oil which is about $45 a barrel, asia in positive territory. can the summer optimism hold? will japan's growth star t as it wrestles with slow business spending, piling pressure on the boj to act in september? properties in london are taking longer to sell, despite a summer price cut. we bring you an interview with the director. welcome to "the pulse," live from london i'm francine lacqua.

let's quickly check of the markets, global stocks holding near a one-year high as we are seeing more and more rising oil prices, now above $45 a barrel. if you look at wti, you can see it around $45 currently. it's pointing to a resurgence in the emerging markets, and to a saudi stabilization. they keep on saying they want some price decrease, but there rhetoric is certainly filtering through to the markets. this is the big picture for the e markets. the yen lower after slow forecast, a lot of investors thinking the boj will have to do more. let's get more of the markets with nejra cehic. nejra: the chinese yuan has suffered its sharpest drop in six weeks after there were concerns raised about economic

growth in china. figures showed new credit growth in july was the weakest in two years. and investment also we get, indicating that the reason stabilization may be faltering. two terminals. at new york's jfk airport were evacuated after initial reports of shots fired. the nypd tweeted that all terminals have now been searched and cleared, and that no shots were fired. the affected terminals are resuming operation. london properties are taking longer to sell this month despite a summer price cut, according to a property website. homes in the capital are staying on the markets for five days longer than the month before the u.k. voted to leave the eu. we speak to the director at 9:30 u.k. time . global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i'm nejra cehic; this is bloomberg. francine: thank you. japan's first quarter gdp missed

estimates as the strong yen continues to weigh on exporters. 0.2% comparedn at to an estimated 0.7%. for more, we are joined out of tokyo by joe schneider, editor of the economics team. great to have you. what is behind this loo sluggish growth? >> two things primarily. one is the decline in business investment; there was a contraction in business investment in the period. that obviously is waiting on the overall number. even though we saw an increase in private consumption, it was a very slight increase, which makes up more than 60% of the economy, so there is another big factor. behind the business investment contraction, we are seeing the strong yen and some declines in stock prices, which is really reducing the appetite for companies to want to invest. francine: what does it mean for

the prime minister and the bank of japan? are we expecting more from kuroda? >> well, i think there's pressure on both of them. since this period ended, the prime minister has come up with a plan for more fiscal stimulus. there is a plan out there but some has said it is still not enough, and there may be thinking that there could be more to do on the fiscal side, but certainly there will be pressure on the monetary side. there will be very high expectations for more stimulus at this upcoming meeting. especially given the last month in july, that meeting really didn't seat. that this next meeting is going to have high expectations; this time we really mean it. the expectations, as we get closer, especially with weak numbers, no clear driver for

growth. the economists don't see what would change in the coming months. francine: thank you so much. jodi schneider in japan. let's get our guest for the first half of the program, peter sufferk. peter, great to have you. the bank of japan -- the big hope that never happens? >> when you look at japan in particular, you can so clearly see the limits of monetary policy. one of the things that is plaguing japan, for ages really, is that inflation expectations are superlow. even if you look at the jgb, which is low, if you have expectations even lower, it means you are going nowhere. whatever the bank of japan is doing, inflation expectations are not going up, and they aren't going to come down. hopefully this is a trap europe will not fall into. it is difficult -- francine: are you sure we won't? >> we will see.

the good news is, even though our inflation expectations have come down, they are still relatively high compared to japan, which means we have relatively low real interest rates. if i may add, if you look at the front and rates, which are now going negative, we have very clear limits. e for thehe boj, sav more esoteric options being discussed, they come to the middle. francine: does that mean they shouldn't even try to do helicopter money because it won't work or because they put themselves in an uncomfortable position? >> there is a chance that japan might be going down that path, not that it is uncharted territory. but everything that has so far been tried and tested is done and hasn't succeeded. francine: what is the next frontier? we talk about these structural

forms, about fixing the demographics. is the only fix structural reform, or getting more immigrants in? >> the demographics typically take a very long time to fix. they should be making changes at some point but don't bank on it that it will change the fortunes of japan or any society in a short time. you heard it earlier, i think the next step is even more fiscal, and a fusion of fiscal and monetary, and japan is probably going to be a test case. francine: thank you so much. peter schafflik. we will be talking a lot more about some of the european countries, next. stay with other with the pulse. britain's exit could take until 2019; we will look ahead. plus, as homes in london stay on the market for five days longer than in may, we talked to the director of the property website rightmove. and a supermarket best known for

competitive pricing, but we will bring you this surprising family feud over extravagant spending. this is bloomberg. ♪

francine: let's get straight to the bloomberg business flash with nejra cehic. nejra: william hill has rejected an increased offer. the you proposal values the uk's

perest maker at 552 pence share. the proposal continues to substantially undervalue the business, and they are in no rush to engage. shares in japanese tv maker sharp has continued to climb in tokyo after a purchase of the company -- a purchase of the stake in the company. sharp shares have risen by around 1/3 in the past two days. an approvale has from shareholders to buy out his property unit for $4.4 billion usd, according to people with knowledge of the matter. it clears the way for hong kong's biggest ever privatization deal, and could see him relocate the property developments, where companies are fetching higher valuations and in hong kong. and private equity firm kkr about making a play -- kkr is making a play for pepper pig.

no final decision has been made. they have already rejected an offer from itv. and that's the bloomberg business flash. francine: thank you. let's get more with peter schafflick. levy bring you over to the terminal. insurance pitting forward this. wti above $45. they may freeze productions. hedge funds have made their spend on the pound before u.k. data, and it is doing the same for bearish bets. this is the futures price in blue and the long positions in white. without getting too much into detail, if we have an oil price that is more robust than it was two weeks ago, are you confident that's a significant move for the global economy or is a

non-technical stuff like this? >> it is more than technical stuff like this, but we still have to differentiate where comes from. when we go back to years when oil collapsed, there were two reasons, one because supply was increasing and because demand was shrinking very fast. that was obviously bad for the global economy. speculation now is that supply might be cut, or at least frozen. if that happens we only have one side of this demand/supply imbalance, and a better thing for the global economy would to in driving prices up. is, it is significant but wouldn't go so far as to say that it's a signal that the world economy -- francine: overall, for the european economy, are you concerned about deflationary pressures? >> yes, it is certainly still a problem. if you look at the state of the economy, we are doing ok-ish at

best. we have been saying this on many occasions. the european economy is not collapsing anymore, but it is growing at a very, very moderate pace, and unemployment is still very high, and wages aren't going up. when you look across countries like the u.s., wages aren't surging there either. we have a lack of inflationary pressure. francine: and how does draghi deal with that? >> look, he has done a lot already. i think the next step for the ecb will be -- and we have been saying this for a while -- he will be looking at options, how he can prolong what he is doing. i don't think he will be throwing the stuff and. as we talked about in japan, the negative interest rates, they can only take us so far. for him, how can i keep doing what i have been doing? that is a discussion of the design of qe and capital key

changes, which i think will be coming. francine: peter, thank you so much. chief european macro strategist that european capital markets. up next, u.k. bond yields approach a record high. we ask if stocks are too cheap and bonds too expensive. this is bloomberg. ♪

francine: welcome back.

britain's exit from the eu could be delayed until 2019 as the government sets up new departments. thewhile, this week, publication of a host of data on how the u.k. economy is doing in the seven weeks or so since a referendum. that includes updates on the state of the public finances. is there any value left u.k. bond market? take a look at my chart of the hour; the spread between the yield on the ftse stocks and tenure gilts. as you can see it is nearing a record spread as investors push bond yields lower. let's get more with peter schaffrick. peter, great to have you. what do you make, when you look at the chart? is it a break that story -- is that a brexit story? >> what you have is a generally low yield environment which attractivesome more and when the ecb publishes data,

they have been buying dollars. bank of england are brexit related stories because what drove it so particularly was the bank of england action and the reverse and what we had on tuesday that sense of market into the tailspin. they put out a report saying, we will deal with it in november. they could have made it a sharp fall, unless they think that we will still see more. >> i think the market is now making a very big story out of this. onre's obviously some full pension fund deficit, but at the heart of it, the fear that there are not enough bonds that will be sold it to the bank of england and the prices have to

be ramped up, i think that is overdone. i'm fairly confident that on tuesday it will look different -- francine: better or worse? >> i'm pretty sure it will look better on tuesday. we will have a very different situation. look at all the other buckets we had. the bonds that we intend to the bank of england were quite a lot. part of thethat reverse options that attracted the attention, because it failed technically. we will have to see, but i think that the gilt market is a little overdone. if i may add one for the comment, fo you were talking about the fiscal data later this week. one of the things he must not forget is that in contrast to , the u.k.rea government is still very large and sizable.

high imbalance -- francine: one of the things we discussed this week is that they could sell longer maturities. that as simple as that, they say there is obviously appetite so i will just issue more? >> we will have to see about that. the u.k. pmo has a very long track record of being close to the market for delivering a relatively balanced mission profile. say,'t expect them to let's tilt everything to ultralong. let's just see what tuesday brings. i'm fairly confident that the world will look a little less scary. francine: what are you looking for the u.k. to look like two years from now? there are negotiations that it could start in 2019, that the ministers aren't even briefed on how they would start. meantime the pound keeps on falling. >> if you look at the economics of it, the following the pound

has happened. there is no doubt about it. exports, it has brought in more tourists. outlatest data came suggested that there are significantly more people coming in for a visit. that is clearly helping. but the heart of the question is what are the structural changes? frankly, i don't know. we have debated this before, shortly after -- francine: right, and we still don't know exactly how much investment will be pulled out. >> well, we don't know what the structure is. the simple term is can the u.k. still access the common market. if that is the case, the structure will be very different from if it can't. we have to see. it is crucial to see with these negotiations will bring. francine: let's say that negotiations are in 2019. in means we will have another two years of uncertainty stands in a very basic question, does

the eucharist have access to the single market? does that make it works for the microenvironment? -- make it worse for the macro environment? >> well, we lowered our gdp forecast. we are expecting zero growth. -- we don't have to wait until 2019 to see a final outcome of the negotiations. pretty adamant that once negotiations start we will see the disruption. francine: how does the u.k. compare with the eu? if you were to give them grades, the eu has a lot to lose. >> certainly. one of the things that is very clear is that the u.k., in terms of its flexibility and structure, it is much better positioned, particularly in some areas of the eu which are much more challenged.

in this particular case it is less about absolute and more about direction. the eu is currently improving from a moderate base, and that is typically -- francine: how much is that thanks to mario draghi, and how much thanks to a weaker nominal basis? >> i think there's a genuine improvement. not in all places, but places like spain, which have clearly done structural reforms, they are benefiting quite significantly. germany is doing relatively strong. but at some places in the euro area, there are doing really well. in france and italy are struggling, but that is more due to mario than what they have done on the home front. francine: peter, thank you so much. peter schaffrick. these are your markets. this is probably one of the biggest stories of the day, oil.

this is the picture for oil overall, $45 on wti. it is the one people are looking at, saudi saying more and more that they want something to stabilize the markets. it is unclear whether they mean a production cut or even a freeze, but that is how the markets are interpreting it. look at that 101.09. if it goes below 100, that is a technical level, and european stocks overall in europe will gain 0.4%. a lot a focus on brexit in the macro economy. up next, staying on the market for five days longer than in may. he will talk about the director of a property website. all of that and more, right here on bloomberg. is rising to a record. this is bloomberg. ♪

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francine: welcome to "the pulse," live from london, i'm francine lacqua. let's get to the first word news with nejra cehic. nejra: according to estimates compiled by bloomberg, the bank of japan is on course to become the number one shareholder in 55 nikkei listed firms by the end of next year. the central bank is already a top-five owner of 81. this is expected after harry eagle kuroda almost doubled his annual etf buying target last month. the purchases are part of an unprecedented campaign to revitalize japan's segment economy.

the chinese yuan has suffered its sharpest drop in six weeks after economic data raised concerns about growth in china. figures showed new credit growth in july was the weakest in two years and production and investment also weekend, indicating that the recent stabilization may be faltering. airportnals and jfk were evacuated after initial reports that shots were fired. the new york city police department tweeted that all terminals have now been searched and cleared and that no shots were fired. the affected terminals are not resuming operation. the uk's exit from the european union could be delayed until late 2019, according to the sunday times, which says new departments set up for the transition may not be ready to start negotiations as early as predicted. the also reported that national traded ministry are still recruiting staff, making it unlikely they will invoke article 50.

global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i'm nejra cehic. this is bloomberg. francine: landed properties are theng longer to sell, dampening effect of the holiday season according to the latest data. 1.2%s the u.k. prices fell , in line with the last six years. the housing market analyst, great to have you. there is so much appetite for foreigners investing in london or for london property buyers to understand what's going on with their has prices. first of all, should we panic? >> not a panic. seasonal slowdown. obviously is that time of year, a lot of buyers with long holidays go away. a fall in demand. but also the timing of the referendum was a great.

there was a slow down before, and it has run seamlessly into the summer holidays. we have a slow period of several months, where less buyer activity, where they tended to price more competitively. francine: i say should we panic, but is this good news for the first-time buyer? do you see prices overall marginally lower? you were talking about the summer, this is just compounded by britain uncertainty. >> the good news for first-time buyers -- that is the top of what is falling most. wait andan afford to watch the market. perhaps the following the financial services industry, perhaps they are paying back. underlying demand is good. for hundred thousand, 500,000 pounds have seen an increase on the month. while that is good news for first-time buyers to some

extent, properties are increasing in price, but some of the heat has been taken out of the market. francine: how much of, for example, these four-bedroom houses where the prices going down, how much does it have to do with the financial services, and how much is it european families wanting to see what their status is? >> a culmination of factors. they can often afford to postpone their moves. and if they think prices will get cheaper, than they might well have them back in that bracket. seasonality has a degree to play as well. plus we have seen 8% more property come to market this august compared to year ago. francine: how do you explain that? people living? [laughter] >> people moving.

it a be some people thinking, gosh, if the market is in the fit of it, may be an easy get my property. perhaps they are too late. 8% more means you have key buyers looking at more property, and slight downward pressure on price. in particular, in the london market, as opposed to the outer london market, is suffering more. francine: what about a weaker pound? does that help with house prices? are you seeing more money from the periphery countries, or even china and the like? >> will obviously, as well as the underlying demand from u.k. buyers and investors, if their assets are in currency that is appreciating on the sterling, that is good news for them. we are hearing reports of more of them circling around, putting in lower bids, looking for bargains. they are going to wait for the right time, pick up the deals that are more appealing to them. oftainly there are reports

more foreign investors starting to look around. but not in the volumes we have seen before. francine: if you were selling house right now how do you look at it,? we have no idea what brexit really means. we don't know when article 50 will be triggered, we don't know whether eu people can stay in the u.k., we don't know whether they need passports, what happens to the financial system. how do you choose whether now is the right time to buy a property or sell property? >> i think it is interesting, because of the length of time this uncertainty might last for, some people are saying, do i put my life on hold for that long or do i just get on with it? one of the positives around the base rate cut is that money is really cheap to borrow. if you get a fixed rate, in uncertain times you can give yourself a degree of certainty. but obviously you have to negotiate hard and make sure you are buying the property at the right price, for the seller's point of view. yes, you might be getting less for your property then you would have done a year or two ago, but

if you are buying in the same market, then obviously you are trying to get a deal. francine: how do you explain the fact that we are seeing property prices go a little bit down in central london of the periphery? is that because there is a lagging time? >> it is partly ripple effects, starting in more expensive areas and rippling out. central london has a more price increases, and essentially has run out of steam at the top end. buyers look for value out of london, and looking to give you, and that pushed up those areas. central london essentially got a bit stroppy. plus, you are often paying 10%, 12% extra on top, just a paid tax to buy the property. francine: how long have you been in the property market? a long time. >> since 1978. francine: what surprised you the

most about how the property market has reacted to brexit? >> i have seen several downturns in my time. so brexit, it is uncertainty. the key thing is that it's not like the credit crunch, where lenders stopped lending. finance is available, and i think that is the critical thing. repossession levels were low as well; a lack of sales on the market. i think in terms of downward driving pressure, brexit, whilst it is elongated, is different from the downturns we have seen. francine: i hear both arguments. i hear the argument about, don't worry about london. it will become like monica. even if we don't have access to market, you will have billionaires -- the common market, you will have billionaires coming in and you will have return. the other side saying, london

will be left in the dust and forgotten like a small village in the south of france. where is the truth? as long as thed, u.k. economy is going, obviously companies want to reside in london and employ people in london, and that is critical for that top and the market. but london has international appeal. it is a safe haven. a lot of the fundamentals are still there. francine: is it impulsive to predict house prices at this moment? has it always been so difficult? >> long-term forecast still says prices are going up, because we aren't building enough for our forecast population growth. that should underpin prices. but markets are cyclical and london has had a good run, so we are in a downturn at the moment. francine: thank you so much for coming in today. a good conversation with miles shoulipside.

stay with bloomberg. extravagant that the austerity empire. we are looking at the family behind aldi. then, diminishing risks to the economy. how hawkish will this week's minutes be? and oil at $45. what to watch in this week's market, coming up on "surveillance." this is bloomberg. ♪

francine: welcome back. markets in positive territory. let's head to market garden for your asset check. is the stoxx 600 today, i was, technology, oil and gas tracking the price of crude about $45 a barrel. things are turning positive for the first time in 2016. , sharesn drugmaker rising as much as 9.5%, the biggest gain since 2019. has an epilepsy drug and they say the ruling is with aawaited sentiment 92 euro price target. far,s have fallen 10% so

any excuse to talk about peppa pig. kkr emerging as a potential , it is of course rejecting a proposal from itv, kkr studying a potential proposal; no final decision has been made. 7%, the show by generated $1 billion in worldwide retail sales in 2015. i contributed to those sales in the interest of disclosure. shares are up by 7% today. hedge funds have never been more bearish against sterling as we enter this massive week for u.s. data, the first pieces of hard data that we will witness post brexit.

pound, bets against the 90000 and 82 contracts, the most 1982. sterling is at its lows level since july 7, falling for the second last week. the pound is the worst performer against all 31 of its major peers. sales and bring on unemployment, what a big week. francine: huge week. i like your disclaimer. we know peppa pig is the best babysitter on earth, so any u.k. parent will contribute. the family behind aldi is battling for control in if you'd amid extravagant spending. mike campbell joins us now with the latest. it's a great story and i urge

all our viewers to check it out. why is it in turmoil? >> we have two branches of the family who founded it back in .he 40's, doing over control there are a number of countries. it's a $15 billion fortune, and what we have is the widow of one of the sons of the founder versus the other. one says the widow is the training the brand and damaging the reputation by spending too much money on cars and clothes, jewelry, art, all the things you would expect billionaires to be buying, but not if you are a billionaire who owns aldi. you are expected to live the brand and this has become controversial. francine: they have to kill your structure. >> it's right. it's controlled by three interlocking trusts.

one is of shared control and then one for each family. this pertains to one of the three trust, where we have one trying to take his nieces and and us having any influence over the strategy. francine: i love the idea that you have to be a frugal aldi.naire to woown who was going to win? >> i don't know. certainly it is going to continue to play out in a very ugly fashion, which is quite remarkable, because they are very private. there are almost no photos of them available. it will be a few years before there's a legal conclusion but there could be a conclusion that. francine: overall, what is the retail environment like? is it difficult for them, or are consumers flocking to them, due to consumption? >> aldi is having a fairly

challenging. like all retailers, it has to contend with online shopping. there is a bigger role of amazon which may turn up in the grocery space at the point; consumers tastes are going more upscale and they are having to spruce themselves up, tweaking this formula. but to do that while keeping the core of the brand, that's not an easy thing. they are navigating a tricky transition. francine: matt campbell with the very latest on aldi and this family feud. they will keep on giving. about fedt is all policymakers and diminishing risks. how hawkish will this week's minutes be? we go live to new york. this is bloomberg. ♪

francine: i'm francine lacqua in london; this is "the pulse." let's get to the bloomberg business flash with nejra cehic. nejra: william hill has rejected ian increased offer that values .t at about 352 pence per share they say the proposal continues to substantially undervalued the business. saysritish homebuilder

underlying market fundamentals remain positive despite the brexit vote. they say it is too early to assess the impact on the housing industry as the first half revenue rose 18%. profit was boosted as a weaker rand lowered costs. the world's largest gold miner had adjusted headline earnings and maintained full-year forecasts. have continued to climb in tokyo after stocks completed the purchase of a stake in the company. the deal was approved in april but was delighted by chinese antitrust proceedings. the property unit from a billionaire has been agreed to be bought out according to

people with knowledge of another. it clears the way for the biggest ever privatization deal and they could relocate the listing to mainland china where companies are fetching higher valuation than in hong kong. kkr is thinking about making a play for peppa pig. they are studying a potential proposal to buy entertainment one, which owns the cartoon character. no final decision has been made. entertainment one has already rejected an offer from a u.k. broadcaster. and that is the bloomberg business flash. francine: thank you. the start of a big week in the u.s. our economics editor joins us from new york for a preview. good morning, welcome back. we will get minutes from the feds to lim's july meeting -- what are we looking for? >> it is all about your holiday. would you rather be seaside or sitting in front of the terminal waiting for janet yellen

headlines from jackson hole? that is what's at stake here. the sad statement on july 27 was slightly hawkish, and the july jobs report was strong enough that retail sales numbers took a september move out of the market. since nobody on the fed has spoke one way or the other about whether september is on or off the table, it could mean that we are going to see some of that prized back in, a lot of market pressure on this set of minutes, perhaps more than usual. francine: what else are we expecting this week? number -- get one mo consumer prices. core prices are expected to continue their rise and strength, and that will be something to watch. we do get some fed speak this week -- a key member of the group is speaking, and we will

also hear from san francisco's john williams and robert kaplan of dallas. a lot to watch that could reset expectations for what happens the rest of the summer. francine: thank you very much. this is a picture for a lot of these markets overall. european shares are advancing ,ains, including volkswagen where the index turned positive for the first time this year. this is a picture for russia, we saw a lot of news on the last 10 minutes or so. picture, and then crude oil is below $45 but still quite because we aret seeing a lot of impact from the price of oil filtering into the equity markets. bloomberg because tom keene will join me from new

york. we will have a conversation with larry hathaway about bond yields, markets, loads of things going on out there. overall, i would suggest that with the biggest thing you need to know is what happens with the bank of japan. we're seeing around 101 -- what does that mean? it means that there is concern that the prime minister has come to the end of when he can do with abenomics. brought a lot of the japanese paper to negative yield in january, and there was a feeling in the market that it kind of backfired. we will be looking at the end and all the currency moves, also at commodities with larry hathaway. this is bloomberg. ♪

francine: a crude come back. wti coming at $44 a barrel. asia nears a one-year high. can summer optimism hold? over to you, kuroda. japan's growth stalls as it suffers with a goose urgency. pressure mounts on the boj to act in september. and as britain prepares for a ross post brexit economic week, they look at how property prices are being hit. this is "surveillance." tom,