what messages that sending from the pboc?ng is in line with how the dollar index is moving. dollar index is moving in response to risk of environment. we are seeing that moving higher. help not going to potential worries in terms of outflows or depreciation. think chinathat, i would be more tolerant in terms of yen fixing or weakness. ap between offshore and onshore is likely to widen, but we think the pboc is likely to narrow the other virgins -- the divergence. teo looking at the foreign exchanges with everything upended by the results in britain. coming up later, more on that decision. we will talk to luxembourg's finance minister for his take. has anreg smith explanation on trending business. ♪ >> it is 10:15 in hong kong. these are the latest first world headlines. brexit making headlines in the presidential campaign. hillary clinton rushed out a tv ad attacking donald trump for saying a falling pound would benefit his golf course in scotland. disgraceful,it accusing her of trying to wash away her bad judgment call on br

how will that play into the pboc maneuver?e have the fx reserves, a key component of how they manage their currency, in terms of how much money they used to manage the currency. we are expecting today's trade numbers to come through, showing exports have dropped another 4% in may, so they would have fallen for of the five months this year. bank of singapore is saying that it is a clear preference for yuan depreciation. the question is, what is the limit for which they can let the currency fall without getting into these concerns about competitive devaluation, etc.? because westing, hear it from the pboc's deputy governor, saying that china's exchange rate has been stable, transparent, that the way they similar to other countries' best practices. they also said the pboc had good communication, and that chinese is concerned about the normalization of the fed's monetary policy. at the end of the day, there is not a lot of confidence in the u.s. because of the fundamental economic slowdown, and every time the yuan rises, the marke

he says the pboc action caused an unnecessary nervousness.ted its claim on the south china sea. addressing a meeting of defense , they struckgapore a more conciliatory tone. he also warned countries to keep their criticisms to themselves. the philippine central bank is stepping up cyber security and demanding more scrutiny toward off money laundering. manila has been in the spotlight after siphoning $80 million off the bangladesh account. most of it has disappeared. will alsol bank regulate digital currencies including bitcoin. powered by over 400 journalists and 150 bureaus around the world, this is bloomberg news. -- check in on the markets in asia pacific. futures in australia are looking like this waiting to a higher open. check out the aussie dollar at 73 u.s. cents. trading intures chicago, pointing to a lower open. why one of reason six bought 60. it seems that negative rates are getting the job half done in japan with banks cutting government bond holdings in almost three years. we have haidi lun with the story. that is not asserting

be, rather than own, it does appear to be online with the pboc's recent strategy.e: that is because of dollar strength. -- callingrd from for a stable eu and the staple u.k.. -- and a stable u.k. line, he reiterated the there is no assumption we will get longer-term depreciation when it comes to the yuan. maintain a stable foreign exchange rate. i keep using the word because he kept using or. dust using -- using the word. there is no need to assume we will get another round of devaluation. if there is further strengthening in the dollar, the yuan would respond. yvonne: we have to focus on that basket as well. more reaction to brexit, we will be speaking to bt global services. that interview is coming up. ♪ >> these are the latest headlines. brexit is making headlines in a presidential campaign. hillary clinton rushed out a tv forttacking donald trump saying of falling pound would help his golf courses. minister isime expected to announce a cabinet reshuffle later today after strengthening his grip on his ruling party. on friday, the supreme council expelled two opp

what does it mean for policy makers, the pboc, how with a look at these numbers? >> sure.he pboc will likely more, and the cpi inflation is likely to continue to edge up in the second quarter this year given that food prices will likely take some time to generate more supplies. that means that the meat price will likely peak in the next 3-6 months. we think that the rising leaveson, cpi inflation, little room for further monetary policy easing, and we also noted that the research bureau put out revising cpierday inflation forecasts for the whole year, so we think cpi wasation for 2016 significantly higher than the rating in 2015, so we don't expect to see further benchmark interest rate cuts from the pboc given the rising cpi inflation component. absolutely, 2% as such a benign figure for last month. you in your weekly shop, how do you see prices going up? food is getting more and more expensive. compared to year the april number, 7.4 percent. it is getting more expensive for households, isn't it? >> exactly. prices, theg food vegetable prices, likely to fall to a more nor

pboc sets the yuan at 6.5793.ok at what is happening in the chinese equity markets. , shares above 8800. we are seeing gains at the moment. here, we talk about with upcoming changes respect to the msci. aey have added allocation for shares. they have taken the money from their hong kong allocation, so that is the thinking on how you position yourself in light of the upcoming change. , upgrading its call on shares of hong kong a company that runs the equity stock exchange in the city. msci will more likely than not announce the inclusion of a shares. the mechanism here will be increased turnover. through -- and that will increase the bottom line. that is a the recommendation here. the broader picture looking like this. asia, most stocks up. 47% of shares on the way up. by m's light ahead of the jobs is light aheade of the jobs report coming out of the u.s.. ,ave a look at the nikkei 225 fast retailing leading the gains there today. sales inon the back of may up 6%, the biggest gain so far this year. a little bit of

air, thehave been on pboc has gotten into the mix and added more liquidity to the system.e 40 billion yuan in the form of reverse purchases, seven day reverse repurchases. to get someo liquidity pumped into the financial system in china. the chinese president highlighting the importance of the strategic dialogue between the two countries. economics, butut alluding to what is going on with these geopolitical tensions we have been discussing. the chinese president saying that china will provide more opportunities to the international community and also what he was saying in reference to the chinese economy is that they would redouble their efforts on the supply-side reforms they have announced, and in some cases stalled upon here. we are talking about structural reform taking place in china. that is what we have at the moment. now some of the other things he has been saying, talking about redoubling those efforts, fairly light when talking about the economy, but more about cooperation between the two countries on various different levels, particularly when it came to mutual

joins us in the studio area do you think that the pboc will have to cut? forced to after the property data came out over the >> it looks like chinese growth is under pressure. looking at recent data points, for me it looks like the growth is definitely under big pressure. especially if you look at private investment, dropping to a historical low. that global economic outlook is , it makesod for china perfect sense for china to cut at the moment. especially after the fed. i think he mentioned that property prices are a problem in china, but it can't be the reason that china can move at this moment. china could do other property policies, like increasing the mortgage rate with property policies and those first years cities to turn down the market china not moving at this moment. >> i want to get back to private investment. in is definitely weaker. is it because of lack of appetite or liquidity? the outlookus that or the sentiment in the private sector is quite weak. the margin of the manufacturing sector is so weak we can put money into the private investmen

if you look at the pboc credit data they came out yesterday and that financing of corporate bonds wasw last month and so it does seem like a lot of these distressed borrowers will have a harder time rolling over their debt. rishaad: what does this mean actually for yields in the bond space? some analysts are saying that credit spreads have narrowed recently, but they are set to widen again. china only had its first few defaults in recent years, which means the risk premiums have been suppressed for a long time, so it would take a long time for that to normalize. rishaad: thank you for that on this bond issue in china. let's have a look at some other stories we are following. car owners and the u.s. government have been given more time to file settlements in the volkswagen emissions scandal. a federal judge pointed to the highly technical nature of the discussion. they have until noon new york time on june 28 a file that draft agreement. volkswagen admitted that it fixed emissions tests on 11 million cars worldwide. main rival vita $28 billion. didi raised $4.5 billion in a round of fu

the pboc for a third straight day setting a reference rate at a five-year low for the chinese currencystories. gdp numbers, very encouraging, beating expectations, well off the lows of the day for the asx 200. we were down 1.3% on the index. aussie dollar, a big rally yesterday. there we go. , $72.84h high yesterday . this typically moves quite file me most of the time -- quite violently most of the time. across the picture asia-pacific equity space, fairly mixed. it is looking a little bit better. 15 minutesly red ago. marketsday for mainland yesterday. down a 10th of 1%, consistent with what the futures where indicating. australia, 1%. nikkei down boeing sharp gains on monday. p three, philippines u force of 1%. fourths of 1%. rishaad: thank you. debut inion making its hong kong. let's get straight to the hong kong stock exchange. the second biggest share offering this year, right? second biggest offering in asia this year. 2.6%, $43.10, compared to the ipo price of $42. up to 2.93%43.65, from the ipo price in the first few minutes of trade. a total of 8.7 billion hong kong dollars,

see how the pboc fixes that reference rate. dollar weakness overnight.they set that weaker, expect people to start speculating. to a leavebe trying short-term pain in the economy. quickly, one group of stocks we're following closely, carmakers in japan. the top three here. announcing it halted production at three of its plants due to a shortage of parts because of an explosion. let me get you the exact details. at threeroduction of its plants. we were expecting a drop for may, so more than expected for tour oh yada, falling 9.6%. , falling 9.6%. honda dropped 4.8%. of course come the big story is unchanged at the moment, oil prices. we will watch that closely. rishaad: it's the big story of the day. above $49 atrade barrel. opec says they will discuss an output cap in vienna. a deal would signify some unity in the group, but would not affect production. it is oil minister says unlikely a deal will be struck at all. ideas is tor main have a country code. we can reach agreement for this matter. rishaad: let's get to aaron clark. he joins us now. a lot of m

meanwhile the pboc has kept its 2016 growth forecast unchanged.t provides that cpi forecast up from 1.7%. japan's economy grew slightly more than reported in the first quarter, helped by revisions and private consumption. gdp expanded 1.9% giving some relief to shinzo abe. the british prime minister and leader of the u.k. have argued each side of the exit issue in a tv special -- of the brexit issue in a tv special. for argued that the eu costs britain far too much in what he calls a rotten deal. >> area after area, things that affect our great country, we would have no say. we want to try and make sure i run cannot get -- iran cannot get a nuclear weapon. we need to work in these organizations. we need to work in nato, the u.n. and yes we need to work in the eu. >> let's say they despite just they cut off their note -- they cut off the nose to spite their face. than tariffs will be lower our next financial conservation. no deal is better than a rotten deal that we have at the moment. caroline: global news, 24 hours a day, powered by 2400 journali

it is not where the pboc wants to be.rms of the wins of globalization, you have offsetting forces. mobile negative advance from the economic point of view, but emerging economies badly hit by the commodity shock, it is becoming less of a drag, and that be good. alix: oil starts to selloff 5% because of the brexit. thank you very much, senior fellow at the council on foreign relations. we go live to portugal were the ecb will hold its annual policy for him. we discussed the following from the brexit vote and that central-bank. special coverage of brexit on bloomberg tv and on bloomberg radio. ♪ ♪ this is special coverage of the historic brexit vote on bloomberg radio and bloomberg television. let's go to the business flash and look at the biggest stories in the news right now. rushing to safer assets after britain's decision to quit the european union. the move added $400 billion negative yielding government bonds, according to the sovereign bond index. they are now $9 trillion worth of securities and yields below zero. sc

doesn't mean that the pboc has room to ease? because there really is still some concern there.haad: what about the prognosis? summer is always seen as a time where it all flows down. ontoanks often hold their deposits because there is regulatory scrutiny. cash is constrained. the big concern now is because the fed is more likely, according to more people predicting this, to hike rates, that will be a double whammy in the financial system. manus: stimulus is coming through as well. let's not forget. >> yes, but we have the cash crunch and most people are predicting a somewhat slowing of the chinese economy again this summer. rishaad: thank you very much indeed. this is stephen looking at these pmi guages out of china. these are the official and unofficial figures out of china. manus? here.: coming up, the view >> 484 meters high, that is the international commerce center in hong kong. trading is kicking off after the lunch break. the top stories on "bloomberg markets: middle east." opec leaders gather in vienna. the global glut is no correcting itself. they are thought unlikely

anna: the pboc has put out a paper talking about their forecast.e economy shows a signs of positive change but sticking to the 6.8% target. enda: the chief economist was putting out a paper that spells explaining it does hurt growth. one of the things that is happening, overall volumes are holding up. haverice as far as exports been off. china ishy leading in these others areas like real estate. they could get a cushion from the soft yuan going forward. that could put a foreign expert -- they would need a weaker currency to really get the kind of stimulus dividend on the export side. it is not just about the exchange rate, it is about week global demand. they are not seeing any quick turnaround for exporters. the manufacturing side, stuck in the slow lane. the new economy isn't going fast enough to fill that hole. anna: thank you very much. elsewhere in asia, japan's economy grew slightly more than first reported. annualized 1.9%, giving some relief to prime minister shinzo abe. world bankthe says global growth will go at corporatece due to spendin

all of this will play into decisions by policymakers and the pboc to step up easing or state pat.jing, thanks. let's take a look at what else we are following for you on the bloomberg right now. rosalind: japanese online recruiter says it will prepare for an ipo. the company hopes to raise more than $9 million when it goes public. shares earlier. it offers a paid website to connect job seekers companies and recruiters. walmart ready to name its china chief. an announcement about the new role could be made this week. the chance of i lunch with warren buffett is worth $3.46 billion. the winner was 50% higher than last years. the top bidder and seven guests will dine with warren buffett in new york. he has raised more than $20 million since 2000 and eight of a charity that helps homeless and poor people in san francisco. war craft looks set to become china's highest grossing hollywood film. , takingthe box office ticket sales since wednesday's debut to $157 million. it could not match that success in north america, where it was beaten by the conjuring 2. main dollars. -- $40 million.

the needwe heard about for reform from the vice governor of the pboc. reiterating what has been said before. process isis reform moving at the speed of continental drift. seem to be the case from many people's perspective, yes. the former vice governor of the pboc saying that there needs to be more reform, more forsparency, a greater role the market. take a listen to what he had to say recently. be the goal of future reform to let financial products returned to the role of serving the real economy in a straightforward and transparent way. innovation does not mean novelties. it means cousin the adapting to the needs of the market. tom: his comments adding grist to the mill to those who say there are divisions at the top of the government in china for allowing greater market forces to play a greater role in the market here and more transparency or whether the default position of the common his party is to control and reassert control because they are very concerned about releasing control when it comes to things like the stock market and when it comes to

treasury secretary says the pboc is to be clearer about policy.eporter is with us and is with the u.s. delegates and will join us from the chinese capital, next. ♪ guy: welcome back. you are watching "on the move." we are positive across the board. thecac is unchanged and stoxx 600 is unchanged. the ftse 100 is outperforming. the dollar is up and the miners are up. there is a sterling factor within this as well. the british pound has been battered. but rio is up quite strongly about 4%. bhp is trading quite strongly as well. anglo american is trading higher. glencore is up 2.5%. the top of the 600 was dominated this morning by metal stocks. this is the mrr function on your bloomberg. the very clearly, a dollar effect coming through australia into the london market. let's get you caught up with the bloomberg first worldd news. david: thanks, guy. the currently has fallen to a thats polls suggest britain favors leaving the european union. a survey found 45% of voters would it choose to leave. 41% say they would vote remain. the "leave" campaign was

in terms of where we go from pboc wouldnk ideally love to see a weaker one.ave always stuck to the view of a forecast of 670 against the u.s. dollar at the end of a quarter is appropriate. i stick to that forecast. a further slow, controlled devaluation. i think the important word is controlled. the pboc were very concerned about their ability to manage the currency last january and august and they were worried about the short-term volatility. they want to clamp down on that short-term volatility. anna: this is the story of june until yesterday. the japanese currency in blue. trouble finding home in global equity markets. y face, strengthen their currency of the yen. if there is a brexit on thursday, how strong with the yen get? -- wouldg with that that be? bob: i think the japanese authorities have a very serious problem with the strength of the yen. with this move towards 104 on dollar-yen, that is reinforcing deflation. that is why i think the japanese economy over the balance of this year will struggle to get more than about 1% growth. deflation is proble

jack lew says the pboc needs to be clearer about their policy is talks kickoff in beijing. ♪ anna: welcomeis 7:19 in london. we've only been up for a few hours. 1.43, the pound against the dollar right now. let's go over to china right now. china's president says his country and the u.s. should talk more often to reduce tension and build trust. speaking at the open of an annual meeting of top officials, he went on to say that the pacific should not be a battlefield for competing views. corp correspondent joins us now and he is that the talks for us. great to have you on the program. this am play a positiv message. -- this sounds like a positive message coming through. flesh that out a bit. >> the chinese president gave his open remarks here in beijing. earlier this morning, they said that peaceful cooperation is key and certainly, a more conciliatory tone from him. take a listen to what he had to say about this issue earlier today in beijing. >> china and the u.s. need to increase communication over the asian pacific. the vast pacific should be a stage for the inclusive corporation, not an

highrey: running such a account surplus which is one of the reasons the pboc is saying the money wouldppreciate. tom: you brilliantly come up with the idea of the fear and one of those is the dollar loses its exorbitant privilege company using the french phrase. joseph and i and there he can buy suggest the dollar will not lose strength. what should we fear from a greater transparency and liquidity of renminbi? geoffrey: number one, what are the institutions backing the renminbi? what engenders faith in the dollar, faith and sterling, the swiss franc? beijing establish that institutional reform. let's continue this discussion, geoffrey yu with us as we take a broader view and that means we must speak with michael burda. wyplosz has been way out of then analysis european crisis. it is professor of the graduate institute of development studies in geneva. it is wonderful to speak with you. i took a quote you did a while back in your scathing criticism of the ecb. under the presidency of , the ecbde touche concentrated on headline rather than core inflation leading it to raise interest rat

ask,e: i was just going to the deputy governor of the pboc spoke to reporters today and an independent entity. what does he have to say? david: this is a very closely watched speech. the deputy stepped in and addressed some of the things americans have been talking about here. said the yuanhe had been floated at a level that he was comfortable with and was common. he addressed something a lot of folks have been talking about, the pace of fed rate hikes, what they will be like. .e expressed some nervousness stan fisher was here fielding questions from the chinese about the federal reserve but i do not think allowing too much information. what the deputy government said it was at the prospect of a fed rise could be good for china. there could be more demand for goods. mark: what is next for this bilateral relationship between china and the united states? there is a lot of stuff that was not hammered down while the two u.s. officials were here like the maritime issues in the south china sea. that is something john kerry says they will keep talking about. all of this is building up to the

does this mean that the pboc is guiding the currency to the downside again?di: that is a concern of some market participants. this is where we are at. has fallen 0.8% against this basket of currencies, the lowest since october when he 14. if you look at this chart, the white line is the bloomberg rebecca of this basket of currencies. fixpboc weakening the daily in a week on tuesday. we are watching for that coming out in about 45 minutes or so. all of this coming in behind that 6.6 declined in the month of may which was the biggest monthly fall since the august evaluation. it was stronger against the dollar and weaker against the basket, allowing it to control outflows. saying, for one, the sweet spot we have seen has faded. the weaker yuan from here on in risks these capital outposts. the other side of the story is weaker currency affect really playing at when it comes to china's foreign exchange reserve. these are the main numbers. the yen and the euro weakening. it is the greenback to put pressure on the value of these reserves. since 2014, we have seen a

you sell the pboc try to come out and stabilize the currency.d of interesting, we seem to be recovering from this exit hangover, but it feels like it is just starting for china. joe: i wanted to ask you about that, earlier in the year and last august, that is all people were watching, what is happening with the u.n.. i was surprised it was such a bad quarter for the currency. there has not in that much talk or spillover into markets. are we perhaps going to start talking again? betty: possibly, we're always looking for some kind of headline risk. this rears its ugly head, again. right, itolutely seemed to die down because we focused on other things to read brexit being the most recent one. the central bank of china has a spent something like $800 billion to stabilize its currency. but that has not stopped money from flowing out of the country. the silent killer so far that we have not paid attention to. if you look at certain measures that havel funds, money flowing from either side of the border, more of that money is flowing out. more is going

it seems that the pboc and authorities are tied to do everything to keep -- it is a value judgment onhether it will work. you are optimistic that they will handle the situation. tim: there is going to be volatility in the short-term. in long-term, we are optimistic. has beenhe growth focused around the coast and east of china. you have a big chunk of the country which could participate in future growth. i think certainly it is going to be volatile and the short-term. we do expect the reserves to come down. the money flowing out of the country. more valuek to buy up the value chain. francine: where d.c. value? you are an asset -- where do you see value? you are an asset manager. it can be a very crowded market. tim: i do like gold. i do see value. european equities are not -- they are all equal good within europe, you have a load of great companies. -- they are all equal. within europe, you have a load of great companies. we like companies that are exposed to these longer-term themes, things like renewable energy. things like biologics. this volatility, especially in the summer months,

the pressure is on for the pboc to allow the currency to weaken.ut that does that too much that capital outflows are likely to speed up again. david: thank you. betty: deutsche bank's chief international economist is with us again. what is going on in the united states? aside from that stomach turning 600 point drop in the dow jones average on friday. will it have a lasting impact? is an extremely important question for investors to think about. it is very important for the u.k.. europe. it is less important in the u.s.. the key question for u.s. investors is to think about what we be talking about in a few weeks time. the expectation is that i assembled the going up. nonfarm payrolls are coming out. another strong number. there will be a july meeting of the federal open market committee. maybe the brexit issue is going to hang around u.s. markets for a little while but we will eventually go back to talking about u.s. fundamentals. numbers so that we should be focusing too much on them. will hundred, jobs make the difference? the whole tone of what

what does that mean for the pboc and the doj as well?people have said the fed's data depends, and what has changed since february -- something happened at the g 20 meeting in february and we don't really know what. we can tell with the fact that they are much more cognizant with how their policy actions affect the rest of the world. if that change persists, that is a much more benign outcome when you think of u.s. monetary policy and impact on the region. the prospect of the fed hiking and causing leverage issues is very, very low. i think that brings a lot more balance in and that also makes is concerned about another one of the tail risks, which is the renminbi depreciation. economically, i think the world is in much better shape. a lot of the risks we're worried about in the first half are diminishing, if not going away. the economic risks look a lot better, i think. >> june 23. a lot of people are now starting to raise the flag. is a little chance -- there is little upside to the vote to stay. if they vote to leave, what could we see

that thesome concern pboc is going down the road of deflation.n has fallen against that basket of currencies. that is that white line here, the bloomberg replica. against the basket of currencies is the lowest since october 2014. all of this on the back of the drop we saw in may of 1.6%, the biggest monthly decline since that august evaluation and certainly stoked some concerns that we are seeing depreciation. part of this is the dollar story. stronger against the u.s. dollar, weaker against the basket, allowing them to control outflows while benefiting exporters. ist we are getting now volatility when it comes to the yuan. take a look at how this is impacting china's reserves, that weaker yuan, stronger dollar effect is playing out. thand a slightly more expected decline in may, falling to the lowest levels since may 2011, and although we have seen stability, we have seen the decline in those reserves, coming down 20%. falling from $4 trillion and 24 in 2014. rishaad: "trending business" back after this very short break. ♪ a look at our top stor

on the other hand if you're going to see a weakening dollar that might by the pboc some time.julie. david: markets have not been all that riled despite the declined yuan. that doesn't for the first hour of . coming up, peter kraus joins us in a bloomberg exclusive. and we will have later from gm's ceo mary barra. how she plans to boost shareholder value. that's next on . ♪ >> climbing the wall of worry. the s&p points to a high. >> driving the future. general motors posting their annual shareholder meeting today. find out how the ceo plans to continue growth at the nation's largest automaker. >> clinton passes historic day. theary clinton becomes first female to win a major party. we will talk about what comes next for the presidential candidate. ♪ amanda: welcome. jonathan is off this week. ahead. big two hours more from the exclusive interview with the women leaving general motors. that is right. the shareholder meeting into choi kicks off an hour and a half from now. we will bring you more for my exclusive -- exclusive interview. growth with the company's new purpos

yuan the pboc says the exchange rate is increasingly transparent. is that true?ell you know, on a day-to-day basis we do have a fairly good idea of where the currency is going. so, each morning the country sort of fixes it. they set the fixing for the point around which the yuan can trade for that day. we do have a fairly accurate model that protects where the fixing will be set. it is the longer term issue that is the problem there. whether the government will plan to prop up or we can the currency. the currency has devalued about 9% over the last weeks. the chinese government insists it is becoming more transparent and that the currency is more market-oriented. but longer term, there is deep concern about the direction of the exchange rate and how low the government is willing to let the exchange rate go. guy: nick, great stuff. let's bring back into the conversation chris turner. is the fed going to let beijing off the hook? chris: we have just had the economic strategic dialogue. there were a lot of areas that they agreed on. as your reporter pointed out, wha

what goldman sachs is saying is after the pboc guides the yuan lower, the risk is that this reignites flight in the same manner that it did in august, and around the turn of the year. fascinating trends, we have seen a lot of money pushing into the hong kong areas instead tried to get out of mainland china, worried about this flight of capital. much of a destabilizing effect will china continue to have? is volatility in the rearview mirror? nicholas: i think the key phrase was "guided lower." they are likely to be guided, and managed, but the key is when chinese currency enters the imf's, the reserve currency at the end of september. so, there will be brought stability as we approach in that. : i wanted to just bring in a pretty cool functionally bloomberg that i used to track etf flows. shows you etf flows in and out of different regions. over the last three months, united states is at the strongest inflows for etf's, china among the biggest losers for outflows. the eurozone and japan and germany really beat it. function,nteresting you can adjust the time, and the way the flows

the pboc's deputy governor this morning saying that they would benefit from a fed rate hike. , awouldu.s. stronger u.s. economy. is he just talking for the sake of it to appease the u.s.? what an interest rate hike not be extremely hurtful for the chinese? gerardo: to the extent that the fed is able to raise rates, as we all expect, on the back of a stronger economic growth momentum in the u.s., that has to be positive for the world in general. so in that sense, not only china , would rest of the world be better off as the fed goes to a more normal interest rate environment. there you see the other aspect of the unknown unknowns of these monetary experiments going on around the world, in terms of financial stability. to the extent that we go back to these more normal interest rate thoseios in the u.s., risks coming from a potential disruption of the financial sector would actually decrease. ifncine: the problem is that it also leads to a dollar rally, that would suppress the chinese. gerardo: absolutely. if you look at what the fed has been doing, they are calibrating the response bas

. >> there anything that pboc can do to disrupt the outbound trend?regg: uncertainty in china could drive it more outbound or slow things down. jeff: do they were -- do they prefer the u.s. over europe? alix: or canada? gregg: not necessarily. the u.s. equity markets are 40% of global equity markets. there are more targets and businesses, but there is no pacific desire to go to europe. and chinese companies have had a better chance of getting approved in europe. to see you. thank you. gregg lemkau, cohead of global m&a at goldman sachs. jeff mccracken, executive editor of m&a for bloomberg news. scarlet: we are moments away from fed chair janet yellen's comments in philadelphia. we will bring you those comments live. ♪ scarlet: we are awaiting comments from the fed chair janet yellen, of the world affairs council in philadelphia. this is her last chance to offer insight to the fed thinking before a media blackout takes place. let's take a preview -- let's get a preview from mike mckee. mike: he just came back from vacation. relax. thelet: janet yellen

the pressure came out of china, some of the economic data there that continued to question the pboc. but the brexit was probably the single most important coming in and the fact that the remaining poll exit dropped by 10%. it's still very much positive, if if you will, to remain, but that sort of weakening concerned the market coming in. so there were some stocks to trade with the microsoft linkedin deal, but the stockmarket itself does not have a real good feel to it. keep an eye on 2081 for a support level on the s&p. if we breach that, koit uld be another painful drop down here. again, if you're a long-term investor, this is going to be a buying opportunity. i'm still bullish. i don't think this is the final song by any means, but this is the tape right now because of lack of participation, lack of volume has a real nasty feel to it. >> we also seem to be tracking crude oil in here, jack. do we continue to do so? >> if you look, it's finally on the wayside. i don't have to worry about it right now. on the other hand, if we look at the slow side manifesting itself look for crowd to

what are people saying about what the pboc's next move could be in terms of their currency?od question -- a knockdown effect. if we see much slower global growth, it is only going to affect the growth in china, and if that growth slows substantially, whether we actually see it in numbers or not, most likely the yuan will have to devalue, not as much devalue as it will have to depreciate. scarlet: vince cignarella, our fx specialist, thank you for joining us. vince: thank you. scarlet: -- this is bloomberg. ♪ oliver: this is bloomberg markets. i am oliver renick. scarlet: i am scarlet fu with our colleague matt miller in london. oliver: take a look at the stock market, staples, utilities, telecoms -- again, this is not shocking. it is incredible to see not only 10 sectors in the s&p up right now, but those three in particular. a lot of investors were starting to ask questions about how high these valuations could go, and whether or not those high valuations were going to affect their presence in low-volatility funds, and whether or not these were placed to go in terms of bala

the helm of huge monetary policy with no experience whatsoever doing it, meaning janet yellen, the pbocbank of japan, bank of england. invest based on the idea of the people at the control of the printing presses and truthfully no idea what they're doing right now. >> and they're printing, right? >> oh, they are printing. >> and continue to print and that would be -- that would argue in the short term that equity prices could continue to move higher. right? >> i believe the market continues the move higher and even though we had a great deal of discussion about the price valuation, particularly of the dividend paying stocks. utilities were the best performing group of the first half of the year. i don't think that's going to change and much of a leadership change. looking for some place else to continue to add money to, i think the regional banks of the united states of america whether you do that through an etf or individual banks will continue to benefit. as interest rates rise, and they'll rise, i don't believe that a rate increase is off the table this year. as that happens, that wi

look at japan, next out on debt, negative interest rates. .hat is not the case for china the pboc cantill pay interest rates, government debt remains very low as a share of gdp. we think the chances of a hard landing in china are pretty far-fetched because the government has the policy to support demand. jonathan: can they cut rates and manage capital outflows? tom: that is the impossible trinity which concerns theoretical economists. china thinks they have managed to solve the problem by having controls on the capital. jonathan: tom orlik is in town and we will be seeing a lot more of him. david: the ecb and payrolls numbers still ahead this week, but could the rate decision and jobs number turn out to be nonevents? purcelli joins us next. ♪ megan: this is bloomberg , i am megan murphy. it may be a short work week for the u.s. but it is still a big week for global markets. the ecb meets to review its monetary policy. friday, we get the u.s. jobs numbers for day. joining us to discuss it all is tom porcelli. tom, three big events coming up. what for you is the biggest event risk o

since the brexit about, traders are looking -- brexit though, not a fed rate hike since 2018 and the pboct the off-shore u.n. markets. with us to break it down is jonathan dollars, we have to start with the valid -- rally, s&p futures having their best rally since february, -- everyone was concerned about was that the brexit would create this massive global unwind that the global economy would collapse, all these issues, it appears that this may be a headwind to create stability but the world has not fallen apart. if you look at the decks, important, volatility below the long-term average, i think we have more upside in this recovery. this is what i was going to ask you about, august, it it was much more to most was in the markets to bed now, what is going on? issuelike brexit is a big strategically for europe and u.k., therefore the world, why haven't the markets reacted more violently? february, the markets often u.s. more, we were concerned about recession, when you put it on a scale of things, the damage that happens from a us-led global recession is far worse than this issue. what is