francine: the rally continues. u.s.ean, and asian and markets. we discuss extreme market movements. manus: focus on france. exclusive interview the economy minister says he will keep an eye on china slowed down but insists it will not threaten his country's recovery. francine: let the good times roll. data shows consumer confidence at a 15 year high in the u.k. welcome to "the pulse" live from

bloomberg's european headquarters in london. manus: what a week. volatility has been the byword. european markets are trading higher, as asia attract the against today gain on u.s. markets in more than six years. francine: let's get straight to mark barton's for all the barton for all the details. mark: what an amazing week. chinese shares, the epicenter over the last week. have a look at the shanghai composite. as i showed you, a five day chart. because this week has been an extraordinary week. in the last couple days, the shanghai composite has rallied by 10.5%. don't forget. over this five day period, in a number there you can see the shanghai composite is down by 8%. it is down 18% since the yuan devaluation. 38% following the market peak. resurgence is down to

speculation authorities are propping up markets before the president takes the stage at a world war ii victory parade next week. that's what's pushing the chinese equity market higher for a second day. i want to put it in the context of the global equity market. and i chose the msci all country world index, a gauge that tracks developed and developing stock markets around the world and once again, it is a five-day chart. you know what happened on monday. markets slumped. it was the biggest daily slump years, sincen four 2011. get in here once again, it is a five day chart. monday we saw that slump heard 1.7 trillion dollars was wiped off the value of global equities. we had another small decline tuesday .2%. clawing backs been gain since then. after three weeks of declines,

it is set to rise. still 10%ghs till-- below may's record. have a look at the price of oil. what an astonishing day yesterday. like equities, oil bouncing back from a slump. yesterday, i find it hard to find words, because that move there in the context of a one-year chart does not look but as you know, that move is a 10% rally. yes, oil rose 10% yesterday after stronger u.s. growth, weak stockpile data. it is on track for its first weekly gang in -- gain in nine. crude oil fell below $40 a barrel. don't forget. oil is still 30% below that june high. what an incredible week. manus: thank you very much for rounding all of that up. let's head over to asia with the

chinese stock market. the second day of gain. the yuan has risen the most since april on speculation that propping upchina is markets ahead of the big world war ii victory parade next week. joins us.ost this intervention came late last night. this is about saving face. richard: yeah, absolutely. under emphasize how important this military parade that is going to take ofce next week -- two days national holidays. the stock markets will be shot for those two days. but there is going to be more than 12,000 troops, heads of state coming from across the world. and this is really a time for xi jinping to showcase china's growing military and political power.

the last thing you need is turmoil in its financial markets. there was a sense towards the end of next week -- last week that the state felt i had done enough. the market rebounded. and they could start to step back and let market forces maybe take some sense of control. we saw what market forces d id. it seems at some point the state decided to draw a line. when need to make sure that everything is stable. it seems until after this pray that everything will go up from here. they intervened, they raced a fix on the yuan this morning by the most since march. ater the sharp devaluation couple weeks ago suggest again that they want to avoid this question mark over stability and their financial markets and focus, instead, on their political strength and military

strike. and so, that has helped feed into a sort of, the asian rebound, the global rebound. we are seeing that for now. china authorities back in control even if investors are not convinced. francine: think you so much. -- thank you so much. whilst richard was speaking, european stocks really declines. so this goes back to the roller coaster of a week. a roller coaster two weeks, zigzagging, the ups and downs we saw. manus: we had volatility moving 13%. it is really -- that takes us to the twitter question of the day. this is the final one for the week. what frightened you the most in markets over the last weeks? #markets. francine: you can catch up on all of bloomberg's coverage of

the dramatically and the markets with a special edition of "bloomberg best." on saturday and sunday. manus: a look at what else is on a writer this friday. while a lot of investors are hitting the panic button on monday, one japanese trader made orchard. the 36-year-old who goes by the internet handle ci.i.s. made a big bet against the market. he arranges a play-by-play of his trade to 40,000 twitter followers. he claims to have walked away with $34 million. you can reall the full -- read the full story at bloomberg.com. francine: oil is headed for its biggest gain in six years. however, prices are down almost 22% on the sign that a global supply glut will persist. manus: the economy minister in france has pledged to loosen the

country's rigid laws. in an interview with bloomberg, he said that france's labor market will be simpler and more flexible with joblessness near record highs. macron insists his country has little choice but to press ahead with reforms. francine: the youngest economy minister, at 37. tsiprre -- the refusal of as to cooperate can force voters back to the ballots again. an excuse of interview with bloomberg, the leader of the river party says there is a danger that greece will be forced to hold yet more elections in november and december. gdp increased 0.2% after a contraction of 0.2% in the previous period. francine: the u.k. office

publishes a second estimate of second quarter gdp in a half an hour. new data shows that consumer confidence rose to match a 15 year high this month. gets: we will also brazilian gdp figures later on. they are expected to show the country slipped into recession in the second quarter. the crisis drove confidence lower. the nation's jobless rate rose july, the highest level in five years. francine: apple has sent invitations to an event on september 9 where is expected to unveil the latest iphone and apple tv set top box. hint.s a is expected to have a better camera. the event will allow the ceo to address concerns about apple's growth outlooks especially in china. manus: up next, it has been a

markets.for european equity markets just giving up initial gains we saw in the first full hour of trading, but the experts are in the house. mark gilbert. we've got a special risk and reward panel after the break. ♪

francine: welcome back to "the pulse" live on bloomberg tv and

radio and streaming on bloomberg.com, your tablet and fun. manus: it has been a two-week selloff. confidence finally started to return until just over half an hour in europe. one of our next guest says he was surprised by the amount of volatility, but thinks there are pockets of exaggerated moves and they will occur again. francine: mike amy, a managing director at pimco. we are also joined by mark gilbert. thank you so much for coming on "the pulse" for this great debate. mike, our first question is how do you interpret the moves in the last two weeks? visit the markets out of whack? the markets were too fearful? or something deploye -- somethi ng deeper in china? mike: what we have seen are

pockets of volatility. this is the first one. we saw the same with the move. forecastty tough to these bit of two weeks in which you get that volatility. the fact that we see the bounce is a big surprise. generally, markets tend to overshoot. seen bige, we have bounce backs. i would put it in the context of this being the latest bout of volatility and we should expect these to continue. manus: we saw some surreal bounces yesterday. oil up 10%. do you think we have capitulated, and this is the beginning of a reprieve? tok: thank god we just get talk about appeared we do not actually have any skin in the game. thesek mike's right, pockets of volatility. this cannot be a surprise to

anyone. it cannot be a surprise to anyone that china is opaque, and we're not sure whether it will hit 7% growth. surprise to anyone that the chinese authorities are going to interfere with their currency to keep growth on track. and the markets have done quite well. that is one of the main surprises. the s&phat one day on 500, but all the circuit breaker seem to be working. all of the concerns about -- they do not seem to come to the fore. i do not think anyone can complain they could not sell when they wanted to. has been quite a resilient market. francine: we were talking about the circuit breakers. it is the pboc. mike: the trigger for the betweenty was the time the shift in the currency regime and a cut in interest rates. i think that is where the biggest uncertainty was. one of your questions was what is it that struck fear into

people? that was key. between the point of moving the currency and going for the rate cut, there is uncertainty as to whether the currency was going to become the primary policy tool. that is a very different world to one in which you have a complementary set of rate cuts. manus: what is your view now? littlee trying to put a bit of support into the currency. they have gone with an interest rate cut. what do think the big policy lever will be? ake: we would agree that range of policy responses is a much better outcome that one -- than one that is focused on the currency, because, if all you do is move the currency, then you basically just take growth from somebody else. to support and act your domestic economy at the same time, then you potentially end up in a much healthier set of circumstances. for us the, nation of moving the

currency, alongside that, trying to feed domestic demand is a better combination. francine: the markets have actually given what was going on seem to be more resilient than we thought. what was your main take away from the last two weeks? was it that markets and investors were maybe not predicting it but they were bracing? mark: i think the aftermath of the credit crunch is a good one. a lot of changes in how people view their portfolios. you had a lot of changes in how people realize th interconnectedness ofe markets. markets are driven by fear and greed. and we had a long period of gree d. we have now get a more sustained pocket of fear. it is probably cathartic. and it is probably a good thing for people who manage money to again reflect on am i safe?

am i really going to be able to cope with their is a big downturn? am i just riding the wave of optimism? next we get the fed. the key driver next is, has u.s. monetary policy change direction or not? and that is going to be the next big traded. -- trigger. manus: the one thing came out of the -- yesterday's number. a lot of it came out of the u.s. gdp numbers. profits and companies rose by 2.8% in the quarter. u.s.hroough the noise, equities is a strong economy. that is where you want to be focused. mike: it is certainly the case if you look at the gdp numbers. i think the combination -- manus: the lowest in four decades. mike: you look at the data coming out of there and it is

clear that the u.s. stocks from a position of relative strength. the underlying domestic economy looks and very good nick. the fun of plumbing rate has come down. the wages number are running at unemployment rate has come down. o us, i think the u.s. t looks like the storm economy and looks like it is going to continue to grow. francine: thank you so much. us.ayw with we will ask mike more about the fed. ♪

macron: i think we have indeed the shock and the slowdown in china, we have -- the market prices in august. first -- thean see monitoring from the chinese currency extremely adapted. second, we had probably another reaction of the markets the beginning of this week but now it is much more cool. third, when you look at the figures and when you compare this crisis with the asian crisis at the end of the 90's and the consequences on the french economy -- it is needed. manus: i certainly was not --

young man with a big job. french economy minister giving us his thoughts on the events in china. francine: we are back with mike amey at pimco. markloomberg's columnist gilbert. in terms of, we were talking before and how you saw the last two weeks. actually there was a consensus that this was healthy. for anyone who manages a portfolio. is this china trying to fight the fed? or is china essentially the victim of monetary policy? i think it is tough to say that china is a victim of monetary policy imposed by the west because they made the decision to peg their currency to the dollar. they are participants in that monetary arrangement. if you have got them in a quiet moment, they would probably say, maybe we would rather have

broken that arrangement earlier than we did. in retrospect, i think the reason they broke the peg when they did, you started working about a fixed exchange rate. it's hiking. i think it is tough to say they are victim. i suspect they would've rather they would've done this earlier. manus: the one thing we have in europe is growth. i think nine straight quarters. i'm the grinch of this show. i am trying to go for the uplifting thought. [laughter] a little bit of growth, as francine says, but we have got a strong currency. over the past month, the euro is up 2.9%. it is cystitis currency in the basket of 10. that is not what mario draghi wants. mike: part of the deal with the

europeans is to try to get the currency down. that is relatively clear. so, no. if i were a european policymaker the thing that would worry me would be that move in the euro. francine: more q.e. possibly on the way? mike: i was running charts. january, you don't round the 60 billion a month, they are bang on track. they are sticking to their guns. they are going to need to do more than that. the european economy is not in bad shape. more all for liberalization of the labor markets for you look at spain, italy, france -- they are doing what they need to do. you've still got around us unemployment in some countries, particular spain, but it is getting there. if we need you

more, we will do more. i'm not sure they need to do more. started in march. it is now the end of august and we already had a market debating about whether or not they're going to complete this program. now we are talking about them doing more. let's just take a deep breath and say, it's clear they are going to complete this program. it seems, as you say, the world has gone crazy because we were saying the same thing about the fed. the fed is tightening but it may do some q.e. or even lower interest rates. our expectation remains that the next move for the fed is to tighten policy. that is predicated on the view that domestic economy looks like it is doing very well. of course, the inflation numbers are lower than they expect them to be. the eci number is a week number. at some point that they will pull the trigger.

do they go next month? talk fed're going to ina couple minutes. ♪

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with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. manus: breaking gdp figure for the u.k. economy. theeconomy grew .7% in second quarter. exports the big contributor to the gdp numbers. exports rising three point 9% from the previous three months. importers gaining just .6%. tdp up by .7%, including a 1 -- gdep up .7%.

the report showing consumer spending growth easing slightly to .7% " . the pace of government expenditure holding it .9%. business expenditure increased the most in the year, up 5% from a year earlier. britain's strengthen the economy and accelerating wage growth pushing the bank of england to consider whether or not to increase interest rates for the first time in over six years. that's the headline rate. .7%. it is the 10th consecutive growth increase for the u.k. economy. have a look at this chart. this is the quarterly increase in gdp going back to 2000. this here shows we have got 10 consecutive quarters of growth for the u.k. economy. and the increase in the pound. yes, look at that. whoosh. a little bit up for sterling. this is the pound against the basket of nine developed market currencies.

just inching higher on the back of that increase in gdp. bang in line with the previous economy. gdp and the u.k. economy growing .7% in the second quarter. francine: we are getting breaking news out of greece. we understand they have nominated -- a temporary caretaker to the finance ministry. wes is not the first time are the position where there is a person we have not heard of becoming a finance minister. and it is another person linked to a lot of, i would say, economic research, universities. we understand he is at the university of manchester and he's, of course, a major in european economic integration. oufakis,ds me of mr. var a leader and a thinker eddie a university. this comes ahead of the snap elections. 63% think that it is wasn't --

it was a mistake for mr. ti sipras to call these elections. dudley signals on wednesday that a september interest rate increase is looking increasingly in doubt. yesterday, bloomberg caught up with me kansas city fed withdent -- caught up ashley george to get her take. >> we should expect volatility from time to time. ee are in a period of som uncertainty, questions about china, questions about global growth. should expect some volatility. what it means for monetary policy i think is not yet clear. it is a complication. it is something we want, but i'm not ready to say it has some particular long-term effect. manus: now we're back with mike amey from pimco. and the bloomberg view columnist

mark gilbert. just before the break, we had the u.k. numbers. before the break we were debating the fed and when they would go. we checked. it looks like it is 50-50 for december. dudley looks like september is off the board. pimco. bonds. go. mike: our best shot will be december. but i think the crucial thing is not so much the timing. it is the terminal rate. if you look out now and you look at, say, december 2017. we are broadly speaking of funds rate of 1.5%, which given where they start from, to us, that is a more interesting level in terms of, a more interesting data to look at to when they actually go. there is a lot of debate. we would argue that, as things stand, 1.5% looks pretty low in the context of the fed was we

think is on a hiking cycle. our natural expectation for the resting point is a neutral rate for 2. to us, we would say, ok, we can debate whether it is september or december. what you think about the next couple years? that looks too low. francine: how do you play in the markets? mike: underway to the front end of the u.s. bond market and ultimately longer the dollar. whichare the two ways in markets respond in the event there is a change in risk premium on the front end of the u.s. market on the back of the start of the fed rate cycle. at theif we look volatility we have seen in the u.s. treasury market. we have 10-year bonds. it has been a volatile week for treasuries. there is a double-edged sword. because there is this whole debate that china is exporting deflation. oil prices are on their knees.

wages. we are nowhere near target inflation in the united states of america. if you look at that volatility in the bond market -- this market is in the passenger seat. mark: i do not think the bond market has been that volatile. if you look at the backtrack -- will the fed, won't the fed? is china offloading billions of bonds into the market. it has been a very stable bond market. the bond market has been pretty reselling. all of these concerns about bond market liquidity, i do not think that has come to the fore. it'll be interesting to see if it turns out that all of those concerns about bond markets are banks is trying to push back on the regulators and saying, stop regulating us so hard, because bad things happen with your debt securities. i don't think that is going to fly is an argument. what worries me about the fed is they're raising rates for

philosophical rather than inflationary reasons. of england the bank are both in the cap as they are nervous of the zero band. they want to have more ammunition in. but the idea that all of the indications that we look at for the outlook for inflation, none of them are saying that prices rise.ing to there are more worries about inflation and all of those indicators. with that in mind, i worry that they are raising rates for the wrong reasons. to idea to raise rates now lower them later. is just insane. all of the countries that have have hadtes recently to reverse. i think it would be damaging for fed credibility if they raise interest rates before the end of the year and then first half next year they have to reverse that move. i think it would be the worst of all possible worlds. francine: do you expect a tiny increase in interest rates and may nothing for five months to avoid that credibility issue?

mike: i think if they go, the thet few, from 25 on official target to 50 and holding it 50. i do not think the markets will buy that. because as mark says, it's a big deal. so, maybe they do 25 and get rates up to 1. pause i think would be tricky. francine: thanks so much for your time. manus: up next on "the pulse" france's economy minister pledges to tackle the country's labor laws. we will hear from him on his thoughts of that after the break. ♪

francine: welcome back to "the pulse" live in london. inus: u.k. gdp grew by 0.7% the second quarter. numbers that have just been really scared exports picks up, rising 3.9%, their biggest contribution in gdp in four years. business investment increased 2.9%. that is the most in the year. today's number is the ons second

revision and leaves the headline figure unchanged. francine: the refusal by the ek prime minister cooperate with european parties after next month's election could force voters back to the ballots again. that is a warning of the leader of the country's river party. he says there is a danger that greeks will be forced to hold more elections in november and december. last: new data showed this monday, one in every seven human beings logged onto facebook. that figure is different from the numbers facebook discloses when it reported results. those are the average number of daily uses over a 30 day period. million active6 daily users in june. overall, it is 1.5 billion users who logged on in the last month. francine: the second reading of u.k. gdp came out a few minutes

ago and it confirmed that the british economy grew by 0.7% in the second quarter. that came after new data from u.k. consumer confidence rose. manus: we are joined by liz martins and jamie murray. great to have you here. a nice set of numbers. straightgreat -- 10th quarter of growth. exports -- this is where i want to quiz. you maintained that exports have not then the shining light. but they are certainly part of this set of numbers. liz: we had a bit of the heads up that experts were going to make -- exports were going to make a strong contribution. for all the talk of strength in the currency, this is it very strong number from exports. but i would caution that there is volatility in the data. we had a strong number in q.2.

sometimes it goes up and down. broadly speaking, i think there is strength across this data. it only takes a couple of extra exported planes to knock numbers around. francine: so, we are looking for a rate hike? liz: we believe the first rate hike will come in the first quarter next year. there has been some turmoil from the markets perspective. expectations have been pushed back this week. possible some's of those expectations have been overdone. we look for february. manus: there we go. harmony. singing off the same hymn sheet. you both say fed european why are you both so far away from the market? and the market has retrenched to august. why are you still hang your hat on february? jamie: i think the market tends

to look more inflation. economist with good inflation two years ahead. and that is what the bank of england is looking at. slack looking at wages, a in the u.k. economy, and we are thinking that some inflation will come through soon. liz: you want to be ahead of the curve, not behind. we have seen some signs wage growth is picking up. we had quite a job in core inflation. i think they will look at those numbers. we are happy with february. francine: when you look, and what we have been talking about here is when you look at the turmoil that china has incurred and the rest of the world follow it, is that going to impact, not necessarily the boe's decision, but what we see in the numbers to come? divided into two chunks. there is volatility in chinese equity prices. unwinding, it's natural.

and then this other bit which is perception of slower growth in the medium-term pichai is the fastest-growing economy in the world. it will still be. we do not think there will be an enormous impact on u.k. gdp. manus: let's talk about currency, because everyone has been saying lower oil prices on the currency -- you and i had this conversation -- are the two biggest drags in the argument against a hiking cycle. the currencyok at in terms of his position given the global volatility we have seen recently? currency is a big reason keeping inflation contained, and the more that happens, the more inflation expectations will be contained over the medium-term. for us, we have concerns about sterling further out -- structural concerns over the budget deficit. for now, i think anyone with a positive interest rate is a tracking -- attracing inflows --

attracting inflows. francine: thank you for joining us. growth fallsench behind his peers, unemployment remains an all-time high. and voluntary rips through markets. the economy minister says things must change. in a bloomberg exclusive, our reporter spoke to him about france's economic future and the threat from china. francine: we are joined live from paris by caroline. he worried is that china slowdown will have an adverse effect on the front economic recovery but he was not too worried. caroline: he was a little worried but not too worried. he said he does not expect the chinese slowdown to really derail the french economy, which is good news. growth ineady had 0% the second quarter he thinks the market overreacted at the beginning of the week. now the situation is getting

more calm as we can see. panic marketr the was a shock for france. macron: i think we have indeed a shock, the starting point of a slowdown in china. we had basically the market prices in august. but now what we can see first, the monitoring from the chinese authorities is extremely adaptive. probably another reaction of the markets the beginning of this week, but now it's much more cool. third, when you look at the figures and when you compare this financial crisis with the asian crisis at the end of the 90's, the consequences on the french economy is limited. but we all have to follow extremely carefully the situation, and we will have to make the maximum to help chinese

authorities to monitor the situation. caroline: does that mean the european central bank should do more in case the situation does not conclude? macron: it is definitely too atly in the coming days jackson hole, we will have a series of information coming from the fed and the ecb. it's important to see how the fed will react to the situation. i think ecb today is delivering its q.e. that is very important. we have the first impact. and regarding the consequences, i'm sure the ecb will take all of the adaptive measures to accompany the european and the eurozone growth. francine: caroline: the chinese slowdown will have close to nil this year .nd limited impact he does not expect the ecb to intervene and he expects the fed

to raise interest rates not before december. manus: great interview. very, very well done. is the. rugby world cup that starts in just under three weeks have you got tickets? francine: i do. a lot of tickets. more than i care to have. but we speak to one of the tournament's sponsors about what the event brings to the brand and what they hope to achieve for the association. ♪

francine: welcome back to "the pulse" live on bloomberg tv and radio and streaming on bloomberg.com. manus: the rugby world cup when england takes on fiji. ahead of it is mark barton who spoke with one of the tournament's main sponsors about what the world cup brings to the brands and the results it hopes to achieve that association. >> i won't give you an exact numbers but it is tens of millions of pounds. again, we have to remember, it only comes around every four years. to when it does it you want maximize its potential. the impact in the u.k. with fans just arriving here would be one billion pounds for the u.k. economy. this is the third largest sporting event in the world. it is almost not connect -- neck soccer worldh the

cup. it is only olympics that is behind. i know the u.k. is a sports crazy country. people the length and breadth of this island are going to get behind this. it is not just about the stadium. so, people that are not looking to have a ticket for the game, they will have the opportunity to meet fans from all over the world, all over the world that will be here. hopefully have a nice cold glass of heineken and see their team winning. mark: how do you choose your sport? you have been associated with the world cup since 1995, european club rugby. how do you choose which sport to associate your brand with? david: the first thing is having a presence in sport is critical.

givenbrand like heineken, its global reach, platforms that have a global reach our important. that is why champions league is watched all over the world and it is important. was foreken cup it many years. watched all over the world. the image of the sport is remarkably important to us. the image of the event. rugby world cup -- very prestigious. the same thing which average -- with champions league. it is the pinnacle of club soccer. when you talk about the heineken cup, it was the pinnacle of european club rugby. mark: the branding, it was the heineken cup. david: these things happen. european european made that decision probably for the right

reasons. again, we had a tremendous run. we are still a partner. we are a valued partner. we intend to continue to remain without sponsorship for the for seeable future. our viewers it is the second hour of "the pulse" with francine and myself. here is what we will be checking out. francine: two exclusive. the ukrainian finance minister. we'll be speaking to her in a half an hour. this follows yesterday's deal. we basically have a debt restructuring profiling. she had a 20% write-down on ukrainian bonds. she was asking for 40%. and we also have an exclusive about your payment systems. this is linked to apple pay. then greece. manus: greece. the gdp figures, the growth numbers will come in a minute. that sets th - -how

up as we go towards that election date. tsipras be ready to be part of a grand coalition. stay with "the pulse." we have a lot to debate. ♪

mannus: volatility continues. european equities give off early gains despite a 5% surge in china overnight. focus on france and an exclusive interview with the economy minister in emmanuel macron who will keep an eye on china's slowdown, but says it will not threaten his country's recovery. mannus: the leader of greece's pro-european union. to nation that may face back back election that may threaten the 86 billion euro bailout.

good morning to our viewers in europe and africa, good evening to those in asia, good morning if you are waking up in the united states. . am manus cranny .rancine: i am francine lacqua this is a positive number. a little bit of a surprise. we already had a surprise number in last month's. in the lead up to the referendum there have been spur buying. people are saying they don't know what will happen, if they will get out of europe or not, so they bought more. that is a possible explanation. mannus: controls are on their way, and people were saying, get out there, get your value whether it is a watch or car or whatever. the ukraine finance

minister speaking to us on debt restructuring. that is natalie jaresko. that will be top of the agenda. francine: another volatile morning on european equity markets. despite a 5% surge on the shanghai composite overnight. mannus: a roaring u.s. equity market. has decided to take less risk for the weekend. saw about aan week's worth of games. if you said that on monday you would have bitten the hand off. we have seen china with two days of gains on the speculation that chinese authorities are propping up equity markets ahead of a military parade next week. we had 5% gains yesterday and

today. the 2% gain on the shanghai composite is roughly 10%. the weekly move is still 8% lower. it is a decline for the chinese stock market this week, the most in over a month. it is down by 8% since the yuan devaluation and down 30% since it peaked in june. we have a long way to go before we reach rates at some of the in june. when it is let's get a sense of how were this week in the wake of such a volatility. it has been an astonishing week. the index encapsulates developedoping stock markets. monday, tuesday, wednesday, monday, it hady,

the biggest drop in four years. on monday, a .2% drop. the market claude its way back . after threee back weeks of decline. after three weeks of decline, global stocks are on track for a weekly gain. this index is 10% below record. i think this is the most astonishing asset out there. purely for what it did on thursday. by 10% yesterday, the biggest rise since 2000. declined, it that gdp from the u.s. that beat estimates, but no one would have expected the biggest increase in crude oil since 2000. on monday, crude oil sank below $40 for the first time since 2000. we have come from above $100, we market, in january, to

just above $40. we moved to $60 in may. we came back to $60. thee the june dive, oil, by way, is still down by 30% on supply glut, but what an astonishing week. most, down thee most, up the most. thank you. volatileon on the markets. that's go to asia where stocks of caps a second day of gains. there's speculation chinese authorities are propping markets ahead of the world war ii victory parade next week. our beijing bureau chief has more. when you look at it intervening, is it a worry that they're doing what the market wanted, intervention? i think there was

confusion about the government's intention. that is what it comes down to. when the market fell on monday and tuesday, people were asking where the intervention was -- why there hadn't been intervention over the weekend. they lowered the interest rate and the reserve requirement ratio, and now we have evidence they are supporting stocks and the yuan. this is a government that had talked up the stock market before, so people were wondering if they were going to let it go as low as it would. they are coming in, and in some ways investors may be feeling reassured that the government will keep a hand in the market. mannus: i hear what you're saying, that people might feel reassured, but deposit cuts, stocks, then buying, it is sporadic. ick: again, this is a

government and a central bank that is not especially known for .ransparenc people are guessing what they might be up to. the data has been concerned. saying an interest rate cut, something like that, where they take out the big guns, that had been widely expected for some months that it was inevitable. it is such a way to get money flowing through the system. otherock market, on the hand, what it shows view is the government's concern is often about image management and politics. the parade will be big for them next week and they want to maintain stability going through the week for that event. mannus: thank you, very much. our bureau chief in beijing. francine: that brings us to today's twitter question. what has frightened you the most

on the markets in the last two weeks? the volatility, the central banks, the circuit breakers -- maybe you were expecting more circuit breakers and for them to come into play quicker and you did. @flacqua, manus is @mannuscranny. mannus: what caught your eye over the last two weeks. 2008, thenything like answer was no. what caught my eye is that we are losing sight of the fact there is good growth in the united states. people are losing sight of that. losing side that we are talking about a fed hike out of good news. the other thing is how quickly you move from a narrative of the convinced that china was going to be delivering 7% growth to 5%

or 2%. push.'re looking at a it used to be greenspan. potc push.e a china feels like why we had a correction. downsidehere is more to come. our core view is that valuations have stretched because of policy and liquidity in the system. people are getting anxious. i think it is a confidence factor, that is where we see the world's economy. francine: if you're going to answer our twitter question, would it be market confusion? that the markets are all over the place and we were talking about a possible rate cut from the fed? that we have to remind ourselves that half of the world equity market is made up of the united states, still theost dominant economy in

world, and it is growing. there is a good story to be told. globalization from the point of portfolio investing has become and angle broken concept. we are seeing asset returns. in simple terms, e.m.'s on the returns on developing markets. there are good stories in emerging markets and bad stories. everyone has been dragged down by the china theme, but there are reasons why countries like turkey, south africa, russia, and china itself, why investors are placing money there. determined tobeen get my chart. i have 2 charts of the day. it is money from emerging markets. francine: they will appear like magic. amountwe are seeing the of money being ripped out of

emerging markets at a pace that we have not seen cents 2008. i want to challenge what you are thinking. they are not all equal, right? people are fearful. are very fearful, you are absolutely right. there has been a stampede from emerging markets. we look at flows into or out of mutual funds, which for non-us offered mutual funds have been year on year based top 10 category. on the equity side, we have had many clients reduce their weight in emerging markets. they are still investing, but just not the way they were before. there is great anxiety. from our perspective we are getting closer to a point where valuations look interesting, but you have to be selective. there are genuinely troubled countries. francine: if you are looking at a correction that forces money holders and a portfolio

to be sure that their house is in order and not taking too much risk, this would be a correction that has been needed. we have the chart. this is a good chart. is this a healthy correction? niall: it is a healthy correction if we see a true correction. this week has been volatile. it has been down and up. from our perspective, the chart country world index, when we think about the global opportunity set in equities, down 10% year today, another 5% at a very simple level. it looks interesting to us in the ratio on the index. we will be selective about which countries we choose to enter. 10% of thehave about portfolio in cash. where are you going to an employee that in terms of these opportunities? niall: if things play out the way we expect, that will put

more money into emerging markets on a relative value basis. far less overvalued than the united states, new york. korea, a country that has been challenged in terms of growth, a 5% interest rate and a 1% to muster great, very challenging in terms of export conditions. currency wars and how they deal won.the and a lot of firepower in the central section of korea. we would strengthen the u.s. economy in consensus growth for a potential export picture. francine: thank you so much for that. at what elselook is on our radar. while investors were hitting the panic button on monday, one japanese daytrader made a fortune. the 76-year-old that goes by the internet handle of cis time to the bottom almost

perfectly. he even decided to share the news. he claims to walked away with $34 million. if you want more on that story go to bloomberg.com. francine: the french economy minister has pledged to loosen the country's rigid labor laws to bolster gross. in an interview he said that france's labor market will be simpler. emmanuel macron says that his country has little choice but to implement reforms. in the second quarter. experts picked up. rising 3.9%, making the biggest quality contribution to gdp in four years. business investment increased to 2.9 percent. today's number is the office of national statistics's second revision.

it is unchanged. francine: we'll get to gdp rigors that expect to see the country intercession in the second quarter. as the nation's jobless rate rose to 7.5%, we will drive that to the highest level in five years. has extended invitations to an advent on september 9 with a are expected to unveil the latest iphone, a and a new box, product. to new iphone is expected have a better camera. it will also address concerns about apple's growth, particularly on china. francine: i would like to meet someone who actually uses siri. tackling the countries labor laws in a bloomberg interview. we will hear from emmanuel macron after the break. keep it right here. you are watching "the pulse." ♪

francine: welcome to "the pulse." behindgrowth is falling its peers. unemployment remains near an all-time high. the economy minister has said that things must change. in an exclusive interview, we are joined from paris. this oneought into

year ago. where is he in terms of reforming the country? for his one-year anniversary inside the government, emmanuel resonate in the business community. a year ago he came to me saying i love business. last night emmanuel macron said now you have proof of love. he was referring to the reform he passed in july, the activity law allowing more shops to open on sunday. that is sparking reform. i asked him exactly what has been achieved in the last 12 months. we are reforming, we are moving. it is about the base, the magnitude, and the continuity.

i think we implemented a series of important reforms. we have risen by 2.5% versatility. competitiveness, we reduced by 2 gdp points. third, reforms on the labor market. ae law that i pushed and was success that we are implementing. we will open a new series of reform. to convey toi want your viewers. a new reforml open regarding the labor market to make it more simple and more adaptable. we have to think about the labor, that is what the prime

minister a few months ago, and will take similar measures. only a reform going to be on the long-term benefit system, or also involving new rules for hiring and firing? mr. macron: the series of reforms the prime minister wants will be on the whole structure and organization of the labor market. what should be defined under the law, and what should be defined under agreement at the branch or corporate level. organization of the french civility that he wants to promote. that civility in the labor market. on the other hand, we have reforms, as mentioned. the union is the first to

negotiate buying in. i believe they will find a good solution to make it more efficient. we will do both. the labor law in france. emmanuel macron wants to tackle those next. he will have to be careful. he will face returns from the union and his own camp. he started control in france this morning, and to the prime minister had to stoke the fire. he said there will be no refund of the 35 hour week. francine: thank you. a great interview with mr. emmanuel macron. manus: the greek gdp rose by as someone just pointed out on twitter, that beat the u.k. for the second quarter.

unadjusted gdp rose 1.7% from a year ago. the country faces the prospect of back-to-back election campaigns unless there is an outright majority of next month's snap vote. the river party had an exclusive interview with bloomberg. >> we should not be having a elections. the government could have try to solve problems first in september, october, and november, and then had elections. a great interview. tell us this, where are we in hass of alexis tsipras, he made noises about a grand coalition but not wanting to be prime minister. how do we start the journey to the next set of elections? the first thing is a fatigue among voters.

they seek a prime minister. began, we wills also see the ninth finance 2010.er since a report published today in a newspaper showed that 64% of greece disagree with alexis to hold a snapon election next month. it will be the third time this year they will be asked to vote on election. has a small lead over the main opposition party. this lead has not been a substantial lead since last month.

from 11 points to 3.5 points. it is a -- it is obvious that alexis tsipras is paying the price for the broken greece in theep eurozone while putting an end to austerity. francine: that was a great interview and fascinating. there's a great bloomberg web story attached to it. snap elections, we just heard of the appointment of a caretaker finance minister. he is already been working with the eurogroup, how much do we know about him? nikos: he was the representative of finance ministers and is the country's creditors, especially the imf, the european central bank, and the commission. he can only lead the country to elections. he does not have a mandate to conditionseforms and

for greece's bailout program. the execution of the bailout commitment will be delayed once more. may win theas election, but he will not have a straight parliamentary majority. he will have to form a coalition with political parties representing the old political establishment and oligarchies. talksl have coalition which will further delay the whole process of the bailout. including banks, do not forget that greece still has capital controls and the economy is suffering. francine: thank you. thes: next, we speak to

ukrainian finance minister, natalie jaresko, about the debt restructuring deal. what does it mean for the country and what does it mean for russia? joining at -- join us on twitter. ♪

francine: welcome back to "the pulse." live from bloomberg's european headquarters in london i am francine lacqua. manus: i am manus cranny. according to the office of national statistics number, exports picked up three point 9%, making it the biggest quarterly contribution to gdp in four years. it is nice and investment increased 2.9% on the quarter, the most in a year. these are the second revision and leaves the headline ticker unchanged. francine: chinese stocks have

rallied for a second day on speculation that authorities are propping up markets ahead of the next week. they have increased the most in five months. 0.9%, greek gdp rose by making it one of the fastest growing economies in europe. adjust the gdp, that is up 1.7% from a year ago. the leader of the country's river party told bloomberg the country could face more elections, and he warns that a refusal from alexis force voters back to the polls again. a pocket-sized device is used by small businesses like straight market vendors.

another round of financing. the founder joins us from stockholm in an exclusive interview. it is great to have you on "the pulse." thank you for joining us. give us a sense of how the volatility and craziness that we have seen on the markets have impacted you. our venture capitalists less , or does it make no difference to you? has an impactit on industry in general. this round took us less than three months. what you will see in the future, and starting now, especially startups, pre-revenue, early in the revenue cycle, finding it more challenging to raise capital.

manus: you have raised $60 million. give us a sense of what will be done with that capital. what will you use it for? in european mobile payments, and in that space in mexico and brazil. first, we will expand into new territories. we are still only in 9 markets in europe. there are a couple of markets that remain to be conquered. obviously, in sweden roughly 50% of all payment terminals are izettle terminals. we have that ambition and other markets as well. we have a ways to go in other markets. growing in existing markets and to new markets is part of that plan. third, to start launching new

financial services on top of our current offering. today we launched jacob: -- we advance.izettle that is the first of the new services that we have launched. you get a cut of all of the sales they do. give us a sense of how big you think this will become. if you are focusing on launching more products like this, and the scope. how big can this get? advanced is a way for small businesses, a way for us to help small businesses. it is getting access to capital. today, the small businesses in the world are pretty much excluded from the traditional financial industries. it is tough to get loans or credits from banks if you are a

rarely new or small company. in our case, what we can offer a very simple and fast on to access an advance future sales, and they repay us an extra fee on top of their traditional payment fees. in my opinion, looking at the interest we have from our the marketmmunity, is monstrous. it is enormous. alternativeat the payment markets in 2014, it is somewhere in the area of 3 billion euros in europe alone. expect less than an exponential growth in this market. i think it will be tremendous. manus: we wish you well with the 60 million euros that you have

raised and all of the new adventures from izettle francine:. details over the debt restructuring deal for ukraine. including a right off of $2.8 billion. how has the market taken it? mark: very well. the ukraine bond market rose the most ever. the two of the yield on year? i charted it over the last 12 months after the government too soft or restructuring than analysts expected. we were almost at 50%. it was down to 30% yesterday. yield fell by 16 basis points to the lowest since december of last year. ukraine and its creditors are agreeing to write down the principal on $18 billion of euro bonds by 20%. byextend repayment dates

four years, and said all back to .75%. the government was originally thought to get a haircut of 4.7%. oflysts breathed a sigh relief. this is not a stock market we look at too much. this is an index of only 20 stocks. it is down 40% this year. there was a little bit of a fill up yesterday. it was small when you look at the sizable moves that we have seen over the last 12 months. of 1%. up 7/10 of 1%. severe does still face financing challenges. it has to compromise with russia. that deal has to take place by the end of the year. some analysts warned that the

restructuring could be an adequate given ukraine's economic challenges. we have had good early at reception for the imf on yesterday's news. manus: thank you very much for giving us a market complex. let's go to the phone to natalie jaresko who negotiated the deal. thank you so much for joining us. what do you say to the detractors that you have done a soft deal and that you have been too generous? ms. jaresko: i disagree. thank you for having me, today. let me go back and start where we were five or six months ago. saying that we needed to meet three targets. they had to do with a balance of payments. our debt to gdp ratio, and our financing ability. when those targets were established and we agreed to them, and we agreed that would

be the goal of the restructuring, everyone said the targets were too conservative. that a gdp ratio of 2.1% was artificial. we just did a deal that met all three targets. people are saying that it is soft. that is beyond comprehension. minister, i think you wanted a 40% right down. you received a 10% right down. no.jaresko: we did not ask for a 40% write down. for three pieces that would meet those three targets. i can give you more than a half-dozen alternatives that meet the targets, including the one that we disagreed two. francine: is there risk that ukraine might have to return to the negotiating table, or do you think this is it? ms. jaresko: there's no question

there are risks. the personalities that caused this in the first place, the invasion and occupation of and terrorists of eastern ukraine. if the war to expand, that would put additional pressure on the country. we are hopeful that the agreements will be implemented. the president works on it daily. we are hopeful that the situation will improve. everyone ister, waiting to see what the russian response will be, participation or not. what discussions have you had? how optimistic are you that the russians will accept these terms? proposingo: they are this in helping to launch illegally in the next few weeks for all of the different obligations. there are 14. one is what you called the

russian bond. every creditor will have the option to participate or hold out. if they hold out that is their choice, but the legal details of the launch will come into play in each series. i am hopeful that there will be few to no holdouts, including beholders of the so-called russian bond. that is their decision to make ofn they see the full text the launch and of the proposal that will be made for them for the exchange. francine: do you think that -- have you received any feedback from other bond holders? do think this will have broad support? ms. jaresko: very broad support. people are glad we did not have to result to a default, it given what is happening in the emerging markets, black monday, and the volatility. i think there is a great deal of support. we were present 9 billion of the

full 22. they have more than a 25% stake going all the way up to in some cases 75% with all of the obligations except for one. they are on the same side of the table working to meet a market of debt restructuring is very critical. this is a win-win for the creditors. manus: a win-win for the creditors. ms. jaresko: and for us. manus: the principle of the debts minister, anyone who buys a bond at the start of the process, that is not what you call progress. until recently -- ms. jaresko: i disagree. if the alternative -- yous: if you buy a bond, worked on the assumption you buy a credit rating. you would receive the full principal return, and an allocation of interest. as risk changes, once you go into a restructuring, it is not what you bought the bond for in

the first instance. one instance is principle. the principle of the right down. that has been the center of the disagreement. areaid you overcome that of dispute? -- it your was that a progressive step? ms. jaresko: no one thing made a difference. i think it was a combination of difficult talks, international ofport for the principles resolving the liquidity problem. they were helpful in speaking with the creditors. they have not done that in a months time. it is always important. in the end, i think that consistent truth is that our situation is a win-win. without debt restructuring, the situation is work areas. that does not create value for the bondholders. that does not create value for those who have an interest to

protect their investors. ukraine needs to survive as a sovereign state, to grow, and to be strong, and get its creditworthiness back in order to be able to price the bonds higher in the future. i think the debt restructuring is one of the building blocks to get us there, a very, very important one. manus: natalie jaresko, the finance minister of ukraine. thank you for your time. francine: apple invites the , saying hey,vent siri, give us a head. what could it mean? ♪

francine: welcome back to "the pulse." live from london on bloomberg tv. detained 23 has people over the explosions in tianjian, including the president of the port in the transport chief, they are being investigated for negligence and abuse of power. it is a gateway to northern china. says the's news agency chemical combination that blew up had not passed safety tests. peculiar and problematic. regulators want google to change the way it displays search results, saying the company is prioritizing its own shopping service and suppressing rivals.

that it isinsisted not. they will consider google's response before taking action. manus: last monday, one in every seven human beings on the planet logged onto facebook. it is different from the number that facebook users when it reports results. those of the average number of data uses over 30 days. billions of users. it had 1.5 billion users log in at least once a month. francine: apple has sent invitations to an event on september 9 with the words, pay, siri, give us a hint. are they be ready to release their new iphone? siri. here is our own it is caroline hyde.

francine: i cannot find anyone who uses syria on a regular basis, apart from what brenda was saying that she uses it for the international clock and other things, but we digress. caroline: it is going to have a capacity of 7000 people other two thousand 500. the siri element is referring to what we think is the new apple tv product, be set top box. the apple tv box was first introduced in 2007 with the first iphone and has not been updated. this could be a siri sensitive set top box and a redesigned controller. the main thing is the all-important iphone. it will be the iphone 6s.

4.7 screen for the new iphone. improved cameras, a faster processor, but a top development that is already in the macbook and watch. when you touch the phone, it will be more sensitive. really sensitive touchscreen capabilities and a new camera. -- a new color. potentially rose gold. francine: this is rose gold. it goes even a step further. caroline: apple tv will be enabled. they could be available next friday. they are being unveiled. they are unveiling their new products, the s series of their galaxy as well.

manus: this is tim cook's opportunity to china. we have been debating. we know that that has been the linchpin in their iphone sales. it is his opportunity to top of the market a little bit? caroline: he has a lot to give us. this is an important event, probably why it has 7000 capacity. for the first time we can hear about what is happening in china. of the revenue is building in china. what does he think about the market route, the slowdown in china? shares are down 40% since the previous earnings statement in july. their numbers, have to live up to expectations. can they stop the drop in apple share price and give us more hope and how they are selling in china. this is 62% of the revenue from the iphone. the iphone success is crucial. francine: thank you, the very latest on the september 9 apple

event. coming up, we go to jackson hole, wyoming for the latest. ♪

,rancine: central bankers market players, a condom is are all in jackson hole, wyoming for the economic symposium. you have major players?

surrealit is a little to be walking to dinner and dividing.o a the official topic of the conference this time around is inflation. the unofficial topic of the conference is whether or not the fed is going to move up to zero bound in september. what plays into both of those is china. whether it's slowdown will export deflation of around the world. we talked to barry eichengreen, a respected economic historian. we wanted to get perspective. he said that he is not that worried about china, but he did say that the chinese central bank, could take lessons in communication. greene: i would have what the policy and intent of the policymakers were. china did a devaluation, 2%

on three percent more. it is potentially destabilizing, because people think the first 3% could be followed by the next 3%, and a third 3%. it is serious business. they did not explain the end game or the motivation. that is what got them into trouble. a they could take lesson from mark carney. you cannot just do something coming off have to explain what you are doing. into: keep on bumping those central bankers. francine: i have seen it fishing pictures of our own reporters with central bankers. i'm expecting great things from you. live from jackson hole, wyoming. get the hiking boots out. that is it from the team on "the pulse." keep it here on bloomberg tv.

there will be lots to come from jackson hole. that is the key focus for markets. francine: we will speak to the indian central bank governor later on. we're looking forward to that interview. keep it right here on bloomberg. ♪

announcer: this is bloomberg "surveillance." august.ays of vix from 14 to 41. a tumultuous week. we look forward to janet

yellen's decision. chair yellen is not in jackson hole. an extended conversation with james bullard of the st. louis fed. this is bloomberg "surveillance," live from new york. i am tom keene. joining the is not a twin. -- joining the is vonnie twin. national bowtie day. i went british today. vonnie: very candy cane. we look at economics. i do not need any more about ties. let's begin a serious friday with our top headlines. vonnie: another day, another rally in china. chinese stocks rose for a second day. areulation authorities propping up markets