the pboc is reported.is rooted but it really points to the difficulties in the balancing act. last week we heard from top lenders saying that leveraging and cutting overcapacity is a priority. but the pboc say they remain supportive. bloomberg intelligence thinks of cut is in- height -- order, but they do not expect a major slowdown. policymakers are going to tap the banks -- breaks gently with this complex slowdown. angie: thank you so much. tom mackenzie live in beijing. let's check other headlines. softbank is reporting sales at stake, and a finish gaining company super cell. they make phone gains and they have buyers in china. they could value super cell at more than $5 billion. soft bake bought a majority stake. to enter theooking film business according to a saudi news. news.hi they are in talks with multiple production companies around the world, and aiming to complete the first movie in the next two to three years. the report does not indicate what nintendo's first film might be about but it would

the pboc has slowed down, but what can they do?arge, the real estate developers, not to get credit. otherwise it would be huge restructuring. we are talking about the largest sector of china. yvonne: what does this mean for growth? guest: i think they will do their best to avoid that. credit would be high. they will do anything on the physical side to make it happen. they could do rate cuts, but i don't think they need to. they can do so much with the open market. they can allow for more on shore -- they can avoid the big cases leading to evidence here. i think they can do all of that. that would bring them to the figure they want. seems like growth is on the back burner -- the forefront i should say,. let's talk about japan. a story coming out of the terminal saying, never before has the boj done so much and gotten so little. exports falling, inflation far from 2%.have they run out of policy tools ? guest: we have learned from the centralthat bank cannot solve the country's structure problems. taken by time -- it can buy time, and

how much pressure does this put on the pboc? anemic,t data has been at best.hey have said -- people are waiting to see if the pboc stimulus will affect the market. angie: what kind of stimulus, monetary or fiscal? hold on to that thought. >> egypt is sending a summer into search for the egyptair black box recorder. scenariosent said all remain open. the flight crashed into the sea on thursday en route from paris to cairo. the verdict is expected later today in the trial of the baltimore police officer charged in the death of freddie gray. he is accused of assault, neglect, and reckless endangerment. india remains in the grip of a record heatwave which images topping 51 degrees celsius at times. the monsoon is expected to bring cooler temperatures. powered by over 2400 journalists, this is bloomberg news. next, anying up excuse. we will take a look at the strange reason some chinese companies are giving for not paying back their debt. this is "asia edge." angie: default there on the rise in china and so was the litany of unusual excuses. tom mackenzie has been

there will be pboc liquidity.ee the problem manifests itself not on the asset side with banks declaring -- that will only come later. he will come on the funding side of the deposit-taking which the banks are in georgian in in more and more risky forms -- becoming vulnerable. yvonne: is this a short-term solution? it is a contribution to keep this problem at arms length , but the scale is too small. it would have to be a massive program. why would the pants actually want to do that is the question. yvonne: we see some stabilization in exports and foreign reserves. now that we see a little bit of, , you are still thinking this stock market is not what people should be worried about, it is the currency. is there stabilization in the currency? guest: a sensibly, that is right -- ostensibly, that is right. capital movements have been tightened up. it has been extremely fortuitous that in february, for example, it wasn't just china needed the dollar to back off. the federal reserve itself and the fmo's he was of the sa

chinese consumer prices rise for a third straight month as the pboc gains reasons not to ease. ♪ >> welcomeo the pulse. i am mark barton, a quick look at the market -- at the markets. we are going to see a second consecutive day of gains if things stay the same for the next seven hours. the stoxx europe 600 is a by 1% today. the mining index is the big performing industry group after slumping yesterday. credit suisse big jump today. we had a loss, not quite as bad as forecasts and brent crude is up today after reporting yesterday up .6%. here is nejra cehic. nejra: china's consumer prices continue to rise at a healthy pace in april, but still a bit low the government's target rate . 2.3% was driven by prices given the pboc a reason to hold off on another rate reduction. easing ing to an factory gain inflation. be his topverty will priority as he claims of victory in the filipina -- in the philippines presidential election. a zero tolerance approach to crime and corruption. a string of on guarded -- unguarded comments. as ills political system has fallen even further as -- an old that bodies

the pboc says it will support the economy. the s&p 500 flirts with his highest readings since the internet bubble, but the fed model suggests it is still far from its 2007. and carney defends his warning about a brings it, saying the british economy faces 1990's era uncertainty. we talked to the cbi. welcome to "the pulse" live from bloomberg's european and quarters in london. first we have to get to the markets. this is your board. downsidelittle bit of pressure on these european stocks, down some 0.4%. exchanges in austria, germany, denmark, norway, are closed for a bank holiday. this is a picture for the asia-pacific index. we had some earnings that came in a little light of forecasts. overall, the rebounded. , japanesew japan falling, commodity prices rallying, with crude at $40 $.85. let's get to the bloomberg first word news with nejra cehic. nejra: norway's $850 billion wealth fund will seek to join a class-action suit in germany against volkswagen following the emissions cheating scandal. vw andd owns 1.64% in said it

pboc officials plan to ask their american counterparts next month.om mackenzie has been looking at this one. it seems a bit forward, doesn't it? the concern ofto chinese policy makers as they love a potential hike in june. they told bloomberg news they will put those concerns to their u.s. counterparts when this china-u.s. strategic economic dialogue takes place on june 6-7. they want to find out the likelihood of the june rate highs and whether or not they could hold off until july. the chinese preference would prefer it happens in july. this comes on the back of the weekend reference rate yesterday for the chinese yuan, down to its lows level in five years. this concern for control amongst chinese policymakers. they made that move, analysts say, to let out some pressure for the depreciation of the renminbi. we know the fed was looking for china towards the end of last year after the shocked evaluation. the fed said in september that china was a consideration when it decided to hold off on a rate rise. china has benefited from that decision to hold

the pboc may have to do more, but at this point, further modest easing coming through from the pboc.ncine: janet henry from hsbc. mark, back to you. janet and i have to go on the panel where with all be -- where -- we willjoined by talk about the impact of negative rates on countries that have put him through. mark: looking forward to that panel. we will speak to you later. up next, china's stocks capping their biggest two-day lost since april. what is spooking investors in the world second against economy? ♪ a bit of a rally going on in germany. the dax is up by 1.4%. gain int a 1.5% stockholm. let's get to the bloomberg. nejra: we are seeing european stocks rebounding, looking at the stoxx 600, rebounding from their worst week since the february selloff. on at the600 up bang moment. it is tech and health-care stocks leading the gains. most industry groups are heading higher. the one that isn't is commodity producers, the worst performers. this is after we've seen losses in metals prices. look at what is happening to copper. this has been driven by china's imports in copper slumping

the pboc has been helped by the dollar's weakness.enabled them to weaken against other currencies. it does but a big issue on the heart of the idiocy. investors are uncertain. predictions could be against the basket for the rest of this year. there could be a drop of 12%. it to positive, i gave you. betty: you did. you get the win today, mark. finally. day losing streak comes to an end. betty: we've got a lot more ahead. pursuings done with big m&a deals. ♪ betty: live from new york and london, i am betty liu. mark: this is the european close. allegan is getting its own injection. news -- stocks are up. they are buying back $10 billion in stock after they sold their generic business. betty: sales have declined 13% since pfizer walked away from the takeover. why buy back instead of merger? what else could they have done without money? it's a good question. why not another merger. >> they have been one of the most prolific acquirers out there. they are with these pharmaceutical giants. i think they are taking a pause right now. they are

angie: can pboc hold off, then? they certainly can.hey have started to restrict liquidity a little bit in the money market. and i think that is and appropriate-- an response. it is difficult to see them providing any easing steps while we are seeing these macro events going on in the form of continued strong money growth, a good rebound in the sectors which have been weak. while, at the same time, we have started to see a drift higher in terms of default and stresses in the corporate bond market. i think that combination keeps them very much sidelined. angie: the thing is, we have got that rising yield on on short debt. that is a concern, no doubt. ook, it is a concern but i think we agree that credit risk in china has been miss trust historically turned we are going to see corrective developments. and that is what we are seeing. also the fact, it is occurring with a pretty modest but a bit of a selloff in the government bond market is good news, because at least that re-pricing is occurring when the economic environment is a little be

this suggests the pboc is allowing market forces to determine the direction of the u.n.have had discretionary input from the government itself. i think this is not going to be -- not going to trigger the currency war. on top of that, at the g7 meeting, the g-7 leaders agreed that they are not going to embark on a currency war. any is a testament that widespread fears will be unfounded. we had a note from goldman sachs saying the end of the yuan's sweet spot is not a, because it is enjoying relative strength against the dollar, but ofkness against a basket other currencies. what do you think about that if that unwinds? guest: if that is the case, i think it will probably be detrimental, in terms of the sentiments across the world. but i think it will be in the interest of the beijing authorities to actually keep the yen in line with market forces. moves againsty it, it will be allowed to move in line with market forces. i believe policymakers have now switched focus on growth, rather than on the stock market or the currency market, because they are allowing market forces

pboc has been saying this earlier, that they want to increase flexibility, but analysts haven't beening -- img has been saying that it is still a blast box. some stopped caring about the fix. rishaad: right. coming up, india's financial minister on the future of the economy. more from our exclusive interview, next. ♪ >> 10:45 in hong kong. the stories making headlines around the world. lawmakers in cambodia have been allowed to petition the king about what they claim is government intimidation. police prevented protesters were marching to the palace, but allow them to avoid potential violence. critics say the prime minister is stepping up on the opposition ahead of elections in 2018. social media has been ordered to use the official title. canada's biggest energy company, suncor, has restarted operations near fort mcmurray. they lifted the last mandatory evacuation orders and production begin again. they say thousands of employees are back, with the number to double in the coming weeks. it forced about 80,000 people to leave fort mcmurray. and china has upgraded its mapping system, p

the pboc has increased stability .ou can see is some of that in the chart here with the pboc has been following the stable dollar. analysts have not been so convinced. essentially, the yuan fix is to a black box, still completely mysterious. the royal bank of canada says they have stopped caring about the fix in august. volatility could come when the fed actually does move. this mechanism needs to be clearer for investors. another milestone coming today for chinese stocks listed in the u.s. 13 will be added to the msci indices. how much of a catalyst will this be? this is what happened six months ago. half of their flea flow was added. now the full free flow has been added. it should be a catalyst it broadens the investor pays into chinese companies also, etf and blackrock added their positions over so avr's by 500% six months ago. this is a good thing. it is interesting to look at stocks since then. in the beginning of the year, we had a dip in chinese sentiment on the economy. line, itt the orange is obviously outper

we wil sl see what the pboc does. the second point about bpi, we had seen that ease a bit. that takes into account that china will not be overly concerned about deflation. it leaves the door open for them to have stimulus, or have more monetary policies. i would be positive on that front. but again, if you look at the last meeting they had last friday, that says a lot about their decision. they want to ensure fiscal prudence as well. i think china will continue to see growth. so, there is a chance they will be more stimulus. guy: manish will stay with us. up next eastyjet posted a loss. usolyn mccal will be with and we discussed the possible impact of brexit on european travel. ♪ guy: welcome back. 41 minutes after the hour. 19 minutes until the market opens. easyjet posted a loss of 24 million pounds. the loss is a little bit less than was expected. easyjet's chief executive is carolyn mccall, who joins us now. dividendsu raising when life looks as tough as it does right now? carolyn mccall: good question. i think we have done a very rigorous balance sheet review. we do th

because of these factors, it will not influence the pboc.ad: egyptian ag asian official says egyptair flight 804 did not lose altitude or swerve suddenly which contradicts of the greek defense minister which it said the aircraft dropped 10,000 feet before falling off the radar. it went out last thursday morning en route from paris to cairo killing all 66 on board. fertility rate has risen as it ties level since 1994. that indicates prime minister abe's may have had some moderate success. the total rate growth is 1.46% more thanich is .4% the previous year. the big contribution came from women age between 30 and 34. from hundred 50 news bureaus around the world. you can get more online. anna: thank you, rishaad. let's get the latest on what is happening in the asian sessions. asian stocks fell for the first time in three days. speculation has been mounting over a u.s. fed rate hike. good morning. >> yes, as you say asian stocks falling for the first time in three days. falling towards a seven-week low. it is a pretty broad base selloff. all i

robin: i think what has been happening over the past months is that the pboc seems to be following the market moves when it suits them. they have generally followed, over the past few months, the moves in the market, what investors are saying. we have seen periods where it does not. the dollar weakens too rapidly, , but not as much as the dollar has strengthened. that creates a weakening against the currency forex trading partners, which helps them with exports. at the same time, we are still following the dollar moves. rishaad: thank you very much indeed. we will be talking to morgan stanley chief executive. he is saying that china's economy will continue to grow quickly but will face, inevitably, some bumps in the transition to domestic demand as a key driver. stephen engle caught up with him. steve, what was on his mind here? stephen: what is on his mind is he has to host about 2000 participants at the rosewood hotel in beijing for the second-annual morgan stanley china summit. we are going to be here all day today and tomorrow, bringing you the highlights. in the last hour, we had

it seems the pboc is gearing up for a bigger world. >> it does. it seems the pboc is among those people who are worried about china's that. broadening, looking at areas of formerly didn't. little nitty-gritty instances. credential framework it has set up in december, it has already been brought and to bring in new areas of formerly didn't look at, areas that the securities regulator would typically look at, like bonds and equities. it's also looking into cross-border flows, something that the banking regulator might not normally look at. the people's bank of china is taking on those things. it doesn't want these things to blow up. francine: malcolm, why are these reforms so important? if we assume regulations are up to scratch, what can improving the picture me for the economy? >> well, china's economy last year was the case in point. it has proved to be a little bit too bubble prone, whether it is ; months ago we were worried about declining property market and now we are worried about overheating. the stock market can go from these huge bull run

the stock market, it's pretty stable and seems to be a lot more communication between the fed and pbocong? >> there is improved communication though the central bank is denying it. domestically, we're seeing large commercial banks in china mopping up u.s. dollar liquidity in the market in preparation for probably another incoming fed interest rate height. so you know, because if you'll remember in 2003, there was a liquidity crisis because of the shifting expectation of the fed's interest rate hike back then and that caught the chinese market that plunged more than 20% within two weeks. so now we're just trying to get ready and if the fed really does hike in the coming months, then we'd have probably enough u.s. dollars in our reserve to get ready. francine: what you're suggesting -- and this seems basically standard, if we see the beginning of a rally, the dollar goes up, which probably means it will push pboc or the chinese authorities to do something with their currencies, are we looking at china devaluing if the dollar rallies? >> i think the dollar has spun up from the bottom rece

is pboc there?you look at the announcements over the last couple of weeks from them, i think the fed is more aware and attuned to not just actions in their own country but how this will impact the global market. it's comforting. we will be in the market of near-term volatility next few quarters but the realization that the impacts it will have an home country will have global ramifications is providing some sense to dampen that volatility. >> that volatility still persist s and will probably increase. --ding black schrock blackrock strategy this year looks into how you look at the region. >> there is no doubt and if you translate the optimism about growth relative to the volatility, in some respects, i think you will see new and innovative investment solutions active ands around passive strategies and the continued use of etf's where can make asset allocations more tactically. n stork fromas rya blackrock. let's take a quick look at where european markets have ended the day. stoxx 600 down about fts

the pboc said last week that they are trying to increase stability, but maintain basic stability.s so far have not been convinced. it remains a black box, mysterious as ever. another analyst said she stopped caring about this last year when they had that massive valuation. angie: we've got breaking news out of korea. north korea appears to have launch,t a missile citing south korea's joint chiefs of staff saying that north korea apparently fired this missile 5:20 a.m. local time, and it appears to have failed. a source.ding to let's take a look at how the one is doing. little change right now. .t is at 1190.38 as we continue to watch north korea and its latest aggressive south korea's joint chiefs of staff saying that north korea filer -- fired a missile at 5:28 a.m., but that has failed. disney says it may be taking legal action after the wanda city theme park after claims that a character looks like captain america. opening of thehe complex. we have rachel chang joining us live from shanghai. rachel, how did the conflict between wanda and disney start? angie.r: hi, ,he conflict

guest: i think pboc is still targeting the u.s.2015, the dollar drove the strategy of the pboc. for the timing, we know that the chinese yuan needs to get to a lower level. necessary is quite for china to reach the growth of that has been set for 2016. an opportunity to start developing again at a slow pace of currency. in the context, markets of settle down. rishaad: that will be it. thank you for joining us, the economist and the strategist at socgen. that is it for "bloomberg markets: middle east." it -- manus, it is your weekend, so happy friday. ofus: you can't get too much a good thing. i will see you bright and early monday morning at 8:00 a.m. oil is still above $50 a barrel. can it hold? anna: bouncing back, rising above $50 a barrel for the first time in more than six months as u.s. stockpiles declined. top the agenda as world leaders gather for the g-7 summit. we are live in japan. and grand central brexit. the billionaire businessman says he would be devastated if

we saw from the pboc yesterday -- not from the pboc, but from the authoritative persons speak for policyhina, perhaps they are not going to go forward on credit growth as fast as they have been, and maybe we will see a pullback from there. otherwise, the rest of the world, the sign is they are going to continue to press forward with unconventional monetary policy. tom: we could do this for six hours this morning. i have never seen such a jumble of nuance, tactical, strategic, and theoretical jumble, a mess of it, if you will. with jeff rosenberg of blackrock. we are thrilled to bring you later this hour, mickey leavy of berenberg capital markets. we are going to talk on central-bank theory. it does not get better than that. "bloomberg surveillance." ♪ tom: good morning, everyone. from zurich and new york, this is "bloomberg surveillance." right now to our bloomberg business flash in new york, here is vonnie quinn. vonnie: the retailer's springtime comeback has not materialized. gap fell 7% in april. old navy did poorly too. pandora is rising the most in 15 months after boosting his forec

pboc, we are seeing a little bit of stabilization. still, so much weakness. look too bad when it comes to fx reserves. paul: one of the problems we've got, of course, is because we are only looking at the stock of reserves, we don't know how much is going in and going out. the change in the stock is not quite the same thing as the flow. we've got all sorts of valuation problems around currency movements. i think the pboc is relatively happy. the capital controls are taking effect. we are not seeing significant retail capital outflow. they are happy with what they've got in terms of the currency, and they are expanding credit to expand the economy. long-term, i don't think this is a good thing at all. angie: buzz is growing about a possible brexit. what do thin client and investors should be focusing on? paul: the whole issue of the u.k. referendum, the first thing is, when it comes to the vote, turnout is going to be very important. most opinion polls show that with a higher turnout, you are more likely to get the u.k. staying in. in this regard, the mayoral

i think for any onlookers that were expecting the pboc might want to keep things steady, this fixingid raise some eyebrows. we have to remember that under the current fixing mechanism, the dollar move against major currencies is playing a much bigger role. it makes sense that if you have a much summer dollar overnight against major currencies, the u.n. -- the yuan fixing should be -- guy: how the mechanism actually works. we world on this year talk about the market playing a big role in this. is the market playing a big role? agree thatople would relative to before, it is playing a slightly bigger role, because if you remember what the pboc told us last august, the fixing depends on the previous day's close as well as overnight moves. what happened is that with the dollar rising over most major currencies, the yuan fixing against the dollar has to be adjusted accordingly so that you take into account the basket of currencies. indeed.nk you very much justina lee joining us. .ayne bauer joining us he is the international cio. wayne: they are really caught and they have been for many mo

if you look at pboc's balance sheet on trade, they look perfect in lockstep.il china, the sovereign, reveals it, it's all con jekture anyway. i'm opinionated that we're right until they prove us wrong. >> all right. what if they do prove you wrong? it's possible that the reserves are larger than you anticipate or do they still maintain even if the number's larger? >> the currency again is the net product of the real issue and it's the credit in the banking system. so the currency is just a barometer, and i think the world seems to focus on that myopically month after month, which we actually don't really care what those balances are. we know the construct of the chinese banking system is so difficult to understand. it's so much larger than ours was. it matches. it's four times the size of ours going into our financial crisis, so you've heard george soros say that china is in a more precarious place or say there were a lot of similarities between where they are today and where we were. i would absolutely agree with that. when you look at the structure of their

the pboc is control -- is determined to have a controlled weakening of the currency which may forestallanic. the shanghai composite is down 40% in the last year. the values are still quite elevated but not like we solve before the huge selloff last summer. nejra: given how much the shanghai composite has fallen, does the market still think chinese stocks are overvalued? sam: we mentioned the index, the , if you look at the member constituent companies, their average pe trailing is 97 which is pretty high. there is a sense that they are overvalued. whether that means there will be imminent correction, who knows. head of asia market structure, sam. thank you, very much. let us bring bob parker back into our conversation. you have made a robust case on where you see the currency going. the other big focus is with abe. he made a statement about global risks. he sees them possibly going back to levels that we have not seen since 2008. that is a rather serious question to raise on the global stage. everyone is talking about china and the wealth management project. how serious is this morning?

the pboc is that weighing to act on this story are are they happy to see a little bit of increase in lending to try to stabilize the economy? >> at this particular juncture they're looking at the lending right. saying if they can see new lending which is trying to generate some degree of growth than we will worry about the problems that could be further done the track at a later date. it's a classic case of worrying about today and tomorrow rather than the medium debt issues. that's how we are seeing an increasing move toward chinese markets thinking more about a western scenario or the politicians saying let's deal with today we will worry about the long-term issues and it will to look the next regime at the potential problems that come along afterwards. anna: are we beyond being wrongfooted by moves in the chinese currency? back to last summer that was something that really cut investors off guard. we see the pboc reference rates for the yuan, is it strongest this year, a lot of that reflecting what's going on with the dollar and other baskets of currencies that china trades with,

the stake council is sitting there in the pboc is sitting there, and they don't have any money.e the central banks. naturally they will turn to the guys with the cash. in this case, they are turning to the banks and telling them to do local bond for debt swap, 5 trillion this year. you have another debt for equity for zombie companies. rishaad: where does that leave us? that itene is arguing will be like the meltdown of the banks with each other. i think the property bubble will collapse and people will start pulling their money out and you will have a lot of on defaults. at that point, the government will be scrambling to give money to those they want to save and let others default. rishaad: will they let that happen? >> they have to at some point. now you are finding gdp is getting slower and slower, arising potential for defaults. they don't have enough cash to support the system. rishaad: this goes to another point of the research you have been doing, contracting the circle of capital. tell me about this. when you look at japan, the ministry of finance try to save all the ba

behind the scenes of the commodity market is a big macro trade commission just rate , allics, the fed, pbocng with crude oil prices and the u.s. dollar. we expected a rally in the dollar over may. brakes --it pump the it is a key issue we are watching for the second half of the year. a risk we want to be hedged against going into the second half. david: opec meeting in a couple of weeks. what the human expect to come out of that meeting on june 2? that's what the ux back -- what to come out of that meeting on june 2? the market is positioned for a no change in message. saudi arabia will continue to chase market share, keep the cadence, keep the overproduction bias. volatility is relatively cheap. david: that is chris kettenmann. looking ahead to commodities, iron ore -- china has had a -- i spoke to kevin rudd about the iron ore business in australia. i'm: i'm not -- mr. rudd: not the next birth -- i am not an expert in the iron ore market. you look at the economic reform , labor-intensive manufacturing for export to a new model focused on a burgeoning private sector from of this process wi

an influential former pboc advisor and senior fellow at an advisory body to the chinese government inend, saying that we can go back to the tried and true remedy, and that is spend more on infrastructure. that is what beijing has traditionally done. he says the timing right now is right for a number of reasons. the global economic slowdown helps, falling commodity prices interest rate environment generally speaking, and the overcapacity issues in china. of excesseduce a lot capacity in key industries if they spend more on infrastructure projects. they can put people to work and get infrastructure build, even though someone argued that they have overbuilt. critics also would say that this could exacerbate that credit binge that we saw, especially following the global financial --sis when they unreleased ineased 4 trillion yuan stimulus measures. they say that china will miss a historic opportunity if they do not stoke growth through infrastructure spending now. rishaad: surely he is not saying that china is immune to financial crisis. what does he see as the biggest risk? he says china

shanghai also looking positive despite the pboc setting that daily yuan fix.something for janet to think about as the dollars upward trajectory is aim to continue if we get that rate hike. watching we are bsi beingscandal and kicked out of the singapore market as well. were not seeing much of a contagious effect when it comes to the financial sector. report withonline 1.8% growth gdp. the kospi recovering from yesterday, bondholders had been getting out of korean bonds on expectations of a sooner than expected move out of the fed. inns across the energy space australia led by willie parsons -- willie parsons. where seeing gains when it comes to sony, investors brushing off that report and looking to the long-term. very muchhank you indeed. one of our top stories, the latest step in this 1mbd socko with the swiss bank ordered close in singapore. not uniqueare if step by the monetary authority of singapore. >> yes, indeed. it is very rare. the last time something like this happened was in 1984 when the monetary authority ask a local merchant bank to shut down. i

little bit on what we're seeing as red-hot prices in those cities, particular chin jim -- chin chin the pbocng a lot of credit and liquidity to the system to encourage home buys , sixthe last 6-12 months rate cut since november 2014, and cuts to the rrr ratio. they are clearing some of the inventories in the third tear ubses, and banks like saying the property sector will underpin growth in china into the third quarter. the top line is that april new home prices in china excluding affordable homes, up and 65 cities month on month. rishaad: thanks for that. tom mackenzie in beijing. center, thenvention third-highest ranking chinese official addressing hong kong. the chairman speaking and mentioning this one belt, one road idea that they are trying to promulgate their. promulgate there. going on to say he would boost cultural exchange and booze connect to the between the regions and help give a boost to the global economy as well and help the global economic recovery take place here is well, which is something that he sees as lacking. talking about this one belt, one road initiative. we are li

having a look at the offshore renminbi in terms of currency, the pboc has weakened the yuan fixation to its lowest level since february 2011. we can see a little weakness in the offshore renminbi, down by .2%. the weakness coming through in the yen as well. japanese equity is holding at its lowest level in a month. elsewhere, we are seeing the won and emerging-market currencies being sold off against the dollar. this is playing into the kospi, but really a story of dollar strength. the market is trying to figure out the rate hike. rishaad: noble group is making headlines. nda amin.ng in hasli this is a little surprise, certainly. haslinda: well, yes. it caught everybody by surprise. according to a statement this morning, alireza decided the time was right for him to move on. noble says he will be replaced by william rendell and jeff frame. the founder will continue in his role as chairman of the company. reza'sacknowledged ali contribution moving the company model.sset-light he played a pivotal role in the sale of its agricultural unit. has beenays alireza crucial in securing the rec

we heard from the pboc that the credit slowdown on friday is not a problem due to the effects of bonding. so that could be just a one-off. that thelast week government wants to restrain credit and cut back on those overcapacity issues in state degrees in singapore today after three leaves of nonstop declines, the benchmark just in the green there. ♪ >> the market moved into deficit earlier than expected. china's refineries reaching record profits. revolt, whytors in shareholders in turkey's central bank on a dividend of just $140. yvonne: big bond auctions across mideast states as downgrade several states. --us: reporter: good morning from london. two and half hours until the start of european trading. let's talk about what we are covering today on european programming. over the weekend, plenty of stories surrounding the brexit. mark carney spent time defending the independence after members of the the campaign called for him to leave his post after the bank of india's governor said that the brits it could lead to a recession. could be to a recession. , the day business lobby in the u

pboc advisor says china may miss a historic opportunity if it does not invest more in infrastructure.to boost growth and won't undermine efforts to overhaul the economy. we are in beijing with more right now. why does he say now is the right time? he is an extremely influential former advisor to the central bank. at theow a senior fellow chinese academy of social sciences, a think tank advisor to the chinese government. is extremely influential. in fact, he never does television interviews. i have tried to get him on camera, but he won't. he did speak at a conference in beijing and said that he is advocating the typical tried-and-true response that chinese leaders have had an years past when facing economic challenges, that is to spend more on roads, railways, bridges, airports, and other infrastructure. he says, the quote that he gives is that china will miss a historical opportunity if it does not increase this infrastructure investment right with growth dipping down into the mid-6% range. he doesn't think such a binge on infrastructure would undermine the efforts to reform the econ

francine: are we any wiser about the endgame for pboc? at this point, they still do have quite a bit of room to act if they desire to do so. interest rates are still high. the amount of money banks are required to keep in reserve is still quite high. the yuan is depreciating. it has restarted its depreciation slide. there are a lot of factors to consider. the big one is debt. we've had all sorts of signals out of the government that did is a problem they need to pay attention to, even if that means sacrificing growth. francine: thank you so much, nick wadhams. here are some of the other highlights. in just a few minutes, eurozone gdp data. germany better than expected. italy pretty much in line. at 1:30 p.m. u.k. time, u.s. retail sales. hostsoday, barack obama leaders of denmark, finland, iceland, norway, and sweden for a u.s.-nordic leaders summit. i'm sure they will talk about the refugee crisis. i'm sure he will ask about more extreme party movement, much like we are seeing in the u.s. not sure they will talk negative rates. who knows

we have the strategy the pboc has pursued in china which is keep the rate steady against the dollar withciation against other major currencies. that strategy is coming under pressure with the resurgence of the dollar. this is the yuan in the past 12 months. the fixing is lower than the levels reached in the january turmoil. the market rate is still .5% stronger than in january. 6.56, that is the level in january. that is the big depreciation that happened in august last year when we were at 6.20. this year we have had a fairly steady rate since the turbulence at the start of this year. -- keepand i on events an eye on events in china, and greece with regard to the creditors, that have reached an agreement to allow the release of billions of euros in aid and easing the debt mounting. finance ministers and the imf also stood down from their own hard-line stars before delaying the pay let -- payout. interesting, the yield on the 10 year just to dipped below 7% a little bit earlier, 7.03 now. was at 6.97. that is the third time we have seen greek yields below 7% since december. when greece w

the pboc weakening the daily fix a little bit extending on yesterday's move. get up to some of the movements. we did have gains in the space overnight and the expectations of cuts, we are seeing energy and utilities driving some of these losses, especially when it applies to daily markets. we are also seeing many banks down by 5%. expecting second half operating profit to be lower compared to the previous timeframe. normalization of growth when it comes to hospital bed utilization rates. tvthe sydney session, the which is likely to weigh on its profit forecast going forward. also falling in the kiwi session as well. the record lows hitting a low in terms of yields. 1.567%. all off the back of the rba statement we have just been talking about. back to that story, though we have been a poor once in i many as a quick stopover on the way to australia but the city state is increasingly becoming a hotspot in its own rate. this is quite something. it is nearly attracting as many people as some of the other places. >> especially considering it does not have the sandy

weakness after the pboc cut. that's off the back. let's look at commodities.is falling for the ninth day. the drive behind gold is janet yellen's comments. stay with bloomberg. mark: our first guest tonight, two guests tonight, and they are chatty, too. thank you for being here. we've been talking about the trump donor score today. how did he do it? >> he does it through charm. he vanquished 16 opponents. a very successful first outing with the rnc. it shows the party unity starts from the top. mark: you are for trump -- and you are not. you acknowledge this is an impressive list. if he can put together a list like this, why not say -- >> donors fall into basically two categories. most major donors are staying out of it. open to funding an independent candidate or they will sit on the sidelines. the other group, some of them are saying i am on board. others are saying, i do not want to be seen as being disloyal for the party. push comes to shove, if this race is truly winnable for trump, he has the capacity to fund it. mark: update us on where the search for a

stronger inflation driven by may give the pboc a reason to hold off on the cut to a key range which is at all record low. airbag maker to cut a is on -- takata has to produce a recall plan as to why the recalls may mean a second straight annual loss. it is expecting a shortfall of $120 million in the 12 months to april. it has been predicting a $55 million profit. at least 13 deaths are linked to the faulty airbags. itsta has lost 80% of market value since the scandal broke. dubai is not concerned about the rise of rival banking house in hubs middlest -- east saying there is opportunity for everyone. they arein the restructuring into an economic zone with its own regulations. these exemptions and links to riyadh airport. abu dhabi is expanding its financial center. >> i think is it -- it is about collaboration and connectivity. three financial centers. fore is much more room everybody. my -- over 2400 journalists in 150 news bureaus over the world. the imf has welcome news saying it is weathering and economic downturn better than its oil-rich neighbors. the fund sees the growth acceler

the pboc has learned its lesson and will not let the market fallen to panic.hina will use the verbal support to avoid spooking investors. tutor investment is trimming fees. the move comes as the finance industries highest paid money managers faces a backlash over lackluster performance. reduce most fees to 2.25% in assets. that is according to a letter sent to clients and obtained by bloomberg. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . mark. mark: morgan starley -- morgan stanley's chair, james gorman, says he is bullish on china despite the slowdown in the world's second-biggest economy. face somes china will bumps as it transitions to domestic demand. >> the chinese economy is a $10 trillion economy. it is the second largest in the world. it is growing at 6.9%, whether it is exactly right or not. it is growing at a rate the monster bleed faster than the rest of the world. japan has negative growth. 2%.largest is europe with percentagewise, y

the pboc says it has learned its lesson and won't let the market forward to panic.s they will use daily fixing and broker support to avoid it. morgan stanley ceo jim goldman says the economy will continue to grow quickly but will end with "some bumps" as it transitions to domestic demand as its main driver. he also told bloomberg television that investors should stay tuned for improved returns on equity from the banks with markets becoming "more normal." and those are the headlines, powered by over 2400 journalists in 150 news bureaus around the world. let's get the latest. haidi, you have been monitoring a fairly lackluster day. haidi: you get the feeling, don't you, that investors increasingly over the past couple days, when we hear from janet yellen, are sidelining themselves. not a lot of direction when it comes to this, but we are seeing a pretty raw based selloffs. -- a pretty broad-based selloff. a lot of investors waiting and seeing. shanghai down by 8/10 of 1%, following for the first time in three days. we are looking at selloff when it comes to property n

consensus is, if they will be anymore easing after six rate cuts, it probably will not happen from the pboc the fourth quarter. keep in mind as well, 49.4 is a miss for this pmi, but it is much better than september, where it was 47.2. and a year ago, it was around 48. it is better. rba looks to china and said the position riff armed their short-term look as well. right, let's take a look at g7, wrapping up the meeting in dubai. a downturn when it comes to oil markets. earlier on i spoke to the u.s. energy sector dr. ernest moniz and asked what is being done to address the issue of supply and demand. >> we certainly do believe in market forces. we believe that the private sector in the end will make the best decision. so, that will govern how prices evolve. certainly right now in the oil markets, there is no question that we continue to have an oversupply relative to demand. and inwas discussed i fact, the international energy agency made a presentation of their analysis. there is a chance of the oversupply will work out of the system and roughly a year. we still have a large inventory, but

angie: and the pboc has confirmed that there is no change in their strategy. we talked to a greater china economist about the importance of this. >> the fiscal support has really been increased. and that is really what is behind civilization that we saw in march. we thought, we hopefully he later this year. it is good for them to come out and say, policy has not changed. but what is important for growth is fiscal and has additional benefits. it is more targeted it will alleviate the concern about overcapacity sectors. angie: and that is the word on china. we are checking on other stories. group, they are looking at another opposite -- acquisition, this time it is a logistics company had that company. withare looking at is catering company and hotels. up in singapore today. sharesting earnings, fell as much as 23%, the worst performing -- performance since 1974. the company says they will incur a loss of more than $80 million in the first quarter for warranties late to the -- linked to the moment deletion -- minute ovulation -- manipulation of data. and nintend

the pboc said just last week that it is trying to increase two-way flexibility with basic stability, making it more market-based while retaining the stability. that analysts we have spoken to, ing saying that despite all these efforts and these reforms, this mechanism is as much of a black box as ever. the bank of canada's haitian fx saying she stopped care about the fixed when there was a sharp devaluation. angie: thanks. coming up, from silicon valley to hong kong, here from the founder of one company that has invested in more than 1500 startups across the globe. that's coming up after the break. and the matter of timing. janet yellen hasn't given much away, so we will be asking our next guest to read between the lines and pick a date. asia edge, coming up next. ♪ angie: 11:14. day other stories making headlines around the world. a series of bombings in baghdad has killed at least 24 people. it happened in a northern suburb where a suicide bomber crashed car into a checkpoint next to a shopping area, killing eight civilians and three soldiers. motorcycle exploded inside the city, k

. ♪ we spend a lot of time talking about the chinese economy, focusing on the pboc.umbers get lost in the are china's citizens grappling daily with the new economic reality in that country. on five of focus is his neighbors in shanghai, in a city of more than 15 million people. rob: china has gone to a point where everyone has made my. that was -- made money. that was the goal for 20 or 30 years. that was the goal for the government as well. so everybody is on the same page. now everybody's dreams are going in different directions. they are looking for religion. they're looking for equality. they're looking for justice. and the party is having a difficult time with this. that is part of the reason why jing paying -- xi jinping is a jury and that puts the party first and the people second. david: you focus on the street that you live on. there is an unofficial mayor of that street. homeless ony who is a street where he lived for a long time. you follow him. you profile him. you got of town. that's when the government comes in to evict him. what does that say about how

by disrupting the pboc's strategy. it combined with depreciation against other currencies. a one-month tokyo, as investors ignore a week profit forecast. they are looking at long-term prospects and emerging projects such as sensors for driverless cars. there is a 46 percent drop in profit forecast. the controversy surrounding the investment fund has claimed its first major victim. we are talking about swiss kicked out ofbfi, singapore, for breaching money, and laundering. and bsihas resigned, will be dissolved. is the worsts bsi case of gross misconduct it has ever seen. and those of the headlines from bloomberg news, powered by over 2400 journalists and wanted to 50 bureaus around the world. let's get the latest markets right now. haidi, a much better day for asian stocks. it is really this perfect storm of factors. we have oil, building on that rally we had overnight. we are also seeing the yen weaker, but helping out when it comes to tokyo stocks. of a fed rateions hike coming in in june or july, they focus at even in odds respectively. that is helped out overnight as we

that's one of the reasons why we are looking for further rate cuts, further easing from the pboc.nna: charlie, thank you very much. el stays with us a little longer on the program. today, foreign ministers from 17 countries, including russia's sergey lavrov and john kerry of the united states, gather in vienna for a syrian support group meeting. tomorrow, a raft of data including united states housing starts and industrial production. wednesday, said minutes -- fed minutes. and we round of the week with greece's alexis tsipras heading to rome, attending to secure backing for his country's next bailout payment. manus: up next, "a dark cloud of uncertainty." that's how the biggest business lobby group in britain said the threat of a brexit is. the cbi's growth downgrade. all that to come on "countdown." ♪ manus: you're looking at the glorious stay in hong kong, where the hang seng is trading 95945. it is up over 1%. it is 6:30 in london. let's get straight to yvonne man with the bloomberg business flash. the chinese car hailing service didi is planning an ipo in new york next year.

so i think the focus is going to be on the pboc in terms of further stimulus measures. it does build a case for more accommodation. it will be very interesting to see where the currency goes as well. depreciation pressure remains. let's not forget the official front page article in "the daily" today saying they expect to recover meaning that beijing is managing expectations in terms of lower growth. elsewhere, commodities resources divergence there, metal prices are down sharply. editing was quite possible. consolidation let's call it. all in all, not the most inspiring of sessions to kick off the week. pack to you now. >> that's right, sri, the l-shape is not inspiring investors. thank you. investors are also keeping an eye to the oil price as we saw a drop in the weekly price. but today we are seeing a rebound in wti and brent. both the wti and brent up 1.14% driven by wildfires in canada. and saudi arabia announced a major reshuffle in the government. the kingdom is replacing the energy minister. that's al-naimi there who has been on the job since 1995 and long seen

the pboc has learned its lesson and will not let the market fall into panic. to the investment, one of the oldest and most expensive hedge investment,tudor one of the oldest and most expensive hedge funds is trimming. will reducehe firm most rates. that is according to a letter sent to clients and obtained a bloomberg. 27%.ee is worth after months of protests against francoise alonso government that's over francoise alonso government -- meanwhile the officers of the socialist party have been vandalized across the country. most recently yesterday. global news, 24 hours a day, powered by 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . guy. guy: thank you very much. deutsche bank in very specific terms has had its credit rating cut by moody's. the banks long-term deposit is to abovee rating -- is two above junk. matt, you were there a few days back, you are watching will is happening. the good news keeps on going. matt: absolutely. these are problems i think deutsche bank knew about and have