bank ofjapan? japan and bank of indonesia? and the bank of japan? we japan and bank of indonesia? japan and bank of indonesia? and the bank of japan? we expect the central banks to be doug aish. they have been laying the pathway and we expect all of them to be in the same camp holding onto the short term by power. how much of an impact is the trade spat with south korea having on its economy? i think it should be reasonably... japan is a big trading country. the trade conflict between us and china now with south korea is going to continue to impact on this trade data so we don't expect it at all for quite some time. on the subject of china, it would be very difficult for china's economy to grow at a rate of 6% or more because of the complicated international backdrop. he added that the world does make second biggest economy faces downward pressure due to slowing global growth and the rise of reductionism. as private players like facebook, dig banks likejp morgan and even central banks around the world, start to launch their own agree to, it is likely that they won't go away anytime

the bank of japan has left policy unchanged, the central bank calling for a re-examination of the economyits next meeting. the decision comes as central banks move to support their economies and speculation japan might follow suit. many see the boj's firepower as already depleted. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. nejra? nejra: annabelle droulers in hong kong, thank you so much. coming up, the big promise from big oil. how are the oil giants doing on their climate numbers? are traveling to work, tune in to work, tune into bloomberg radio, live on your mobile device anywhere in the world. just type in bloombergradio.com in your browser or in the london city area, check us out on london dab digital. this is bloomberg. ♪ >> i refuse to postpone taking on climate change. we will address the catastrophic problem of climate change and transform our energy system away from fossil fuel. >> we will make sure we get to net zero greenhouse gas emissions no later than the year 205

well, i think the bank of japan will stay think they will do? think the bank ofjapan will stay on think they will do? well, i think the bank of japan will stay on hold today. even though it has good reasons to cut policy, but i think it wants to wait and see how the consumption tax rate increase in 0ctober will impact economic activity. the bank of indonesia, on the other hand, will likely cut rates today and the fed decision to cut makes it even easier. in indonesia we have low inflation and economic growth is weakening. could other asian central banks make surprise moves today, or maybe even tomorrow, before their monetary policy meetings? i don't expect any surprise moves in the near term, but i think there is room for further monetary easing across the region before the end of the year. of course, everyone is before the end of the year. of course, everyone is looking towards brexit and the bank of england. what you expect them to in terms of monetary policy? i think the bank of england will stay on hold today. they want to see more clarity on

what do you think about negative rates for the bank of japan and other central banks? ive tool? michael: they don't seem to me to be. i'm quite worried about a prolonged period of very low interest rates because i think they affect over that over time is behavioral. people come to think it is a permanent condition. then, we run up that level -- debt level in the corporate sector, that is fine as long as it is a condition. but i don't think anybody is sure. if it is not a permanent condition, we got ourselves vulnerably -- ourselves globally in a vulnerable position. paul: is it another behavioral risk with the low rates when you go down to the consumer level? because average people see rates and negative territory and instinctively know something is not right with that and tighten the purse strings. is that a phenomenon you would be concerned about? michael: there is a certain amount of research that has to do with the question what do people do when they are saving for retirement and the rates of return on their investment, including on bonds and bank deposits and so o

no change to interest rates at the bank of japan. central bank did say it would reexamine developments and pay, quote, closer attention to price stability. in the post decision press conference, they said the boj is more eager to act now than it was at the july meeting. >> another central bank meeting, swiss banks are rallying after easing decisions by increasing the threshold which they have to pay negative rates also keeping the policy rate on hold deciding not to lower it and not joining the ecb and trends they said they are willing to intervene in a bid to ease pressure on the swiss frank. historically, euro swiss frank, below 110 is the left they would typically make those interventions more pronounced. the managing director ahead and managing director. great to have you with us. we are seeing quite a strong reaction in swiss banks. i wonder whether we are entering into a different paradigm now where the sentiment of european banks beg so oversold and so cheap that from a value perspective, this is where you want to put your mone

an eye on what the bank of japan will say in a few hours time. could be in an hourm could be this hour -- hour, could be this hour. no changes expected in that bank buyback program. it could go more into negative territory. another interest rate decision is coming out of indonesia. most people suggesting that we may see a cut. there is another body. it is a minority and they may stay after three interest rate cuts in a row. the indonesian rupiah has a dollars worth 14,090 in indonesian rupiah's. the bank of england a bit later. they are expected to state here. -- stay here. bloomberg's u.s. dollar index, we had some gains after the fed moved. .e are holding on to those just up by a fraction. on's look at what is going market wise. have a look at some of those first word news headlines. here is su keenan. with president trump, he has signed a newly completed section of his border while in california, calling it "a world-class security system." he toured a section of the barrier in san diego and said it would be virtually impenetrable. the customs

futures do look mixed the bank of japan has left policy unchanged. king in the last half-hour, they said they are more inclined for easing than the last meeting. the bank of england will stay out of the current easing and hold rates steady. benjamin jones, senior multi-asset strategist, state .treet bank is still with us the bank of japan, the lack of movement in their policy pushed the yen up a little. any takeaways that they will do a review for the meeting in october. have we drawn a line in the sand to see more from the boj? benjamin: i think they are doing these reviews all the time. today the statement is what we expected. still weak inflation pressures are there. realizing the limits of traditional monetary easing, and the limits of qe. they will have to do something different if they are going to get inflation expectations. are in the wait-and-see mode with the boj, but today's announcement is nothing we did not expect to see. matt: it is a great points, and one mario draghi was making last week that they have reached the end of the line. ther

think yeah, i do dollar-yen is a worry for the jet -- for the bank of japan. rd to pinpoint what level, but i would say one level to look at is around 104. one of 4.4 i believe was the most recent low we hit and law august -- in august. if you break that level in a sustained basis, there is not much distance to 100 which is the breakeven rate for japanese manufacturers. therefore, 104.4 will be the level to watch. also saidrnor kuroda he wants to see a steeper yield curve. what are the difficulties posed to achieving that? izumi: one is that the shape of the curve in some ways and yield levels on the long end reflect expectations on those are struggling to pick up. the other is the sheer amount of a bond buying the bank of japan has already done. in order to steepen the yield curve, one the thing that boj has done is it has been tapering its purchases -- bond purchases, especially on the superlong space. 20 year plus, but also 10 year plus. however, if you think about the stock effects, if you think about the fact that they have taken so much supply of gdb out

all of this ahead of the bank of japan's meeting at the end of the month where the governor has alreadythat things are bad enough, that they could add more stimulus. now we are going to move on to korean inflation. just a month ago, we saw inflation in korea hit zero year-over-year, and now, it is forecasted to go even lower. -0.3. over the weekend, governor lee rising. downside risk more than upside risk they made a surprise rate cut in july. will this still to them toward another rate cut ahead? as the two meanings we are going to see, we will get the reserve bank of austria, a big debate. divided by yes they will cut the key rate, they will cut it again, others saying they will wait, because the governor has indicated he sees a gentle turning point in the economy. reserve bank of india is not expected to wait. they are expected to make another rate cut to spur growth, boost inflation, and are terrific interview we had last indicated that. maybe this is not quite time but we will be watching anyway. shery: here in the u.s., drumroll to the september payrolls report. what are we expect

you mentioned potential risks for the bank of japan and policy of the negative rates that may lead toi want to get your thoughts on this chart in the bloomberg terminal that illustrates the extent to which the bank of japan dominates the jjb market overwhelmingly holds the most government bills. do you see any potential risk arising from this? it surely can't be healthy. tomo: well, that's a good question. i think we have to accept the fact that nowadays, central holds al over the world substantial amount of assets. how is important now is they control the size and control the 10 year bond yield, in terms of japan. what was mention today, he is worried about the flattening yield curve, because that is affecting negatively the management of other financial institutions. the side effects are there. i think we have to see very carefully the side effects going forward, because that may become a political situation as well. shery: we will be watching japan closely this morning. thank you so much for joining us. tomo kinoshita, invesco asset management global market strategist. plenty more

we have a number of central-bank meetings this week, one of which is the bank of japan. probably the last thing in the world the bank of japan needs. the central-bank policy response, we have the fed, the boj, the s&p. how pivotal a week is this and how much of a move is this for the boj? jimmy: they are an oil importer, and oil dependent region. no one is going to ignore something of this magnitude. i do not think it will necessarily influence policymaking. they have other issues that are much more structural in nature. they will be paying close attention to what has happened at the ecb. and the response. how much room is left on the monetary policy side. in terms of the order of investor attention, people are much more focused on the ecb and the fed than they have been on the boj. one might say that if there is any creativity that they have been looking to deploy, perhaps this could be the catalyst for bringing that forward. know, onet is, you associates higher oil with inflation, this is a supply shocks, not a demand shock. you are seeing that from the bond market reac

bank of england could be in a position to raise interest rates at some point in 2019. it doesn't look like that will happen. they will definitely hold interest rates today. and the bank of japane bank ofjapan, as definitely hold interest rates today. and the bank of japan, as you spoke about earlier, everyone starting to realise that while they may have been a bit overly pessimistic at the beginning of the year the road does look a bit more rocky than it currently is, in the future, and therefore having a little more monetary policy ammunition isn't the worst thing in the world. thank you. we will talk a bit more about brexit and impact of sterling as well, so speak to you soon. still to come — getting your sweat on. we hearfrom the brains behinds the world's first hot yoga studio on wheels! you're with business live from bbc news. first, though, let's unpack further this news from next. shares down 5% in london. the high street giant next has published strong for the first sixth months of the year. sales were up 4.3% and profits before tax up 2.7%. that is the boss. but the chief executive warned of the problem of high street rents — as online retail becomes more important h

we did see the bank of japan not do anything today in terms of their bond buying program. int has put some things stasis, if you will. as a result, we are not seeing very much action apart from a move to the downside. it seems like those positive yields are longshot when it comes to german bund. guest joins us from singapore this morning. let's start with germany. the data we got overnight, it seems like it is spreading to the services sector. how close is germany from a recession? seeing a very sharp slowdown and i think the real problem is that the european central bank negative deposit rate are not stimulating growth. they were intended to stimulate growth and instead, they appear to be holding the economy back by putting a massive tax on the european banking system, much of which is being paid by derman banks. -- by german banks. many of them are downsizing staff as well. they are not extending credit to the rest of the economy, as one might expect. we are seeing very weak economic growth. david: hold that thought. we are looking at this life press briefing. carrie lam

. >>> the bank of japan voted to leave rates. later on, you'll hear from the bank of england.teve sedgwick joining us now with what we can expect. >> brian, i want to introduce you to a new concept called the rates smorgasbord. it means a big buffett of all different kinds of things. that's what you are getting in europe let me show you what i've got in advance of that. the ecb last week cutting rates, giving tiering on deposits and the big qe program you've got the cut the swiss who are desperate not to cut their economy is fantastic they've got a 2.6 unemployment rate many thought they would mirror what we saw from the ecb the norwegians, they've been hiking rates today fourth time in the last 12 months because despite the fact that they are a huge part of continental europe, they are not dictated to by the ecb and they have some of the biggest oil reserves on the planet then dear old bank of england here mark karny, his hands are tied we have the small matter of today's bank of england meeting before the small matter of brexit european markets are wondering how much bang fo

the bank of japan watching the direction of the yen. they will be incredibly important. rengthening, we see the bank of japan getting more creative with policy. shery: the shanghai composite is near its peak. where are wesaw -- expecting china to go in terms of monetary policy as we continue to see this -- these more targeted moves? i think you can expect further easing from the government in china. inle they are being targeted the way that they are going about enacting that easing, markets are interpreting the signal as easing coming through. we all know in china, that determines one of the biggest drivers of asset market performance. from an investor sentiment standpoint, you could see further optimism onshore as the government does move through the rest of the year to ease policy further. even if it isn't in a nuanced and targeted way. paul: thanks very much for joining us. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go on their terminals. it's also available on mobile in the bloomber

the federal reserve, bank of for and ecb pushed forward with rate cuts, leading the line. and then, holding their ground, boe, rba, and bank of japany fans, that came a surprise froma the nordic bank yesterday. matt: the lone hawk. there are risks to navigate, of course. wars,rum has seen trade geopolitical tensions causing problems. how to navigate that? half touad needs a fly open the door, like jeffrey gundlach, and if all else fails, rely on your fullback to hold things together. ecb president mario draghi, this month seeing his last or second to last chance to salvage the eurozone economy by restarting quantitative easing. he only has one meeting left in charge. sticking with central banks, pressure is building on the fed to permanently increase its reserves as it prepares for a fourth straight day of liquidity injection. carl weinberg from high-frequency economics is still with us. i have been seeing so many debates online, iit's seeped ino twitter, reddit now. what caused the credit wrench driving rates to 10% on tuesday? was it really corporate tax payments and too many debt sales? or it the euro carry trade, the saudi atta

not budged from 1% for the last 5 or 6 years, that's a strong commitment >> that is exactly what bank of japan has done and they haven't succeeded. >> a good point. the ecb is now very similar to the bank of japan. the eurozone isn't in deflags. the problems aren't as acute yet. fiscal policy is still an instrument that should be used and used effectively you can fix bridges in europe and build bridges before you start building bridges to nowhere. >> thank you >>> eurozone leaders have reacted to the call. european commissioner told cnbc that eu should look at improving fiscal policy to help the block in fiscal times. today, draghi made it clear, now it the time for fiscal policy to take charge. are they going to do anything differently? >> reporter: that's really the big question here. the elephant in the room as the finance ministers gather here to try and find out what they are going to do about this policy. i asked earlier, what is going to get germany to spend more to vest more? let's take a listen to what he had to say about that? >> i spoke about slow down in economy, germany is one of

investors awaited decision from the bank of japan. official think lowering to a negative rate will not provoke a backlash. attention on the trade war. the deficit seen widening last month. let's get a quick check of asian futures right now. in japan we got the nikkei futures pointing modestly higher. a similar story and south korea. while here in australia we have got futures pointing higher. new zealand been trading for an hour now. not a great deal of action to report. paul: shery ahn: u.s. futures not doing much of the moment. after stocks drifted throughout the session, and then we had a slight uptick for the s&p 500 to gain .3%. we have consumer shares rounding and energy stocks were some of the big losers. losing a lot of ground after that huge surge we saw a 15% for crude monday and continuing to fall below $60 a barrel. we also have banks underperforming. ahead of thatll fed rate decision on. wednesday ahead of that, we are now seeing the money markets and turmoil. take a look at this chart on the bloomberg. we saw the rates su

we have seen a lot of money being spent as a purchase programme, both by the ecb and the bank of japan the us and all it has done is fuel asset prices. the little has grown into real economy and growth. when you think about that process, if they were to announce quantitative easing, what will be the consequences around the world? that is the real question. the biggest risk to the global growth outlet as well as the euro area is that the ecb's action triggers another round of competitive devaluation by non— dollar area central bankers and we get a rerun of 2014- 2015 in central bankers and we get a rerun of 2014— 2015 in which global trade goes into a deeper downturn and global profits go into a downturn and we get a slowdown everywhere.” am hearing that traders, finances and economist are really worried about this cycle kicking in. do you think governments are thinking about this and thinking we need to do fiscal spending on infrastructure and things like that to get our economy is going as a poster looking to central banks, in the case of germany, for example? what governments are thi

businesses now await a decision from the bank of japan. officials think lowering the rate will not provoke backlash. shery: take a look at how markets are trading at the moment. we saw u.s. futures unchanged but the s&p 500 gaining .25% in this session. we had seen u.s. stocks drifting throughout the session. saw gains toward the end of the session. not to mention that energy stocks were the biggest losers at the end of the session. wti coming back under pressure again, down .7%, and below that $60 a barrel level. we had banks also underperforming the broader markets. we saw the 10-year yield pull lower toward 1.8%. this, of course, ahead of the fed rate decision, and the fed rate decision coming out a time when we are seeing some turmoil in money markets. take a look at this chart on the bloomberg showing you how the repo rate surged as much as 10% at one point. that took the red funds effective rate to 2.25% -- the fed funds effective rate to 2.25%. this coming at a time when we have seen wall street struggling to absorb that extra treas

this is the 20th anniversary of the bank of japan having zero interest rates.here country clearly fell into this trap. unfolding inly that euro zone as well, the lower interest rates not bringing a revitalization and credit growth. if you go back and look over the last five to 10 years, the history of negative interest qe, there has been a pretty low outcome in terms of inflation. and inflation expectations for that all speaks to that liquidity trap. guy: if that is the case, is --istine the god a lame-duck lame-duck president? if that's the case, there's nothing more she can do. do think she sees it that way? andrew: i think monetary policy and europe will be subordinated to fiscal policy. in essence, a replay of what is occurring in japan. that will require possibly some changes at the european council isel as to how fiscal policy coordinated and run, but the future of monetary policy there , tos to be now subordinate go into a role of supporting the school policy. that could be simply asset purchases. at some point we don't know exactly where, but we will re

the bank of japan the fed perhaps going to be next. well as early as next week the federal reserve is expected by many on the financial markets to cut interest rates again and it's very unlikely the the fed is doing this because of donald trump's tweet you know the u.s. president is constantly putting pressure on the fed to cut rates but the fed has the same reason that mario draghi mentioned in that sound bite you just played also in the united states the outlook for businesses has become more in secure inflation perspectives have weakened so the fed is inclined to do something by the way the u.s. budget deficit the deficit of the united states has just reached one trillion u.s. dollars again so off course mr trump wants no or interest rates it allows the treasury to take on more debt and of course it reduces the borrowing costs for the united states there is a lot of resistance to what the e.c.b. did yesterday though and it's not just trump. no it's not just trump insiders of the e.c.b. are reporting about loud opposition being voice

this easing and if you say that negative interest rates will basically stop here and that the bank of japan actually wants rates to go up, that that creates a rise in interest rates and then the potential for a trade deal >> so three legs of the stool all of a sudden. bond yields moving higher. the data has been supportive and the trade deal you put all that together, and what are the implications especially for the stock market whi today is taking it in stride obviously sectors will do better than other, but we're almost touching all-time highs here >> and you have to remember the stock market has been tripped up twice this year when optimism turned pessimistic and so likely some people sitting on the sidelines still caucus we're among them so, yeah, a small deal would be positive for equity markets.the question is how long does that last because you still have to keep talking and all the big rocks are still there to move. >> there are some sometimes where you can look at things get to such an extreme and say it only starts a little bit of something to start the fire. and what we saw in au

moving onto the bank of japan, what an interesting meeting. they did not do any change in policy, but sent strong signals. the governor basically saying if you ask if he is leaning more leaving, they could do it and october. not just yet. they are concerned about the loss of price momentum, things that will not push inflation higher but lower. that clearly came out in that statement. they are also going to review prices in the economy. this is important. i just want to throw one more in the mix because bank indonesia, third rate cut. not everyone was looking for it. preemptive easing continues and they probably agree that fed rate cuts have opened the door for them as well. global economics and policy editor kathleen hays, thank you for joining us. still to come, strategic alliances in nasa. shery: up next, investment strategist kate warren says banks are returning to higher volatility. her markets outlook just ahead. this is bloomberg. ♪ paul: i'm paul allen in sydney. shery: i'm shery ahn in new york. you are watching "daybreak australia." t

and the bank of japan for the policy, lack of inflationssible that we are wrong? is it a lot better than we might have thought? peter: the bank of japan this week had a chance to cut rates and chose not to, and that is because there were some signs that were on the trajectory toward getting inflation for the 2% goal. kuroda -- then we had the data coming out saying in fact the core inflation, and when i say "core," not only credit but also fuel, was 0.6% year-over-year. that is well short of 2%, but at least it is not falling even more. and so it is looking now like there is a good chance they will end up cutting in october, their next meeting, but we have the report coming out. japan was one of only two -- a few countries come along with canada, in which the oecd raised the projection for growth. katie: i will give you a reason why that is the case. and japan, there are a lot of things to be said about for the macro, and the demographics of melissa, there is no way to argue with it, they are very bad. we will have a country going from 126

you have got the fed this week and a bank of england and the bank ofjapan, week and a bank of england and the bank of japannd the bank ofjapan, there is very much a central bank focus this week but it is getting drowned out by what is going on in saudi arabia, the price of oil and the reaction to that, the uk supreme court, i mean, so much is going on. yes, and certainly, last week, there was quite a bit of a risk on rally that happened and we wondered if it was the rebound coming in and obviously come over the weekend, we had the oil strike and now things are back in turmoil again. ijust wanted and now things are back in turmoil again. i just wanted to and now things are back in turmoil again. ijust wanted to get and now things are back in turmoil again. i just wanted to get your ta ke again. i just wanted to get your take on the oil situation, are you worried about where the price of oil is headed and the vulnerability of the reserves, etc, in places like the reserves, etc, in places like the middle east? it is going to be a case of how quickly they can get back on board. some people are talking days, we

let's bring back sayuri shirai, university professor of economics and a former bank of japan monetaryard member. it seems like the numbers are better than expected. a bigstill a slowdown in divergence between the manufacturing and nonmanufacturing sectors. what do you make of this? so, it was better than expected but it is clearly slowing down. and that weaknesses there. at the same time, the whole japanese economy is still is growing more, because of the nonmanufacturing sectors are doing ok, because there are lots of activities in big cities. the conception and other sectors are doing fine. also we have a lot of tourists. there is a lot of hotels, shopping centers. because of that, although the japanese economy is still not bad. but once we look at the export sector, it is really dropping from late last year. i think the manufacturing sector profit is dropping. maintaining the current exchange rate is important for japan. paul: let's talk about that exchange rate. reste is outperforming the -- the end is outperforming the rest of 2019, gaining 3%. how much is that dragging on the ec

they will watch what happens with the ecb, and to a similar extent, the bank of japan.se countries are in negative rates, if they go further negative, and that is likely to push capital towards us, which would make the dollar stronger. with trade wars, that fx those economies. -- affects those economies. certainly, the europeans would like to see some fiscal stimulus. they do keep an eye on what is going on elsewhere and talk to each other, but they are not at the point yet where they will do some sort of coordinated effort. david: wherever the fed comes out, it will still have a positive sign. attzerland, bank of japan, what point do we conclude that this has not worked, that negative interest rates has not given us the growth we wanted? $16 trillion in negative yielding debt. mike: you have to wonder when other central banks will decide when that is the case. the fed's research has ruled it out, they say it would penalize savers, does not seem to incent any additional lending, and hurts the financial system. deutsche bank the other day, the bankingout how system has h

banks. as we look to japan for guidance on where we go from here, the idea that negative rates have these consequences, something the bank ofan is really concerned about. they don't want to do more unless they absolutely have to. other central banks are paying attention. i think the european central bank in the fed are looking at what their tool mix might look like. if japan isn't the number one example, more uncertainty for the market. alix: to that point, mr. kuroda seems to think they might have more tools. here's what he had to say at the press conference. >> risks have been rising from slowing overseas growth. it is right to say we are more inclined to additional easing then at the last meeting. we will continue to carefully modern the economic and price movements. really? [indiscernible] stephanie: to your point, they have been out there. withhad to be the leader, everybody following whether they like it or not. they look to making this guaranties in the long end. alix: they seem to be losing so much control. stephanie: that's why you may get into them buying more etf's. they have opened their toolkit about as far as

this after the bank of japan held steady on monetary policy.owever, we could be headed towards perhaps a halloween treat -- we have heard the governor talk about now reviewing their policy next month, given that overseas challenges could hurt momentum in prices. we do get august cpi numbers out of japan this evening, so do watch out for that. amanda? amanda: and of course, we have seen that along with watching the yield on treasuries, everyone wondering what central banks globally are doing and some reaction there, we have been watching the price of gold in recent weeks as it continues to trend higher. take a look inside your terminal. this is the ratio morgan stanley tracks between gold and the s&p 500. as it widens in a significant way, an 18% change, the folks at morgan stanley are pointing out that could ignore bearishness about the value it -- that could signal bearishness about the valuation of the s&p 500. course, one of the top stories moving all of this markets remains the federal reserve cutting rates for the second straight meeting,

that could boost the japanese yen pressuring the bank of japan to cut and mark carney is holdingis fire before he knows how the u.k. is going to exit the european union. in an inteiew in jackson hole, he talked about the impact of brexit and trade >> business investment is actually running 25 percentage ints below itstrend. business in the u.k. and quite reasonably said wait a minute, i'm goingo wait until if they have any exposure to eurr e, upstreamwnstredo, they decided to wait and see what are the new rules going on f that's partat's hpening worldwide. well, okay, i've gotur expos to chy these supply chain. let me see where this goes. >> there's a wide spread in global interest ratete china's central benchmark rate is at 4.35. u.s. at 2.13. pek. at just three quarters of a pe ent while eu is at zero and japan is nigh news 0.11. up 37 looked at by threuters, a net 14 cuts in august. that's the most in a decade. and that's up from eight nul cuts in and the seventh straight mon of cuts from these banks. the fed is expected to cut rates in september and again in that could prompt anothe

i think the bank of japan, there for part of the excess liquidity surplus to be eligible for a zero deposit said iftion was markets i put my money into short term government bonds in germany at -80 basis points, if i can get 0% on the deposit would be exempted from the negative rate, then i might do that. this is why the short end of the yield curve reacted for that reason, rather than the reversal of yields later on the recession driven by other factors. caroline: what you think of italy doing quite so well? >> that has much more to do with the political risks in italy contained now. there is one clear reason. thee is the anticipation buying of the ecb will press down on those rates. italy aseople look at a country where there is no esoteric risks. through the whole budget negotiations and markets had to -- have determined yields in italy should be lower. stillal and spain are near 0% on a 10 year, which they were in line with italy in the past, so this is quite italy has done so well. romaine: what we got out of the ecb was not a complete surprise, but when you look at other central-bank

bank's control over federal interest rates. that is just part of a huge week for central banks. the fed said its borrowing rate and the bank of the japansteady. against a slowing global economy, they are finding a job increasingly tricky. we are joined they are finding a job increasingly tricky. we arejoined by they are finding a job increasingly tricky. we are joined by the governor of the philippines central bank here in singapore. thank you for joining bank here in singapore. thank you forjoining us. yesterday we heard that us president donald trump criticised jerome powell and the fed, calling them no guts, no sense, no vision. doesn't independent and autonomous group deserve to be treated this way? no, i think it would be disrespectful for the institution to be treated like that. in the first place. traditionally, central banks in many countries should be independent of the executive. earlier this year, you we re executive. earlier this year, you were appointed the new boss of the central bank in philippines. have you felt president deterred a's pressure to cut borrowing rates more than you should ? pressure to cut borrowing rates

important to see what happens with manufacturing and looking at exports, let's talk about the bank of japanerts are important. japanese exports have been down nine months year-over-year and people are wondering about industrial production. lots of -- the industrial production number, the economics 0.4,says we will be down negative. at the bank of japan's tankan survey, the interview manufacturers, services companies, large and small and this rate will show falling confidence and big manufacturers, and other negative. anotheracturers, negative. let's move on to korea. korean inflation will be out this week. it will be closely watched because the last reading was zero, 0% year-over-year and now it is expected to go to -.3%. this is a negative, something the bank of korea will be watching. something else, the bank of australia, they cut the rate two times in a row, down to 1.0, a record low. traders are pointing in 80% chance they will cut again. analysts are divided. the rba governor might not be ready. we will want to see how the trade war of course plays out. he said at jackson hole, it is

phrgt where they are xpected to go deeper negative and bank of japan they are negative o go intoto territory. does it make sense for the fed in that ove deeper direction? >> fed is looking at three things. environment continues and continuing to erode among businesses and there is a lot of anxiety and then inflation continues to be tepid. putting those together they a recipe where the fed can feel comfortable lowering them. just 25 basis points all or is there a case as many say if new that ressivelyvely salves you cuts on -- saves you end. on the back >> we agree in terms of whf it pointsok like 25 behaves but we think that will be enough but there is a scenario where fed goes more. hey have another 75 priced in about 25 the rest of it year and another 50 next year. that would be the case if we continue to see a ramping up in between the actionaction u.s. and china that for the g.d.p. growth. it is interesting if we talk bout the fed goes harder faster. what do you think the e.c.b. has making terms of anything work? more bond buying? does it get were bang for the buck? a lot of a view that

of decisions in japan and the u.k. and of course from the fed as well. let's go to the senior affect strategist with nav national australia bank. yen.you expect to see this in the environment of geopolitical risk like we saw over the weekend. >> the first reaction for dollar-yen is to show strength is -- and particular for the yen to show strength. you'll control policy, and we saw it going significantly last weekend friday as well. supply -- what and it might mitigate someshing strength. paul: for the paul: yen, when will that become a concern? expecting any comment? we have seen intervention in the past. >> for now the bank of japan, similarly to qe stimulation is limited what it can do. they will wait and from the domestic side the economy is doing relatively ok thanks to investment and fiscal spending that have occurred. any talk of intervention, you have to see dollar-yen closely 105 many havethan suggested. shery: what are we seeing in terms of oil sensitive currencies? we are seeing the cad rallying but not the aussie dollar as of yet. -- i suppose close for some they are more sensitive the oil crisis whereas the aussie and k

paul: we also the bank of japan meeting this week.at today might cut sort term rates into negative territory. >> it is a tougher one than the fed. in many respects. because the japanese economy remains somewhat under pressure. it is hurting with the strong yen. we know there is a manufacturing slump in japan and the rest of asia and europe. the export story is not where it was. there heading into the increase in consumption tax in japan. the thinking is that will be a weight on consumers. is not clear what the boj will or can do. they are already in the middle of a massive stimulative program. that is having negative side effects according to the boj themselves peered they are concerned about the impact that negative rates has on for example bank and insurance sector profits and on regional banks. and there is a skewed effect in the financial markets because the boj such a big purchaser of securities. all that said, some economists say this one is in play peered we have reported ourselves that the boj are considering new measures in t

. >> the bank of japan, the last of the big three to make a rate decision this month.hey held, as many were anticipating. governor kuroda saying he and his team are paying even closer attention to inflation. not a cut is expected but could we argue the change in guidance, long-awaiteda acknowledgment, their movement toward the inflation target, is all but a mirage? >> there is no doubt the impact of the trade war has been heavy on japan. exports down nine months in a row. this is an export-dependent country. the labor market is still strong. gdp is still growing, and yet there is still a loss of momentum. they are acknowledging it. now they are talking about re-examining the economy and prices, what is happening, to be ready for the next policy meeting. >> norway's central bank moving further away from the pack. in a decision many were not expecting, they raised the benchmark rate. it is the highest level in almost five years. this is really going against the wave of what everyone else in the world is doing. is the norwegian economy immune to the global economic downtu

that 106.19 level as we get ready for the bank of japan to meet. long the 105 level on the end that the boj will not be inclined to do too much. see a little bit of a strength here in the offshore yuan. surprising perhaps dollar and you on trading off the pmi, purchasing management index. you can see the aussie dollar .oving a little here we're waiting for that big rba meeting tomorrow. the rb is expected to hold steady. just the rmb is effective hold steady. of 14.9.a level week many factoring numbers. korean pmi expected this week. plenty of macro data for the markets to digest as the trading week gets underway. thanks, kathleen. a check on china's small pmiters with the caixin reading later in the next hour. we have the standard charter economists to discuss this. lan shen, china economist standard chartered bank thanks for joining us. you would have to imagine that caixin reading is not good to be too pretty. tariffs have had an impact on china's exports with growth of 6% year today compared to 9% in 2018. exports to the u.s. declined the most a

donald trump wants bigger cuts and tweeted -- the bank of japan stopping short of following the fed in next month they will review. saying theythe boj have more flexibility than other central banks. ecb, i thinko the the boj has more room to ease than the ecb has. we have different options toward monetary easing. sayana: 83% of economists the boj's next move will be to add stimulus. the u.s. attorney general william barr circulating a proposal for expanded background checks for gun buyers. president trump has not stated what efforts he will back. he has questioned whether they would be affect of. -- effective. exporter's largest oil is looking to buy fuel, scouring for cargo after the unprecedented attack on its fuel. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. francine: thank you so much. we are just getting news out of the ecb. at 3.4 billion ltro,in the long term p their policy tool to target long-term refinance operations. we were trying to figure o

the best way for banks to do that including ecb, bank of japan rg bank of england is to dump all thebonds they never should have bought in the first place and do it relatively rapidly in a disgorgement. the fact is that the way people think lower interest rates are better but it is actually better if we have a bigger spread -- that lower interest rate better thing is a demand side thought. we never have had stimulus actually from quantitative easing. every place it's been deployed, loan growth mass slowed. quantity of money growth has slowed. if you want to accelerate that stuff, you steepen the yield curve, and the way you steepen the yield curve from today's condition is to have the central banks -- what i call the central bonkers, have the central bonkers disgorge all that excess debt that they never should have bought in the first place. their concern was never about stimulating. let's be real clear about that. their concern was about overcoming the problem of too big to fail because not a one of them knows how to run a bank and doesn't have a clue what to do if a big bank fails.

bank of japan governor kuroda has been talking of the virtues of negative interest rates, triggering ction he will act next month. he repeated the bank is closer to taking action than it was in july, but avoided committing himself to a move in october. he we iterated a 2016 policy review that said short-term rates have a more powerful impact than more long-term ones. rba chief philip lowe says he agrees with a gentle pickup in the australian economy, seeing policymakers are ready to cut rates if needed. however, he stopped short of flagging limited move that some markets and economists have factored in for next week. the aussie dollar rose on its comments while a cut on the current cash rate of 1% fell. >> after having been through a soft patch, a gentle turning point seems to have been reached. we are not expecting a return to strong economic growth in the near term, but we are excepting growth to pick up a little bit. against this backdrop, the main source of the mystic uncertainty continues to be the strength of household spending. ritika: global news 24 hours a day on air and on t

shery: last week we heard from the bank of japan governor saying the boj has more room for easing comparedthe ecb despite everything they have done so far. how do you rate the economy? lakshman: i am worried about japan. that is one place we should look for recession risk because leading indicators have gone down. couple of bad things happening. one is global trade, they are a supplier to china. they are very much hurting right now. they also have the spat with korea which is significant, their second-biggest export destination and to make it interesting, they are raising sales taxes at the end of the month, which is poor timing. they did that in 1997 and it triggered a recession, in 2014 and here we are again. shery: the question would be, have they learned their lessons? lakshman: apparently not. i am saying it here, it is knowable it is not a great time to do it. shery: especially given your considering more and more analysts are calling for long yens. lakshman: we don't make market calls, but that could happen which may not be the best thing for them. they are taking it on the chin wit

businesses now await a decision from the bank of japan.g the rate will not provoke backlash.

risky assets, that will be seeing the yen soften, and that will be a good thing as far as the bank of japanconcerned. guy: we are going to leave it there. thank you very much indeed. jane foley is rabobank's head of fx strategy. some breaking news, vonnie. vonnie: yes, president trump tweeting that did mr. ration is theking california -- that administration is revoking california's waiver on car emissions. we were anticipating this. the trump administration had ,elayed a public announcement revoking california's authority to regulate automobile greenhouse gas emissions. the president has now declared it openly on twitter. california'sg authority to regulate on gas emissions. as you can see, stocks moving just a little bit. this is bloomberg. ♪ ♪ vonnie: time now for a look at some of the biggest business stories in the news right now. novartis, ist of halting all distribution of generic zantac as a precautionary measure. regulators have been looking into a possible cancer-causing agent in the heartburn medicine. not providers will health coverage to stricking workers. united auto work -- to

i think the ecb and the bank of japan are probably the outliers. the rationale is they don't have from of room to move monetary policy perspective. they are going to have to engage in nontraditional monetary policy, and that means more .uantitative easing they can't necessarily -- the ecb cannot necessarily do yield curve control because there are too many participants. i would caution people to focus too much on european debt as an asset class, and the more to other areas like the u.s., australia, new zealand where you have positive yield curves. the big outlier we are focusing on is what is happening in the funding market. i think that will bring things to life, particularly over the next six months as we lead into year-end. i think this can get a little more squarely in terms of the level of volatility that is input into the market. romaine: speaking of the funding market, are you taking comfort in the three repose we have gotten oversubscribed on two of those days, probably would have been oversubscribed on the first day had they been able to ro

i think we've seen in countries like japan, the bank of japan has been active in buying equities.here are extreme measures countries can take. their asset purchase program set that ecb is looking at they could be extended. rishaad: all of this is because is what more can monetary policy do? mark carney is saying that what we have is a global economy that is showing signs of a slowdown. it is open edned as to what goes on next. jim: the issue that we are detecting now is that monetary policy cannot be used in isolation. it has to be used with other tools another the big one is fiscal policy. we're seeing in countries across the world, specially countries like china, which is very active a means ofolicy as stimulating consumer spending. but if you actually should yourself -- shoot yourself in trade war.th a david: jim, arguably the korean market, perhaps the biggest victim of the trade war and others. we were just talking about the earnings first session taking place in korea. how do you approach a market that is already cheap, but burning seem to be, they just can't find a floor. j

one of the bigger questions is how central banks will respond remember, in addition to the fed we had bank of england, japanrway, switzerland among others meeting this week that will certainly be a big topic that's likely to come up morgan, back to you. >> certainly is. we're seeing the same down side move in transports here as well. thank you. >>> let's go to sue herera for a news update. >> good morning, morgan. good morning, everyone united auto workers and general motors resumed talks aiming at ending the strike that began at midnight first strike since 2007. 49,000 workers walked off the job, calling for better pay, health care, and profit sharing. >>> hurricane humberto expected to dump more rain on the bahamas as it moves away from the u.s. coast. they say it will bring life-threatening waves and tides to central florida and north carolina coasts. >>> a small plane carrying local government officials crashed in the southern part of colombia, killing 7 of 9 on board. the cause is yet to be reported. >>> nine time nascar champion mike stefanik killed sunday. it took off from rhode island. they say he w

tomorrow, the bank of england, unlikely to change policy even as the brexit deadline approaches. and the central bank of japan the world of central banks, i one group we are going to see a race to the bottom, or if it will be more of a muted reaction. mark carneya of continuing at the bank of england. that has been percolating in the last 24 hours? francine: it has. this is the report. if you think about it, tom, let's recap. three years and counting since the brexit vote. mark carney has already delayed his exit from the bank of england twice. this would be a third time. it is first of all important that we figure out exactly how politicians have been focusing on the next boe governor. the current governor has not had a lot of times to think about it because they are preoccupied with brussels things. that could be one possibility, asking governor carney to stay on. tom: it is different across the atlantic. they are begging the governor to stay, and hear the president is asking the chairman to leave, leave, leave. maybe that will be addressed in the press conference. 2:00 p.m., scarlet fu has spent hours, i s

election and finally the growing influence of china the fed, the ecb and the bank of japan have to face the fact that when the next downturn comes there won't be the power to reverse it in the same way that existed before the fed should cut rates slowly and by small increments rather than rushing to stimulate the economy. it's down about 6% through late last month. >> thank you very much so back to you, you used to work for the federal reserve bank of dallas the federal reserve is simply shooting blanks for lack of a better term. they're not going to have the power to reverse the recession what say you >> well, dalio sounds a little bit like hurricane dorian. the strength is disapating as well as the speed which is what people in north carolina want to hear i think the message is going to be music to jay powell's ears. he's speaking later today. we have to stop listening to fed speak. you're going to have to find something else to do with your spare time i think it will residence mate with the federal reserve because i think that they want to be able to maintain their ammunition and not