anna: wti stabilize, falling to $40 over concerned the global supply glut will exist. to counter disinflation and the picture. japan's government is set to announce the details of a $273 billion stimulus package. the hong kong exchange canceled trading as a storm lashes the city with rain and wind. ♪

anna: very warm welcome to countdown. that are have markets moving, central banks taking action. it will be an action-packed day. we will kick it off with oil because it dropped below $40. we're definitely back in a bear market. highest levels in nearly two decades. the hedge funds have pushed their short by the biggest amount since 2006. this is the s&p 500, this is the price of oil. the two big emergences -- divergences. the last major time we saw this was back at the end of 2014. and medially after those divergences, we saw the stock market dropped by over 3%. you have to look through the downsides.

$50 in the 2017 first-quarter. a sustainable deficit because only $1 trillion being made. beings a time bomb waited. anna: let's show you where we have been on other assets. we are waiting for the abe, shinzo abe giving a speech about they fiscal stimulus plan. fairly flat. just to draw your attention to the data, japanese july consumer confidence facing its first month on month drop. certainly interesting in the context of what we are going to hear. the need to do something in the japanese economy. there is the australian dollar. the aussie dollar weakening, weakest in 17 years.

they say the prospects have improved because of the cut they have introduced. we have the gold price at 1349. 5, down 3/10 of 1%. dropping from its three-week high. gold up 27% up-to-date. manus: it comes down to how much does abe spend? can he overwhelm the markets, shift the markets? that is the question. anna: here is heidi for the first word news. is trading near $40 a barrel this morning, but u.s. government stockpile data -- crudes fell into a bear market yesterday. that is upsetting industry expectations. reportingand exxon worse than estimated second-quarter earnings.

australia's central bank has cut interest rates to a record low. by 25 basised points to 1.5%. they moved to counter inflation and support a labor market that has been hampered by underemployment. stock exchange has canceled trading for the day as a storm lashes the city with rain and wind. the hong kong observatory issued its third-highest warning. hundreds of people have found refuge in temporary shelters. buffett attacked slighttrump over a

e-mail of the heartbroken parents of a muslim american soldier killed in iraq. >> our families have not sacrificed anything. but, how in the world can you stand up to a couple of parents who have lost a son and talk about sacrificing? have you no trump, sense of decency, sir? trump buffett challenged to releases tax returns. >> he can pick the place. i will bring my return, he will bring his return. believe me, nobody will stop us about talking about those returns. send the word to him. haidi: the center for disease control has warned pregnant women not to travel to the zika transmission area in miami, florida. pregnant women who live there should take steps to prevent

mosquito bites and the sexual spread. there iswas evidence, evidence of the potential for ongoing spread of zika. that is why we have taken the steps of advising pregnant women not to travel to this area. haidi: global news 24 hours a day powered by more than 2500 journalists in more than 120 countries. you can find more stories on bloomberg. manus: thank you very much. a little bit of an update. we saw the pre-release of the capital rates at 11.5%. on the stocksmack last week but they are talking about provisions for bad loans. they are likely to increase by a moderate amount. lossd quarter loan division, 170 million. it is likely to rise. net income dropped by 32% in the second quarter. anna: we have the numbers from

dsm, the iteration and materials business. they have beaten estimates on their q2. word of caution -- the global macro economics remains a concern. o, we will talk to him later in the program. ab -- it will be effective from october 10. onting the combined entity october 11. finally, getting there. anna: let's check out our asian markets. julliette has the details. we all waiting for abe. juliette: we are. it is a waiting game. most asian markets are about as gloomy as the weather. hong kong market is closed due to thae typhoon eight.

in terms of waiting for abe, we are seeing stocks and the yen uighur on the nikkei, down by 1%. a little bit of weakness as we await details of the stimulus plan. the finance minister coming through with a fairly common x markets areg if f stable and the stability in the fx market is what they are aiming for. kness coming through in that market. in australia, even though we saw that spike over half an hour ago, weakness coming through from most of the southeast asian markets. there is a little bit of upside on the shanghai market. it is pretty flat coming back online after the lunch break. in terms of stocks we have been watching, the biggest bank in australia is the first to announce whether or not it will pass on the abe rate cut.

it is only passing it 13 basis point cut. cba shares down by 2/10 of 1%. mitsubishi ufj has been under selling pressure. it is a 32% decline in net income in the first quarter. nippon soad is the best performer on the nikkei, up 6%. they will spend about ¥2 billion buying the shares. this is how be asx 200 is faring. a very big spike came through when we had the rate decision. in terms of the australian dollar, it is weak, down by 2/10 of 1%. it did have the downward spike on the decision. manus: thank you, juliette. an, theywith thjap

will release details on their stimulus package in a few hours. threatened by strengthening yen and weak consumer spending the anna. anna: morning investment was needed to expand the world's third-largest economy. let's get more with our tokyo bureau chief, kevin. what more is expected from the package? ¥28 trillion. what more is expected? obtaineding to a draft by bloomberg, about ¥7.5 trillion of the ¥28 trillion will be in new spending. the rest will be in loans or some other form of financing. we also know the focal point of the budget will be on infrastructure. we expect that to focus mainly around building of high-speed rails and the expansion of ports

to allow crews ships, targeting korean and chinese tourists to dock, especially along the ports in the sea of japan. manus: what about the impact in terms of the economy, the real economy? so, with the spending, much of this will not be immediate. the high speed rail that is expected to be in the budget, the spending for that will not happen because the spending for that is for the section is the final portion of the high-speed rail. beennitial portion has yet completed so we have to wait a couple of more years for actual spending to come through. the port building, this is where we will see some spending, but

again it is not going to be immediate. overall, the package, as big as it sounds, most economists agree the impact on the economy will be upside but marginal. that any impact on monetary policy will be difficult especially with the next meeting in september. the budget will not be approved by then so we will go into the -- the boj have to go into the next policy meeting without seeing any of this come through. anna: thank you very much for your analysis. let's bring in tim, head of macro strategy. great to have you here with us this morning. $273 billion -- maybe a quarter of that is new spending. what do you make of this size, the intention behind what the japanese government is doing? tim: certainly positive.

it will keep japan out of a recession for a year or two. so much of it in the total package is contingent. financing and loan programs. it is graduating overtime so the immediate impact is quite smaller than you want. percentage ofis a gdp. expectations were higher leading into this. it is a bit of a disappointment in that sense. theus: do you buy into h abe proposition? tim: not with numbers like that. you could get there but you have to talk about numbers three to four times larger than that in direct spending rather than an an amount like- this. anna: what do you think of the

handover we talked about last week between the boj and fiscal stimulus side? is this a gauntlet being framed? on friday, we talked a lot about that. yesterday, the conversation changed into monetary spending which might result in more stimulus in september. tim: potentially, but this is part and parcel with what is going on in japan and other central banks are starting to push fiscal officials rather than having the focus be completely on monetary policy. focus on the fiscal side. you will see this happen ideally in europe at some point, but it will take a time. iss focus on fiscal policy something that could play out over time. manus: i have the dollar-yen. the monetary base.

aggressively into the currency back in 2011. should intervention work again? analysts say it will go over 100. does intervention really work? looking at that, it does not. tim: unless it is massive. the monetary base and the bank of japan balance sheet is already enormous. it would have to be orders of magnitude bigger than what they have done in 2011 to get a trend reversal of dollar-yen. until they get to that point, it is only going to continue with the trend. anna: how much control do they have over this currency? it is a currency that moves in the time of political dissension. they're at the mercy of things

they cannot control. tim: unless they act more forcefully. i think that is right. you need to let the markets tickets course. anna: thank you, tim. a not to talk about. manus: let's get you set up for the trading day. england the bank of monetary policies. pfizer, shire and png earnings coming up. anna: oil's second quarter gains slip away as they enter the bear market. at 6:30 a.m. u.k. time, we speak to the ceo of dsm. they have upgraded their estimates in the results. at 7 a.m., we check in with the ceo of intercontinental hotel groups. and then, richard solomon joins

us. this is bloomberg. ♪

manus: this is a live shot of hong kong. the stock exchange has canceled trading for the day because of a lashed the city with rain and wind. it has gone 6:20 a.m. in london. let's get a business flash with haidi. haidi: hi. a long-term rally in japanese bonds as likely run its course because central banks have gone as far as they go. they say they are running out of options and opted against extending two of their main tools. even as inflation falls further

below zero. $20osoft has raised almost billion in the third largest corporate bonds sale of the year. it has helped finance its planned purchase of linkedin. yields turned negative on a number of bonds globally. division has been fined more than $15 million. it has canceled a certification and sales of 32 vw and audi models. a new jersey resident has filed for maybe the first lawsuit tendo over pokemon go. he says people are going into his home uninvited to catch creatures. he is trying to have a class action on behalf of all people territoryeople's

trespassed on. anna: oil is trading near $40 a barrel this morning, ahead of the u.s. government stockpile data due later. marketell into a bear over concerns of the global supply glut. manus: bp, shell and exxon reporting worse than estimated second quarter earnings. tim graf is with us for this conversation. what we showed with this relationship at the start between the oil prices in terms of the white line and as an p5 hundred -- s&p 500 have divergences. there are pluses and minuses. how do you look at this particular mood? driven is clearly supply

but i would take something from the u.s. gdp figures last week. very weak oil related numbers. this is discontinued flush out from the fracking industry. that will run its course at some point. that will be when the supply has potentially run its course as well. the earnings outlook has been quite poor for the industry. i think we are well underway in the cycle of removing production from the market that might spell better time for oil. not immediately, maybe another quarter or two. anna: the magic number according by 2017.ts is $57 there are analysts expecting things to bounce. $57 next year is the median forecast. tim: global demand will still be fairly weak. it never really trailed off that much. it is still slow. i think that is somewhat punchy.

the supplies coming off line will push it back to $50. $57, we will see. manus: i have a chart here that shows the relationship between oil and em bonds. oil and high yield debt. these relationships are not as close as they were. it is a ten-day correlation. the lowest it has been this year. typically, if oil goes lower, all of these markets go down as well. is it about policy by the fed? tim: to a degree. we are seeing this grab for yield em bonds are the focal point. manus: 10 times the amount of yield you see in g-10. tim: the markets are smaller but people don't seem to be carrying right now, and that goes for bonds right now. the demand has been spectacular as a result of fed policy, the bank of japan, ecb.

the bank of england, will likely ease further. this grab for yields continues. anna: what about the earnings we had from oil majors? we said a number of them are disappointed. refining margins coming under pressure. we talked about a lot of those businesses were actually insulated by some of the falling oil price, but now the refining margins seem to be supporting these oil makers. tim: it gets worse before it gets better potentially related to cap x. they are all seeing it is a bit of a trend. anna: since the beginning of july. tim: when you relate it back to equities, it shows you how much tech is driving things like u.s. equities higher you get a really

poor oil pictures from producer. you are getting continued earnings contraction for yet another quarter in the u.s., but it is close to all-time high levels. thes: i pulled up wcrs, emerging-market currencies against the dollar. presumably, if i take what you $57, we may get a performance in terms of the currency. tim: even if it is a lower-priced target, you might have easier fed policy. you had a lot of bad news. you're now seeing a little bit of a recovery. in terms of trade when you look at oil, it has not accrued yet. if you do get a further reduction in supply and prices, you might see that. anna: tim, thank you very much.

he's staying a bit longer with us on the program. manus: next, csm reported its second-quarter earnings. we are joined by the ceo, next. this is bloomberg. ♪

anna: welcome back. it is 6:30 a.m. in london. let's get some news. passenger margins rose by 5.2%. they had a difficult second half. the average ticket price was down and they saw a decrease in demand. the yield has declined 0.8% in the second quarter. that has been caused by the average sales generated by kilometers flown dropped by 4.1%

in the period. that is doubling in the second half. lufthansa echoing everything we have heard from every other major airline. --aterial impact i terrorism by terrorism. anna: key revenues came in at 25 billion euros, in line with the 24.5 we have been seeing. the focus on the x1 compact suv. this business has managed to find themselves in a comparatively weak point in their cycle versus their rival mercedes. it looks like beat in terms of the e-bit number. let's leave that one and talk about csm.. manus: the world's biggest

vitamins maker. the company also sees 2016 results being ahead of the medium-term targets. who joinsto the ceo us from the now to lens. -- netherlands. great to have you with us. how much higher can we expect in the 2016 outlook and where is the drive going to come from? feike: indy. eed. we had a strong quarter again. look at the underlying elements, our growth was good in all of our businesses, in attrition and the nutrition and the field. we have done better with materials. it is not only the growth of our businesses, but support by our group wide improvements and cost

reduction programs. based on all of that, within the current macro economic context, we even revised our outlook. grossn medium-term increase to the low to mid teens. initially, that was high single digits. from quarter, it is on track with all of our programs. anna: you say you have upgraded your outlook which sounds very positive, but you are warning about the global macro picture, the environment remains a concern. what is it that particularly concerns you? feike: well, i think it is good to make the statement that the global economy in the last quarter or last half year did not improve further. we operate in the same world economy. it is good to flag that there are concerns. in brazil, the growth in china,

etc. what we have done in recent years is carefully repositioning our portfolio. we believe we are well positioned in the different markets. in materials, especially the specialties, that segment is growing. in nutrition, we have invested. we believe the portfolio -- we can do better than average. also, improve cost reduction programs help further. hey, the world's the does not look excellent, but our company, to be honest -- i don't want to be carried away by it -- but our company looks pretty good. manus: that is optimistic in the shareholders will be happy. tell us about the united states. omega-3, you have struggled in the past couple of years. what have you seen? is there an upturn and give us

some guidance of the geography of the u.s. that is one of the countries that will power ahead relative to the rest of the world. feike: the united states economy is still growing an interesting for us -- and interesting for us. some of the specific segments, we do well. but zooming in more on detail, especially in the world of vitamins. the market in the united states is not doing very well. on the other hand, if i look at our nutrition space in the u.s. -- manus: you have just touched on the omega-3. you are not seeing any upturn on the omega-3 business? the united states market, we don't see enough stake in the omega-3 business. although we have positioned ourselves with more high

quality, more concentrated -- it is a better segment and we have done well to position ourselves in the high end of the segment. overall, the market of the u.s. is not increasing. globally, it looks better. we don't focus only on the united states market. china.l see growth in europe, for example, building in our field is doing better. anna: let me ask you about the joint ventures you have operating. you talk about stepping away from those, specifically two companies. what are your plans with those joint ventures? what would be your favorite way to get out of those? feike: we have three big non-corps ventures. one in pharma. the chinese and one

with the americans. the third one is chemical. all three in the coming years will be monetized. we had a first stop with the ipe. o. maybe with chemicals, it is a little bit early. we only created the joint venture last year so we need to work a little bit on improvements before we can take any monetization steps. we will look at how to monetize our joint venture with the chinese. all three over time will be divested and will proceed well for the company. anna: any segments for sales or ipo's at this stage? feike: it is too early to say. the way we which we will, ipo or do any other things with other

businesses, we need to see over time what is the way of exiting those businesses. we will look to the best way for our shareholders in terms of monetizing our business. manus: feike, dsm ceo, thank you for joining us on countdown. it has gone 6:37 a.m. in london. we have a new edition of daybreak. lego and take a look. if you want to know what a great storm looks like in hong kong, this is it. markets are closed in hong kong. 325 flights are expected to be rescheduled. the storm rated from eight down to three. it is now a tropical storm. you cannot say we let you down on, down. moving images for you on this tuesday morning. to china's headed

province next. cutting the rates unexpected. the interest rate is down to 1.5% which had a negative impact on the australian currency. selloff coming back a little bit. the focus on inflation, the weakest in 17 years in australia. they are saying the profits are returning to normal. a very subdued labor market means inflation is likely to happen. manus: crude is another story for daybreak. the world is waiting for shinzo aboe. $40.07, adding to the bearish bets. crude and gas prices at the highest levels in a number of decades.

we are down 22% from the peak and lost 14% of that value in july alone. anna: more on the oil sector in the next few minutes. oil is trading near $40 a barrel. a bear market yesterday. here for more on that is mara. >> yes, crude oil very much taking the focus in markets this morning. i have done a chart of wti and brent over the past year. you can see oil falling more than 20% from its june peak. wti dropping below $40 for the first time since april yesterday. barrel, looking ahead to the u.s. government stockpile data. energy stocks driving down the asia-pacific index. they are the worst performers, making this benchmark fall from near a one-year high. within the region, japanese

stocks declining ahead of the stimulus announcement from shinzo abe. taking a look at dollar-yen, it was on its second day of decline earlier. it is pretty much unchanged now. we got some comments from the finance minister saying stability in the market is important for the economy. recouped some of its losses now. we are keeping a close eye on aussie assets. the aussie dollar being the worst jeter performer after the rba cut rates. the three year yield hit a fresh all-time low. with aussie bond yields falling, to show you the 10 year yields premiums. this is in white for the aussi. over the 10 year treasury yield. that premium has been tracking. in purple, you can see the spread. that yield spread may actually disappear in coming years. manus: thank you.

back to one of our top stors. crude is pervasive and who better to talk about it then yousef. good morning. yousef: good morning. as you mentioned, crude down 22% since the june highs. ausaudi adding to the rates but this chart is what you could be looking at. this shows you the price of wti. we have added three key lines, three key moving averages. 50 day, 100 day and 200 day. what has happened is it has broken through these three averages which has not happened since november of last year. we have marked it in red. what happened last time in november when it broke through those three lines, it went down to $26 a barrel by end of

january. adding to the possibility of additional builds in the oversupply is progress when it comes to the iranian format of their oil contract because on wednesday, the government is expected to give a possible green light on the new format. the iranian government is hoping that will unlock a lot of the investment which is targeting up to $50 billion a year in infrastructure. that could unlock a lot more potential than the current 3.5 million barrels a day. thank you very much, yousef. the reserve bank of australia has cut interest rates to a record low, reducing the cash rate to 1.5%. the move solve it aussie dollar drop. manus: let's get to sydney for our bureau chief. ed, the decision was expected

but it was a close call. what do you think tipped them over the edge in terms of the decision? ed: good afternoon, yes. what tipped them over the edge -- inflation. past growth slowed to a 17 year low last quarter reflecting stagnant wage gains. the rba is hoping its 25 basis points cut today will result in more sustainable economic growth in australia and see inflation move into the target of 2% to 3%. the central-bank interest rate move is just a blunt instrument and the only lever at its disposal. it was hoping to get a little help from the australian dollar which has remained high. fromgained 10% roughly january.

with negative interest rates, or zero interest rates in other major economies around the world, even 1.5% interest rate is attractive to overseas investors. anna: they wanted some help from the dollar and wanted some help from the government. how much help as the government providing? there is a big transition underway in australia. ed: they are providing very little help unfortunately. justurer scott morrison pulling those fiscal levers. the government is aware it has a budget deficit it have to get under control. it was warned last month that it had to take action on that front or risk losing the nation's coveted aaa rating. we are only about one month out from a hotly contested election. governmentinister's

was reelected by the narrowest margins has a majority in the lower house. hardly convincing mandate and that could make it more difficult for the government to push ahead with any productivity enhancing reforms. it shied away from any major changes. an overhaul of its taxation system in the last parliament when it had a healthy majority. just prospects of major action by the government are looking somewhat bleak. manus: as you say, the central bank backing everything. ed, thank you very much. coming up -- anna: turbulent time for airlines. amid brexit and terror attacks. and then we check in with the ceo of internationa intercontinl hotels group. manus: this is bloomberg. ♪

anna: welcome back. 1:49 a.m. in new york. let's talk about the aviation's sector. lufthasen just reported second-quarter numbers. ryan, how are the numbers looking? ryan: a couple of numbers you need to know in the earnings statement -- one is the revenue. it declined in the second quarter. they say they expect to double the decline between 8% and 9%. that is not good news. you take a look at the shares this year and they are down 25%. lufthasen is the white line. it is massively underperforming the dax. one other number we learned in this report that i will take you

to a graph that will explain it. this is pension liabilities. we learned as of june 30, pension liability provision would add 10.8 billion euros. i put this chart together yesterday. the record going into today was 10.3. last quarter, it was eight. lufthasen has a pilot problem. it is the pilot that are no longer working at the airlines that they are paying a pension to. we are in the low return environment so they are not able to generate enough money to pay those pensioners. the pension gap keeps creeping up. in addition to that, more and more money being set aside to top off the pot to make sure they have enough money to pay their pilots. this is weighing down on the share prices, the company. does is something they have to be very keen to get a handle on.

on friday a deadline of this week, the last day of this week to try to get some deal with pilots. they have been talking for years. manus: you have hit the nail on the head in terms of the low rate environment. great, great graphics. ryan on the graphs. tim is still with us. think the story ryan told us is a real challenge for people like you. a zero rate environment. a huge boost in the emerging markets. is that a natural transition? tim: it is enormous to see all these trends. the ones that can be flexible are behind these push for high yield assets. for those two have a mandate to do so, that is where they are looking to. they are taking longer maturity

risks and looking at the credit spectrum. anna: i can imagine at certain points in the investment cycle with rates so low, looking at corporate and distinguishing between them and some companies that have enormous pension schemes, the aviation sector is a classic example. deciding at this point we want to avoid these companies that have potentially big pension liabilities. the longer we see these, is that going to be a theme? tim: i think it will be. able stick out as being the more -- it will stick out as opposed to these airlines. manus: let's talk about the bigger picture in terms of the u.s. jobs figure. have for you is bank of america looking at 20 measurements. it is overvalued according to

them. blue line is pe. a high of 2009. taking you all the way back to levels of the dot-com boom. is the u.s. the investable story relative to europe and asia? tim: relative to europe, and probably still is. the earnings picture, although it is not great, it probably is a little better when you look at what is being upgraded and downgraded. it probably on a relative basis -- i'm glad i brought up the driving force of tech behind u.s. valuations earlier because that chart shows the parallel we're seeing between now and 1999 where tech drop valuations although the earnings picture -- manus: the you think there is more malice in modern tech? tim: it unnerves me from a

historic perspective but the environment is different now. there is the potential for it to extend and these bubbles to build. the policy environment globally and the u.s. after friday's gdp pictures is one that is likely to remain easier in the long term. anna: what is it about the profitability of tech that does not impress you? they are more profitable than they were in the 2000. not quite the same story. tim: that is definitely true. we don't have to worry anymore. it is just the concentration and a few big tech names is worry. on theength of tech earning side is not somewhere you want to be. is enough hard data in the u.k. everyone has their expectations. is the u.k. less investable for you as this data goes into

the negative territory? tim: you have the outperformance of u.k. equities off the currency weakness. now you have seen the currency really stabilize. it is probably 10% cheaper now. it is not going anywhere. that is down to what policymakers can deliver. it is the reason why it has been weakened further. anna: do you think the bank of england goes as far as to forecast we will go into a recession? will that be in the inflation report? tim: based on the pmi data, it is possible. anna: we will get pmi later on today. manus: yes, absolutely crucial. a willingness to be gradual. i will steal that one. anna: thank you very much, tim graf. up next -- manus: we have intercontinental hotels reporting their earnings. we will speak to the ceo for his

first conversation of the day. this is bloomberg. ♪

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manus: oil in fair territory, $40.tabilizes near australia's central bank interest rates at a record low to counter inflation. and a mixed jobs picture. japan's government is set to it has details of a $273 trillion --billion a storm lashes hong kong with rain and wind canceling its stock exchange for the day. ♪

good morning and welcome to count them. anna: welcome to the program. manus, should we do the hotel sector? hotels,ntercontinental revenue below the estimates of $851 million. the adjusted operating profits 344 million,$ slightly ahead of the operating profits for one-time items. first half revenue, $838 million on the block. --a: some news out of hondu it was up against the estimate. it is better than expected from the japanese automaker. third-quarter operating profit at $266.8 billion.

north america, the prophet of 121.1 billion yen. be sales numbers looks to falling in line with estimates. sales almost exactly in line with estimates. billionnumber at 174.4 yen. asia excluding japan making operating profits. there getting numbers from buildings sector. more uncertainty in the outlook after the referendum for the construction industry. it is really crucial ahead of the construction pmi numbers, what the businesses are saying in light of the u.k. economy. many of these numbers for the first half. the outlook is very crucial. more in the outlook after the

referendum. ofus: let's get to the ceo intercontinental hotels group. richard solomons, thank you for joining us. the confidence of your outlook for the year, first half profits. i suppose the immediate question to you is the impact of terror, the impact in france and turkey. are you sure you can really hold on to the outlook as confidently amid a tough trading environment? richard: it is a fair point. in europe and turkey, we've had some tragic incidents. that is something we have to deal with in our industry. the reality is people continue to travel. if you look at the performance at our two biggest markets, u.s. and china, we have had a lot of growth. underlying 5% increase in revenue. we have upped our dividend by

9%. i think the balance across our business really demonstrates our strength. anna: previously you said to us bouncestomers actually back quickly after we see these tragic events. is that continuing to be the place? is it lingering longer due to these recent events? is 25% down so that has lingered. although others has been good. it is hard to predict in the short-term but in the medium to long-term, these people will travel. for a business like ours where we are so diverse, from a financial perspective, we can deal with it and demonstrate strong growth. i think the other way to look at it is we don't own our hotels. we signed 35,000 rooms in the first half of the year.

they are having real confidence in the business we have to look to that. itus: i'm curious to know, has come under pressure post brexit. we have seen a little bit with marriott. would you look at u.k. as an opportunity? what does brexit mean for you in terms of opportunity? richard: brexit for us, in terms of the currency, the majority of our income is dollars. -- inhalf is a startling sterling. it could go the other way. we'll look at it in this or -- we don't look at it in the short-term. this is a very long-term business. we have continued to invest heavily in innovation, our digital business and mobile is 30% over a year ago.

continues to grow on new brands. we signed new hotels into her china brand and opened our fourth hotel in the u.s. it is genuinely a long-term game. short-term currency movements or issues in one country we have to deal with and power on. anna: the weakness of the pound has made a number of international businesses looking to the u.k. does this make you more likely to be an acquirer or be acquired? richard: i don't think either really. we bought hotels last year. delighted to announce we have signed some in paris. company, ourpublic shares are doing well and our business is doing well so we are focused on doing what we do frankly. manus: at the start of this

conversation, you talked about the model, your business model running hotels rather than owning them. what i want to know now is about the smaller luxury brand area. youyou still in buy mode or considering building from the ground up? which is the preferable route? richard: i think with intercontinental, we have the largest luxury brand that we see more opportunities in the luxury sector. it is a bit of a financial call. is there better mpv in developing your own brand for buying? -- or buying? there is not much to buy out there in terms of quality brands. we would look at both. looking at acquisitions that slot well into our portfolio, we will look at. we have done both in the past. i think short-term movements is not going to impact our strategy, but we would like to

add a luxury brand at some point. anna: you are a very diverse building with a global footprint. around 60% of your business comes from the u.s. on friday, we saw a lackluster gdp figure and growth in the u.s. but it was only half the number that economists expected. what are you seeing in the u.s. market at the moment? richard: if you look at our 2.5%,s, it was around slightly ahead in quarter two. seeing good,e steady growth over there. closelyness is most correlated to gdp. we are growing our supply share. the market is growing even had a few percent gdp. we have 13% of the active pipeline under ihg brands.

you can see from my u.s. numbers good solid growth and record levels of signings. we do remain positive about it. manus: it is a very upbeat statement and i'm not looking for a dim and gloom. people are looking at the risk in terms of recession in the united kingdom and the effect that could have on eu rope. give us the pulse of what is going through your doors over the past month and a half. what are the real signs? richard: a month, month and a half is not long to pick up pulses. i think it is a fair question but people tend to look further ahead and make plans early. in the u.k., we saw london slightly down but that is really supply. the region actually group. ew. i do not see a recession in the u.k. if you look at our future bookings, intent to travel, we

feel reasonably confident. i will not say we are shouting from the rooftops, but we are confident the way it has been performing. if you look at interstate forecast, there is reasonable growth. the reality is the u.k. is about 5% of our business. we are truly a global company. we see ups and downs in different markets. saudi has been a difficult market. overall, we have grown. confident, but not shouting from the rooftops. anna: richard, thank you so much. richard solomons joining us to talk about his company's earnings report. head.workout where we manus: we have a little bit of a better offer in terms of london, paris and frank for.

london down. the reserve bank cut the rates which was implied in the market. what it comes down to is what happens from shinzo abe in terms of the global stimulus. you heard from richard it is so hard to call the u.k. it is only 5% of their business, but no material impact. i think that encapsulates business as normal. no dramatic slowdown. anna: it has been the oil prices that has been the focus of the asian trading. we have asian equity markets. they were on the back foot as a result of the weaker prices. it is now at $40.10. other assets on the move, the australian dollar sol rate cuts from the -- saw rate cuts from the central bank which sent the australian currency falling initially, although some of it is working its way back up. ofalso have the yen in terms

-- shinzo abe, we are waiting for him and the stimulus plan and what that would look like. it is up on the dollar-yen as we wait for details. fairly laughe is but decreasing from its three-week high. amidst that global central-bank stimulus. manus: let's take a look at the bond board. it is a bit of a kickback in japan. gdp on the bottom of your screen. bonds rally -- that is probably a paradox. 1.5% on the equities being lower. it is a little higher in the u.s. anna: here is haidi with first news. s trading near $40 a barrel ahead of the u.s. weekly government stockpile data.

crude went into a bear market yesterday over concerns the global supply glut will pursue which is updating industry expectations. exxon reportingn less than estimated earnings. reserve banks of australia lowered the cash rate by 25 basis points to 1.5%, as predicted by 20 out of 25 economist. that is as ab moves to countere disinflation and support the labor market that has been hampered by high levels of part-time work and underemployment. hong kong's stock exchange canceled trading for the day as shed the cityla with wind and rain. hundreds of people have seek refuge and temporary shelter. inton buffett ripped

donald trump, speaking at an event where he was campaigning for hillary clinton. buffett attacked the presidential republican nominee comments made by donald trump about a war hero killed in iraq. >> how in the world can you stand up to a couple of parents who lost a son and talk about sacrificing when you own a bunch of buildings. have you no sense of decency, sir? he also challenge donald trump to release his tax returns. ohamaill meet him in or he can pick the place. i will bring my return, he will bring his return. nobody will stop us about talking about what is on those returns. send the word to him. haidi: the centers for disease

control has warned pregnant zika not to travel to the transmission area in miami, florida. pregnant women who live there should take steps to prevent mosquito bites and the sexual spread of the virus. >> this one investigation showed there was evidence, there is evidence of the potential for the ongoing spread of zika. that is why we have advised pregnant women not to travel to those areas. haidi: global news 24 hours a by hundreds of journalists and analysts. you can find more stories on bloomberg at top go. this is bloomberg. manus: thank you very much. juliette is standing by. we are waiting for the devil and the detail in terms of abe and the real money. how are the markets, treading water? juliette: we have seen some

weakness. japan closing down at 1.5% on the nikkei. we have seen a little bit of trepidation as we await the details. the yen appreciate after a fluctuating session throughout the course of tuesday. the nikkei closing down on the day. also, australia closing at its lowest level in a month. that surprises the work rate cut failing to excite investors although it saw a big spike in the aussie dollar. new zealand closed at 4/10 of 1%. no trade in hong kong today. hong kong will be playing catch-up tomorrow. indexgional benchmark having its first loss in seven sessions. in china, and little bit of a turnaround in the last hour of trading. we have seen a number of stocks hit the 10% daily limit.

we are seeing a big diversion from hong kong and chinese equities. rally into a three-month high. certainly playing catch-up as well. quickly showing you how the aussie dollar is faring after cut interests. it is higher by 2/10 of 1%. the yen making a little bit of a comeback after the day's trading. up a quarter of 1%. they are holding on to the 102 handle. anna: thank you. sticking with that theme, japan's government is set to announce details of $273 billion stimulus package in a few hours. it seeks to bolster in economy threatened by weak consumer spending. manus: shinzo abe singing more

investment was needed to advance the economy. let's get to our reporter in tokyo, and a sharp -- andy sha rp. how much of this stimulus will be real spending? that is the question. andy: pretty much. we are starting to get more of a clearer picture on the details of this spending plan. we are seeing about half of this ¥28 trillion in fiscal measures. ¥7.5 trillion in new spending. basically, this is trying to improve demographics, infrastructure, mitigating risk from brexit and some earthquakes we had here in april and a 2011 terrible disaster. one of the main things we're seeing today is the round of spending this year. we are seeing from these documents we have obtained,

about ¥4.6 trillion, $45 billion in extra spending for the current fiscal year. this is the second stimulus package that abe has passed this year so we can really see how he is turning to the second of his three arrows -- more fiscal spending. anna: what impact will this have on the economy? i know there was a great piece earlier this week on bloomberg talking about how many attempts at fiscal stimulus and how little end result they have achieved. andy: exactly. always it is hard to forecast boostese will work or the economy, gdp, etc.. there will be a short-term gain i'm sure but in the long-term it

depends where the money goes. one thingring that the government is thinking about is cash handouts of over ¥15,000 to low income people, $100 or so each per person to go out and spend it. we will have to see if this works, because it has been tried before and ultimately did not prove to be so effective. let's see what else is in the plan later today. manus: the devil will be in the detail. andy, thank you very much from tokyo. let's turn our attention to germany. know via released -- vonovia released its full currencies. anna: we will not talk to the cfo.

you seem confident to raise your full-year outlook. what raise your confidence? >> confidence lies in the numbers. we have a stable business model therefore we can see already easily on the horizon. volatility in the markets affect us less. the operating performance of the company is low. about what weases have seen before. there was a structural imbalance in the german market which favors companies like us at the moment. it is no secret that interest rates are low and therefore our refinancing costs are low. this allows us to raise our guidance for the second time this year. manus: good morning. minduestion on everybody's -- you said low interest rate is helping you. is there a bubble forming in property market? we have been through one. is there one forming? stefan: due to the regulatory

pressures we had in germany in our area of real estate, i cannot foresee a bubble. i see more catch up of 30 years of stagnation. on the other hand, if you were in the inner city of munich or frankfurt, individual house sales, you sometimes scratch your head about the yields. the problem with the bubbles is you see the only when they bust and go down afterwards. i don't see a bubble throughout the country. i see a couple of hot spots. anna: many in london. with that in mind, the boom this bank has talked about preventing bubbles from forming. do you a anticipate role changes? stefan: they will affect the retail investor. i don't see professionals in a larger scale are getting affected because we are already

on a very tight leash with regard to these type of financings. for us as a blue-chip company, we're kicking in a different way. manus: obviously, you ipo'ed in 2013. what about international growth? i know you have that attempt to take over last year. what about international expansion? is that something you would consider? what about here in the u k? your euro is worth more. not the wormy into a brexit implication discussion please. if you are a market leader, undisputed in germany with less than 3% market share, there is a lot to do in your own country. let's keep in mind residential living is very close to the people and therefore close to

the cultural and political, social demographic environment. i would never rule it out, but it is definitely not the emphasis of our strategic thinking at the moment. there are enough assets in germany he could take under management. think local authorities will be selling properties anytime soon in germany? the refugee crisis might mean local authorities will want to raise money. stefan: i would not anticipate that at the moment. properties23 million which are rented out in the german market, close to 16 million are with individual landlords. 2.5municipalities are at million. at the moment, i would say political sentiment in germany is not there. keep in mind, the municipalities

could refinance themselves at low rates at the moment so there is no real pressure lately or economically. cfo of for know vonovia, thank you. into ahe oil market fell bear market. manus: let's get to work energy asia reporter. the whole price of oil has the relationship to em. how is it weighing in your market? the indications of it weighing on the market at the moment is essentially supply of crude and products. what we were talking about earlier in the year was about products like gasoline and diesel. we have this apply weighing on , theyice, especially wti

are of the highest in at least two decades in the u.s. an increase in drilling from companies in the u.s. are seeing five straight weeks of increases which is added further pressure to the prices and pushing it lower. dipped below $40 and hanging around that level now. anna: briefly, where to from here? $57 is the number being talked about for next year. ben: if you look at the forecast, goldman says between $45 and $50 in mid-2017. in the next six months, it may get to around $50 towards the end of the fourth quarter. rebalancing is in process and that should support prices. anna: ben thank you for joining us. manus: that is it for us. on the move is next. equities a little softer. oil at $40.

anna: japan will announce the details of its ¥28 trillion stimulus package. we will bring you all that news as it breaks. this is bloomberg. ♪

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. odintrg ucin pwifiwiro, fi hthatpsyow usur bs.ines u 'doe t eth dvery.nebusiss. ascomcbut t builbufor sssine welcome to "on the move." here is what we are both watching today. japan's government is set to announce the details of $273 million stimulus package. australia's central bank slashes rates to spur inflation and support the labor market. we