♪ anna: janet yellen and mario draghi. the central bank's inflation target is that it will be met. >> to low inflation is dangerous. that was probably the think in taking the 2% target. japan's core consumer prices inch higher, lagging behind the gains in economic growth. harvey sentane gasoline surging. -- sends gasoline surging. manus: judgment day.

heir prepares to receive his fate. we are live in seoul. ♪ anna: a welcome to "bloomberg daybreak: europe." there is an old saying which is around and around she goes, where she settles, nobody knows. where will be dollar and tonight at 8:00 p.m. in the united states of america? the positioning is so stretched. there is something that has crept into the psyche of the market. rally like this and we are heading for the first monthly gain on the dollar.

the question for markets is according to networks. investors are undermining the prospects of federal reserve tightening. anna: we are seeing dollar pools adding to the positioning. not everybody is bullish. there is a survey showing dollar shortening is the most crowding -- credit trade. -- crowded trade. it depends on how tight you think the fed will take policy. we will talk more about that as we go through the program. let's take a look at the risk radar. the equity session a little mixed. trump points senior republican for the mess about the debt ceiling. blames senior republicans for the mess about

the debt ceiling. manus: janet yellen is going to focus on financial stability. mario draghi will talk about the dynamics. one thing to note from aim market positioning -- from a marketing position point of view. goingdraghi it's probably to tone down the drama in terms of this market. the market is positioned. the three-month risk reversal hasn't been here since 2009. mind what time it is going to be in europe. it is going to be 8:00 p.m. u.k. time. as a public service, bloomberg news has put together a bingo for central banks speak. you might want to use that to focus your mind. intended as a drinking game. it is merely as a public

service. we are seeing upside on wti. hurricane harvey headed for the coast of texas come a bearing down on corpus christi. the focus is on the refining in that part of the world. and rain willinds we see? about 5 million barrels of gasoline at risk with the effect of this storm. maybe 2 million will be knocked out. you have a trimming of the losses. what happened next is the biggest story. anna: let's get a bloomberg word first news update. key measure of's inflation rose slightly last month. core consumer prices which exclude fresh food matched forecasts. struggles to see

significant improvement in inflation. off hisrump will kick push to overhaul tax policy next week with a campaign visit to missouri. support forrally the republican lawmakers to hash out the details. harvey is set to become the worst storm to strike texas in more than a decade. coastfineries on the gulf hold as much as half of the mining equities. it has at the prices of the gasoline a rallying. the trial of samsung's de facto reaches the end today.

been that heas wasn't involved in the decision-making at samsung. the company has posted record profits. a court in thailand has issued for -- afterrant she failed to show up to a hearing. lawyers told the court she couldn't attend the hearing them a later telling reporters he doesn't know where she is. the court postponed the verdict until september 27. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . it is mostly positive you're in asia on the final trading day of the week. the regional index is up. you can see that hong kong is leading the gains, up .8%.

energy giant coming through with earnings boosting that overall index. tradingghai composite at the 3300 point level today. hong kong really leading the gains. qantas coming through with it for your profit. it is also announcing a stock buyback with a share price of -- a share price up of almost 4%. we are talking as we await the verdict of samsung --heir. even though we have seen samsung shares all today as much as 3%,

investors are still favoring. this is the white line. though president moon is trying to break up these tables and reform the country i'm investors are still favoring these big company names. samsung still doing well. manus: thank you very much. tothe central bank forum, fed officials offered opposing views on the inflation debate. another rate hike is said to be feasible this year. kaplan calls for patients. >> -- calls for petience. >> you have to understand that historic cyclical forces and the models that would have suggested

be hase impact would been offset by new forces. think those are having an immediate effect on inflation. manus: mario draghi and janet yellen will deliver their speeches today to investors. now is kathleen hays. thank you for staying up silly. -- staying up so late. expecting?u >> i love that bingo card story. it is clever and delightful. when of the cards would have to be inflation. it is a been conundrum. -- it is a big conundrum.

people were probably hoping that janet yellen might -- that would be of boosting inflation, but instead the topic is going to be financial stability. financial stability and raising this question could be raising the question that jacob frenkel raised. j.p. the chairman of morgan chief international. he said rates have been so low for so long, you run the risk of excesses in financial markets. a chair told us that he -- that if you were back at the fed, he would not be voting to raise rates now. there is clear evidence that inflation is starting to rise again. if janet yellen sent any signal that could be connecting the

dots of risk of financial instability to some sense of a reason that, even with inflation low, the fed to be considering one more rate increase this year. we shall see. anna: it'll be interesting to see whether it is the bread and butter. in terms of the european conversation, mario draghi taking to the states. if you ready to send a strong policy signal? does he tried more carefully? carefully?tread more >> european inflation is halfway to its target. there is a mixture of growth rates across the euro area. he has won monetary policy to deal with all of this. there is some expectation that he will underscore that by september, the ecb will be ready to discuss it and to get into

it. then, by october, have some kind of vote on it. not only does he have this low , maybe weissue that wonder if it is the right thing to do. we have the strong euro. are ready tosts we taper. we know the euro bulls are bullish. sooner or later, the ecb is going to have to taper. that is what has been driving that trade. we have to keep the door open to the possibility that that may be the news from mario draghi if you addresses this head on. he has done it in the past. he has taken these forms to take the opportunity to say something. hand, why would he go all the way to wyoming and

give a speech if he was not ready to send some kind of policy message? the ecb says he is going to stick to the script, but it will be interesting to see what will happen. manus: thank you very much. joining us now is peter westaway . anna: she is in wyoming, we should say. manus: the question is, what will dawn bring? peter westaway, welcome to the show. there is a lovely line at the top of this story. the scuttlebutt says it will be a damp squid. -- eight amp quit. travel allrio draghi the way to wyoming?

what do you expect? we have done the bingo card. what could be the most pressing issue? peter: whether you're talking about the united states, the euro area, in both areas there is this underlying puzzle that the real economy is picking up. inflation isn't picking up. slightly different in the united states, because inflation is softer than you would expect. most people think that is probably temporary. the euro area is week. -- is weak. in all other circumstances you would expect it to pick up. it is not. what do central banks do? janet yellen will talk more about financial stability. reading interest

rate up sooner rather -- stop bringing interest rates up sooner than later. september is when we are expecting to get more details. we spoke to a guest earlier who said the unwinding of the bounce sheet would be the equivalence of 130 basis points. how do those two things operate together? peter: there are different estimates out there. reason why the balance sheet was built up with to give additional accommodation to the economy. when that gets unwound, it is going to have a similar effect. how that works and whether it works in the same way is anybody's guess. we are in uncharted territory. wary.re very

a quick unwinding the cause yield curves to snap up too quickly. manus: a guest said the risk of hiking rates is the real risk. i wonder what janet yellen might focus on. this is the asset price growth. this is qe personified. she mentioned it in london. it is a bubble in a sense it is only going because everybody thinks it is going to carry on. the asset pricing we are seeing is a deliberate consequence of what central banker trying to do. aref what central banks trying to do.

the longer it goes on, the more excessiveis that the risk-taking can have bad financial stability consequences. i am probably on the side of janet yellen. the risk that inflation is suddenly going to exploding get , we see no evidence of that. you mentioned the world bubble. that is a high-scoring word on the bingo. things,iscal side of what stimulus might we get in the united states? travels totrump missouri. he is going to set out more of his big picture ideas around taxation and relaunching his

agenda. what is your expectation of what he can deliver? not much. he has blown so much of his political capital. the government and the administration is going to get tangled up in debt ceiling debates. for meaningful -- manus: thank you. you stay with us. peter westaway stays with us. shifts tofocus europe. hintshere be hence -- from the ecb? this is bloomberg. ♪ ♪

i have it on good , we are not doing the weather today, but the msci asia is up a quarter of a percent. let's get a business class. juliette saly is standing by. -- let's get a business flash. juliette saly is standing by. juliette: amazon is wasting no time to bringing its reputation for undercutting competitors. the company said it will begin slashing prices on a broad cross-section on monday. it is the same day the $13.7 deal is set to close.

apple is planning to unveil a renewed focus on the living room with a device that can stream four k video. 4k video. it is also testing updated version of its tv. aggregate programming from apps that already offer live streaming. qantas has announced its fourth stock buyback. reportinglian carrier its second highest profit on record. shares traded near an all-time high. that is your bloomberg business flash. anna: germany's second quarter gdp is due later today. -- th

from: peter westaway is vanguard asset services. he is with us. mario draghi has a better scenario on his hand. has a strong european economy. he also has a strong euro. i want to talk about the american side. he think he will go to jackson hole and let it pass by as a damp squid. is this something to do with the euro? peter: i think the experience of his speech a couple months ago when the market got overexcited and probably overreacted, i think he has been twice shy and

will be more careful. i don't think there is any doubt there won't toer be more color around what they are going to do. the ecb will announce eventually slowing down of rates and adding assets to their balance sheet. the u.s. is literally withdrawing stimulus. discussions like this equate the two as if they are the same. there is a big gap between what they are doing. anna: they are a long way behind in terms of unwinding the stimulus. talking about what happened. he is going to be mindful of what happened in june. maybe he stays away from that, but he will have to present some assessment of the eurozone economy. even in doing that, is there a -- isthat he get somebody there a risk that he gets too

excited and the euro goes higher? euro, it isnk the pretty good-looking. it has been for some time now. manus: a lovely phrase. the economy. not the currency. the currency is the reflection of the underlying health of the economy. the underlying conditions have been there for a while. because of the political risk that was hanging over the euro through this year, things were being held back. now, suddenly, things can let rip. that is why the euro has started to appreciate. manus: peter westaway stays with daybreak. anna: up next, decision day for samsung's heir. seoul as then action unfolds. we are live outside the courtroom.

we will bring you more details. jay y. lee ensnared in this scandal. what will be the verdict today? this is bloomberg. ♪ ♪

it is 6:30 a.m. in london. it is a live shot in singapore. -- in seoul in the central district. we are waiting for the verdict in the trial of jay y. lee. we will bring that to you as we get news. anna: let's check in on the markets. here is nejra cehic. nejra: gains in china, hong kong, japan. the msci asia-pacific index

rising. up two or 3/10e, of a percent. financials and materials following quite closely behind. overall, we are seeing a little bit of risk on and these asian equity markets. a lot of focus on the dollar. the bloomberg dollar index heading for its first monthly gain in six months. i am looking at technicals on dollar yen. it is pretty unchanged, although the yen is heading for a weekly loss against the dollar. we are keeping an eye on this this week. we saw dollar-yen breach that conversion line, which is a nine day moving average. that is a key technical to watch. also keeping and i on oil and

gasoline. we are seeing wti trimming a weekly loss. keeping an eye on oil and gasoline. we are seeing wti trimming a weekly loss. we are rebounding today. what i find interesting here is that eia data. the fact that gasoline stockpiles have been rising where is the crude drawdown has been coming down has somehow had more of an impact on the oil price more than you would expect. i wonder how that balance will change now with the prospect of hurricane harvey. talking about production, not stockpiles, but interesting to address. manus: thank you very much. earlier, a live shot outside the court. we have one mine from the news, the verdict trial on jay y. lee is beginning. these lines are going to drop out very shortly. we are told this could take a

considerable couple of time. -- a considerable period of time. anna: let's turn our stories to this edition of daybreak. tolet's turn our attention the stories in this edition of daybreak. stayed in a holding pattern ahead of speeches by janet yellen in mario draghi in jackson hole. asian shares headed for weekly gain. retro china led a rally in chinese and hong kong markets. we are also watching. manus: jeff bezos. the amazon-whole foods deal will close august 28. what are they going to do? reduce prices on some items on the same day. the company is also going to begin to integrate amazon prime into the grocers system.

i signed up for amazon prime should -- amazon prime. oil: hurricane harvey has and gas platforms in its path. flood ps threat to lants. manus: the refineries have been shot down and platforms have been evacuated. hurricane harvey there is down s down on texas. the assumption is it could hit a category three. maximum winds sustained are 100 miles an hour. by philip.e joined we also have peter westaway still with us from vanguard asset services. good morning to you. let's get the latest on hurricane harvey.

it is no hurricane. it wasn't this time yesterday. where are we expecting to see? >> yesterday we thought it would be more of a watery affair then when the affair. it is getting stronger. 20% refinery capacity onshore in texas hours -- is already shut in and it may become more. manus: we are trying to track this storm. if you were a bloomberg customer, have a look at this. you can see where we are in terms of the action. the green dots are still operational in alabama. you go down on the coast and you begin to understand some of the dynamics. up to 2 million barrels of gasoline could be threatened. we are seeing a spike in the gas market. how long does it typically take for these kind of issues to play through in the market? >> there is a concern, a fear.

how it turns out is anybody's guess in terms of the storm. it will definitely create a spike. refineries, one refinery shutdowns take three weeks to come back to its full capacity again. going into next week will see probably higher prices. anna: the refining site is what we are watching to see what damage is caused, how long we have to remain off-line. what about pipelines and other parts of the infrastructure? is there any other kind of read across, keystone? wind is worse than flooding, but pipelines will not work as usual with flooding. the houston flight -- pipeline is highly controversial.

you could argue that bring you more crude into this region would reduce the diversification windsreate more risk for and hurricanes like this. manus: thank you so much for being with us. we still have peter westaway. oil is barely unchanged. from an economists point of view, how does it come to bear? peter: from an economics pointed you, we get events like this -- economics point of view, we get events like this. the main driver of economy prices is global growth. china has a huge influence.

it looks as if commodity prices are going to be range bound. i don't think commodity prices are rarely -- are really laying a huge role. -- are really playing a huge role. the surprised site is up at him what opec is happening in north america. this weather event is part of the story. on the demand side, what is the strength of the chinese growth story? the keep local events will take place there and the autumn. -- in the autumn. maybe china will slow down slightly from some of the numbers we had.

the way we like to characterize chinese policy is one where what we call fighting retreat mode, the idea that, on the one hand, policymakers are trying to keep the economy down, but on the other hand, they are worrying about the financial stability. in many ways, the same story we are seeing in the u.s. and elsewhere. the difference being that the financial stability worries about china are quite considerable, because so much of the growth is being driven by expensive credit. -- expensive credit. xpansive credit. manus: what would be the biggest policy risk? peter: the biggest policy risk to maintain the current levels of growth around 7% in the face of slowing structural growth.

in five years time, china could have 5% growth easily. try to keep it up at 7% would be the big policy risk. anna: peter, thank you. he stays with us. the samsung story. lee, a say he did not ask for favors. this goes to be heart of the issue as to whether there was embezzlement, trying to make favors so they could get greater power. they say samsung hasn't asked for a favor. that is according to the news. anna: we are live in seoul shortly. jay y. lee confirmed in his testimony that the company gave millions to a foundation.

that ensnared the whole political establishment. hasenies that samsung thought any favors. that is the line we are getting from the court at the moment. u.k. published in avalanche of documents on brexit. money will it pay the european union? anna: the you can make concessions to the e.u. and some of its positioning papers, yet sterling fell on wednesday to its weakest level against the euro since october. manus: peter westaway is still with us. a slew of documents. are you any the wiser? peter: not a huge amount. the u.k. government has been in an unrealistic mode. probably what we are seeing in

many of these positioning papers is that. there were a few copper mine is being made -- there were a few compromises being made around the court, the justice. at heart, there is still a lack they arem about what really going to come up with in terms of the deal that is going to deliver the sort of being outside the e.u. but effectively being in it. anna: this leads us into negotiations. we have the gdp numbers yesterday. slowest gdp growth in the g-seven so far. where does that leave the u.k. story? we bumble along at these kind of levels. in no way, it is easier to explain these slow growth numbers than the rather small

numbers we were seeing at the back end of last year after the referendum. why didn't we have a slowdown in investment in the face of this manifest uncertainty? on top of this now is the impact on consumer spending, the fall on the pound. consumer prices are way ahead of wage growth. consumer spending is slowing down on the face -- in the face of that. there is no real prospect of anything getting better. manus: there was a bit of a bump. the first budget surplus in nearly 50 years. whether that lasts. i got a notesment, asking me where my foreign income was.

this is an anomaly. it sends the broader question about fiscal policy in the u.k. and infrastructure spending. many of the things we stopped talking about, will become? will we see fiscal latitude? peter: i don't think we will see it outright. the timingelative to that george osborne had in play for us, we are not going to see that. did that and, we are getting a little bit more relative stimulus then we would have done. the bigger picture is looking for the brexit shock unless we get a much softer brexit than most people are thinking, or even if it didn't happen. in the absence of that, i think we are going to see a deterioration in the fiscal output. as that a possibility that brexit doesn't happen in your view? -- is that a possibility that

brexit doesn't happen in your view? peter: it is a possibility. before the general election, we put the chance of no brexit or 2% andexit at around hardly at all. we have upgraded that to 10%. still pretty unlikely, but not totally beyond the bounds of possibility. you need to politics to play out. the idea of another general election triggering a chain of events, who knows. manus: peter, thank you so much. peter westaway is with vanguard asset services. that's got to the samsung story. anna: the verdict of the trial of jay y. lee and his former deputies is being announced right now. we are bringing you some of those lines. there live from seoul. hear?re we expecting to

rosalind: this feature is expected to take in our, maybe two hours. we have already been hearing some iterations of what we have been hearing this week, denying allegations. he is up for five charges them including bribery and embezzlement. -- five charges, including bribery and embezzlement. he faces jail time. indication of the mood that has been around in the last few months. there have been wide implications because of the geun-hye, sof park this case has widespread implications.

the polls are somewhat divided. 34.8% think a 12 year prison sentence is too light. is proper and others too heavy. there are those who are saying that corruption and bribery should be punch in -- punished with the heaviest possible sentences. in the coming hours, we will be hearing a lot more coming out of the courtroom. manus: what are the wider implications? we have seen some previous examples of where executives have been found guilty of wrongdoing in south korea. they eventually returned to their leadership roles. do they really matter? that is one of the

issues. if you look at history, yes, there has been several leaders convicted, some done prison time, some continued running their companies from behind bars and they are eventually parted. system want to stop that system. this case is significant. because something is so big and powerful. has, because the impact it on the former president, park geun-hye. not giveny y. lee is the strongest assessed -- sentence available, even if he is let off by all the charges, there is still going to be movement by the government for reform. that is what the president promised and campaigned on. anna: rosalind chin did joining us live from seoul, and we will be keeping an eye on what is being said. manus: coming up, we have fresh

data out of japan. growth remains below the inflation target. what is it mean for central bank stimulus? ♪ ♪

anna: welcome back. inflation or the lack of it takes central stage in jackson hole as central bankers convene for their annual summit. kathleen hays says robert kaplan calls for patients. >> you have to adapt to reality. i haven't lost faith that inflation may get back to its 2% target. you have to understand that historic cyclical forces in the models that would have suggested

what the cyclical forces, what the impact they should have are being offset by a new force, would you can understand mainly by looking at industries and companies and talking to ceos. i think those are having an immediate effect on inflation. it is not black or white. weis that we may well find can run a lower level of in order to build be cyclical forces to overcome some of these structural headwinds we face. it is more that we have got to adjust and adapt. there is a lot of talk in japan, people walking the bank of japan saying, the 2% target is realistic. why don't they give up that target and adaptive lower target? is that something be fed to consider? >> i say no. we have a history in this country and we went through in the great depression and japan is concerned about it. it is deflation. high inflation is not something

you want. you also don't want deflation, particularly when you are this highly leveraged. the u.s. government debt held by public is highly leveraged. if you got deflationary forces, it is hard to deleverage. too high inflation is dangerous, but too low inflation of also dangerous. that was probably be thinking in taking the 2% target. i still think that thinking is pretty solid. kaplanthat was robert speaking to kathleen hays at jackson hole. we have the japanese data. that has been released overnight. anna: japan released new data that shows the country is stuck. overall, prices rose. inflation remains below the 2%

target. central bank is likely to continue stimulus. that's the latest. good to see this morning. then beats the pants off g7. withwe are, trudging along a rocking inflation number. why? there are a number of reasons. it is a worldwide phenomenon, but it is more pronounced in japan. the reason inflation is specifically lower in japan has got a lot to do with the low population growth and the demographic profile. one third of their citizens are

now in the pension age group. group wherean age they typically are not increasing their spending by much. the is bearing down on to -- unless the relatively low demand growth is been meeting the significant international slack we have and labor markets. the result is this low inflation. is the boj going to have to push out into the future? ric: yes. they are not going to get into -- they are not going to get to 2% by their deadline. anna: thank you so much. we have an update on samsung. bribed in y. lee

return for help on succession according to the news. leeave more from rosalind outside the courtroom. ♪

manus: yellen and preventative the podium at. the dollar spent president saying it will be met. >> to high inflation is dangerous, but too low is also dangerous and i think that was the thinking and taking the 2% target. i still think that is pretty solid. anna: japan's core consumer prices lagging behind gains in economic growth. manus: gasoline surging as it heads to texas. the worst storm in more than a decade. anna: samsung's -- once his fate. the verdict on the month-long corruption right now.

♪ manus: welcome to bloomberg daybreak: europe, the flagship show in london. anna: welcome to the program. 7:00 friday morning in london. 8:00 in germany. economyhe german expands by .6%. the preliminary reading was .6%. government spending up by .6%, private consumption, this is the bulwark, rising by eight point -- .8%. capital expenditure ruled 1%. exports a little less than markets had anticipated. .7 percent. but you are on track with these kind of numbers for germany to grow at around 2% this year. that would be the first time

since 2011 and it is that private consumption number that is driving the economy to perhaps a stronger -- record unemployment, robust orders underpinning production. hinted atorecast being too pessimistic. anna: further lines coming through in the case against jay y. lee, samsung's de facto leader. what is being discussed and we are getting these headlines across the bloomberg. courts saying the 7.2 billion yuan was a bribe. and the role of south korean companies in supporting this sport has been crucial to this case. also saying, funding for the agency was a bribe and the president's friend, this is a scandal that has already led to the failure and stepping aside

of south korea's president, so we are watching to see what the verdict is in this case. the prosecutor won approval to verdictee to secure a and sentence, or else he has to be released. that is what we're waiting to hear, his fate. are looking for 12 years. when will see what he gets. atus: topline log on the go the moment, go to top live go. he had given many donations, up for a potential of 12 years in prison if these are found against him. 0.3%,s, london down by hardly an aggressive fall. the rest of europe is in positive territory. financiall talk about stability, draghi will talk about growth dynamics, but donald trump is going to verbal war on twitter about the mess

with the grand old party. moving, thelar-yen biggest weekly loss in almost two months. the market is slightly more favorable risk on proclivity versus the doom and gloom over what could come from jackson hole. anna: it all comes down to your assessment of the jackson hole conversation. yellen and groggy taking the stage. let's show you their asian equity session, waiting for jackson hole to take hold and for the commentary to come from there. white house drama over -- ongoing as trump blames republicans for the "mess" on the debt ceiling. euro-dollar in here because we are waiting to see if mario draghi has something to say has gone all the way to jackson hole and doesn't want to move the markets. 117 point 94 is where we trade on that. 8:00 p.m. u.k. time. manus: wherever you are in the hand, class of wine in

not that you drink and read your bloomberg at the same time, losses yesterday because of hurricane harvey. an update on the strength of that. it started as a category one storm. anna: the national hurricane center saying it is strengthening and the extent to which it brings rains and high winds and what that does to refineries, we have heard about closures near corpus christi and the gulf of texas. a few lines on samsung, it is all about the alleged bribery and embezzlement. we heard the bribed -- lee bribed and now embezzled 6 billion yuan. we're keeping an eye on this story. says: samsung, the court samsung transferred the assets overseas illegally.

let's get your first word news with juliette saly. good morning. juliette: japan's key measure of inflation roseberry slightly last month. core consumer prices which exclude fresh food increased, matching forecast. that likes behind gains in economic growth as the central bank struggles for significant improvement in inflation. hurricane harvey, set to become the worst storm to strike texas in more than a decade has forced evacuations from offshore platforms and shut refineries. oil refiners in the gulf coast, as many as half america's capacity, halted operations, threatening the region with deadly floods. that has sent the prices of gasoline rallying. trump administration planning to unveil another round of sanctions designed to punish the government in venezuela. according to two familiar, when move under consideration would block trade to venezuela and hold dollar-denominated notes.

it would be the latest in a u.s. campaign to put pressure on nicolas maduro. will kick off his push to overhaul tax policy next week with a campaign visit to missouri. according to an official familiar with the plans, he plans to rally support for the effort while republican lawmakers hash out the details. the trip wednesday is expected to be the first of several presidential stocks around the country in the coming weeks. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can of course, find more stories on the bloomberg at top . inal trading day of the week asia, we are seeing japan and australia close out the section -- session, the nikkei higher by .5% and australia only higher by two points. by 1%, it hasup come back with an -- with a vengeance after wednesday due to

the typhoon, we had patrol china and energy giants coming through with strong earnings. chinese stocks listed at a two-year high. other players we are watching, hsbc,ring in hong kong, qantas profit better than expected and announcing its fourth share buyback in two years. htc in taiwan also rallying on rumor that it could be meeting with the likes of google, could be spinning off its virtual reality headset business. we are getting these lines from down.g, shares in seoul despite all the woes flying from samsung, investors are still favoring these companies over

the small caps. cap indexe the small on the blue line. most analysts saying this is because they are not listening to what is happening to the chairman jay y. lee and are focused on what samsung is doing as a core business and the release of its new note eight smartphone. manus: that is what the market is focused on. since the trial started, the stock has made an all-time high. one of our lead stories is about the kansas city fed symposium in jackson hole. two fed officials already offering opposing views on the debate. anna: esther george said another rate hike is feasible if u.s. that holds up. the dallas fed president called for patients in waiting for prices to go higher. lost faith that inflation may it back to its 2% target. it is that you have to understand the historic cyclical would and the models that

have suggested what the cyclical forces, the impact they should have are being offset by new you can understand mainly by looking at industries in companies and talking to ceos. as are having an effect on inflation. mario draghi and the fed chair janet yellen delivered their speeches to investors and we are parsing get for clues on the timings of the reductions of stimulus. let's get to jackson hole where kathleen hays is staying up late. >> it just turned friday. manus: you are going to get the gold star at bloomberg for the longest day. this, just before you get a little sleep. what are people saying, will it be a down squid, or could it be sexy? kathleen: i wouldn't rule it out. we have two of the world's top central bankers giving speeches. janet yellen, typically, every year this is what they do.

they kickoff proceedings, 8:00 mountain time and the fed chair can say something very bland or delivery message and increasingly over the years, that is how they have used his forearm. same with mario draghi. in 2014, he surprised everybody by opening the door to buying bonds again, keeping qb going. -- quantitivese, easing going. on from saying it is transitory, it is going to pick up in the medium-term to showing a little more doubt. what will we hear from her tomorrow? alan blinder told us earlier, if he was still at the fed, he would not vote to raise rates until there are cleats -- clear signs of inflation moving higher. janet yellen will give a speech on financial stability, that is not necessarily apart from monetary policy inflation because if you are jason

frankel, the chairman of jpmorgan, you say there is inflation in asset prices and keeping rates too low to long can exacerbate that. will janet yellen take this financial stability question to that point? if she does, it could have impact on the market because it would be seen as hawkish. we don't know though, it may be a more measured speech because janet yellen may not be ready to give a signal. we know they want to start the balance sheet reduction september and a lot of fed officials the we will do that in september and if we hike the rake it won't be until december. maybe janet yellen doesn't want to upset that view. anna: when she talked about asset prices in london, that grabbed a few headlines. what about mario draghi? he has gone all the way there to say something. what kind of signals are we expecting? kathleen: that is what everybody wonders. he has given high-profile speeches in jackson hole,

london, other places when he wanted to give some kind of policy signal. so will he be ready to give more details on tapering? inflation is below target, euro has surged. that is a reason for him to soft-pedal this and let everyone know the ecb will taper at some point but maybe he's ready to go there. -- not ready to go there. would he take this as an opportunity to express some concern over the strength of the euro? how it can hit european exports, growth and make it harder to boost inflation? good people wonder if the ecb would consider intervention if the euro continues to rise? i really pushing it here, we don't know. he may be cautious as many think he will be, but it is ours from now and we will know what he has to say. manus: we wish you well, get a little sleep. kathleen hays, with the very latest on jackson hole. tomorrow morning will look stunning. anna: we are joined on set in london to conducted -- continue

the discussion. you are focused on the white house and the politics and what that does the -- to the dollar. but what would move the markets today from janet yellen? would it be asset prices or something, clues about the september balance sheet, what would you look for? yellen's speech will be about financial stability but we think she may be slightly more cautious over the prospect of fed tightening. we don't buy into this idea that the fed needs a hike interest rates aggressively just to tighten financial conditions and in the absence of inflation, what she may point to and has spoken about, is structural forces from their asset prices are. her story remains that janet yellen and the fed is the subplot for u.s. asset prices right now. it is really the white house that will drive the delay -- u.s. dollar and equity prices going forward. manus: have you confirmed your dollar?

have you reconfirmed dollar bearishness after the trump tweets last night, going up against paul ryan? , mostis the positioning short since 2013, and the dollar has risen this month, so are you still holding in their with your dollar bear position? august, but nothing has changed on the political front. uncertainty still affecting the dollar, it is likely to be the case going into october when we have the real debt ceiling debate. if that passes through, you've got question marks over tax reform, let alone next year. those are serious factors weighing cyclically on the dollar. anna: clearly some in the market, and we see this with short and treasuries, are they nervous about see on the debt feeling -- ceiling debate. you mentioned the tax conversation, next week trump is going to missouri and will seek

to relaunch uninitiated around taxation -- uninitiated around -- an initiative about tax. why do you still have little expectation? some say he can deliver something on this, maybe nothing else but this. viraj: the economics, we have in producingoles some sort of corporate tax cuts, but also balancing the books, making sure there is no increase in the budget deficit, that is where the politics comes in. you have republicans split on where we are in the budget deficit. manus: we are getting some lines coming through from the samsung trial. samsung, is now saying jay y. lee is guilty of perjury. there has been a number of different lines that have come through in terms of transferring assets illegally, but this is

the latest line coming through in terms of samsung. jay y. lee is guilty of perjury. anna: the first worship -- version of the word guilt this warning. the role of succession planning here, the court said earlier they found no evidence samsung soft favor from park, but then embezzled say lee had , the funding for the agency was a bribe and he is of course a friend of park, the former leader of south korea. and going on to talk about this guilty verdict around perjury and more details. manus: the top line is that jay y. lee is guilty of embezzlement and bribery on a sportscenter front. if you want to understand what is at risk for jay y. lee here, the prosecutors have demanded a prison term of 12 years. they have accused him, in line of the charges for embezzlement and bribery and hiding assets

overseas. they see those could deserve anything up to 12 years. the top line is he is guilty of embezzlement and bribery on a sportscenter front. rather specific. anna: if you wonder why so much mention of sports and korea,cing, in south samsung tonight they had soft favors. sought they're often asked to give funds for charity and sporting events and jay y. lee said he was scolded by park for not doing enough to support the sport. that is why sport is at the center. manus: a line coming through that say donations to the foundation were not abroad. you're looking at live pictures of the courthouse where these verdicts are being handed down. just to give you a sense of the power of this company. samsung and its affiliates command nearly 15% of south korea's economy. pauselet's take a short

in the conversation. we will get further analysis from seoul. 7:18 in london. coming up, japan still off target as core consumer prices show little improvement. we will run through those numbers next. ♪

♪ nice shot of erlang -- berlin. euro down 117.94. gdp, nice set of number. on separate 2% growth in the german economy this year. it is the consumer that is the bulwark behind it. they are confident, unemployment at a record low and an election coming up for angola number -- angela merkel. anna: despite concerns around the strength of the euro and exports. let's look at the broader markets.

stoxx 50 futures telling us we will be pretty flat at the start of the trading day. we're been range bound because everyone is poised for their jackson hole bingo cards. what will the central bankers tell us, what will be the focus of the address. --io draghi and janet yellen will draghi one to move the market at all? manus: i have a vision in my head, bingo cards. anna: merely to assist us in focusing our minds on the important fact, not at all inciting a drinking game. stock price,g, the a variety of lines coming through from the courtroom. down 1.5% at the moment. --t we know so far is that rosalind chin is outside the

court. run us through the most important one. jay y. lee guilty of embezzlement, bribery of the sports fund. why do we care so much about that? rosalind: so we have the court saying that vice-chairman jay y. lee offered bribes to the x president in terms of -- in return for his -- her support in his election process. what this means is they are saying yes, all of his allegations are correct. they're referring to a 2015 merger of two affiliates, which led to him consolidating his power in samsung group. actually popular among activist investors, like -- itinger who said value didn't land valued shareholders.

trial, of this prosecutors have said that samsung donated money, millions of dollars, to organizations which were controlled by a very close friend of the president and that in return bought some government support to consolidate his power and position. anna: rosalind, thank you. a complex verdict being read out. still here, fx strategist at ing. let's leave the samsung story there for a moment. jackson hole, we talked about what we would get from yellen. draghi, lower high expect sanctions? -- expectations? rosalind -- viraj: we think he will be more careful this time around. it is not in the ecb's interest or economic interests to see markets front right -- front

running normalization. we may see draghi raining in the optimism. manus: these are the one risk -- one week risk reversals, they are all telling the same story. the euro is not frightened. the euro is not frightened of a jawboning by mario draghi today. viraj: i wrote earlier this week it is showing the resilience of a boxer not going down. manus: like me. what we are likely to see is it is hard for draghi to talk down the euro. negative impact on the ecb inflation projection, the growth. we don't want to see the euro surging above 120, that might be the message of mario draghi. anna: we will see what words he chooses to describe the economy right now. ing fxou so much, strategist. that will do it for daybreak europe.

the european open is up next. manus: i am off to do some radio. -- i will continue on tv. the top line is jay y. lee is found guilty of embezzlement and bribery on a sports front.

♪ manus: welcome to bloomberg markets, the european open. we bring you the first trade of the day. i am matt cranny alongside matt miller in berlin. chairmanay y. lee, the who has offered bribes in favor of succession and is guilty of a perjury charge. he is sentenced to five years in prison. five years in prison on graft charges. that is the top line.