manus: stocks lower, oil higher. fomc minutes are due later today. day two of hard u.k. data. we get another piece of the post brexit economy with jobless claims do this morning. job cuts. a hedge fund shrinking its firm by 15%. up toisco plans to slash 14,000 jobs off the workforce within weeks.

you are welcome. it's "countdown." i'm manus cranny. breaking news on the beer market for carlsberg. first half organic revenue rises by 4%. the market had an estimate of 3.2%. the strategy implemented across andgroup to try to cut cost take cost out of the carlsberg group. the target is to reduce their by 2022.apital that is making progress. how is their position in russia? beer volumes declined in the first half in russia. their share of the market in russia comes in at 34.8. organic operating profit rose higher than expected. they are expecting a higher than expected revenue growth, the

organic operating profit, in the second half. russian market share, 34.8%. declinedan beer market 2% in the first half. these are the first half numbers coming through. waiting of ing, we are for those numbers to hit. as soon as we get those, we will bring those to you. abn amro is the other stock we are watching. abn amro, let me quickly clarify the numbers, it says it plans to euros as anion interim dividend. they will pay a dividend of 45% of the reported 2016 target. that is the main headline coming from them. second-quarter net income comes in at 391 million euros. the cost to income ratio comes in at 357.2.

fordend to pay out of 45% 2016 and they are saying their core equity tier one capital ofio is 16.2% as of the end june. those are your reports. let's tell you how the markets are doing. little bounce in the dollar, a real wrestling match in terms of where dollar-yen goes next. , dollar-yen,l dollar index itself bouncing from a three-month low. probability of a rate hike goes above 50% for the first time since pretty brexit. xit.ince pre-bre as dudley, as dudley, as dudley really opens up the best that the probability for a september

hike is live. dollar-yen, i have met as well. we've seen a nice turnaround, a nice bounce in terms of what is happening with the dollar. excuse me, a bounce in the dollar-yen story. we were careening through that 100 level. 101.08.en trades at bank of tokyo mitsubishi and morgan stanley both suggesting there could be a little more to play. ¥10 trillion will be the limit of any intervention. brent dipping ever so slightly but still encroaching on that $50 level. i've got nickel there for you, a little bit of a change. the philippines is calling on companies to comply with environmental standards. that is your risk radar. let's talk about the fed.

it is squarely in focus. the central bank set to release minutes for its july meeting this evening. new york fed chairman bill dudley gave his take on the fed -- future moves. this was on fox news yesterday. >> could you see a rate hike potentially in september? you also have meetings in november and december. >> i think it is possible. we have to see where the data falls and where we are in terms of broad support for the economy. i think the economy is in ok shape. job gains are pretty sterling. you have some weakness in business fixed investment. perhaps the election uncertainty may exacerbate that weakness for a little while. and generally, the economy is going to be better in the second half than it was in the first. the labor market is going to continue to tighten. manus: keeping it real, keeping it alive, that was dudley.

speaking on bloomberg yesterday, the nobel prize winning economist paul krugman argued against expecting any fed action to have much impact. >> i think there's evidence that monetary policy is pretty ineffective. we came into this thinking monetary policy at zero rates was ineffective. then along came qe. then along came negative rates. i didn't think that was possible. so there's all these other things central banks can do, but it is not doing very much. manus: a deeply intellectual take on quantitative easing, negative rates, and radical policy. we've got hans read accor. you've got to love paul krugman. in, great experiment we are it hasn't really done an awful lot. would you agree with him? quitehe was taking a interesting stance against the riksbank, accusing them of

running monetary policies too tight, implicitly suggesting that monetary policy was working. i guess there is a general seachange currently in the marketplace. six years ago, the seachange was that fiscal policy is not working and the emphasis came on monetary policy. now as we have run into negative interest rates, maybe monetary policy is not working. so you go into the renaissance of fiscal policy. i think we need to be very interpretation. the marketplace needs to find its new way. i guess that we are in an environment where we are going to change a lot of correlations. we need to have a very clear view about manners in foreign exchange and other places. manus: you are right.

we are trying to understand where we are with the fed. dudley last night keeping september live. to what extent would you agree with that? this is something you referred to in your notes. you say the libor and the dollar, a rising dollar libor rate is putting additional selling pressure on the dollar. first let's deal with dudley. would you concur? is september live at morgan stanley? hans: the fed wanted to keep its option nobody -- its optionality . they are pointing into this direction. it is all about optionality. the question is the structure of the u.s. economy. dudley is absolutely right that the u.s. economy is looking ok, but it is only ok.

look into inflation expectations. that is not ok. when you have an economy which has high leverage and low return of investment, and you go ahead and increase real rates, so that actually means you would have an increase of real rates which would not be covered by productivity, it would not be covered by better real gdp numbers, then under those circumstances, you would get a real appreciation of debt. then you get a real appreciation of debt, then a recovery is going to derail very quickly. there's another point to be made. that is the relationship between real rates and the fed financial conditions. the equity market has become increasingly dependent on real rates staying low. look at the headline revenues. look at cost-cutting programs which have been running in the past.

we are now seeing that corporate's are driving profitability and numbers lower. the result is that the equity market can only stay stable or rise from a relative valuation perspective. you need to have real rates being low were falling to justify further equity market gains. you have seen what happened overnight, the immediate negative response of the equity markets on those commentaries. i guess it is going to be self-correcting. you have shown what happened in dollar-yen. it has rebounded quite sharply. there has been verbal intervention taking place from japan. then you have to think about if this is not going to lead to a situation where either the fed is going to stay where it is with current monetary policy and do nothing. then we are talking about

ral u.s. dollar weakness. if the fed would tighten, you would have a negative risk event. manus: what would that be? hans: the negative risk event is simply based on the assumption that when you hike rates, you would have an increase in real rate. when you get an increase in real rate, you take one of the major arguments for equity stability away. so the equity market is not stable. manus: i get that. what i'm trying to get my head around is going after record after record in the nasdaq and the s&p, those equity markets. you have to think about at what time can you correct. i believe you should only correct when you see inflation moving higher. so if you have to see in the case of the united states that

inflation is a global event, it is not a local event, it has very little to do with the output in the united states. it has to do with the overcapacity's you find globally. within this environment, the fed and other institutions would be well advised to allow inflation to develop, and then to act. if you act preemptively, you rise real rates. that could have an impact on financial conditions and the whole thing would be derailed early. manus: hold that thought. very significant warning shot in terms of the ability of central banks to run inflation. hans redeker at morgan stanley stays with me. rosalind chin is standing by with the first word news. >> the bank of england has found enough bonds to buy to meet its weekly target. yesterday the boe purchased 1.1 7 billion pounds of gilts after attempts last week fell short of

the central banks target. cisco systems is reportedly to cut up to 14,000 jobs worldwide. that is 20% of its workforce. the networking equipment giant will announce layoffs in the next few weeks. cisco has been shifting toward software-based networking products. japanese shares climbed on thin volumes this morning. exporters are gaining and million halted its advance. it was the second time this year that the japanese currency has risen above that level. the businessman and economic advisor to donald trump says the republican presidential nominee could free the u.s. from bad trade agreements. he spoke to bloomberg about how trump would balance the books. >> the way that the trump plan will balance the books, i'm not sure the books will ever be exactly balanced, but the trump plan calls for stimulating the

economy and thereby generating more revenues for government, by relieving the private sector of burden. >> global news 24 hours a day powered by 2600 journalists and analysts in 120 countries. i'm rosalind chin. this is bloomberg. manus: thank you very much. let's get into those markets. juliette saly is standing by. dollar-yen has turned around. up is still trying to chug towards $50. equity markets seem to be pausing. juliette: yes. that research in yen -- resurgent yen has given a good used to japanese equities. the nikkei has posted its first win of the week, up 0.8%. good news for japanese equities.

elsewhere it is pretty flat in asia. we are seeing energy stocks really leading the gains. we have seen crude fall back a little in asian trade, but still holding above $46 a barrel. i want to show you cap a pacific shares in hong kong. they are the worst performer on the hang seng index. cathay came through with a miss in its profit numbers. half expecting the second to be challenging as well. looking at a few other stocks we're watching in the region, we have been looking at hong kong exchange. this is the hong kong-shenzhen link finally got that will ahead. probably not going to make that much of a difference to hong kong exchange. bhp billiton rising, saying it sees the end of that commodities downturn. qbe insurance, a miss with its earnings in sydney down almost a

percent. certainly seeing japanese stocks get a good run today. manus: thank you very much. juliette saly with the latest from hong kong. the highlights of your day ahead. we get another snapshot. we've got the jobless claims. that is what we are going to focus on. mortgagethe mba applications out of the united states. at 7:00 p.m. u.k. time, the minutes from the fed policy meeting. coming up on "countdown," the june unemployment data. can it stay below five present levels? we take a closer look. the strong japanese currency briefly broke the 100 threshold to the dollar. what are the limits to the government's ability to stem the rise? plus, ford goes autonomous. the ceo says a mass-produced

self driving vehicle will be on the road within five years. more on that in bloomberg. this is bloomberg. it's a glorious day in london. ♪

manus: welcome back. is, the hangit seng is 22,962. let's get a business flash with rosalind chin. good morning. rosalind: carlsberg has reported first half profits that missed analyst estimates. the danish brewer said earnings before interest, taxes, fell to $522 million in the company's ceo will be on "surveillance" this morning. fund is sent hedge

to dismiss about 15% of its work worse. according to people with knowledge of the matter, the employees range from money managers to support staff. the cuts come after more than $2 billion in investor withdrawals from its fund this year. a u.s. giant and its german competitor have completed preliminary discussions about a potential merger that would create the world's largest supplier of industrial gases. any potential merger is likely to face antitrust scrutiny from regulators. cathay pacific has reported first half profits that missed analyst estimates. 45 million u.s. dollars as losses masked gains from carrying more passengers. billionaire steve wynn said his is 4.2 million other resort

targeted squarely at adults. that is despite government officials attempting to reinvent the world's biggest gambling center as a family friendly playground. bloomberg spoke to wynn ahead of the resort opening. means itification isn't just a place for a baccarat player. it is a place for people who want to stay in beautiful in the hotels and be well served, and the sense of the hospitality industry. so you spend more money on the rooms, on the food, the restaurants, and on the meeting facilities. that is diversification. it doesn't mean adding a roller or ferris wheel. and that is your bloomberg business flash. anna: thank you very much. inflation ticked higher in july. the cbi increasing to 0.6%. this came as the import prices

jumped the most since 2011. we will be keeping an i on u.k. unemployment data. hans redeker is the managing director and head of global fx strategy at morgan stanley. inflation is here and it is coming at a faster clip than the market anticipated. there is this debate that the bank of england is perhaps underestimating the velocity with which we will see inflation hit the u.k. you get some people out there saying it is going to hit 3% next year. the bank of england doesn't see that until at least a year later. is it going to hit harder and faster than we anticipate? hans: we got a significant decline in the exchange rate. there will be effects in higher import prices. the question is what is really of concern in the most brexit environment.

the inflation rate was in a global deflationary environment. i don't think so. it is all about activity. the central bank has made it clear that they are willing to look through an increase of inflation. then you have to think about how that recommendation would work. when you have higher inflation rates, then you have the flexibility to set the real yield and re-level where you as a central bank want to set it. you do not want to get into a state where the european central bankers control on setting the real level of rates. the reason why they have lost that control is that yield curves got exploited and the inflation rate are too low. you have an undershoot of inflation expectations relative to nominal rates. in the u.k., you don't run that risk.

when it comes to foreign exchange valuations, where do you think sterling is going to move in this environment? you have in the u.k. the lowest real rate levels you find in the g 10 and even globally. that implies that it is fairly to all the money markets. the current account deficit of 7%, this currency is going to depreciate further. this i think is well within the game plan of authorities. in a post brexit environment, this country is going to be in trouble on supply side. it, you try to stabilize then all the majors -- the measures should be focusing on the supply side too. that means a lower exchange rate and lower corporate taxation.

therefore i'm quite confident that our forecast of 1.24 in cable and euro-sterling of that is 92 to 94, that a very valid forecast. many people would disagree on the euro-sterling side because we are currently trading u 86. the point here is that the european central bank has lost the capability to manage the exchange rate. it has lost it because we are running in an environment of yield curves in europe. nominal rates are already very low. the downside is limited. that means you can get easily inflation expectations moving faster to the downside than nominal interest rates. so you get what i call a deflationary increase in real rates. well, it is the battle of

wills between the market and central banks. stay with me. we got a little more to get through. up next, capital inflows and strengthening currency. we're going to talk about new markets. ♪

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manus: beautiful day in tokyo. dollar-yen is moving. no longer facing down the barrel of 100. we are 101.1. that is up 0.75. sony mobile. it is daybreak and it is available now. let's look at the top stories. cisco very squarely at the front. this is one of our biggest corporate stories that we are tracking. giant potentially plans to lay off 20% of its workforce as it moves toward

software-based products. a spokeswoman for cisco declined to comment on this particular report, but that would be quite in cisco.ant shift up next is spain and their attempt to form a new government. that story is running. leaders with his party to consider the reforms proposed by the free-market party in an attempt to end a seven-month political stalemate. you are seeing one of the strongest turnaround stories in the area. political chassis. there is no government yet. about the fedl minutes. what is driving at jackson hole?

president bill doubly spark it again. september rate hike is still on the table. it will be interesting to see the access of rhetoric comes from janet yellen and the new york fed. here is that he is deputy court share of the fed. feeling confident that the bank of japan stand in the way of further yen strength. the currency surpassed 100 to the dollar. that was the second time this year. we are looking a closer look at the market. firepower fizzled. wrestling,a fan of it is not a was the biggest wrestler that ends up winning the bout. what you have here is traders see that the bank of japan has run out of wiggle room.

disappointing stimulus. they have pulled back post brexit. the japanese yen being seen as something of a haven. we have seen this 20% increase in the strength of the japanese yen so far. we dipped below 100 yen to the dollar yesterday, 99 or so yesterday. now we are back above that level. currency trading, including anchors at tokyo mitsubishi u.s. yen to extend some of his gains this year. we can see what the japanese yen has been doing against the dollar and there is a view against the -- there is a view not the bank of japan is going to intervene unless we get into the 90 level. we will see the bank talking the

talk instead of walking the walk. manus: talk the talk with the yen. it is said japan should double its economy. the noble laureate said ahe move should be company by a large fiscal stimulus. >> i think japan more than the rest of us needs a higher inflation target. not just 2%. they need to go further. manus: that is the question i want to know. he is with me from morgan stanley. krugman says you need fiscal stimulus. williams is saying about a 2% target. there is a paradigm shift. dollar-yen and what elliott was talking to us about. what comes next from the bank of japan? i have written down is intervention futile in its historical sense?

$142 billion sold of yen. we need more than that to shift the momentum. >> it is quite interesting to see that people tend to forget. the couple of months ago we had a treasury report on intervention and they made it very clear that their intervening into a currency market is not what the u.s. treasury would like to see. reiterate orould retaliate in respect of trade sanctions. manus: they have a $10 trillion cap on it. hans: yeah. i think this intervention talk is not very fruitful, it is misleading. decline,ar-yet does and make no mistake, when we were in november of last year we were trading at 125 and we did take the year 13, 14, and 15 to

make it from 80 to 125. now you drop below 100. nine months, you buy 50% of the previous gains in respect of dollar-yen. why did it happen? the main reason why this is happening is that we got the relative shift in rear great levels. real rate was going down in the united states. in japan it was going down far less. we have increasing inflexibility. it is best manufactured where the japanese yield curve is. it is difficult to move at much lower from here yield lies. that actually means -- yield wise. then you have the situation which is increasing. there is a combination of

account and account surplus and higher real rates and you wonder how you can get the currency towards a lower level. it is impossible unless you go to the new regime of policy. that means you become more revolutionary. manus: what is revolution? hans: you have to blur the lines between fiscal and monetary policy, the dividing line. so far it looks as the central bank makes it very clear that it would buy very long japanese bonds and we do a 50-year issuance. they are getting closer in breaking the link which is currently well-established between debt in a country, not only government debt, government spending, therefore not having the multiplying effect because people think that today's spending is tomorrow's tax increase.

that is leading to a crowding out situation. inyou break that link making people assume that isday's spending tomorrow's expenditure increases, you can do that. four-day rocking game. who better to explain then yousef? reprieve ining the the crude momentum. crude markets, several variables feeding into this equation. we put out this chart for you. there. the line and white is wti. gasoline stocks expanded. --y are at their highs it

highest seasonal level in two decades. total volumes are 11% above the 100-day moving average. additional data from the eia. you had commentary when it comes to the informal opec meeting slated for next month. we've got notes from citigroup and sacks a bank -- sacks bank -- it is in the word of citigroup to expect any consensus on a freeze. hold on a second. this other charge with the magic of one button, i'm going to flip across to this emerging markets rally. rsi.ll off the relative strength index. what we see it is across the key

70 level. this has been overbought. if history is any judge, well, usually quite a selloff follows after that. has the emerging rally market gun too far, too fast? impact a lot in there with technical dexterity as well. redeker back in the conversation. yousef as set this up nicely for us. the stock story and the currency story. pricked theust entire momentum? we are above the 50% probability of the height. >> i think we do. if the fed would hike interest relatedou would have

adjustment in short-term interest rates spilling over into the long end of the curve. you would have a's impact -- a significant impact on the market. they would scale back. a couple of months ago, brain hard from the fed term it is not only about u.s. foundations. you need to put financial foundations in an international context. that thought is well-planted in the fed. in this environment where an early rate hike of the fed, and i do early if you are trying to be ahead of the inflation curve. you've pushed real rates up. under those certain masses, you have an immediate negative response in financial conditions and you will find the fed back where they were in january and february. manus: you have this deep rooted concern that they try to get out and ahead because that is what they feel they should do versus

what you feel they should do. this is the momentum. this is em over the past year. you've got the rear. i know there are politics involved. the kind of momentum we have seen in these emerging-market currencies -- does that persist if the fed goes by another 25 basis points? does that change the momentum you have seen as it was in the emerging markets? at what thek back history is of those gains. we had the perception that the fed would hike four times. the emerging markets did not like that. the emergent market rally did set in in february. there are new thoughts about financial conditions measuring in an international way.

we have seen the fed moderating its views. we have seen the market rising away from rate hikes into a situation where it is a 50-50 chance of seeing them hike anyways. by the end of this year. see that thisw fed moderation would be interrupted, that they would go ahead, which i would regard as a big mistake in a and under those circumstances you will have risky assets coming under selling pressure, including emerging markets. you would see real setback. is this going to be a lasting one? when you do the analysis of the economies and you find that this is not the first time since the year 2012 that the gross differential -- growth differential between dm and em is no longer narrowing. it is not the first time the bout of risk is no longer linked to em.

the bout of risk is linked to dm. call it italy, call it u.s. elections. those are dm-related. if it comes to a setback in in emergent market. they would hike rates. under those circumstances, it is going to be self-correcting. the fed is going to say we are going to moderate ourselves again. you have to think about what they are talking about. let's may be hike rates but they are talking about a flat profile. the gross potential of the u.s. economy is apparently much lower. the natural rate of interest is much lower. again, that makes sense to look for higher yields but you would not find that yield. manus: that action followed perhaps by a u-turn? hans: i will say so.

if there would be a hike, markets would track badly and there would be a u-turn. manus: that is a negative reaction that might come through interns of these e.m. perhapsdown in e.m. is a relative opportunity to reenter. had these rallies on the ruble and the rand. i'm looking at emerging-market bond funds. $80 million in since august. you have em reserves rising by $70 million. the e.m. is in better shape than it was. hans: it is in better shape and the starting point of this better shape was laid by the double deficit countries substantially reducing domestic toand and allowing deficits go down into manageable levels

or even going into a surplus. capital is no on longer there. that is an important point. the second point is the growth slowdown, if you take china a side, the growth slowdown is no longer emphasizing on em. we have problems on the dm side and that implies if people are looking into where to look on the risk-reward point of view, then emerging markets are looking better. manus: if you look at this board, and i know there are intricacies with the top performers, but where are your biggest out for you to know in e.m.? does it continue to be the riel? does it continue to be the ruble? or is the rupee there? hans: you see it on the riel. it is still a carry story, too.

if you assume the riel would do nothing, you would still be paid by holding fixed income in brazil. the of the currency game in brazilian riel may have been fed. isn't that our time to look at the ledger? where has been the biggest concern? you have mexico running a big concern about the potential outcome of the u.s. election. when there was a republican party congress. since this, we have seen that this concern as eased. in the past one and a half weeks, the mexican peso became the best-performing emerging-market currency because it had to catch up to a declining risk profile.

they seek out the specific locations which are now warranted, but beyond that, one overall theme should stay with us for the next couple of months and that is the theme of general u.s. dollar weakness. you mentioned currency reserves which are rising in the emerging-market environment which are nothing else than a manifestation that the shortage of the u.s. dollar has moved into an oversupply of the u.s. dollar. that is a completely new observation. that is a risk that funding conditions for the markets are in better shape. manus: the mexican peso is up 1.7%. hans, thank you for giving us your time this morning. global head of fx. bad news for carlsberg. the danish brewer misses estimates.

we also get results from the insurance company admiral. that is at 7:00 a.m. u.k. time. after that, we talk brexit and the fed and the yen as chief economist and head of currency strategy jeremy koop joins me.

manus: it is 1:52 in hong kong. roselyn jin is with me. : according to people with knowledge of the matter, affected -- tudor corporate has seen more than $2 billion in investor withdrawals from its fund this year. reported itic has

missed estimated profits. carrying loss after more passengers. 's executive will be on surveillance. german competitor lind have confirmed their preliminary discussions about a potential merger. it would create largest supply of gas producers. it would face strong antitrust opponents. the second-largest u.s. automaker is joining bmw, tesla, and google in the autonomous car field. ford ceo mark fields laid out the plans in an interview with emily chang. >> we're going to start mass-producing a fully autonomous vehicle, what we call

a level for vehicle, which means it won't have a steering will, gas pedal, brake pedal, and we see the first application is commercial applications, right sharing services -- ride sharing services in major cities. 2021 is our intent to launch. rosalind: that is your bloomberg business flash. manus: i've got trust issues with the whole driverless car. let's talk about beer. carlsberg missed their estimates . earnings before interest and tax same 83.4 billion danish krone. duncan fox joins us now. he has been going through the numbers. this first quarter, this set of numbers, this is a strategy about ripping cost out of the business. where are they on that road, on that target? $2 billion by 2020, isn't it?

back intoe billion the business, which is the most important part. they are getting rid of complications. they have gotten rid of over 2000 small brands which give them complications. they are on track. manus: i find it fascinating. i said what do you mean you are getting rid of it? they just stopped. what is going on with russia? this is the powerhouse for the profits. duncan: it used to be. there used to be a margin of high 20's. it is now around 15, 16. the volume is good. costhave taken a lot of out of breweries, down to eight. now it is about getting volume backup so their investment goes up. the market share is good. they are on track. bi,s: you are part of the

bloomberg intelligence team. i wonder what that spike is? 8 this is m&a tech heavy -- activity taking us back to last year. this is the sab. it does not look like we are going to get a replica of that. what are the ramifications of that for carlsberg? duncan: is probably good news to be doing restructuring and reshaping. if you are abi, you have 104 billion in debt you have to pay back. i would not expect them to be aggressive on the volume side. that means carlsberg can do what they need to do and invest in one of their brands and get their business in the right shape for the future. manus: let's see how the stock is when we open in a little while. duncan fox from the bloomberg intelligence team, setting up the carlsberg day ahead. stay tuned to countdown and bloomberg throughout the day. hart will be steve

joining the surveillance team. from thef earnings insurance companies admiral and we will talk fed and the post brexit blues. ♪

manus: september is live. the new york fed's dudley says a hike is possible sending stocks lower and oil is higher. minutes are due later today. day two of the hard u.k. data. we get another piece of prose to -- piece of post brexit economy with the jobless report this morning. jones is shrinking its firm by 15%. plans to slash 14,000 of its workers within weeks. the company declined to comment.

welcome to "countdown." i am manus cranny. a little bit of breaking news. admiral, the insurance company. you have the dividend of 62.9 pence. revenue for the first half comes in at one point two 6 billion pounds -- 1.2 6 billion pounds and the number of customers is 4.8 2 million. a return on equity of 49%. what is going on in the insurance market in the u.k. and beyond? stevensdmiral ceo david on bloomberg at 8:00 a.m. london time. that is with i johnson and caroline hyde. attentionch our across to the engineering company. they came in at 12.4 billion pounds. versus 11 billion

pounds a year ago. the order is up. underlying net profit is at 14 billion pounds, versus -- million pounds, versus a loss of 135 million pounds. first half revenue came in at 4 billion pounds, a decline from 4.9 billion pounds. they have a deficit plan. the pension deficit plan agreed in principle and the dividend is reinstated. there is an interest payment of 0.9 pence. plan,is a pension deficit the dividend is back on track, the order is up and the underlying profit comes in at 14 million pounds as opposed to a loss of 135 million pounds this time last year. on the the state of play corporate readings. i am just clicking futures.

we have got a nice turnaround. a lot of this is all to do with dollar-yen. the dollar-yen broke 100 for the second time in 2016. that has with all the way around. dollar-yen is moving aggressively this morning. there is much speculation about unilateral intervention, what the limit of it would be. we have seen the dollar rising, the yen falling. we made it to 101.27. oil was a little bit better. it has given back some of the the initial gains but we are pushing towards the $50 level. let's look at the risk radar. it is a bit of a shock from dudley in terms of putting life into the september rate hike probability. the probability of rate hike has gone to over 50%. that is the first time since the evening of the 23rd of june when

we were told and voted to leave the european union. the dollar is big. .4.97 you are just off a three-month low on the dollar. that dudley comment at the september meeting has changed the trajectory for the dollar. dollar-yen is 101. brent is down by 0.7%. value on whopping 12% the pound and four days. more in the coming days. nickel. something different. the biggest nickel production in the philippines under pressure new regulations are coming into play. for ae bond markets ready hike in september? probably not.

equities are bid. tenure government bonds. thes, you are seeing interest go less. muchese bonds, that's treasury but agency bonds in the united states america. the last 10 months, $50 billion worth of u.s. bonds were bought. the majority were agency bonds. let's get to rosalynn chin. -- rosalind chin. rosalind: a rate hike is possible. he warned investors they are underestimating the number of increases in borrowing costs. we will get more into the fed's thinking at 7:00 a.m. today when the minutes are release. the bank of england has enough to make its weekly target.

-- boe touched 1.7 touched 1.7 billion pounds. reportedly tois cut up to 14,000 jobs worldwide. that is 20% of its workforce. the network equipping giant will announce the layoffs in the next few weeks. been shifting towards software-based networking -- ands and did it workers with different skill sets. a spokeswoman declined to report. shares climbed on thin volume this morning. the yen halted its advance after briefly posting 100 per dollar. a second time this year the japanese currency has risen above that level. the business of visor to donald trump says the nominee could free the u.s. from bad trade agreements. he spoke to bloomberg about how trump would bounce the books.

>> the way that the trump plan will balance the books, i'm not sure that the books will ever be exactly balance. it has been a long time since they were. the trump plan calls for stimulating the economy and thereby generating more revenues for government by relieving the private sector burden. rosalind: global news 24 hours a day powered by 2600 journalists and analysts in more than 120 countries. manus? manus: thank you very much. juliet turned it around, . one hour since you and i last checked in in the market, the nikkei is big, tele-yen is marking an outcome of an sentiment has shifted. -- yen is rocking it out, and sentiment has shifted. that comingave seen

through. the nikkei up by 0.9%. the yen giving back some of the gains it has made over the last couple of cycles. stuff hase the export done a lot of the heavy lifting. still sing a little bit of flat movement coming through on the shanghai and asia markets. hong kong looking good. it has about two hours trade left to go. it is doing quite well by the lunch break. they came through. they very much missed the mark. café is saying that it's second half could look quite challenging. that has seen a big drop in its -- cathay saying it missed its second half could be quite challenging.

australia has turned around, up 0.1% on the clone. southeast asian markets looking a little bit mixed at the moment. i want to show you these currencies that have been moving. the yen really giving back to the dollar, up 0.7%. theyen down 0.7% at 101 to dollar. --have also been walking watching the korean won today. the worst performance today, down over 4%. that has had a little impact coming through the asian markets. good things coming through from japan. manus: juliet sally with the latest. the fed, the fed. what will they do? the focus will be on the central bank this evening. the new york fed chairman,

dudley, he gave his take on the fed future moves. this was yesterday. >> could you see a rate hike eventually in september? you also have meetings in november and december. >> i think it's possible. we will have to see how the data falls and where we are in terms of broad supports for the economy. i think the economy is in ok shape. consumption is doing quite well. real income gains are pretty sturdy. jobs are sturdy. you have some investment. perhaps the election uncertainty may exacerbate that in business for a while, but in general, i think the economy will be better in the second half than it was in the first half. i think the labor market will continue to tighten. i think we are getting closer to the day where we will have to snog of interest rates a little bit. rates inp interest the. winninge had the nobel

economist paul krugman and he argued against the fed action. >> i think there is an accumulation of evidence that monetary policy is pretty effective. we came into this thinking monetary policy was ineffective. then along came qe, and along came negative rates. i did not think it was possible. there are all these other things that central banks can do. it is not actually doing very much. manus: everything is possible. that is what we know from a variety of central banks. joining me to tell me what is possible is jeremy koop, head of currency strategy. read interesting when you the story. september is live is how he has written it. when you listen to him, he has got a smorgasbord of what is factually correct. he took the dollar off the

three-month high. is september live for you? paul krugman says it would be a mistake. jeremy: i think it is possible, not probable. even if we see a strong payrolls number at the beginning of the month, we really have to focus on the inflation number. it was ok. take that from a 30,000 foot view and save the jobs market is tightening, inflation is stable, and wages are increasing, then that is the thing we should be hiking into. we should be taking out this kind of emergency support that we have. manus: is inflation sufficiently bit? a bit trashy in my reference, inflation expectations sufficiently bid? jeremy: business people i spoke

to last week said they started to see inflation move higher in the second half of the year. that is a microcosm view. i would say expectations are looking to come higher, certainly. 18us: the expectations, straight days from a record low. there is a shift in the united states. trump could push a double-shift. jeremy: he could do anything. this is the big elephant in the room is the election and what could possibly happen from there. coming into these minutes, the minutes that we have later on they, the data you out of u.s. was fantastic. industrial, housing. everything was going really well. that is a record 18 days of positivity. the minutes today will express positivity. manus: as you just heard, there are questions of validity of monetary policy.

dudley, of course, adding to this situation in terms of what could happen next. what is the reality of fiscal response coming from in the united states? we seem to be moving into the shifting rhetoric globally to expend a few dollars. that is what krugman said. in theory, by the way, if treasury rates go below 2%, i had brenda brian with me yesterday. we are not interested in bonds below 2%. we hoard cash. jeremy: i would not be surprised. manus: where are we on the fiscal debate? that seems to be the new buzzword. jeremy: kruger was saying monetary policy can do anything. maybe, but it needs to have a complementary fiscal atmosphere and that is the problem we have had in europe, in the u.k. over the last five or six years. it has not been the same in the united states and that is why maybe the u.s. economy has rebounded a lot faster than

other members. the fiscal atmosphere was not as tight. they were not so focused on austerity. manus: would hillary be a spender? she is just not saying. jeremy: she is not saying it, but i think the pressure she would get from the left side of the party would push her into using the checkbook a little bit more. trump is going to be a spender. manus: he's going to make america great. the minutes this evening, i just wonder with the firepower, when the plunges come -- punches come. last night it was doubly. then you get yellen. the people focus on that rather than the minutes? jeremy: i think you have to focus on jackson hole. the minutes are not going to tell us too much. we did not have a gdp report when we had the minutes. we did not have the wage data

coming out of the states so it is slightly old hat. it will be interesting to see if people voice their displeasure a little too much because nothing has happened there and a significant portion of the federal reserve says inflation is not the way to be. we may stay there. manus: if the fed hikes and we and we 51% possibility, have not seen that since the evening a brexit. they are saying a hike is live. what would that do to the dollar? where were -- as i drop my pen. where would that take the dollar to? is it dollar-yen in terms of the momentum? jeremy: i quite like dollar-yen lower. i think euro-dollar is a good one to be looking at. i think that could be the breaker below 110.

emerging markets is probably where people will be focused on. we see dollar-rand, dollar-malaysia. if people start to get scared that this is going to cause some huge run of normalization -- we came into this year with the fed talking about all rate hikes this year. manus: i have had everyone come in and tell me about normalization. i'm sorry, mr. cook. i am not going to buy that. i am moving on briskly. i am being unfair. dollar-yen. we broke 100 yesterday. we did it twice this year. there are rules and regulations in the u.s. by how much you can regulate. what happens next on dollar-yen? you get the feeling that the market gets nervous. dollar-yen run down to 75? jeremy: i would like to see

something in the early 90's. i don't think we will see too much intervention. coronationfor getting into the low 90's. the japanese. i think they are ok with a slow progressive grind lower in dollar-yen. about five yen in 10 days. if we get down to 92, that is our level for intervention. manus: how realistic is that and what time frame is that achievable in? i get the sense that rba, nobody blinked. you have the new zealanders. did -- cause and effect it is no longer established. jeremy: no. 92 only happens with a trump presidency. i think that is the risk that

boosts dollar-yen to the ground. about 25%. manus: jeremy cook, stay with us. watchdog -- what does the post-brexit economy have in store for us? ♪

juliette: abn amro has reported afterdrop in profit making provisions for legal fees. once one of the top banks, abn amro was transformed by the netherlands. it returned to the market in november. havejones is said to

dismissed about 15% of his workforce. the employees affected range from underperforming money managers to support staff. seenuts come as tutor has $2 billion in investment withdrawals this year. halfberg missed first estimates. the danish brewer said earnings to $522nterest fell million. the company's ceo will be on surveillance at 10:30 a.m. u.k. time. that is your bloomberg business flash. much. thank you very just a couple of calls for you on the back of the news that juliette just gave us. abm ave a bmi amaral -- little higher. up about 2%. these are early indications.

we will call it about 2%. abm up about 2% this morning. we will focus in on the u.k.. data sweep at 9:30. it is about unemployment and data. what does that do for sterling? the billionaire william ross spoke to bloomberg and struck a will wish -- struck a bullish tone. >> on a personal basis i bought some sterling. we don't speculate in currency in the fund. to fund always hedges back dollars. investors gave us dollars and we want to give them dollars back. i think sterling may be getting a little low. i don't quite agree with george soros. manus: i do hope that wilbur ross is right. jeremy cook is with us. are we slightly overdone? nobody seems to think so. jeremy: i still think there is

more to come. we may be overdone on short-term indicators. the grand scheme of thing, the political and economic hurt for the u.k. economy has not really been felt yet. we have only had one piece of our data, the at -- of hard data, the inflation data. the positioning suggests we are to a rebound. if we continue to see poor consumer confidence, a fall for business investments, and a atmosphere that shows brexit is not going to have any time soon, then perhaps it will be harder than people are letting on. manus: what does it do to cable, what does it do to starting? jeremy: cable, 122. euro-sterling, up towards 19. the european central bank will not really fight back too much. they want a weaker euro against

that, the ability to drag deals lower than they currently are. manus: if i take brexit and i take fed, that is a double punch to cable, is it? jeremy: i think it is. manus: in terms of positioning, we have seen an aggressively short market as it stands. from your perspective, is there cover thatallying you sell into? jeremy: short covering that move we saw cpi yesterday. i would not be surprised if we see more short covering if wage data held up in the month after brexit and we have not had a huge falloff in employment. it takes a while for businesses to lay people off. it is difficult to file people that fire people in the it is difficult to fire people in the united kingdom. -- it is difficult to fire people in the united kingdom.

i would be looking for data in the november or december time. manus: you hit the nail on the head in that nobody understands the disparity of the situation. ♪

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guy: welcome to "on the move." 7:30 in london. we are counting you down to the european open. i'm guy johnson; caroline hyde is on assignment. death to the fed. the fomc pleads with the market to price in at least the possibility of a hike this year. will investors really listen? u.k. job today. a snapshot of the post brexit labor market. u.k. also begs insurance investors for a ride.