taylor: the bank of japan leaves its targets unchanged. the central bank said it will reduce the amount of bank reserves and negative interest rates. it intends to maintain the current fixed relay low levels of short and long-term interest for an extended. of time. u.s. president donald trump said he is willing to meet his quote, counterpart with, no precondition. that comes amid tensions climbing after trump left the nuclear deal. some hours later the white house walk act some of those comments saying the officials do not expect tehran to seek a meeting. >> they want to meet, i will meet. it's good for the country, good for them, good for us, and good for the world. no preconditions. i will meet. hasor: north korea reportedly continued to build missiles sense kim jong-un agreed to commit to denuclearization. says photoson post and other evidence indicates efforts were underway to assemble at least one and possibly two liquid fueled intercontinental ballistic missiles. the rockets were being built on facility -- at the facility on the outsk

bank of india and bank of england. kathleen hays is in tokyo this week for the bank of japan meeting. there has been speculation governor kuroda may tweak policy. what is the likelihood? kathleen: speculation is red-hot. at the very least if the governor of the bank of japan is not ready to fully announce a step towards a small but powerful, potentially important change in how yield curve control policy is conducted, it will be a surprise because whatever he announces officially he will be just smothered with questions at the press conference from just about every reporter who is there. speculation started a week ago, reports in the press from reuters, bloomberg and others, saying there is something in the works, a small change in yield curve control to let it not be just the 10 year -- not firmly cemented to zero, but something higher, maybe 0.1%. not a big deal on the outside, but if you are a bond trader or investor or the bank of japan who needs steepness in the yield curve, it is important. take a look at the chart. one of the gtv charts, you can see something everyone is watching

we spoke about bank of japan. e pboc is really the only one that has quite a bit of expansion going on with the balance sheet. but that will moderate as well. at next 12 months, you look this group of central banks, and i think you have quantitative tightening going toward the end of 2019, and that will make the spread come lower. i was to speaking to some clients this past week, and we had a chart that showed a 10 year u.s. against all the other tenure sovereigns, and there is a huge gap, except for italy with the election spikes, but otherwise a huge gap that is holding our long and down and i think that will have to narrow with quantitative tightening. >> i think expectations are so ,ow at the moment at the ecb very little is priced in. see a little will more, i think the bar is so low that they could use some more forward guidance from the ecb. --sing a little adjustment we are seeing a little adjustment on the balance sheet, but also unknown. i think we could see some more forward guidance. are staying guests

the bank of japan announces its decision tomorrow. thursday, the bank of england expected to hike rates. central banks in brazil and india hold decisions this week. joining us is stephanie flanders, senior executive editor for bloomberg economics. mark carney is the cover story for the latest bloomberg markets magazine parade let's get into that story because at said he wask carney spending half his time on brexit and said this "let's be clear, it takes 50% of my time. " he spent a fair time in contingency planning, but now it crowds out other things. he mentioned it because the issues are important, there is a responsibility to manage the downside. howdy they continue to do this -- how do they continue to do this when they don't have a plan for part two, let alone part one. stephanie: they have said repeatedly we are hoping to have clarity on what this post situation will be once britain tradeft and has a new relationship that everyone is equally in the dark. i was struck talking to governor carney that he admitted it was taking at le

banks. jonathan: jack, that is what i am thinking about. the policy objectives of the bank of japanere clearly through the portfolio mechanisms, they wanted pension funds and investors to take more risk, to get out of jcb. if you changed the yield curve controls, if you allowed yields to the long end to start rising, are people going to start buying it will takejack: more than a minor change to get that to happen. what we could expect them to do would be minor adjustments. jonathan: what is your base case next week? jack: they're going to say they are moving toward removing the yield curve control, and i don't think they necessarily are going to give a big number that is going to scare anyone. jonathan: does this play into the overall qt picture? jack: i think it does. at the end of the day, we had the fed, the ecb, and the boj was lacking. now we are falling into place. that basically makes the case for rates to be rising a little bit all around the world. jonathan: victoria, let's talk about a spread that has been super, super wide, bunds versus treasuries. it has widened through

as well as that decision do from the bank of japan. policy as well as local media reporting the bank. made by fewer nikkei to tie five shares. it leads our asia equities team. what exactly is going on in japan? have had quite a few companies report earnings, but that is only about 20% of the company's on topix. it is about 50-50 when it comes to the ratio of companies that have the are missed earnings estimates. this week and next week are going to be that heaviest weeks for japan companies to be reporting. you have companies like toyota motor reporting. you have sony that will report. we will have to really wait and see what happens this week with earnings season. and then make a little bit more of a comprehensive decision on what is going on when it comes to earnings for japanese stocks. the boj has massive holdings and the nikkei 225 has been talking about. it the next big thing to watch out for when it comes to the stock market? yes. i think we will have to wait and see what happens tomorrow. everybody is in a wait and see mode. de

rishaad: the bank of japan racks -- wraps up. is a potentially significant tweak to the doj policy. this is kathleen hays outside of the central bank there. why would governor kuroda want to make any change now? saying that here might want to do this because he wants to make sure that aggressive monetary stimulus can be sustained. the problem is it has some distortion. this is totally negative, under 0%. where the situation regional banks are having their importance discussed. prime minister abe is facing the big lep collections. maybe there is a limit pressure on the boj to do something about a policy. also, inflation is running and 0.8% year-over-year. the boj target is 2%. it got to 1% year-over-year. you have to ensure that this aggressive stainless policy is just sustainable. it seems pretty clear after .eports coming out of the boj it eventually may be up to 0.2. today, they'll make an official announcement that they're making a technical change to that policy. he said they will not change their policy. the may be a range f

the bank of japan, we see it there. e pboc is really the only one that has quite a bit of expansion going on with the balance sheet. but that should moderate as well. over the next 12 months, you look at this group of central banks, and i think you have quantitative tightening going toward the end of 2019, and that will make the spread come lower. i was actually just speaking to some clients this past week, and we had a chart that showed a 10 year u.s. against all the other 10 year sovereigns, and there is a huge gap, except for italy that had its spike with elections, but otherwise there is a huge gap that is holding our long end down and i think that will have to narrow with quantitative tightening. jonathan: is that your argument too, marilyn? >> i think expectations are so low at the moment at the ecb, very little is priced in. i do think we will start to see that play through a little more. i think the bar is so low that if we do see more fired guidance from the ecb and you start to see a little more of an investmen

donell, what needs to be to take japan's economy to the next level? what can the governor of the bankthe bank of japan has done all that he can in this environment. the jew -- the bank of japan taking a wait and see policy is in the end a safe policy. as i said, there are signs that inflation is starting to rise on wages. spreade news starts to that wages are finally on the rise, i think that would change the picture. just waiting to see more confirmation on wage inflation would be a key issue to look at when you want to monitor the japanese economy. rishaad: thank you for joining us. we are going to take a break. on the other side, chinese wireless infrastructure seeking a billion dollars. it could be the world's biggest ipo in four years. we have more on what it means. rishaad: we look into what is going on with some of the semiconductor makers. >> they had a disappointing third-quarter forecast. the company is seeing a 10% quarterly decline in revenue amid imagery correction. makers are also taking a tumble. singapore, this company sliding after reporting a loss in the second quart

points, the most since june 2016 in the session so we are seeing some market fallout from the bank of japan's left key interest rates unchanged while announcing policy tweaks. that is something we want to talk about with our guest, to more of the world's biggest central banks are scheduled to make policy announcements this week, tomorrow it is the u.s. federal reserve and on thursday the bank of england announces its latest policy decision and governor mark carney gives a news briefing. now joining us is the fixed income portfolio manager at jpmorgan asset management. great to have you with us. it seems the markets have taken this as a dovish decision from the boj at least for today. 10 year yields on the jgb dropping but will we see curve steepening further down the line? diana: the market has been expecting to see a more explicit guidance on where the tenure target was or perhaps a bit more information around how much was willing to tiger -- tolerate. we have not got back in the statement, we will see what the governor comes out with at the conference. but i think ultimately, this is positi

that's dilemma for the bank of japan. ds to get out of what it's doing but will the market be able to cope with that? will the stock market end up taking a bath? >> critics have been saying that the b.o.j. has been distorting those markets, they don't want to rip the band-aid off but we'll see what happened in the next few hours. garrfield reynolds, bloomberg markets live strategist. don't forget to check our gtv library for some of those charts, gtvgo.com. secretary pompeo took a hit at china. let's go to washington and our congress editor. mr. pompeo signaled the trump administration wants to re-engage with asia but steadfastly without the f.p.p. what's the plan here? >> right, well. secretary pompeo is trying to reassure some of the doubts that were -- about nations who had some doubts after trump pulled out of the t.p.p. and doing so that he said that with the u.s. contrasting with china, trading partners could expect honest contracts, transparency, and he portrayed china as fostering smog of a dependency culture nits

kanno joining us outside of the bank of japan. ior adviser to the bank of japan and clearly someone who has a sense of what is going on inside and outside of the bank. ramy: kathleen hays, thank you so much. breaking news on the bloomberg terminal -- unexpectedly earlier out of china nonmanufacturing pmi has come out at 54.0. the survey expecting 54.9. the prior was 55. nonmanufacturing pmi coming out of china at 55.4. that is a miss. the expected time is one and a half hours out. early dataprise coming at us right there. don't forget our interactive tv function which is tv where you can watch us live and catch and divet interviews into any securities or the bloomberg functions that we talk about. you can become part of the conversation by sending us instant messages during the show. this is for bloomberg subscribers only. check it out on bloomberg tv go. this is bloomberg. ♪ ramy: this is "daybreak: asia" and i am ramy inocencio in your. of the a quick check latest headlines. cathay pacific may cut jobs at its overseas operat

david: for more on the bank of -- on the boj action, we welcome sayuri shirai, a former member of the bank of japanormer professor at the asian development bank university. -- is it a baby step in the direction of really tightening or is it a way of making sure they can continue on their easing policy by alleviating some of the extraneous problems? sayuri: it is both. what the apd to suggested. [indiscernible] they gave the impression to people that this is just a minor modification. actually, i think if market conditions pickup, this is suggesting that the boj is able also they target but did not say that they will maintain current interest rates until october of next year and they did not mention anything in their outlook. this includes the possibility that the boj may take steps toward normalization. that is my feelings. they said quite specifically they are not doing this to alleviate pressure on the financial community. is that right? will this relieve the banks some? this is -- this activity is good for the markets but in terms of the issuance company and banks, this interest rate is still to

don't forget to catch our coverage of three of the world's biggest central banks this week. tomorrow, we hear from the bank of japaning. the next day, it is the u.s.. federal reserve. on thursday, the bank of england announces its latest decision. governor mark carney gives a news briefing. if you are a bloomberg customer, you can watch the show using tv as well as a via stream. you can follow all of our desk video stream. you can follow all of our charts and message the team directly. this is bloomberg. ♪ ♪ london, 40s 7:19 in minutes away from the european market open. if we look at how they might open, we could see a lower open going to days of gains in the stoxx 600. we have seen some losses in asia as well. on fridaylosed lower in terms of the s&p 500 and nasdaq. tech stocks providing a big drag. a big week for central banks, 10-year treasury yield traded at 2.96%, higher after a drop friday following the u.s. gdp print. let's get the news business flash. : internet platforms are set to face new content laws in europe. companies, including google, twitter comments race book, could face fines from number i

bank of japan gets the two-day meeting underway with watching equities on the way down in asia. their way up. possibility of another intervention from the bank of japan. earnings continue watching out for the likes of apple, burke xiao hathaway -- brookshire hathaway. have this trade war in the background, which is of putting ant damper on everything. let's get to what we have after this trading day started in shanghai and hong kong. sophie: asian market starting this week off in the red giving concerns over earnings as well a central bank decisions. onshoreh offshore and trading around 683, adding to last year's slump. taking a look at what is going on in mainland markets. 7/10 of a percent, could snap a three-day decline. the stocks are jumping on the mainland. a look elsewhere. i want to highlight what is going on with the korean won. inflation data due on wednesday. is a spark that think it korea could see a rate hike in the first -- in the fourth quarter. the target.ds with the boj in focus, let's look at was it -- what is going on in the jgb market. traders are testing the

we just spoke about bank of japan, you see it there. that should moderate as well. over the next 12 months if you look at the whole group of central banks, you have quantitative tightening going toward the end of 2019, that will make that spread come lower. i was speaking to clients of the conference this past week and we had a chart up that showed the otherr u.s. against the tenure sovereigns. there is a huge gap there. that gap is holding our long and down and that will have to narrow as quantitative tightening becomes part of anyone's. >> expectations are so low to the ecb. very little was priced in. we will start to see that play through a little bit more. expectations are so low the bar is so low that you concert to see a little more forward guidance from the ecb and you --rt to see or an adjustment we concert see that spread narrow if you start season more forward guidance from the ecb as well. program johnthe fox continuing to vote outperform. that's up next. this is bloomberg's real yield. andand him and him bloomberg real yield. the treasury $190 billion thr

the bank of japan. trimental to a country's economy? or have we just learned that it's no big deal? they are kind of printing of this my themselves? we know there are unintended side effect we're not come to with but perhaps it's ok to have the alan sheet big. but can we stop growing it? slowlyfinding out very about how this effect other bits of the economy. there's all sorts of this coming through from these policies that have taken years to sweep through to our consciousness. i think it may be dangerous and it certainly dangerous to keep it going ever upward as a first step. stabilizing would be a sensible plan. to day they inclined addiction to almost anything is bad in some way. he's going to stick around and we will stay addicted to him for a while. no, i have another 32nd. what is the ripple effect coming off this? what is the effect into other -- asset classes? you say to small move into a huge way. -- huge way. kit: small enough they might get away with it. japan are the holder of the biggest inv

sliding on speculation about the bank of japan stimulus. 731.-dollar $1.1 let's take a look at fiat shares, news over the weekend that sergio marchionne a was going to step down. shares of fiat chrysler down. coming up, we talked trade war global growth with bob sinche. let's get to first word news with taylor riggs. taylor: engines of leading economies fall out of sync. g20 finance ministers and central bankers said at a statement published at the end of their two-day summit that global growth remains robust and emerging-market economies are better prepared, but risk to the global economy has increased. steve mnuchin moved to calm his counterparts' concerns. : this is very important set of communiquÉs, but don't over analyze one sentence and be concerned. we understand what the trade issues are, and we are trying to productively deal with them. presidentxico's new includes president trump to a range of issues, including trade, migration, and security. he added that prolonged uncertainty about a new nafta could hurt investment in the medium-term

bank of japan is set to announce tomorrow and the fed on wednesday. in israel and ndia hold policy meetings. marc bring in the head of chandler. japan is probably going to be the one where there is most suspense because we are not entirely sure what they are going to do. marc: and i think if it stays away from the market, but if there is a change, there will be a price to paid for and make them further to intervene. joe: what is the problem with the current monetary stance that s causing a rethink? marc: the federal reserve meaning it slowed down its buying to get to the end. but what the bank of japan is doing. the economy contracted in the first quarter and bounced back in the second quarter. net-net the first half, the economy is stagnant. if you ex clued fresh food, and rather than tweaking programs, they have to tweak their programs to extend it. scarlet: they have a 2% inflation target. any chance it could change that? it's been discussed. marc: the mets got the least amount of home runs in the major league so it could have bought more or better

bond traders still pushing against the implied limits from the bank of japan. .eem to be testing it forced of the bank of japan to come back in the market again to buy bonds today. it's as though they would have achieved their aim. we are also seeing some movement in the chinese currency as well. it is still pretty weak, still continuing to fall further today. that america may announce more tariffs or confirm the tariffs tuesday asian time. that is something also on the mind of chinese traders as well. central banks have also got the tariffs very much in focus as well. overall, volume a little bit lighter than usual. it does not really tell us too much about the week ahead. it is likely to be a very busy week in asia. surprising that the boj is in the market during a policy meeting? mark: they have this supposedly corridor- suppose it -- supposed corridor. there is some suggestion that this was never really an absolutely hardline from the boj. they have allowed yields to go up to 0.14. that mean a semi-for much. -- they may not sound very much. rather than annou

i think at the least he will on, the bankgoing of japan doesn't seem to be shutting the door on this move. a lot of people are wondering if the bank ready to take this very big step. we shall see, but for now, what we saw is the 10 year jgb --ding as high as zero point 05%, the highest in one year. this is cap during many people that -- catching many people's opinion -- catching many people's attention. this chart was up before the boj didn't move. you can see where the yield is now, definitely moving higher, the 10 year treasury note in the u.s. also a bit higher. we will see if this catches fire as it did a couple of days ago. the question about a policy tweak is very interesting. in fact, what with the tweak be? it would be possibly saying something along the lines of banks need to have a little bit curve, a steeper yield there are some technical reasons for the boj to let the yield the 10 year jgb rise a bit above zero. if the governor makes his move, he will have to make it clear to everybody that this is not a change in monetary stimulus. our bloomberg economics team figures they need to have a discussion about this and not

the people's bank of china is still easing, it looks like. moree bank of japanelaxed about the degree of accommodation, and you have three big central banks going the same way. so the market is focused on it, although the move is microscopic in the big picture. what it implies could be significant. excited but you are right, it is microscopic. it's the messaging that goes with that. you mentioned dollar-yen. i got excited, i was looking back to the 1980's. this takes you back to the reagan era of tariffs. that was the predication looking at this. extrapolate, what does it do to yen in the backdrop of potential tariffs? scott: for the whole market in general and the direction of the dollar, the terror situation has been positive for the dollar. if the tariff issue is lifted, then we go back to economic fundamentals. one could suggest that the dollar appreciation could reverse marginally over the next several quarters. we look at things like emerging markets which have suffered because of the terror of issue. to me there is an attractive asset class. concern about

he has some ideas on who should replace him >>> the federal reserve, the bank of japan and the bank ofl front and center wall street pointing to a higher open global policymakers getting ready to kick off a bunch of meetings. >>> chipotle shares under pressure following reports that some customers apparently got sick at one of its restaurants in ohio. >>> america's priciest property just hit the market. cnbc has access to a listing that is listed at $1 billion what do you get for a billion? we'll show it to you as "worldwide exchange" rolls on. ♪ >>> welcome back thank you for being with us. i'm brian sullivan we have a lot to get to today. let's kick it off with jackie deangelis who has the top headlines. >> here's what's happening now chipotle closing down one of its restaurants in a suburb of columbus, ohio this after at least two customers said they got sick after eating there in a statement to cnbc, a chipotle spokesperson says we acted quickly and closed this single restaurant out of an abundance of caution chipotle planned to reopen the restaurant today conditional on approval b

tomorrow the bank of japan announces its latest monetary policy. expecting tweaking. s turn. nobody expects much of it change from the fed. the bank of england is expected to raise its key rates despite uncertainties surrounding greg's it. we will get u.s. nonfarm payrolls numbers for the month of july on friday. alix: the big week for central banks kicking things off with the bank of japan. joining us is troy gayeski and stephanie flanders. her recent interview with mark carney is the cover story for bloomberg markets magazine. we will talk about some of that interview. troy, you can see what's happened to the 10 year yield over in japan. 1/10 of 1% is where it sits. as a traitor, investors, what do you need to watch for? troy: if you see material moves higher, a basis point or two is not considered a material move in japan, perhaps we will see a steepening of the yield curve in europe and the u.s. one of the reasons we have an artificially low back and of your curves is because of central discontinued central bank intervention. , ecb isoj starts moving going to be ta

bank of england will be expected to race —— raise rates on thursday. bank of japanse rates on thursday. bank ofjapan is expected to race —— raise rates on thursday. bank of japan is tweaking and not necessarily to do with banking. what does all of this mean? it isa banking. what does all of this mean? it is a sign that things are healthier, isn't it? if you look back at 2017, it was strong. better—than—expected growth in japan, the eurozone, the us and still have good growth in the us. we had a really good run. that means that the central banks were about to normalise policy but actually, if you go back to the start of the year, people have had to pull back some of their expectations. some central banks such as australia and new zealand probably aren't going to do anything this year. that in the uk, many would argue, why are they poised to raise rates in august when oui’ poised to raise rates in august when our economy is flagging and there are signs we are struggling? they are signs we are struggling? they are in certain sectors. the retail sector for example. if y

there is a chance this could be much ado about nothing, given that statistically the bank of japan is still heading toward 2% inflation. they can really change too much about policy. >> yeah. it's been an interesting earnings season so far. generally, if you look at earnings outside of some of the brokers, it hasn't actually been that bad. but looking at nomura, for example, that was a shocking set of first-quarter numbers, and they're not the only ones that have had troubles coming into the start of the year. a few other and smaller brokers that had a domestic focus, they also came

has the bank of japan all it can? e do should he decide to run for prime minister again and how far is japan away from being out of the woods? >> well, i think if you look at the longer term picture for inflation, it's steadily been moving up. it hasn't been moving up nearly fast enough and it is a mystery to earn including the research of the bank of japan. the supply and demand is incredibly tight and prices aren't moving up that much. partly because it's an older economy. what you need is job hopping picks up. with an older population that doesn't tend to happen have so much. if you wanted to get it moving a little bit faster, i would have thought that delaying the increase in the tax hike would have been a good idea. but really what you need to do is put it up in 1% steps rather than this larger step that they're doing. >> if you look at the structure of reasons why price gains have been so muted in japan and other indicators which suggest g.d. pmpt is chugging along. the 19th straight month of expansion, do they n

banks do not have a lot of lending opportunities. -- several years ago what they would do is pour money into the government bond market to get pretty much guaranteed decent returns. but with the bank of japano, and 20 year, 30 year bonds only a little of that, the problem -- little above that, the problem is these regional banks will be hard-pressed as times go by. andhe old bonds rolloff they invest in 0% coupon bonds, these guys are going to be in big trouble. now, the concern that has been there for some time, but what has triggered this elevated worry in the past few weeks, that is unclear to us at this point. governor kuroda, a lot of people have been saying the more bonds the bank of japan buys, the more it is owing the government bond market. this has created less liquidity, less trading, and this is a problem. he says the lower we own the lower -- fewer we have to buy. long-term on yields rising in the u.s. is making it tougher to give the yield on the 10 year at zero. i come back to this point, isn't there a way to say, well, we are going to allow more flexibility, but we are not really going to move off of this policy of continuing stimulus. chris: yeah. one option that would be

kathleen: so we've got the ecb under about, and next week the bank of japan meets. though bank of japan, investors are keenly awaiting, a lot of excitement and anticipation building around that deal. haidi: there has been a lot of speculation into movement of the bond market globally ahead of that, looking forward to that. kathleen hays there. just before we get more analysis on central-bank action, were getting these breaking lines over bloomberg from the hp, entering a pack to sell assets for $10.8 billion. -- the entire , were just getting a few more details there as they come through. certainly as part of a broader theme and we had the sale of the u.s. on sore -- i'm sure's shale assets. -- onshore shale assets. certainly one to watch in that energy space today. in the meantime, let's get back to central banks, the ecb with mario draghi pretty much staying on message, overnight, were looking ahead to the boj. constances bring in hunter, good to have you back here. talk about the ecb, it was no secret, we knew this was going to happen. constance: i think kathleen

speculation in the bank of japan might find in quantitative easing programs, sends bond yields soaring basis points to 0.09%. this made the yen go higher, stocks decline, and the bank of japan had to intervene, offering to buy at a fixed rate. a roller coaster morning in japan and all eyes will be on governor kuroda when the boj finally meets next week. matt: all right, quit of charts hillary clark, who takes the crown here? hillary: this is hard for me, the i must say i think annemarie wins today because of the impact it will have on the global market -- oil market. matt: definitely a financial chart because it picked up in the bush. we looked into this this morning. they listen to regulations in iran. yes, and that chart highlights what happens if the sanctions are reimposed. matt: thanks very much all of the for joining us. tadeo,e hordern, maria and hillary clark out of our control room controlling everything. you can see the charts and all others on gtv on your bloomberg. use them in your own work if you like. do cite us. it will be a huge week for earnings. we'll bring you a

there has been news out of japan that the bank of japan may tinker with its may letyield, so they the longed and go and be supported by market forces. lisa, if it wasn't under a close watchful eye of the market, it will be more so now with powell. does his job get more difficult because of the president? think the fed will continue on with its independence. chairman powell has a path, and that won't change as a result of the comments from the present. jonathan: we have gone back and forth. you think yield could have a handle on tenure can walk me through where we get from 10 year yield and treasury over the next 12 months. points is only 100 basis from here and is against the backdrop of the fed having raised rates for two and a half years, indicating they will go for another year. that is a lot of upward pressure. does it look reasonable to buy treasury with the 3% in tenure? -- 10-year. ? i don't think so. it is not fully into the system. you have treasury supply that will fit the market over the next 12 months. i think a good stopping point for the fed is june of next year, two and

global bond investors looking at the bank of japan as they gear up for decisions from the reserve bankf india. kathleen is here with more. let's get the aftermath from the bank of japan. changes toignificant curve control policy. what does this mean for future policy? >> it is interesting, because i think it remains to be seen down the longer road what this means. it seems the bank of japan has given themselves more flexibility on policy than they had. the tweak in policy is what everybody was wondering about. at the press conference, they made it very clear that it makes -- has to do with lack of liquidity in the bond market. let's take a look and listen to one of the things he said at this important press conference. bank will continue with the current purchase program, but with more flexibility in terms of the amount. while doing so, the yields may move upward and downward to some extent due to the economic activity and price movements. we see the range of 10 year yields may double from the current 0.1%. kuroda says he is not trying to remove stimulus. this allows the boj to have a

have been tracking moves in yields higher across the board you talk about speculation around the bank of japan jjb was going higher a bit on that do you think this trend continues? >> i think it was an overreaction around the change in yield curve control out of japan. at the same time you had trump tweeting about the fed he's worried about the economy he's taking a proactive role to complain about it. >> complaining about it won't necessarily change what's going on at the fed. >> you would hope not. central banks by in large are independent institutions i think the markets know that. >> greg, we'll come back to you in a minute. first a look at second quarter net profit at deutsche bank, which did fall 14% but beat expectations at 401 million euros. revenue roverrecovered and came flat dws, which was spun off from the german lender cut its 2018 inflow target. it says it remains committed to its 3% to 5% net flow target in the medium term. let's get out to annette in frankfurt. kicking off with deutsche bank here a lot of the details got released in the pre-release earlier, that's when we saw t

l eyes are going to be on what 457 wpbz the bank of japan, if they modify monetary policy. ill trading foggy. weaker in early session trading. let's see what the picture is like you can see they're treatingall are red me to tune of a 1/3 of a percentage point let's not forget they're expected to hike for the second time also comp earn weighing as the mood grows putensh frail a second referendum. but that is the noise back there. watch out for the next can couple of days as well we've got difference coming up tomorrow and earnings continue and hets let's take a look at the 2nder. if almost all of the sectorers are tradinging in the red. we've got assurance up and food beverage continues to log already. but that is the picture. >> heineken shares trading sharply lower after the comp canany cut its full year margin guidance it missed first half profit expectations weighing a hit for currencies se its growing brazilian operation. firm >> it's good and bad news. brazil has lower han our average margin across the group but it growing much faster than why anticipated. so that is ve

rishaad: the bank of japan has been tinkering with the market here as well. they made reductions in the bond buying in a couple of places rather than the usual one. yeah, the bank of japan is -- remember, the bank of japan is buying a tremendous amount of government debt as part of its monetary easing program. i think it is about 42% of the whole government debt market. even a shift in policy, it is looking for ways to trim back on its bond purchases. there is a rally in the bond market. long-term yields are low. from a basis point or two from the lowest in recent years. so it's an opportunity for the bank to trim back on his purchases. it is also a signal for the central bank or suggest that policymakers are comfortable that long-term yields will stay low, signaling there is still support even without the central bank buying the happening place for long-term bonds in japan. rishaad: is that what you are suggesting? the bond market no longer needs as much support from the central bank? yeah, i didn't mean to suggest that the central bank will wrap up its bond

i think also there has been news out of japan that the bank of japan may tinker with its optimal yield curve control so , they may let the long end go and be supported by market forces. jonathan: lisa, perception is everything. if it wasn't under a close watchful eye of the market, it will be more so now with powell. does his job get more difficult because of the president? lisa: i agree with bob. i think the fed will continue on with its independence. chairman powell has a path, and that won't change as a result of the comments from the present. -- president. jonathan: we have gone back and forth. you think yield could have a handle on the 10 year within months. walk me through where we get from 10 year yield and treasury 4%?break out to bob: by the way, 4% is only 100 basis points from here and is against the backdrop of the fed having raised rates for two and a half years, indicating they will go for another year. that is a lot of upward pressure in the front and of the end of the curve. does it look reasonable to buy treasury with the 3% in 10-year? i don't think so. it is not full

the bank of japan is meeting next week, july 31. wondering what they will say because we will be getting new explanations of where they think they are and where they think they are headed. will the bank of japan continue to assert that it is on track for 2%? people will think they are not in touch with reality. shery: that is made global trade tensions. import have lowered prices. that is not getting them anywhere closer to that goal. shery: we are hearing from the g20 saying that the u.s. should return to the transpacific partnership. japan really not willing to go the bilateral way as president trump wants. >> i think they are right that it would be positive for the u.s. to return to the transpacific partnership. that was one of president trump's first actions to withdraw from those talks. japan recently signed a trade deal with the european union. japan is very much into the multilateral approach, unlike the u.s. shery: we also have shinzo abe talking about potential u.s. auto tariffs. >> that would be a big problem. the u.s. is

we saw yields fall and bonds rally in japan on the back of the bank of japan saying they the not enforceof tweaks anticipated, but overall, we saw the dollar gained some strength. it closes the day on the downside. that is look at the european market. vonnie: we will start with the s&p 500 here because it is balance.nice trade tensions easing a little with the idea that bloomberg is reporting that china and the u.s. are talking again or trying to find a resolution. otherwise, the aliens of dollars in tariffs could go into effect tomorrow. we are seeing some dried on the s&p 500 from for late -- from chipotle's problems in ohio. the spread again, 29 basis points as the fomc meets. we will talk central bank in a moment. crude oil is down to 68.88 with demand worries. a quick look at the g10 movers. we have a look at some of the -- odity complex, including caroline: the bank of japan held rates in an announcement this morning, driving the yen and japanese funds. tomorrow, we get a decision from the fed and on thursday the bank of england. lynch'sing in merrill head of global research ethan

dollar yen, the big story has been bank of japan and some of the signaling that's coming out of the bank of japan sending the yen a little bit stronger. of course, ten-year japanese bond yields are trading sharply higher on the fact that they're trying to make the stimulus more sustainable. as the bank looks to stimulate sustained inflation on the economy. the ten-year yield hit the highest point in six months. when it gets to 10 basis points is when the bank of japan gets involved and buys an unlimited quantity there were reports that they were thinking of modifying their behavior that is having implications on bond yields everywhere as the market comes to terms with the potential change in behavior it could be a big thing for markets if it does happen. >> close to home in europe, italy's government appears to have resolved a disagreement over two keogh owe they are arcing with their economy minister, giovanni trio. rivera will take on the role of director general at the italian treasury someone who knows about that is lorenzo coe dog know lorenzo, a lot of the disputes over the last fe

great set of words, but i think also there has been news out of japan that the bank of japan may tinkerh its optimal yield curve control. so they may let the long end go a bit and be supported by market forces. jonathan: lisa, perception is everything. if it wasn't under a close watchful eye of the market, it is going to be much more so now for chairman powell. does his job get more difficult because of the president? regardless of what you think he will or won't not do -- will not do. lisa: i agree with bob. i think the fed will continue on with its independence. chairman powell has a path, and that won't change as a result of the comments from the present. jonathan: we have gone back and forth on what happens with rates. you think yields are going higher. you think yield could have a handle on the 10 year within 12 months. walk me through where we get from this really tight trading range we have had on 10 year yield and treasuries, and how they get to 4% over the next 12 months. bob: 4% is only 100 basis points from here, and it is against the backdrop of the fed having raised rates f

thel ahead, why two of world's biggest money managers are split on whether the bank of japan will tweak its policy next week. more on the views of vanguard and blackrock a little bit later. trop--- will be donald trump-jean-claude juncker trade talks reduce tensions? ♪ we are counting down to the open of trading here in sydney. this is our futures are trading -- are shaping up. looking mildly more optimistic going into the open. a strong session overnight for commodities as well as the energy space. of course, that overwhelming theme of trade tensions diffused, at least when it comes to europe and the u.s., perhaps with this deal between trump and jean-claude juncker, a little bit more risk appetite to the agent session -- the asian session as trading gets underway. ramy: you are watching "daybreak: australia." u.s. markets rallied on the trade agreement. treasuries declined but their lossesred after being spared the threat of more tariffs. did the markets view today's development as a turning point in the trade war or was it more of a blip? >> it was certainly a short-term turning poin

of the capacity to grow. in ouri want to bring central-bank watcher, kathleen hays, in tokyo, looking at the aftermath of the bank of japanress conference. it was seen as something of a sigh of relief to see the reaction across by markets and also the yen. kathleen: actually people felt, and the governor did his best to underscore at the dresser afterwards that the tweak in will curve control policy allow the boj to keep its full stimulus going even longer. he specifically mentioned the government bond market and the fact that liquidity has been drying up. the question i want to ask about clear-cut where the boj ultimately goes. he sees the range for the tenure doubling. is this a wind down the road for the boj to just let the market when it needs to push yields up, .2, without proclaiming the end of monetary stimulus? dino: that would make a lot of sense, so i would tend to think they will gradually allow the 10 .ear yield more flexibility but it some point, there's another issue, negative interest rates. they did tweak some things where fewer banks are going to be subject to negative interest rates with their regime, bu

i think one thing we have to put in perspective is how possible is an exit for the bank of japan? japan is now a major shareholder, 40% of listed companies, their equity positions work more than a quarter to trillion dollars in a $5 trillion economy. 5% of gdp. these are big deals. the bigger deal is the notion of underperformance of the stock markets relative to everybody else where would they be if they didn't have these positions? the most important question is where will they be if they try to exit those positions. carl, back to you. >> thank you very much, rick santelli >>> massachusetts senator elizabeth warren applauding the eu for the recent fine on google in an interview with john harwood. john joins us with more on the interview which yielded quite a bit. hey, john. >> elizabeth warren says she's a capitalist, one that believes in appropriate regulation she believes antitrust regulation is an important part of that. take a listen to her reaction to the google eu fine >> european union fined google $5 billion you like that? >> look, they made their case and make a strong c

tom: we are going to go to the bank of japan, the fed and then the bank of england. friday? tell us how we want to feel good come friday. >> i think what you are likely to see tomorrow with the bank of japan is subtle signals that there will be i further assessment of policy, and quantitative easing policy. the bank of england though, i think they will be executing a policy error in putting rates up. i think there are missing the trick here, which is that the u.k. economy is going through a structural change, brexit, and not factoring that into their forecast, or their implicit assumption that the neutral rate 1.5%.e somewhere around i would say the neutral rate is pretty closer to .8%. francine: yes, and the boe is set to give a forecast, guide us that.t comes to over all, central banks in the u.s., japan, u.k., brazil and india all meeting this week. on the part of the boe, how much do you worry about the boj? we saw the news in the? tenure today, what does that mean for governor kuroda? gilles: i think it is showing the most significant thing, the market move is si