against the stronger dollar. 131.05. with the stronger dollar, weaker gold prices. gold sold off sharply on friday as a result of this trade. down .3 of a percent. >> keep an eye on the pound as well. holding a cabinet meeting this wednesday. starting to form that policy after the summer break. be fascinating over september when they start to announce what their formal plans are on brexit. >> she can announce she's trickling article 50 without parliamently approval, right? >> that's a stat we think is happening. the conservative party and the sources, seems today that's what they'll do. they're in disarray at the moment but it's unlikely they'll have much traction. >> economic data paints the picture of a resilient uk. for all of the doomsday scenarios, it hasn't happened yet or the experts are totally wrong. >> business investment was very poor, whereas retail spending was pretty strong. you wonder how much of that retail spending is tourists in the summer, weaker pound. it might not be sustainable and business investment might have a sign of what's to come. >> we'l

think the dollar will go higher. f it stays where it is, this would be on the back of a small rally. >> you say that you need to differentiate. >> i think this is a combination of credibility and balances and imbalances. -- and the turkish lira raises alarm. >> it is something that i would you join in this rally? >> no. i am more risk adverse. >> you want to keep your hair. >> i think the uncertainty is to big.-- tooo next, rumors of abdication? this is bloomberg. , lifted by payroll. board data andh imports raise concerns with domestic conditions. bank of japan monetary policy has most analysts expecting more action. good morning and welcome to countdown. we have breaking news from germany with a tortured set of numbers. rose andl production there was a run-up with brexit and there was a negative number with industrial production that was easily adjusted and there was rising all the way around with the largest economy for a seasonalmentum on a basis. guidance laste bundesbanku had the saying there was no indication a

where would that take the dollar to? is it dollar-yen in terms of the momentum? i quite like dollar-yen lower. i think euro-dollar is a good one to be looking at. i think that could be the breaker below 110. emerging markets is probably where people will be focused on. we see dollar-rand, dollar-malaysia. if people start to get scared that this is going to cause some huge run of normalization -- we came into this year with the fed talking about all rate hikes this year. manus: i have had everyone come in and tell me about normalization. i'm sorry, mr. cook. i am not going to buy that. i am moving on briskly. i am being unfair. dollar-yen. we broke 100 yesterday. we did it twice this year. there are rules and regulations in the u.s. by how much you can regulate. what happens next on dollar-yen? you get the feeling that the market gets nervous. dollar-yen run down to 75? jeremy: i would like to see something in the early 90's. i don't think we will see too much intervention. coronationfor getting into the low 90's. the japanese. i think they are ok with a slow progr

the u.s. dollar recover for most of the day yesterday, but during the course of the day, we hit the lows since brexit which is quite extraordinary because yes, we have seen expectations of a hike ease particularly with the bank of england, but the data in general has been fine so the fact the dollar had continued to slide since brexit was a surprise leading into that. >> as for commodities, oil is giving back recent gains. been very strong recently. wti made it all the way back up to 46.11. brent at 48.69. a lot of anticipation and optimism from the bulls that we might see some sort of production feez or move from the major producers at an opec meeting later in algeria. as for gold, it has been strong on the back of the weaker dollar. has helped gold climb back towards the highs. 1348 is where we sit right now. >> here's on today's agenda. weekly mortgage applications. 7:00 a.m. also watch the eia. 10:30. before the bell we hear from w lows, target. jcpenny holding analyst meeting today. courtney rea

kick it off with the dollar-yen. you see there is a big break, a big psychological break, which is breaking the 100 yen. this is the third time since brexit. what is going on in the market, where the sentiment seems to be that you want to buy. this is about challenging the bank of japan, in terms of their ability and capacity to actually intervene unilaterally, or it could be quarter needed. -- or it could be coordinated. we have been through the 100 level. 99 is where the losses are. this is the movement year today date. a great piece of advice from the advisor. he calls for gold action. toord economics just said me, we are potentially looking at the ability of this administration to look at helicopter money. nevermind qe. so, let's have a look at oil. this is a cracking chart. wti and the brent mark, both are back in bull territory. oil is set for its biggest gain since march. it is the longest run of games thiins this year for crude. u.s. stockpiles have declined. will opec deliver a freeze? these are the moves we

the dollar weaker off the back of this. the dollar index down by .3%. of .7%. .he estimates were for .2% any inflationary hope come you can blame energy in terms of the overall number, is not being supported. an increase of .7%, backing out food and energy. jonathan: the debate will be of everyone spent money on automobiles last month without money for anything else. i wonder if that is the positive side. when you strip out the autos and gas it is a downside surprise in the markets reflect that. david: we want reaction. the chief u.s. economist for barclay. what do you make of it? >> you had it right. the autos number was solid, but we knew that with incoming data. expected. weaker than i would say it in context, remember the last several months were strong. sequential improvements are sometimes difficult. .etail sales is a noisy signal for example, stronger signal from outright auto sales data than retail sales data. that said, it is a disappointment relative to expectations david:. there has been high correlation between retail sales and services. that

the aussi dollar gained. the head of island's national olympic body was arrested in rio for allegedly scalping tickets. ireland's olympic committee says hickey is temporarily stepping down from all of his roles in sports. global news 24 hours a day, powered by 2600 journalists in more than 120 countries around the world. you can find more stories at the bloomberg at top . manus: let's get into these markets. we have the dollar-yen moving. let's break this down from an equity perspective. what is this? we've exports down in japan and the dollar-yen on the move. from an equity perspective, it is a real challenge, isn't it? >> it certainly is, manus. but we can see here is a reversal of what we saw yesterday. so, the yen stronger against the dollar, surging past 100, sending export stocks down as well in response to that data. we do see the nikkei up by one poin 1%, one of the worst performing markets in the region. hong kongtocks in are set for their highest close since november. that is thanks to some highe

i've got a chart that shows where the dollar has been. in the red boxes, can see the effects from the hawkish commentary we've been getting from the fed. i'll draw your attention to the comments we had over the weekend from the fed vice chairman stanley fischer saying that economic goals are close to being met and the market readjusting once again. little more chance of a fed rate hike perhaps being factored into the dollar. let's bring up the risk radar and show you currency markets. 94.89, ar index at lift of 0.4%. the work function on bloomberg suggesting a 22% chance of a rate hike in september. not much change versus friday. we've got dollar-yen in there as well. the yen under pressure. further chance of easing being flagged by governor kuroda. he talks about a sufficient chance of more policy easing. he talked about not doing helicopter money. down 1.3%..87, we had seen the longest run of games in four years. iraq seeking to increase their exports. that putting downward+++ a lot of focus on the changing of the guard over at the reser

here is the story. dollarof the u.k. we are unchanged on a 10 year at 1.57%. we are .5 hours away from the federal minutes. let's get your market open. stephanie: relatively flat across the board. the nasdaq slipping into minor positive territory but no one is picking up into minutes. we have retail earnings continuing to trickle out and there are winners and losers. on the downside, you have target up 2%. is cutting its annual forecast. same-store sales were down 1.1%, slightly worse than estimated. they go on to say the next quarter, sales could be flat at best. terms of sales lower than home depot had seller earnings yesterday. but the worry is if home improvement was helping consumers with gdp, is this a warning sign? not when it comes to urban outfitters. a surprise 1%. seems to be paying off. also following in health care let her in they don't -- in mid july to the department of justice saying it would to the obamacare health exchange if they did not pass a humana aetna deal we learned days ago aetna bec

kamal: i think the problem with dollar-yen, we have been of the view that the dollar-yen 100 risk is ry much there, even a move below 95. despite the fact that we have stanley fischer on the wire shortly, we also have a bank of japan policy meeting and a lot of the focus among investors is -- the bank of japan will tweak its outlook on monetary policy. we may well get a bit of a bounce. having said that, we have enough event risk in september with the risk of the ecb, the bank of japan. tom: bring up the chart of trade weighted dollar. i think this is very important. larry summers with his criticism yesterday, larry summers lived that dollars surge in the middle. the people that are critical of the fed, including frankly stanley fischer, have a collective memory of 1998. that is a fact. into thethat full reticence of the fed to act in september or december? kamal: i think it is very much relevant. the keyword i think is global financial conditions. having very nascent u.s. economic growth. investment spending is basically negligible and it is debatable how far the u.s. consumer can co

the dollar index at the lowest level since the brexit vote. ou've a look at dollar yen as well. 175 the level there f. we can get the board. sterling there versus the dollar, 1.3019. gdon't too excited abouthat, but we did see a pop off the back of that inflation data. particularly the producer price index. we saw a significant shift higher. this is just the beginning. >> yes, inflation data particularly important in looking ahead because there are surprise effects in markets. the u.s. data yesterday were particularly interesting. cord inflation disappointed a bit, but remains above 2%. in the euro clearly missing inflation target which suggests they have to continue qe and ends up well beyond the inflation target and points to the challenges we were discussing earlier. i think the very strong consensus in the market is the low inflation environment will continue which is most likely the case, but this is where p surprises could come from. particularly in the u.s. and that's why we believe the fed is likely to hike this year. >> they've got to

we are talking about the taiwan dollar and the south korean won.er overbought, looking at some of their charts. they could see the taiwan dollar rising ahead of the meeting at hole.n looke i go, let's have a at the one trading data we are getting in china. again, we are looking at an absolute surge out of the gates. i will not tell you what it does. remembergle one that i has gone bursting out of the gates. which indicates we are getting renewed interest back to the markets. evidence is growing the shadow banking maybe the biggest threat to china's financial system. bank in onete-owned of the most depressed areas of the country. >> as you just pointed out, what is interesting about the bank is the disconnect between the poor local economy and the outstanding performance of the bank. assets have been tearing away. it has a tiny proportion of that luck. 06%. the local economy is just not great. rishaad: that is not where the money is at the moment. zone, in this industrial it is largely a ghost town. maybe one day, that will be a great development. s

so how much of that is priced into the u.s. dollar? e analysts we have spoken to feel that a very dovish view is already reflected in the u.s. dollar. guest: yes, it is reflected it is fair -- reflected. it is very interesting, we saw some pulldown in the u.s. dollar. the recent cpi figures and the core pce, which ,s the fed's inflation goal around 1.6. it is still way away from 2.7. i think the dollar is very much where it is right now, and it has not done much against most other currencies. yen, down 20% against the but it is down 5% against the euro. think it will stay where it is until the real story begins ahead of the december fed meeting. angie: we have been talking to a lot of analysts who say it is not necessarily what she says, but how she says it. howtone from janet yellen, do you think, if it's not going to be the u.s. dollar, which of the g10 fx currencies will be most sensitive? she is notong as going to be in a hurry to signal a rate hike, i think the currency known as the anti-dollar of the euro. seean see one -- we can

but we would expect the u.s. dollarue its upward trajectory, and that would not be good for gold. it would not be good for other commodity prices either. we are expecting the oil price to head towards by $55 towards the end of this year. price is around $60 a time, rallying 17% in the last month. we expect the price it to hold at the $55 to $60 a level at this stage. rishaad: thank you very much food right, a look at other stories making headlines. everbright security setting the terms of its first share sale and hong kong. brokerage planning to offer 680 million shares at a price range of $11.80. proceeds toe the fund overseas business and develop wealth management. shares start trading on august 18. early is one of the proponents of electric vehicles and talking to panasonic to sell off its battery division. inwill dispose of its 51% the automotive energy supplier. the automaker is in talks with companies, including chinese ones, a spokesperson saying the reports are mere speculation. aec countries see resurrection to

and the dollar is alongside that. the correlations are not particularly strong at this point.i would like to see them develop more befor we start saying watch the dollar and oil trade together, or sort of with in a relationship. i still think we are sort of off from sort of a traditional pca correlation analysis. correlations, just are not holding up. peter, the emerging market currency index is up nearly 6% so far this year. the emerging-market currencies are getting a reprieve. we talk about the fed and their inability to raise rates. does that momentum carry through an emerging market currency for you in the second half? peter: absolutely. a goes back to what you're talking about earlier in terms of the global hold by central banks. every time that we move away from a fed rate hike, and we start seeing more easing, boeher it is the bogj, this afternoon, we see the vicious risk cycle. if you look at the emerging markets, you see a few things like the turkish come back, you see south africa, brazil, countries with ext

if you're the ordinary guy, you're buying gld and that is in dollar terms. >> the thipg about the dollar said, one of the last sentences, which i think is right, it's less about the fed being price d into the dollar. face it, you think the fed, whatever the fed's going to do, it's in the dixie with the asumgts that we are so far different in terms of central bank policy. i think it's actually the opposite. those other central bapgs are running out of gas or realizing everything they're koing is not working. efficacy not working an that the current circle l of japan and europe are what's holding those currencies up and they will outperform the dollar. that's the dixie. em currencies are still outperforming in the last few days. >> gold has hung in there. i think it goes higher in whatever terms you want to throw. you're dollar. fz i think people are flocking to gold. i think gold is going to work its way higher over the roast it have year. >> health care is one of last week's worst performing sectors, plus, fit bit announcing upgrades, but is it enough to save the stock? you're watching "

on what the dollar is doing on a particular day. d: would you say that about the yen as well? >> certainly. we are seeing the shift towards a delay in terms of hiking having an impact. seeing a paring back of expectations in the u.s.. if you look at the rates differential perspective, that is working in favor of japan. the surplus environment is another factor, and also this view in the markets that japanese policymakers, we keep saying this, they are out of ammunition, but they are limited in terms of what they can do right now. this surface environment and paring back of expectations in the u.s. is having the usual impact on the yen, gradual strengthening. rishaad: it seems no matter what they do, that they cannot get it to weaken. actually, going in there, they've done a bit of that on the qt, but do they do more of it? >> it is probably a futile move. the only way to get the yen weaker here is two ways. one is external, and one is domestic. the domestic one is they have to surprise with policy. they have surprised on a number had

at that positive kerry could drive the australian dollar -- carry good drive the us trillion dollar igher. the differential is still there. manus: where could that momentum take the aussie dollar against the dollar? bob: put it in historical perspective. we came from a high of close to dollar was grossly overvalued. down to a low 70. we have retraced to 77. i think we may edge of towards 80. i would be surprised if we edge much more above 80. against the u.s. dollar, i think would bel short-term technically overboard. i also think those investors who went into the australian dollar in the low 70's will be very tempted to take profits at that level. manus: let's talk about the trade relationship. there is a symbiotic relationship between china. this is ecp. to australian relationship show the trade relationship with china. it trumps everything else in the world. i understand the rebalancing story. fundamentally, the stability story in china, it is certainly a big blow, potentially a big blow for the aussie's. bob: two questions there. the first answer is the data on china, i think, is

the dollar is mushy across the board. the pound is higher, moving against the dollar. the yen moving lower. the yen is looking at its first monthly decline versus the dollar since may. is relative mushiness across the board. banks doing well in europe. into the jobsn number. in the bond market, selling. the japanese 30 year, basis points moving two basis points higher on the yield. in sweden, a similar story. yields moving higher by 1.5 basis points. that selloffs been in the two-year treasury note, the most since june 2015. the yield backing up the most november as rate hike expectations re-rate. when you still reigns have each president saying different things on the same day. how can the market make big bets? caroline: meanwhile the dollar sees a significant rise for the course of this month. we will dig into those moves in the next hour. a look around the world with the bloomberg coverage. we start with our top stories of the day. our guest is here with the deutsche bank merger. guy johnson is looking at weaker than expected euro area inflation. doma recess -- dilma

a whole host of currencies falling against the dollar. have yields on the two-year government bond here in the u k rising. the french 10 year, credit default stock prices are rising in ireland in a dead market. commodities are declining today, appetite for risk is diminishing today after the release of bank stress test results on friday. i want to get heineken, the world's third biggest brewer reporting sales that missed expectations. demand waning in key regions such as africa, russia, and the middle east. performance upsetting earnings that came in line with estimates, heineken coming to rely on sales more outside its home region amid fears price competition and editing demand for europe which accounts for about half of its revenue. these the big brewers in the world, in 2016. carlsberg is actually the best performer among the four, by 10%. year, itsat on the attempt in buy sab miller. heineken is up by 3.7%. the french company announced a statement first-half profit missed, that was the news the french industrial gas company, first of

the dollar,in fairly flat, 95.54. eport due out later on this week, then the fed meets in september to consider interest rates. is september back on the table? the work suggestion is over 40%. we've got considerable weakness 3, the end today, 102.3 propelling japanese equities. reaffirming that transpacific partnership is a big focus. msci down, emerging markets investors arewn, not convinced this morning that any sort of deal in algiers will result in anything meaningful from opec. let's have a quick look at the bond markets. is where we stand, 1.61 the yield on the u.s. 10 year. let's get the bloomberg first word news with christine hardy. ch+++ janet yellen jackson hole speech looked hawkish enough for goldman sachs to boost the odds of a september interest rate increase. conversely, pimco has said there was nothing of note in her remarks. bond traders agree with that goldman view with the market implied probability of action arising after yellen said the case for tightening policy has strengthened. and forget helic

you want to buy the dollar because you think the fed is going to hike, it is the dollar goes up, theed will not hike. is problematic. caroline: we are hearing from other central tank policymakers, governor kuroda among them. -- central-bank policy makers, governor kuroda among them. him talking about further stimulus is not earth shattering news. he has been talking about further stimulus for three years. the fact that it came alongside this dollar bullish move has amplified the impact on dollar-yen. he faces a really difficult task. in a cynical market -- one that is used to under delivery -- he is anticipating that he would cannot do or will not do helicopter money, which is the big story out there. in that kind of environment, the pressure will be for dollar-yen to move lower. if you add to that idea that equities are lower today because the fed is expected to hike, that is another problem for dollar having yen, another reason dollar-yen will go lower. fed timing is not securely great for risk appetites. caroline: we could see on the back of it some heavy lifting being done by a s

the action in the dollar is really backing that up. le are pretty confident they will stay where they are, at least through the election. david: fed futures are pricing in a 28% chance in september. the currencies, the u.s. dollar is up about a quarter percent now. talk about currencies and the etf now. what are the best performing so far the sheer >> they are the ones tracking the yen. yen is up about 40%. the currency shares etf is the fxy up about 9%. the dollar weakness has been good for some of the funds that are basically tracking other foreign currencies. david: if an investor wants to get in, talk to me about writing strategies. -- buying strategies. >> a lot of them, especially from guggenheim, the strategy is to track the currency, whether it is the british pound or the euro. they have one for most of the major currencies. some of the other ones did a little more asked her to eric. play thethe futures currencies. there is some with leverage. anything with altra will be a leveraged fund trying to double the return of the curren

but the dollar is the key part of this, the strong dollar and a weak global economy. bill gross -- it is buy gold, buy assets, and he is not the only one saying this. we heard it once again on friday on this program. what do you make of the argument at this time that i do not like stocks or bonds given where they are trading, and that real assets is what i like? way too markets are relaxed about a modest overshoot of inflation. because we have had low inflation, markets are pricing in breakeven measures. that is a bad debt. -- that is a bad bet. the fed has an incentive to overshoot. i think they are running a policy which they think will overshoot, and we could be talking about higher inflation next year. that is the case to have real assets. my present -- my reference is to price in inflation bonds that are relatively cheap week is markets are too relaxed alix: thanks very much. good to see you. richard clarida, with pimco. coming up, the search and hunt for bargains. our guest will reveal how he is finding returns for his investors next. this is bloomberg. ♪ alyx:

the dollar is weakening. market continues to price out the possibility of a rate hike from the fed further and further and further. 2016 is pretty much done and 2017 is looking shaky. we just don't know. it could be one and done. when do people start to think, this is a pair? the dollar side of it is starting to scare me a little bit. >> the amount of people shorting the pound, how negative people are. the pound versus the dollar will 1.25,o about 1.20 to which is still in the very early stages of the brexit fallout. we've just in the bank of england turning from a passive to an active central bank. we expect more action out of them, potentially in the form of more quantitative easing and potentially in another interest rate cut. is badeconomic data enough, does the bank of england step over the border and go negative question mark guy: they have made a very clear that that is not going to happen. >> indeed. it very cleare that the bank of japan was not going to move into negative enough,ry and no now sure the

the decline in the dollar -- the advance in the dollar today has not really put that much of a dent inemand. here's the weekly performance, up nearly 9% and the best week for oil coming all the way back to march, as we've seen a reversal of the bear market that oil recently entered, now back into a bull market. countker hughes rig coming year to date, now the eighth straight week we've seen in advance in rigs. there had been optimism that those were declining, but now, with those up, one would think that production would be trending. a lot of contradictory signals there. thes get a check on headlines. i: u.s. politics, donald trump's campaign chairman paul manafort has resigned. trump said that he accepted his resignation from the campaign. manafort had come under media scrutiny because of his previous work for the former prime minister ukraine. hillarywell advised clinton's use a private e-mail server. the information is included in notes the fbi shared with congress earlier this week. the blaze is now 26% contained outside of los angeles. it is unclear when all areas will be cleared

e,is is the chines a story of dollar weakness. but notably the volatility, on my screen, the lowest we have seen since november. look at where we are trading, currently in the red circle. clearly, volatility coming down. there is hope of stabilization. we saw yesterday some of the data coming out of china that stabilizing somewhat in deflation, expectation will not see a suppression, a deep appreciation from the government and particularly. and monetary policy coming from thechinese, could stem removal of money from china. and quickly, a quick look at oil. in focus, down below $43. weekly u.s. data once again showing the glut is nowhere near over. blue line is wti prices. and the white line really does show you how high inventories remain. manus: caroline, thank you very much us focus in on the numbers, reporting net profit slightly ahead of analyst's estimates. the world's largest staffing firms in the second quarter trend growth continues in july. we are joined now by the ceo alain dehaze, on the phone with me from zurich. you ar

the idea of the estrogen dollar beleaguered -- the australian dollar beleaguered. tralian weakness. bob sinche, the great rollover is basically all of abenomics taken away. he see that first in a much weaker australian dollar versus the japanese yen. does that signal more to come of abenomics as a failure? robert: a lot of us have been skeptical of abenomics all along. the main effect of it was to weaken the currency and that is unwound now. this is a combination of those cofactors. the australian dollar down on weaker global commodity prices over the last few years. it's also fortunate japan's current account surplus and the fact that australia used to be one of the destinations for a lot of their global investment. you had very high relative interest rates in australia often 5% or 6% higher they were in japan and that would take capital out of japan and australia, health finance australia is current account deficit and keep the yen bit weaker. as we have compressed global interest rates we are really not getting capital flows moving around the world the way we use

if the dollars starts to show strength. ities and oil could see a bit of weakness. >> which would be a reserve of what we see over the last few weeks. steve, appreciate the analysis a as always. when we come back, the latest on the company trail. plus hillary clinton takes to late night television to joke about health rumors and the e-mails. >>> before we head to break, here's the forecast for weather channel, jen carfagno. >> we have some of the most beautiful weather of the summer happening across the northeast. leading to a comfortable afternoon, lots of sunshine. temperatures hit the low 80s, it's a return back to summer. had a break from the heat and humidity. today humidity down. temperatures coming back up. couple of showers and storms left along the gulf coast. next chance of severe weather comes today. stretching across parts of nebraska, iowa eventually gets to chicago. west coast looking nice and dry and temperatures not as hot as they had been. "world wide exchange" continues after this. choose to smooth. choose

the dollar is demonstrably stronger. ndeed proud of the talks. caroline: up next, we are talking in "the pulse." this is bloomberg. ♪ francine: the advice chair is the latest official to signal a hike this year ahead of janet yellen speech at jackson holy this week. sufficient chance that the bank of japan eases as september is meeting arrives. and pfizer's $14 billion ambition. the giant is said to be close to a deal. welcome to "the pulse,"

the kiwi dollar taking a breather thanks to the fed. stronger dollar could mean a tough day for energy and stocks. or i japan in for a comeback after governor kuroda's comments a september review does not mean a shrinking a policy. the yen near a two week low. incould see a 300 point pop tokyo today. an early look at what we can expect in the region. how do you think this will play out on wall street? ramy: we are very u.s. centric here. what has been happening with the fed speak, that is what everyone is looking at. it is something playing out in terms of fed fund futures. i want to show you the 42% fority of a hike, september. this is up 10% from thursday to friday. the december meeting is now 65%. that is a jump from 57%. to somere edging closer kind of near certainty that investors are in some way fearing. that's why we saw the volatility in the markets on friday. with that, i want to head over to su keenan. talk us through what happened on friday and where we will be looking ahead this week. on friday. road yellen, her remarks, and

the u.s. dollar been very firm and it is part of the financial conditions, monetary conditions in the u.s. because the dollar has kept on rising, there is no need necessarily to put interest rates higher for the last six months. anna: financial conditions tightening through the dollar but not the interest rate picture. we talked about how the dollar was increasing every time we saw one of these hawkish fed comments coming in last week and yesterday. not pushing out the dollar, but it seems like the interest rate market, treasury yields are unmoved. treasury yields staying down even though they climb through a rate hike. not seeing much movement in the u.s. 10 year yield. does that make sense to you, making this hawkish commentary? markus: we have to bring in another element of the current regime which is the savings. we have an oversupply of savings, more than any else going for the bond market in conservative investment and bring that interest rates. since you mentioned yields on 30 year bonds in th

you are seeing the dollar hold its games. the bloomberg dollar index is now in a three-week high. it's not on the board, but the dollar/yen is one to watch. it's the biggest losing streak in about five months in terms of winners, south korean yuan is moving higher. -- across the board, you are seeing dollar strength. it's a positive risk on day except for japan. they have relatively weaker macro data. the dax is up almost 1%, and russia and emerging markets up almost .5%. commodities are not the story today, but we see some weakness when we have a stronger dollar. relatively flat, as well as copper. iron or below $60. done, as pere and stanley fischer, the moving towards friday, it will be about the jobs number. and what number would put september more firmly on the table. caroline: they have to be that 180,000 consensus, alix. tokyo,ng from dublin to we start with the top stories of the day. is in new york covering the first comments from stanley fischer says jackson hole. guy johnson looking at the euro area confidence data, or lack thereof, and in dublin, darragh doyle has been

the lower rates tend to weaken the economy which we have been seeing on the dollar. e fed is unlikely to raise rates any time soon. across asia, kospi is dropping lower, sidney also down, the dollar actually recovered from an initial loss after the central bank reduced rates 1.5%. we did see a decline in sales for toyota for the month of july in the u.s. back to you. >>> all right, rumi, thanks a lot for that update. we'll talk to you in a few hours time. as rumi mentioned, japanese government officials have revealed the details of a stimulus package worth more than $270 billion. now they are working on ways of funding it as they draw up a budget for the current fiscal years. the plan is to take about $40 billion out of account for the central budget. out of that the government plans to sell construction bonds of about $30 billion to cover a funding gap. the extra funding will provide a one-time payment of $150 for people on low income. facilities to process food for export will also be constructed before the trans pacific partnership free trade agreement takes affect

it's only the dollar responding in significant fashion. emporary move where we overreacted a bit to the content janet yellen was saying, and, in fact, is there no change really from what she's expected to do and that's wait for a decedent print in terms of data. >> i think a couple of things there. number one, the reason december makes more sense or even next year is you get past money market reform, which happens on october 14, which has put an increase in the short side of the yield curve. you get past seeing on october 28 q3 gdp which we know q1 has been soft. looking for a stronger print there and get rates. washing money ashore has to get converted to dollars and puts a dollar bid into the market. >> now that we've seen stocks near record highs again, what do you make of the valuations at these levels and are you on board with the idea that as long as we are in super low interest rate world globally, equity market valuations take a back seat? >> i don't know if they take a back seat. they always matter. you do see the trough in earning

the at the u.s. dollar strength -- be it the u.s. dollar strength, the latest u.s.numbers. >> we look at the uae as a whole, we rate different entities outside abu dhabi. we rank banks and corporate. we are based here in dubai. most clearly, the impacts of the strength of the dollar has been on dubai. issue is inflows into dubai. you have seen the weakness in the russian ruble, the u.k. pound. those investors who came here to dubai are less likely to do so given the strength of the dollar. even dubai is performing relatively well. yousef: reading through your report, substantial shortcomings in the dissemination of macroeconomic data. disclosure related to governments external assets. you are struggling on that front in terms of access to those numbers? have sufficient information to rate abu dhabi. mentioned the size of the government's assets, growth is still strong. the specifics of the government asset position, that data is not published. qatar andlar to kuwait. we think we have robust estimates. we do speak to the authorities. they are not publicly available a

is it going to be from the dollar or elsewhere? >> i think in the near-term, sterling has been the dominant one and that is driven the euro higher up to now. the dollar has weakened for two straight weeks. i think in a next week, it will be important what chair yellen has to say. we have a ecb meeting a week or two after. depending on where the euro is, the ecb will have their say because they can't be happy with the euro on a trade weighted basis at the highest levels we are seen since generate 2015. that is not in their playbook. as always,jones, thank you so much. more and currencies ahead. the ruble falls against u.s. dollar as tensions rise between moscow and ukraine. what could it mean? have bladder pins efforts to revive the -- including >> counting you down to the european close, we're just about 15 minutes away. >> it is time now for the bloomberg business flash. some of the biggest business stories in the news right now. volkswagen's production at four german factories is at risk of disruption. a payment dispute with the s

the dollar. -yen up. 156. yields on change. two year notes in focus, up a basis point. crude started to read force. -- reverse. i have got to say the federal reserve very much in focus. it seems we have heard from mr. alix, i've got a say it feels like an attorney since we heard from the lady. you miss her? alix: i do. remember the hierarchy come you dudley.len, fischer and here is what else you need to know at this hour. pfizer has agreed to buy medivation for $14 billion, more than 20% premium for friday's closing. an executive editor of global deals for bloomberg news. what was the real trigger to send this deal over the edge? >> it was basically the fact that pfizer, since their deal fell apart in april with allergan, they have been trying to do what you would call late stage drugs or assets in market already are could be in the market sooner. the reality is poor sanofi got out gunned by pfizer, which is twice their size. an all cash deal. if you look back at march, it is funny. in march the o

is the dollar is calm at the moment .se we had such a correction in rate expectations on friday? adam: yes. i think the market is reasonably priced. 50% or so probability of the move this year. i think the risk in payrolls is quite symmetrical around that. for choice, if i had in the payrolls i would reach to the downside for the dollar but not by a large margin. francine: how many interest rate hikes, if any, are you expecting from the fed this year? the first move, given the global environment, the first move. be until the middle of next year. particularly when you combine the global environment with an uncertain political environment in the u.s., which could have a similar effect as the referendum in the u.k.. the fed has plenty of excuses to do nothing for the remainder of the year. tom: tell me about sterling as a one-way bet. everyone is on the weaker sterling bet. is it a big bet, little bit, normal that? looking at the positioning that we have, the market looks like it is limit short sterling. i think that is bein

the dollar started moving higher. it is lower on the day that backup from a lower dollar. ets. that message is "you're too complacent." he was clear about saying that december could be on the table. that the head is -- the fed is still in hiking mode. i think that is why we have seen such a live in markets. alix: this is very different essay we got from the san francisco fed president john williams, who said we will not necessarily see monetary policy help inflation, that we need to rethink the whole model. how do we square these ideas what williams was saying is that we are living in a world where there is a new normal. where the neutral rate that neither stimulates nor raises growth, it is stagnant and we need to everything our framework, because it may not be applicable in this new world. the way we have been inflation targeting is not going to work. that is a long-term view. what dudley came back with today, which was more of a reframing was in the short-term, we will need to raise interest rates. i do not know if those two things are currently opposed, but dudley's res

[laughter] manish: that is the billion dollar question. n't think what we have seen so far in qe is helping the economy. saying, ikeep don't like negative interest-rate policy. the bank is never going to pass it on to consumers fully. and to make matters worse, in japan, they buy etf. in europe, they don't buy etf. francine: so, it really does not help europe at all. manish: yes, and they would have a good equity buffer and take on more risk. it takes a long time. and takes a long time to make a political agreement. francine: in japan, there are so many concerns. we will focus on this. thanks for coming on today. jens bjoern andersen -- manish singh, joining us this morning. up next, the pboc promises innovative monetary policy. what does it mean? we are live, to figure it out. after the u.s. jobs report on friday, we focus on china and global demand. this is bloomberg. ♪ francine: welcome to "the pulse ." i'm at bloomberg european headquarters right here in london. let's get to bloomberg first word news. he expressed a desire to abdicate w

the dollars and represented by the bloomberg dollar index on your terminal. e s&p and white was down before the minutes, and the dollar out. after the minutes, the dollar fell and the s&p rose, which would signify that investors considered a rate rise not as imminent as bill dudley made it sound. financials continue to rally. you can see utilities of the biggest gainers because a weak dollar is good for that, but then financials as well. not nearly as big as utilities, but the second biggest industry group. ,f the fed does not raise rates then margins won't have a chance to expand. joe: interesting things in the government bond market, u.s. -- no,ent bonds portuguese government bonds, yields a jumping on the 10 year, bad,rned the dbrs is raising questions about government debt and whether it would be eligible for buybacks. dbrs is the rating agencies. now it is back. two year and 10 year yields dovish minutes push back expectations. scarlet: the dollar fell after the fomc minutes showed officials split. -dollar did take a leg up, and it has given back some adv

the u.s. dollaras been taking a bit of a retreat. yeah. and that the euro is starting to show a little bit more backbone than it has done. the yen is showing more backbone than it has done. even sterling in reaction to the bank of england did not fall as much as most people had expected. the dollar is not going to have a huge amount of strength. is expectations for a december rate hike pick up above 50-50%, -- 50-60%, that will drive the dollar. 25 basis points will not see a seachange in evaluations. anna: get orange, we have the gdp number, nine bond payroll in white. have a perfect correlation, but 76%. which is not bad. in the face of that weakness in the gdp story, how does this engine hold up? >> most of the weakness that we saw in that gdp number was away from the private consumption side of the u.s. economy export numbers. residential spending was 6.1% lower or something like that. something passed since then we have seen it pick up in data around the u.s. housing market. i think moore presen

. >> that is the multibillion-dollar>> question. year, they said, no one can re-china come in that is the big x factor. demand has been a weaker, but it has not fallen off the cliff. strangely, it has held up. there's a huge question mark about the sustainability of current demand levels. caroline: are you trying to read china at all? where do you see that particular area of significant demand going? is it just a cooling story? >> it is cooling, but i've there is a transformational aspect. china has not sat on its hands doing nothing. if you visit or talk to some of the state owned enterprises, they are at a transformational stage, moving away from heavy industry, moving away from pure extraction of commodities, moving up the supply chain. more high tech, more engineering. you can see there are transformational programs going on in state owned enterprises, especially in the steel sector where they are moving more into consumer product amanda cycles. that will take many years. you can't turn a refinery into a steel manufacturer in a t

as for the u.s. dollar has been weaker over the last few sessions and right now we're seeing the euro strengthen again against the dollar t. as for the pound getting some relief after being battered yesterday on the back of the latest negative data point on the uk post-brexit. stronger, but sit that dollar yen that is the focus. some disappointment or at least the fact the stimulus passage has already been priced in. flip side of the dollar has been gold. and it continues this morning up about half a percent. >> so many stories around the dollar right now the major u.s. -- the major world currencies against the u.s. dollar all showing some signs of strength. yellow arrows to the downside. >>> now back to japan, the cabinet approving a highly anticipated stimulus passage. joining us now from tokyo with some of the details. this was a widely expected move, but just how important is this particular stimulus plan coming from the government itself and not of the from the bank of japan on the monetary side of thi

has been korean won showing weakness against the dollar. response to the missile north korea fired off its eastern coast. downan see the currency, 0.5 percent. the worst of the emerging market currencies. anna: thank you. notes, as0 your investors await janet yellen's speech on friday. yellen is scheduled to speak at the symposium in jackson hole wyoming. indicatedents interest rates may still rise in 2016. great to have, you on the program. i am interested in your thoughts ahead of friday's speech by janet yellen. how hawkish do you think she will be? you look at the title of her speech, it is very generic. the monetary toolkit. she is leaving it wide open to all kinds of interpretations. we have had a slew of speakers suggesting the fed could -- the market is pricing over 50% chance they will raise rates. we think she will keep the door open. stick largely to script in terms of the minutes and what the fed communications are so far. we think if you look at the data, the labor markets, reason -- recent housing markets, the u.s. economy rem

i don't think -- i mean, the u.s. dollar has been in a range for rough live 20 months now against the euro. it's 105 to 115. i don't think that that policy will be enough to kick it out of that range. that policy is -- it's not going to be too much of a surprise and the divergence between the u.s. and the eurozone is not going to rise. the distance will more or less stay the same. i can't see a big rally for the dollar at the moment. >> joe, good morning. it's louisa. the case has become stronger for a hike in september if you look at the actual fed speakers and their hawkishness and mark points out as well. lockhart, kaplan, george, the names go on. surely we must be pricing in more movement to come in the shorter term here than the hawkish stance that the fed seemingly has at this stage. >> yes. you saw a reaction on the dollar. you saw it in the interest rate market. but in five, six, seven basis points. i think this is justified. it's not the fed will be slow. it can -- still possible to raise hike rates slowly. there's

gold has been on the other side of the dollar trade. er in the last few sessions coming off by about two bucks. >> breaking overnight, another executive joining the anti-trump list, meg whitman throwing her support by hillary clinton. whitman ran for governor of california in 2010 as a republican urging other republicans to reject trump who she says is, quote, unquote, reckless and uninformed on critical issues. she rals added trump has exploitexploit anger, grievance, xenophobia, including trump refusing to endorse paul ray yan in the gop primary and our own john harwood reporting on strange relations inside of the donald trump camp. >> that brings us to our twitter question of the day. we want to hear from you on this. long time republican now backing clinton, so which candidate will be better for business, donald trump who is a businessman himself or hillary clinton? weigh in and we'll bring you the results later in the show. not to ruin things, but hillary clinton has a pretty sizable lead in the early going. >> we'll say that so go

i have here the dollar index. the end fairly stacked.luctuating on the back of the japanese inflation data. it was worse than expected. the dollar index is fair as well. it is still heading for a weekly game. the word function on the bloomberg and we are seeing increasing probability of an interest rate hike in the fed. it is hovering over 30% for the month of september and somewhere above 50% for december. holding above $47, less of speculation about what kind of output conversations we might get next month from opec talks. bond markets like this. the yield on the german ten-year is+++ year ahead of the jackson hole speech by janet yellen. let's get bloomberg's first word news. shery: and a, thank you. consumer prices have fallen 45th month in japan. underscoring the central banks struggle to spur inflation to its 2% target. -- fell by an estimated .5%. -- before kuroda and his board consider a possible policy rebound -- policy revamp next month. russian president has ordered snap military drills after angela merkel accused him of break