, taiwan, and the philippines. as we head into the close for

both south korea, japan, and australia. the nikkei looking like it will close higher. have a percent gain in new zealand -- australia. second-quarter gdp numbers for japan coming through and they were a better than expected. .6% in aprily one to june versus expectations of 1.8%. we have seen some good gains coming in from health-care stocks in japan, basic materials up by 1%. the oil and gas players are weighing down. it is all about these wild swings in the currency markets, the devaluation of the yuan having an impact on other currencies. we have been talking about the malaysian ringgit, which is

continuing to fall against the u.s. dollar. at those levels we have not seen since the financial crisis. it is extending its 17-year low today against the u.s. dollar. the south korean juan has been under pressure -- the south won has been under pressure. korean wonng the under pressure. yuan, no with the change in the reference rate from the pboc, but we have it very much fluctuating against that u.s. dollar. highs of about 6.4. a little bit of a mixed picture markets.of

the currencies remaining very volatile in asia. guy: nice work, thank you very much. caroline: we have some breaking news, when it comes to u.k. 9%es, 9% uptick in sales, a uptick in its profit. average sales prices are taking higher, a mix of improvements in terms of the market house prices. managing to benefit from what has been the continued demand for u.k. housing. company on an operational basis delivering. let's find out what is going on. ceo joins us now. welcome, david, to the show. congratulations on the numbers.

midst of are in the growth strategy we see playing out over the next three years as we invest into the future growth of business and our plans to between 5000ness and 6000 homes. isoline: how much of a risk raising interest rates in the united kingdom? give us a sense of when you think rates will rise in the u.k. david: if you look at long-term affordability, we are in a situation where paying a .ortgage is relatively stable affordability is therefore good. interest rates are going to rise. that will be gradual and modest. we believe it will allow people

to accommodate the initial interest rates rise. our business is capable of dealing with interest-rate rises over that year as we invest. guy: a number of measures on the supply side -- on the demand side that are obviously driving the story at the moment. have you fully felt the effects of that or are they still coming through? david: we have seen strong support from the government, which is great. it is driving first time buyers into the market with the ability to afford and by their first home. we are seeing 35% of our sales using help to buy, which is great. the government doing positive stuff on the supply side in terms of their drive through the planning process to release land. are you: how optimistic

on the supply side of things that you can meet demand? 245,000 homes are needed per year. we have averaged about half of that. will the market meet the supply needs? businessre growing the quickly. we have invested significantly in new land. we have 19,000 plots within our land bank. this business is growing, we are doing our best to step up activity. the country as a whole has a long way to go to achieve the higher levels of activity we require. guy: any sense you are having to pay your staff more? give us a sense of how much you are struggling to get the right pay. david: it is a challenge. we wereo be that

struggling -- it used to be that we were struggling to get land and customers with mortgages. we are having to work hard to get the required level of labor onto our sites and into our offices. we are paying those people more and that is the strain on the business. at least we are seeing an increased opportunity to grow the business and we are working hard every day to bring new people to the business. we have employed over 200 people more in the first half of this year versus the first half of 2014. to be more specific, how far in advance inflation are you having to pay your staff at the moment? we are trying to get a sense of what the wage pressure story is looking like. curious.

cost of ourat the subcontract labor items. that is where we are seeing the most stress in terms of cost. we think build inflation in our business running at about 7% per annum. the labor supply, that is what is driving the inflation number. you are talking about high single-digit growth. caroline: how important to you is immigration? we might see less skilled labor being able to easily access the u.k. guy: within london and other southeast locations, the supply for domestic and overseas labor is important. we as a business are invested across the south of england. we are a traditional homebuilder. a little bit less of a stress

for us. most of our labor is u.k. domicile and the immigration is not as impactful. guy: why can't the u.k. build more homes? what would your answer to that be? david: we can and we have seen through the planning system a greater release of land. we are seeing 200,000 commissions per annum and that gives us confidence the supply of land is coming through to meet in the medium-term the required number of houses to be built. there are people in our industry who have the capital to invest and the opportunity and the ambition to grow. we are one of those businesses. we will ultimately be able to build more houses each year. caroline: how much do you factor in geopolitical and the factors happening around the globe? concerns about china, concerns

about the emerging markets. do you ever feel the repercussions -- aware andare always cautious about what is going on outside of the u.k. the vast majority of our people are u.k. domicile. the vast majority of our materials come from u.k. businesses. we are a very domestic business. this, what itf does not stop us building houses on a daily basis. guy: nice to see you, congratulations on the numbers. us.line: stay with we look ahead for a very busy week and we are talking about risks to economies. the german parliament vote on the bailout on wednesday.

comments on the deal. the extension of greek debt might be. guy: we will be watching the developments of that story very carefully. the fed releases minutes from its july meeting. that is on wednesday. also on wednesday, the world's largest commodity supplier reports numbers. will the trading side of that business compensate for the cork from -- for the poor commodity side of that business? devaluation, that will work its way through the backend of the week. wednesday, we get the full numbers. caroline: we will be back in two minutes. ♪

caroline: welcome back.

here are some of the top stories. guy: the chinese economy contracted last quarter. exports tumbled. betweenfell at 1.6% january and march. that was better than experts predicted. caroline: china's premier has visited the scene of last week's tianjin explosion. 95 are unaccounted for. investigators are trying to confirm reports that the warehouse may have held as much --700 tons of sodium guy: the wreckage of a plane that has been missing has been region.in the papua

the flight lost contact with air traffic control sunday afternoon. latest greek bailout is set to go before german parliament this week. merkel sent signals that she is willing to consider debt relief to help ensure the imf's participation in the bailout. hans, when we talk about debt relief, we are talking debt extension. is this to woo the imf? hans: they want to do something on the side of greece's debt. germany will not do out right debt reduction. angela merkel, her first comments since coming back from vacation. her 10th summer interview and we

saw a defensive merkel. is it is expected to pass, but at what cost? how many votes is she going to lose? she thinks the imf is going to play along and the imf has given no indication it is going to do so. chancellor merkel: with regards of extension of maturities, the room forrates, we have maneuver. just like we had in previous times, we did extend maturities. it is always possible to do something else, but there is a clear statement the eurozone cannot allow another haircut. vote will be on wednesday. she has delayed her trip to brazil so she can make the case

for the vote on wednesday. this is a 26 billion dollar tranche that would be released. of praiseite a bit for her counterpart. importantly and crucially for this note, the finance minister has indicated he will support it. she is also saying she is not twisting any arms and her deputies are free to vote whichever way they want. she wants to clearly make through -- make sure this goes through. let's turn our attention to what is happening in athens. politics ofus on whether or not mr. tsipras will be calling a general election anytime soon. momentgovernment at the is focused on the disbursement of the first tranche of this

bailout package. the prime minister will start initiatives on the political front. the greek parliament, it is something that has been discussed. this time around, they will probably not offer help to the private a start. they will have to figure out within. 2015 are highly likely. there are two camps in the inner circle. one is contending that may be elections within the middle of september is a better option for the government so that the left platform has a newly formed party.

also, the great people would not have seen the damage to their net disposable income with all of these measures. another camp says the government should wait until the end of october when the measures are voted for by the greek parliament. greek debt relief is on the table and maybe that is something that separates will be able to sell more convincingly to the greek people. guy: we will wrap it up there. thank you very much. caroline: let's get more on that story. greece really a focus for you in terms of the greater euro zone economy? >> one would hope that with a third greek bailout and the risk of a euro breakup contain, we

would've had a greek summer. the risk is a political headline , and it is back. a standoff between greece and -- chancellor merkel will probably face a revolt on wednesday. we have had 60 members of the ruling coalition vote against extending more money to greece. that was double the number of protests vote from merkel's ruling party back in february when the eu was negotiating an extension of the second bailout. relief, imf debt involvement and the implementation risk. what we heard just now was extendinging she is

her own political capital. uncertainte quite political environment at the moment. the periphery is performing really well right now. remarkably so. france, italy not looking so great. germany, not looking so great right now. >> what we have learned is the political union is ultimately the heart behind the consortium. what we have is a new political environment in europe. if we are to get a greek exit, and i think it is a matter of greece -- if we are

it will comehere, into question. there is a limit as to how much debt relief can deliver in terms of greek growth. what we have at the moment is an economy that is operating with an expensive exchange rate. dependent on imported goods and imported capital. the reforms that have to happen are very much in the pipeline and we are looking at a second election in greece within a year. the greek nation has been rallying against austerity. the political risk, far too high for the markets to get relief. caroline: on that optimistic note, thank you very much. always wonderful to have you.

talking about the concerns about greece. they are looking pretty rosy indeed. guy: looks like we will have a fairly positive move to the upside. by .5%.dax up at generally, we are seeing a favorable equity market open expected in europe. plenty of volatility elsewhere. brent has been pushed higher. the commodities story still front and center. prices,: london house

why are owners being so stingy? stay tuned. ♪

caroline: welcome back. it is 7:30 here in london. here are some of the top story this morning. study has indicated that china's economy is growing more slowly than data suggests. they think the economy expanded by 6.3% in the first half compared to the official report of 7%. that may explain why policymakers have stepped up stimulus over the last few days and the move to boost exports. caroline: german chancellor angela merkel says she's confident the imf will join greece's third bailout and has signaled willingness to consider debt relief to make it happen. merkel's comments are the first

since the finance ministers anded the aid package comes as the bundestag prepares to vote on wednesday. guy: the chinese premier visited the scene of last week tengion explosion. the number of people killed has grown to 115. investigators are trying to confirm reports that the warehouse may have held more than 700 tons of sodium cyanide. businesses continue to be severely affected. caroline: let's take a look at what is moving in the asian markets billion juliette saly is standing by in hong kong. insurers really moving on the back of that tragic incident. juliette: yes, absolutely. we are seeing that here in hong kong. the insurer stocks under quite a lot of selling pressure on the hang seng, overall in the red. we are seeing things a little

brighter in china, up by 0.25%. it has been another volatile session as you would expect in china. in terms of the h-shares in hong kong, a bit of an exit is of those because of this weaker yuan. investors feeling that their efforts aren't worth as much, foreign investors fleeing. that is why we are seeing weakness there. on the currency page, we are seeing the weaker ringgit in malaysia impact malaysian stocks, down by 1.6%, making them the worst-performing market in the region today. in taiwan, in the philippines, and in india. we have seen a few bright spots, including thailand and new zealand. some gains in utility stocks there. japan also lifted by utility stocks and health-care stocks, sending the nikkei up around 0.5%. south korea way down today by

samsung. its index closing down by around 0.75%. i will show you some of the major market movers in the asian region. it has been a busy day around the region. in australia, a rail operator coming out with full-year earnings, sending its share price up by 3.5%. hase group in singapore been falling all day. down by 7% in singapore. and samsung in korea really i,ighing on the overall kosp down more than 3% today. yuan,ponse to that weaker we've been watching all the other major currencies as well in the asian region. one which has garnered a lot of attention is the malaysian ringgit, continuing to fall against the u.s. dollar. it is at its lowest level since

1998. continuing to c-17-year lows. down another 0.5%. a lot of volatility in the currency markets. we have still half an hour to go for hong kong and mainland china shares. hong kong weaker as you said, caroline, weighed down by insurers. the shanghai mike it is a little brighter. caroline: juliette saly in hong kong. thank you very much. chinese shares potentially a little brighter. guy: didn't have a great week last week, but looks like they may be opening a little higher. let's show you what is happening here. looks like we are going to open nearly a percent higher for the euro stoxx. the cac looks like it is going to open on the front foot as well. this line here is percentages. i want to show you this chart here.

this is the stoxx 600 over the last month. you can see this decline over the last few days. we get a bit of a pop, but it is on the back of a significant amount of selling. caroline: 3% last week. guy: but it is august musso we need to bear that in mind as well. caroline: now let's change tracks and look at another asset class, housing. their home sellers drop asking prices in the quiet summer months. but this august, they are offering the smallest summer discount in years. elliott gotkine has more. why the lack of willingness to cut your price? elliott: they are being less generous than in the past. the simple reason is supply and demand. there are almost 1/5 fewer houses on the market in august this year than there were the previous year. fewer houses on the market and prices have declined in london

by 1.3%. nationwide, just under 1%. this is a clear sign of upward pressure in the pipeline. overall, the biggest decline are was in south london. gainers, barnett and westminster. my mom lives in one of those and i live in one of those as well. [laughter] caroline: good. keeping it personal. ,et's bring in our next guest and way in a little bit about the asset class that always has success in the u.k. thank you very much for joining us today, stephen. a little bit if you will on u.k. housing. are we likely to see any uptick in terms of pricing going forward? volatility lot of going along in the emerging markets. could we see that come into play

or is it more focused on the interest rates? around thethe point haven is probably more important than interest rates. particularly if you are talking about london, the big driver of a lot of it is foreign capital and a lot of that does come from emerging market countries like china. in primehat property locations in places like london has become one of those places where people park their cash these days. interest rates, less so. from the perspective of some of the macro prudential policies put in place by the bank of england, that is really targeted much more at the middle level of the property market and where you have leverage. a lot of places we are talking about in london, there's not a lot of leverage in the system. do you expect that volatility to continue? are we in the foothills of a really big emerging markets

story or are we already understanding the full extent of it? >> it is difficult to say at this point. there's too really big things going on. one is the fed and the other is china. i think the challenge is clearly the uncertainty around what does the fed hike actually mean for a georgian -- for emerging markets. the bill that has been negative from the perspective of uncertainty. nowle are talking about it because the story has been running for quite a long time. then you have the china story. their ability to control the transition is the big question. at what point do they get to the stage where they feel they have to resort back to the old policies, which is what last week was about. this uncertainty around, are we shifting away from reform? is this a reform thing or back to the old prop the economy with

a weaker currency? i think the volatility in emerging markets, you are likely to see that subsiding. caroline: do you believe this is playing for the market, that the market will have more of a leading role when it comes to the currency, or is this the government being unfair? >> this is more on the reform side. it does slightly help that they free up the currency at a time when the currency goes down, when the economy is weak. i think it is more on the reform side. i don't think this is the beginning of a major devaluation like we saw in the 1990's. guy: back to what elliott brought to the conversation, london housing bubbles and what is going on, we are seeing an awful lot more being pumped into the global economy. the fed is only just wrapping up. japan looks like we could have another go at it. the ecb. everybody.

down, butpriceare the points about london housing, where are the bubbles forming? the stinging a few of mistakes that may we made in the past. >> the point you make is exactly right. on an aggregate level, the amounts of money being pumped into central banks is as great if not greater than it was at the height of fed qe. it is just coming from a different place. i think there are areas like property, some of the money sloshing around in parts of technology, where you are starting to see a lot of money around and people trying to find where to put it. there are other parts of the economy where you are seeing a squeeze on liquidity. that's why china, which has been close to a credit crunch, has had to re-accelerated. they need to do more to accelerate getting rate cuts through to avoid a credit bubble.

caroline: we need to get all out of emerging markets right now? >> i think most people are out. caroline: and remain so? i think the key thing is, on evaluation basis, emerging markets look pretty interesting. the problem is the sentiment is so poor. it is very hard to say, pick this bottom here, because yes, it is cheap. when you look at commodity prices, i think the downward pressure is still there. the fed needs to hike. i do think we are in a situation where, the fed looks at the and we felt that over the last three or four months. you could argue that some of the uncertainty around is driven by the fed. in a way, getting the first hike out of the way could be the

things that settles things down a little bit. elliott: are you talking about money from emerging markets going into the u.k. property market? i wonder how much changes the standard duty would affect people. they are paying hundreds of thousands of pounds. if mark carney starts getting concerned, you could see further attempts to try to curtail those gains. >> we could in the sense of -- they are showing they are concerned about any sort of property bubble. they know that interest rates isn't the best tool. it is kind of a blunt tool. it is not necessarily dealing with the problem. you don't really impact the bit you are trying to impact and you negatively impact the bit that would cause consumption around the economy. it is looking at the policies they looked at. there are things they could try

to put in place as they start to hike interest rates. it is going to be a balancing act. caroline: thank you very much. the asset class that we love so much in the u.k., the topic of most dinner parties, party. on "countdowncome ," germany votes on the greek bailout. we will look ahead to what is likely a busy week despite it being august. see you in a moment. ♪

guy: it is 7:46 in london. it is monday morning. what do you need to know? japan's economy contracted last quarter as consumers and businesses cut spending. gdp fell 1.6% between january and march, ending two quarters of growth.

that was better than estimates of a 1.8% drop. caroline: china's premier has visited the scene of last week's tengion explosion. 95 still unaccounted for. investigators trying to confirm, the warehouse that exploded may have had 700 tons of sodium cyanide. the port remains closed. caroline: indonesian authorities say the wreckage of a plane that went missing with 54 people on board has been spotted. a land search team is now heading to the area to check for survivors. the air flight lost contact with air traffic controllers on sunday afternoon amid cloudy weather. breaking news are just getting at the moment in terms of an order when it comes to airlines. 250 airbus planes being ordered by indigo. check out airbus when it opens this morning. guy: this is the new version of

the aircraft, the new engine option. caroline: these are the workhorses. guy: but that order won't be fulfilled for quite some time. they are still in the process of building these aircraft. a huge order, really just highlighting the expansion plans that india has in the aerospace sector. stephen cohen still with us. we were kicking around at the break where you get out performers. european equities suffering last week. you like japan. we are looking at the china fallout. where am i going to get it? where am i going to deliver the out performers? stephen: you mentioned japan. the data is weak, but the boj is constantly on hand. i think europe is a similar story. that whenmentioned

all the grease headlines were going on, everyone was worried about the grease situation. the underlying corporate data was pretty good. corporate earnings is something europe has not managed to deliver. that is worth noting. that the economic story is going to be modeled going forward. caroline: talking about modeling, does greece bother you? we've got a vote on wednesday. angela merkel discussing debt extension in terms of repayment. how much does that factor into when you are choosing asset classes? stephen: it is amazing how quickly these stories fade. that is one that has faded away. i think the situation now is that we have this deal that is likely to get through the various parliaments, but clearly the greeks have voted for it. now you kind of go into it being a micro story about greece until at some point it will bubble back up again.

if they don't do significant debt relief, it is kicking the can down the road. the thing that will be most interesting is really the story around whether they are prepared -- or what type of debt relief they are prepared to do. merkel's comments have been quite hawkish recently. that is going to be the thing we will keep our eye on. in terms of driving asset classes, -- guy: reporting numbers wednesday. how tough is the commodities space going to the? let's not get into the specifics, but oil is down again. copper is under pressure. the story just seems to get more and more dismal. how deflationary is that force going to be? stephen: i think it is very bad. the reason is the oil story. there are very few commodities out there that are really doing

well in this environment. the interesting thing this time around, and we talked about it last year with respect to u.s. energy companies, this time around i think you will see it in the glencore numbers. the struggle to really get liquidity, to get financing in the commodities space, that is the story we are starting to move into. commodity prices have dropped. a lot of it is driven by what is happening in china. the challenge is going to be credit squeezes within the commodity sector. potentially that takes out some of the excess capacity and maybe that is the sign you are looking for. i think that's the story we are going to see. aboutne: you talk investment-grade credit being one to watch. are there other sectors we should be focusing on? isn't it definitely not commodities? stephen: commodities is kind of a stay away. parts of the liked

high-yield market, particularly in europe, because the qe trade is still there. it is very much in the background, but it is still relevant. when we start to talk about deflation, this income search comes back to the four again as well. i think that is an area we will be focus. guy: nice to see you. thanks very much indeed for your thoughts. stephen cohen. caroline: let's look at what else we are watching for this week. greece. hans nichols has the story. many focusing on wednesday in germany. hans: wednesday is the vote that we are going to have in parliament. they had 60 defections last time from merkel's party. about five abstentions. the magic number seems to the 100. if merkel loses 100 votes, she could be in trouble. last night, her annual summer interview, she talked about how there was no pressure on individual lawmakers, but she says she can't force individual

lawmakers to vote for it. she did get a vote from wolfgang schaeuble, her finance minister. he gave an interview. here's what he told. after truly arduous negotiations in greece, they now know the country cannot get around real and far-reaching reforms. in some ways, you see this in athens and here in berlin, they are pointing back to how difficult these negotiations are. it passed athens. it will likely pass here in berlin. it has a couple other parliaments before that first tranche can be put out the door to repay that ecb loan on august 20. caroline: hans nichols in berlin. thank you very much indeed. guy: data as well coming out. we have been talking about glencore. we've got a report coming out 7:00 a.m. u.k. time.

that will be gone through with a fine tooth comb on a number of levels. this is the largest supplier trader of global commodities. the federal reserve will release its minutes for july on wednesday. we were just talking about the glencore reporting that we are going to be seeing. to what welook ahead are getting at 8:00 a.m. it is not jonathan ferro. mark barton taking the helm. mark: good morning. big day today. china currency stabilizing. further intervention from the people's bank of china. the exchange rate could go either way. intervention could go either way as well. japan's economy contracted not as much as expected. do we need more abenomics? ?ess focus on nuclear energy and of course military spending. antonin joins me. he says, don't fight the chinese central bank.

the european equity market will outperform the u.s. equity market. earnings fell in the second quarter. we know why, the declining price of gold. gordon tells us he's bullish on gold. gold on track for its third annual decline. see you in a second. caroline: thanks very much indeed. let's check in on those futures. guy: looks like we are going to see the euro stoxx of by around 0.8%. the cac looks like it is going to outperform the ftse and the next. that is it for "countdown." caroline: "on the move" is next. ♪

mark: good morning. welcome to "on the move." i'm mark barton in for jonathan ferro. moments away from the start of european trading. let's get straight to your morning brief. japan contracts. gdp go negative once again in the world's third-biggest economy. abenomics under pressure as consumer businesses cut spending. chinese contagion. the yuan stabilizes, but emerging markets feel the pain. no rest fight for the ringgit as the malaysian currency extends the worst week for asian currencies since 2011. and backing the bailout. merkel makes the case for a

great deal of ahead of a key bundestag vote on wednesday. greece owes the ecb 3.2 billion euros this week. that's what we are watching today. european markets just opening. futures indicating we will see stocks open today, euro stoxx futures up by about 0.7%. ftse futures up about 0.4%. one week of the after two weeks of gains. what is happening today? caroline is at the touchscreen. caroline: we are expecting a rebound. we saw a 2.7% selloff in the stoxx last week. with china ringing in everyone's ears, we saw the dollar surged and we saw a bit of a comes turn about the exporters getting hit. today, a bit more tentative buying. a little more appetite for risk as we see a bit of a stabilizn