>> people are increasingly betting that the pboc is cutting back on intervention in the currency and allowing more of a decline in the yuan as they seek to help their exports. so they see a decline at a very frantic pace earlier this year, late last year as well. people are reading in that there is some sort of a reduction intervention. we have seen the yuan declining for a while now. yvonne: there is a chance there is -- that the deceleration could lose control. what we saw earlier, we saw in august and january as well that the pboc sometimes tends to miscalculate what happens with its policies. we talked about it yesterday and this morning. finds the people are more sanguine with the decline so far. yvonne: i want to bring in stephen engle. it looks like this is a very surprising bounds. stephen: yes. $13 billion up to $3.21 trillion u.s. they had to defend the currency after having the sharp devaluation last august. but there were a couple of things that play. obviously, the yen's rise against the dollar, the fx core, cash pile was up 7.3 against the dollar. also, the pboc and aut

the pboc did news to use unconventional monetary tools. at in thed about past, the tools were the pboc puts money into developing banks in the real economy. the question is, what would be the gdp figure if that monetary stimulus was not put into the market? that is interesting. we are looking at the next point, the interest rate, the pboc base rate sits at 4.35%. they have not cut right since october 23, 2015. i think you're going to have to have the price of interest rates allowown, and that should the whole economy to come through. the services will continue to grow. we have spent a lot of time looking at the balance of payments going through the accounts. u.s. dollarslion net that leaves china by the current account. we are looking at the services sector, and they are saying real data, and that number could go above for hundred billion dollars in 10 years. that services sector -- above $400 billion in 10 years. that is what is required to rebalance the economy, which is reliant on fiscal stimulus. yvonne: real quickly, you are able to ca

what is the pboc's master plan? of affairse state over the past couple days.t we have seen the pboc doing previously is, it kind of follows the market. it is now going against market moves. the general feeling is that it is trying to defend the currency from slipping past 6.7 on the dollar. nobody really expects the currency not to slide past 6.7. rishaad: some are suggesting this is the flaw. >> some are suggesting that probably this is where the pboc once the currency to be, but the , what theiew is that pboc is trying to do is clever. they are allowing the currency to decline, coming into the market at certain times to control the pace of the depreciation so there isn't a huge amount of depreciation pressure on the currency, and then letting it slide again. then, repeating that over and over. what it is achieving by doing that is, it is allowing a decline, helping exports, at the same time not really putting huge pressure on capital outflows. people know where the concert -- the currency is headed. rishaad: exactly. where do people think it is going? and th

the pboc has improved its communication. can improve further of course, but when you consider where we were back in january, it has settled nerves now. there are additional press releases. on the other side of it of course, investors are growing more comfortable with china's new exchange rate regime. china made clear that they were going to put a flow under the yuan. they came into the market in a big way earlier this year. they spent the reserve and a major that the capital border was closed down to get a grip on capital outflows. when you take it altogether, the sense that china is looking for ion istive devaluate not there right now. but people are still watching very closely where the yuan is going to go. anna: if the yuan weakens much further, does some of this lack , is this related to the lack of big moves we have seen with the currency? >> they could raise the suspicions among investors and they could start to become worried. forcing the what we woul central bank to support the yuan. it would force them to have to put

stimulus, ifind of any out of the pboc, what kind of stimulus could we imagine to see? t, probably not very much, depreciation is primarily the approach they have been relying on. but going forward, i would say they are probably very much data dependent. capital outflow is probably more sterilization through rrr cuts or open market and the pboc will inject my liquidity. that will probably be the first thing. if that is not enough toward the end of the year, we will still likely be seeing rate cuts. yvonne: hold on a second. breaking news out of japan. machine orders actually fell 1.4% in may from the previous month. this is actually a miss, because the rise was expected. as per year on year, orders fell 11.7% expect -- compared to expectations. let's check the yen to see if any reaction for the figures are continuing to be in negative territory. we do see the yen slightly weakening on that news. 100.69 right now. looking ahead to the japan opening in a few minutes. futures expecting a huge pop in shares. we continue to see about a 400 point pop monday morning and eight c

the g20 is coming up in a couple days. theuld like to mention that pboc seems to have developed a itategy of late, where allows a currency to decline, guides the currency lower against the basket, when the pace becomes frantic, they control it, they step into the market, telling everybody we can control the pace of declines, drop ad -- then let it little bit. it is achieving the goal of allowing the currency to the -- to decline, but stepping in when it's necessary. angie: is there a threshold? >> definitely. there is a level at some point, but i don't think 6.7 is that level yet. exports have declined for the third month in a row. they are not expected to bounce back soon. depreciation, the you one has 2.8%, 3% for the year. that hasn't really helped x towards -- exports yet. we are expecting further declines, but the controlled decline over the next couple months. angie: controlling expectations. thank you, robin. the malaysian government has with lawfulooperate investigations as u.s. prosecutors seek to seize $1 billion in assets linked to b. theled st

angie: if the fed does not raise room foresn't it give the pboc to act now? ying to value how the chinese economy is doing, one thing you take, from -- comfort from is there is more stimulus, soal that is the extra tool they have it they needed if the chinese economy does not grow as much as they would like. angie: it's good talking to you. thank you for joining us. the latest first word headlines. hillary clinton will not face charges over her use of private e-mail when she was secretary of state, although the fbi described her actions as callous. -- careless. obama says he believes in her and deserves to be in the white house. is president says election not a choice as the republicans do not have anything to offer. a fire broke out on the egyptair flight. information from data recorders emergencyent with warning messages of smoke in the cabin before the crash and the mediterranean. signs of smoke, heat, and fire. all 66 people on board were killed in the crash. arguments about the iraq war are said to be revived with the u.k.'s long-awaited report into the c

dollar goes weaker, it does provide a reprieve for the pboc. we will leave it there. t first word headlines. taiwan has close financial markets, offices, and schools as a typhoon sweeps across the island. it has sustained wind of 200 kilometers an hour. taiwan's china airlines canceled all flights and high-speed rail services are suspended until late afternoon. the philippines has also suspended -- the new philippine environment secretary says all mines that fail checks will be closed down. overs will be carried out the next month and could see polluting mines forced out of business. the philippines is the leading source of nickel and supplies almost all of china's imports. prices surged after the investigation was announced. is -- thisthere been is be more important than the lives of our people? i will not allow it to happen. relevance does stock markets have with your people? , the welfarewe do of our people must be paramount. the state department has announced the resumption of its inquiry into hillary clinton's use of private e-mail when she was secretary of state.

the pboc did not respond directly to our questions about this. have set the banks here are well capitalized and can withstand shocks. they had a report that came out last month showing that the capital ratios of the banks would dip below certain levels, around 10%, if there was a severe shock, but would still be in good standing. china wants its big four major banks to have capital reserve ratios of 11.5% by 2018. this potentially could weigh on markets, but could a bailout be good news for the economy longer-term? right, we have a president china stepped's into bailout its banks when nonperforming loans hit 40%, and they use things like bonds to do that. they set up a bank that took on some of those loans, so some economists are saying that the sooner this is done, the better. the they expect is that system here and policymakers will print money or issue bonds as well to clear out some of that bad debt. they said that will create an initial market shock, looking at a selloff, particularly banking stocks and the renminbi, so that would face more p

the reading is that the pboc does not want to tighten. do not want to give the marketing -- market impression that the stimulus is coming. market policy is more neutral. where is that money flowing into? are we still talking about the overcapacity sectors that we h d ve yet to see the kind of contractions promise, or are they flowing into new, like tech and digital and health? guest: very interesting question. ,f you look at the investments numbers are much weaker than the market expected. overall investment is coming down. if you look at the details, manufacturing investment continues to be weak. real and -- real estate investment continues to be strong. is high-tech,rea ,ut also infrastructure related like infrastructure pipelines and the new energy. these are the areas where the government is spending big money. angie: china can sometimes be accused of functioning in its own bubble, it's a vacuum. it is very domestic-centric and driven. of the latest global round of uncertainty, including brexit and concerns about global growth, factor

why doesn't the pboc do something on the monetary side?think they we are looking for more rate cuts this year. this point int at time to exactly quantify the impact of brexit. things are still so much in flux, but i think it is fair to the longer uncertainty drags on, the worse it will be for business sentiment. worserse it gets, the investment will be, mattering a lot for asian exports as a whole. there are these potential risks that we don't now -- know how to quantify just yet. act, thenc wants to they should ease policy. rishaad: what did the data tell us now? we look at nonmanufacturing pmi, the service side, argue arguably closer than the manufacturing one. >> that is a fair point. if you look at services sector , it seems like there are some downward pressures there as well. you should not be completely surprise. overall, economic activity is a mixed bag. we still have these downside risks you need to protect the economy from. even from a services perspective, if we are not -- we are not completely out of the woods yet. rishaad: you

we have actually had a lot of yuan depreciation based on the pboc's basket measure, the yuan is down10% on a trade weighted basis since last august. that should give some resilience, some competitiveness to exports. all of that makes us think we will see stability and growth heading into the second half of the year. of course, that down great, the possibility of further stimulus measures -- that downgrade by the pboc. further stimulus is not off the table. i think expectations are now shifting more towards maintaining the existing stimulus but not necessarily adding to it. mark: thanks a lot. joining us in the wake of that chinese data. let's get more analysis. the country's economy is better the perceived. an research.asi a national bureau statistics spokesman says the economic environment remains complex. is that a good summary? first positive thing to know is the shift towards the consumer. i think what is important to ane is we've seen improvement in industrial profitability over the first half. the first quarter, we saw a huge amount of credit pumped into the system. but in a co

over the weekend, we heard from the pboc governor and deputy governor saying further efforts are beinge to maintain stability in the yuan. a lot of analysts suggesting consolidation around that 6.6 mark. the most recent survey of bloomberg analysts suggesting at yuan will and the year 6.79. rishaad: moving from events in china to what's going on in japan, exports dropping for a ninth straight month. june.n is in tokyo.r let's have a look at what is going on behind these numbers. what is going on? out, the dropted was not as severe as had been forecast. that is some positive news. economists telling us that export declines may be bottoming out and we may be seeing a leveling out of this trend. are some of the biggest trading partners, still big declines, 10% with china, japan's largest trading partner, 6.5% with the u.s., and a slight decline with the eu as well, but on the positive side, much less severe than anticipated. what is behind the numbers is , they the yen strengthening making japanese products more expensive on the world stage. we got the boj meeting later this week, even th

that recent ppi figure, doesn't that really pressure on of the pboc?think it is good news that we are heading in the direction of ending ppi deflation. we think by the end of the year, it will start to get positive again. it is really a victim of the excess capacity problems that china has been facing for quite some time. we know that while policymakers are aware of it, there is no urgent rush right now to try and rapidly reduce that and have the knock on impact of higher unemployment. eventually, we will see some higher producer prices. and actually, the run rate for the economy itself will help justify that. we will see 6.7% achieved next year for gdp growth. angie: what is really critical is the weaker yuan, is in it? david: certainly, that does make a difference. and the interesting thing we have seen since the start of the year is how the trade weighted rimimbi has been continually weakening. having trade weighted depreciation ground plus attention, but still achieves the ultimate objective. the is something to continue to expect through the rest

bloomberg intelligence says the easing of deflation at the factory gates is doing the job for the pboce: thanks. the wait is over for australia after a tight election with malcolm turnbull to be officially sworn in as prime minister next week. malcolm turnbull claimed victory eight days after the polls closed despite both still being counted. more, let's get over to paul allen in sydney. how clear does that do the election results look? paul: it is unlikely to change dramatically. votes will continue to be counted for a few more days, but the coalition has 76 seats. 77, whichet up to would give them a two seat majority in the new parliament. it is not much, but it is enough. they also have the support of independents if they need it. bill shorten called malcolm turnbull on sunday to concede to over.so it is however, we will have a weaker government and australia, so the concern remains that it will mean not a lot of action on the policy front and could mean the deficits just keep on getting wider. s&pe: what about this putting australia on negative credit watch last week? it made headl

it was suggested that in the second half, the pboc would be fine-tuning monetary policy. perhaps, in the way of short-term cash injections. we might not get that wholesale easing, or potentially a rate cut. that does seem to have disappointed investors when it comes to the chinese markets in thi part of ths part of the wor. on the mainland markets, we can see china up by .4%. sydney stocks down by 1% amid political uncertainty. conclusion to get a from the weakened election. election.e weekend we had a little bit of a spike here, but it has come down now, 7509 at the moment. manus: the australian central bank cap interest rates on ho.d. -- rates on hold. the cash rate was left at 7.5% britain'sighs decision to leave the european union and the election. anna: what were the reasons for keeping rates unchanged? there are many uncertainties to deal with. >> there were and some of them got a mention, and some of them did not. the reserve bank of australia said it was "prudent to hold at this time." it did note volatility in the markets. but most markets have been continuing to

some economists think the number show that pboc did not intervene heavily in the u.n.. joins us. this goes against what we have thought all along, that the pboc is always in there messing around, but $13 billion is not a big part of $3.21 trillion. betty: and are member the reserves were a lot larger because they were intervening so much. what investors are taking away is they are taking away a little more confidence in chinese regulators and the government because suddenly, even though the currency has dropped almost 2% since exit -- since brexit, the chinese have not had to spend money to support the currency. they have let it fall and that says the system appears to be working better. the currency system appears to be working. joe: i remember when they had that the prize 2% valuation. people looking back said maybe they screwed up. maybe one part of the government was not communicating with the other part. is the view now that they are a gearing things out more and not making the same kind of mistakes? betty: and some of the things they did after the august back all

today seeing the pboc strengthen the one -- yuan.ese yen has been the one that we are very much focusing on. it is still seeing upward strength of their. although, up .4%. the aussie dollar tracking higher as well because we have ,ad a general upturn in prices up .3%. also, expert prices coming through. they rose 1.4%. a little bit of downward pressure there, in terms of expert prices. iting a look at softbank, will report after the bell, and analysts say there could be some upsides, particularly to its also, wesiness, and are waiting to hear what they say about that $32 billion acquisition. we did see down by .9%. certainly, things looking mixed in terms of asian equities. there is an upside in taiwan and shanghai. australia, generally a bit of weakness. and still awaiting that report from singapore. let's have a look at aia. boostt did do there was a in profits. it is asia's third biggest , despite the% chinese crackdown on insurance policies. that is all part of a bid to curb capital outflows. >> they continue to be strong, we hav

following the fixing from the pboc. not the biggest surprise but i mentioned a strong dollar earlier, a strong dollar story overnight. level judging7% by this move that surprised some people. isething you want to watch how do the central banks and policymakers control property market to prevent it from overheating as they prepare to further.es down 70%-70 1% chance. move nexter 50% month. should be interesting to watch. macro totals. that is a lot of things i just said for what rishaad i guess said was an uneventful day across market shares. rishaad: britain's station shouldn't to leave the european union likely to drive down growth not just in britain but around the world. looking at the new figures, what does it have to say about japan and the ends strength. -- the yen's strength? >> down from 0.5. downplayed the need for a week or yen saying intervention was not necessary. you have seen some currency but said itecently would be challenging to reach the inflation target and japan needs to use its available tools. to ac

david: how is the pboc and interpreting this? will they remain steady? pboc is probably interpreting this with a sigh of relief. they're hoping the finance ministers and central banking meeting in the next several days, they don't want any thrills and spills. they can look back and say there were apocalyptic warnings last summer, and again in january and february. death played a huge role. debt played a huge role. one of the trends we have noticed and discussed is china's economy is changing from a sort deal circa 1980 economy to a consumer economy. you would have noticed the starbucks was packed around the clock. chinese consumers have money to spend and they are not afraid to spend it. david: if you are to put that into a timeline, where are we in that process you -- in that process right now? daniel: service consumption accounts for 15% of gdp. having said that there are huge discrepancies between the coastal provinces where there are transition -- where the transition is more advanced than the inland areas. maybe it is 60% to two thirds complete. nor

do you think the pboc has time to pause when it comes to policy? f you look at what our data is, rates have been going down and down and down since 2014. what we have seen in the last quarter, we hit the all-time low. shadow bank rates, overall bank rates. firms are not looking at interest -- lower interest rates as appetizing. china, cut rates, stimulate demand. it does not happen in the data. betty: what does this mean for the yuan? >> everybody thinks there was a sea change by brexit or back in january. the chinese have been consistent. the chinese want a relatively stronger currency. it is something that will allow them to do this investment to consumption transition. betty: other countries do not believe this. the united states, they do not believe china wants this. >> i believe they are mistaken. says -- if you look at the numbers everybody uits, there is this -- floor. there is an imf it does not apply to an economy as large as china. the number is not the three 2 trillion everybody is talking about. point $2 trillion everybody is talking abo

again, the message is fairly bear that the pboc may spurring speculation they are defending because fixingw for a third straight day. saying, as david was six point seven, is that the line in the sand? >> i think it is. also from my market reaction point of view, what we had last year was a total surprise, little communication, sudden evaluation, which created panic. model driven,s prices driven devaluation of the currency against a basket. it is very different. reserve in at the fx china, they have stabilized even though the yuan is breaking into new lows. while we may have the same kind it isnd, but the point is not posing the same panic it did earlier in the year or late last year, so it is different. stabilizing.is this brings us to what you believe is the biggest surprise of the year. i don't disagree with you, and that is the price of gold. does that rally have more legs? >> it does. i think it does. biggest coststhe to having gold was the cost to carry. bondith 30% of gold indices and negative yield territory, there is not much cost of carry. gold is a great hedge. number two bank,

what can the pboc do? >> i think it is debatable. of still growing in a 6% to 7% growth channel while rebalancing. it has shifted its growth impetus dramatically away from the old industrial sectors towards more labor-intensive services, so that is boosting gdp and also holding the line on labor absorption and unemployment growth, so i am hopeful that china can walk and whichum at the same time, is something other economies really struggle with. angie: ok, so they can walk and two gum at the same time, but i want to ask about as oe reforms. we have seen a change in language coming from the president, saying we should make them bigger, better, and stronger with full confidence. does this signal a setback to you on china's plans to boost efficiency? >> well look, china has to clarify its state owned enterprises strategy. you are right. they talk about supply-side initiatives and taking excess capacity and headcount out of industries like steel and coal, then they talk about maintaining their unswerving support for state owned assets. t

we had the pboc actually strengthening the rate for the second session, and that is as we saw the currencytrack gains in the broader market.it is pretty flat , 6.6769. markets, most regional indices tracking back higher on the back of those gains in japan. if it stays at this level, we will close at the highest level year.october of last paul was mentioning the cpi figure in australia. more strength coming back into equities there, particularly in the mining space here it apple suppliers boosting a number of equity markets, so taiwan in particular is pretty fat -- flat on the kospi, but some weakness coming through on the shanghai market. other than that, looking pretty good. angie: thank you. let's check in on some stories we are following for you. hillary clinton has become the first woman to be nominated for u.s. president by a major party. formerlyormally -- monday -- formally one the nomination after each state announced its vote from the primaries and caucuses. in a gesture of unity, former rival bernie sanders asked for clinton to unanimously be named the party's nominee. proposal t

at speculation of some stimulus hopes after brexit from the bank of england, bank of japan, even the pboc is giving rise to commodities across the board. take a look at another safe haven, silver. silver is having a better run than gold in terms of percent. in the past week, up by 10.4%. this is its best week since august, 2013. haven seekers have driven up the price of silver in the past week because of brexit, and they say this could continue for the rest of the year. vonnie: thank you, ramy inocencio. more fallout today after the transfer tos energy buy williams company. six executives resign following a failed attempt to remove the ceo alan armstrong. armstrong has been with the company for 30 years and oppose the energy transfer takeover. shares of williams are calling this afternoon on the news. machinations in the oil industry. who would've thought? six directors on the williams board and the ceo gets to stay. does this presumes that decision not to have the merger was the correct one? >> that is hard to say. what we are learning today is this was not something that .appened off-th

the hopes of more central-bank action everywhere from the ecb to the bank of japan to potentially the pboc this risk rally we are seeing across asia. most markets in the green. a lot of strong buying is coming through. essentially, undeterred by lackluster inflation numbers that cannot. we had better than expected results, suggesting manufacturing companies in japan are feeling more upbeat. head of the weekend's federal election, up 6/10 of 1%. risk aversion going on. very strong gains come in particular when it comes to the industrial space, miners. a strong by coming through from the philippines and taiwan. mainland markets, underperforming the rest. not much of an improvement on that front. regionally, we are up by 0.5%. the other big story we have been watching is a continued decline when it comes to yields when it comes to japan. we are falling to record lows for these short-term bonds. we've got the five-year declining when it comes to this morning's action. we've got the decline coming through in terms of the five-year and 10-year. the 10-year, also declining. ♪ cory: office landlor

angie: with the fdr -- sdr yen -- how will this ripple out for the pboc? u will see a big change in .he market sentiment at the beginning of the year, any movement in the renminbi and the markets panicked. .urrencies have been weakening no one is really concerned. that is a big change in sentiment. ultimately, equity markets are driven by sentiment. threee seen in the last months particularly, a huge swing. despite a lot of negative things happening. we have seen brexit. continued issues and japan. investors are saying that things are getting better in asia. that is a very important change. angie: will money managers like yourself count japan out now? >> you never count japan out. , we havepoint of view always thought much more in terms of stock specific. we never really believed in the -- the economy will change dramatically and the inflation will surge. if you look at the whole domestic consumption players. look at companies that are growing market share. of a theme now, ironically because of the japanese yen that you look at the tourism beneficiaries. th

the pboc released a financial stability report last month, banks are able to maintain relatively highapital levels even if hit by severe shocks. economistrt-term, predicted bailout would hit markets, bank stocks, the renminbi, pushing up government borrowing costs. many say longer-term that a rescue would be positive. china bailed out it's banks in the 1990's when nonperforming recapitalize, then the big for lenders and set up a big state run bank, largely seen as successful and followed by 10 years of breakneck growth, so short-term pain for long-term gain some of these analysts are saying. angie: thank you so much for that. we will take a detailed look later on in the show. we want your opinion. tweet us your thoughts. let's take a look at some other stories we are watching today. as companies consider their future in the u k posts brexit, the chancellor exchequer may offer an incentive to stay. john osborne is looking to lower the tax rate to 15% from 20%. meanwhile, tens of thousands of people marched through london protesting against leaving the european union. campaigners point

the pboc is really trying to manage. they want to weaken as we have this trade weighted basket. they actually set the daily fixing at the weakest since november of 2010. anna: thank you very much, haidi. three of britain's property funds have frozen 9.3 billion pounds of assets. energy investments, aviva investments, and standard life investments have halted withdrawals because they don't have enough cash to immediately repay clients. nejra has details for us. the dominoes them, starting to fall, perhaps? nejra: yes, that was one comment from an analyst. the analyst says it takes time to sell commercial property to meet withdrawals. the cash buffers are being eroded by investors heading for the door. as you said, this started on monday with standard life suspending trading in the commercial property fund. that was followed by aviva yesterday. these are funds that together, total my .1 billion bounds -- total 9.1 billion pounds, or almost $1 $12 billion. just to give you a bit of a sense of scale of that 9.1 billion pounds, according to the investment association, about 24.5 billi

we also have rumors perhaps, of more action from the pboc in particular. driving some of the gains in hong kong. bouncing off that three-week low we hit yesterday, we are up about .9%. regionally, we can say a lot of gains in the energy sector. this, after oil recovered. the nikkei 225 just close to five minutes or so ago, down .5%. they are extending losses a little bit into the close. we do have a stronger yen again today. sydney stocks are interestingly up by .8%, despite the s&p announcement downgrading the outlook from stable to negative and warning we could get a cut thein two years if government fails to push through these deficit reduction measures. we have pretty strong gains coming in from these emerging markets. up nicelys sitting here. we have been looking at dollar-yen, of course. it is pretty stable, but strengthening. it is not quite breaking through there. dollar, the aussi had a very strong reaction to the s&p outlook. anna? anna: thank you very much. four more u.k. property funds have a frozen withdrawals. this is in the wake of the brexit

the chinese renminbi, the pboc weakening this on stimulus bets as well, up at the moment by 1/10 of 1% to create the european union, they are set to announce their policy decision. mario draghi's press conference this afternoon will answer questions about the potential impact of brexit and the concerns of italy's bank. caroline hyde is tracking it . but that's have shifted to september. caroline: exactly. it's pretty dreary in frankfurt, and pretty dreary in policy action today, but we could hear plenty of talk and questioning coming in from the press conference at happens after the announcement, and surely mario draghi might be hinting to further stimulus to come. the economists are pretty bullish that stimulus will come as soon as september; 33 out of 34 see more quantitive easing, more bond buying, to stimulate the economy. the market traders are less convinced, batting only until december when we see any more stimulus. but notably, they have to read the tea leaves that ecb; like the bank of england, they will watch more dates for the ramifications of brexit, because throughout the

have a look at the off shore renminbi following the fixing from the pboc. ction in the offshore space. kiwi dollar is where we are seeing the action. we have consolidated at these levels following the latest inflation data. a big drop their, 1.3% drop in the kiwi from session peak. a little bit weaker as far as that is concerned. let's bring in some breaking news for you, china released property prices for june. let's get over to steve engle. more cities did see year over year price increases in china, 57 out of 70 track. it was 50 in the previous month. month over month price gains, that is starting to slow. ofare seeing a number cities, including shin jan, the cities that have had fast price increases, starting to implement curbs. month over month new residential rose in 55 out of the 70 cities tracked by the government. inwas 60 and may, and 65 april. -- priceeen prices gains starting to slow a bit in those larger cities, in shenzhen --hin jan shenzhen --shenzhen. 22.3%. up both of these cities have seen sizable games -- gains. is the cheapning credit we

looking at ways to ease corporate debt through these type of facilities, so it is a signal that the pboccoming more sophisticated in the way they are looking at markets and managing the economy. >> windy think we will get stimulus out of japan? think we will get stimulus out of japan? go big or goy is a home moment for japan. it was a real disappointment, voters coming out of the elections last week, 56% said they believe in abenomics, but with the stimulus package this small compared to what was expected, it really is a disappointment. they need to double down or triple down on abenomics. the inflation expectation down below 1% last year, and one of the big benchmarks of success for abenomics was a 2% cpi. >> europe is skeptical, why? we haven't really seen fiscal stimulus work in japan. and 2000s, we saw a lot of fiscal stimulus move out, but inevitably this stuff gets siphoned off into inefficient projects or it does not go where it is intended to go. the finance ministry is going to invest in things that look at productivity, things like total , that'sproductivity where it really nee

francine: as long as the dollar is stable it does help china and the pboc. : right, but you have to look at what is going on. the single most important thing that would save china was when the fed backed off its tightening cycle in february. amount of money circulating today in china is greater than that of the united states, even though the chinese economy is a smaller economy. there is a wall of money in china waiting to leave and if they get high interest rates abroad they will leave. the fed backing off has been the important factor helping china avoid a bigger crisis then what they were staring at in february. jonathan: certainly chinese corporate earlier this year were moving against the yuan. their pressure was decided at some point around february, it is not a one-way bet against the yuan. they came back and balanced things up. beyond china, this is also good news for emerging markets. there yields look pretty good. francine: i understand the fed not moving is good for everyone and less they surprise the markets but at some point they will have to tak

we heard from the deputy pboc againor over the weekend, saying china will be expanding its efforts to on improving cross-border and offshore yuan policies. by, thatad a risk five-day game, about 1% last week, the most since october, but keep in mind it was ahead of that g-20 meeting of finance ministers and central bank ministers. unusual to see stabilization ahead of a key global event. where does the yuan end up? 20 traders seeing the yuan ending 2016 at 6.7950. are likely to see stability at this level and they won't seek one way depreciation allowed by authorities in china. yvonne: interesting timing with their one anniversary of that shocked the violation coming up. joining us live from shanghai. the operator of the hong kong stock exchange bringing back a closing auction for the first time in seven years. from monday, the 10 minute session will feature a random close in the final two minutes. some brokers are said to oppose restrictions on amending orders. closing options are a staple of every other developed market designed to reduce volatility and manipulation. russia's olympi

don't fight the pboc. there's also in certain places around the world and even in the oil sector for a lot of the oil companies, you're coming up against easy comparisons as you go through this year so if oil or commodities or anything frl a lot of different countries, it doesn't have to get better. all it has to do is stop getting worse and by the end of the year, comparisons are pretty good. >> they've already made all kind of move. they let the yuan depreciate. >> i don't know how you feel about the auto makers, but they're dividend yields are pretty huge. that i have been trading poorly after the latest monthly sales numbers, what would you do with the auto makers? >> i think it makes sense. we've seen sales continuing at a rate. the u.s. economy, we don't need things to get substantially better. we just need a lot of things to stop getting worse. there's signs that actually starting to happen. so i don't expect jobs to go down. i expect them to come back and people are going to continue to spend. there

the three months to june. apple has fallen to number five in china smartphone market. counterpoint research says while weight increased its lead with 17%. pbocn fix a higher than yesterday's five year low. the chinese currency has fallen 1.7% over the past few weeks. unlike the selloff in risk arets, this time investors taking the decline in stride. stride, david monitoring the market in shanghai and hong kong. david: that's right. i was just talking about the yuan. it is in focus now because it has underperformed. -- moreallen against than a lot of these counterparts across seizure. -- across asia. you have the fx reserves, the different slow, i know, but these to tend to move in the same direction. tends ton why the yuan .eaken when fx reserves fall $25 billion less is what were expecting for china's fx reserves for june at some point today. have a look at where we are at the moment for the offshore renminbi. a lot of these traders told us that before markets open in asia that this was well bid. ,his underscores that statement 6.70 on the offshore renminbi. dollar-yen capping the gains on the cash market, back hello 101 -- below 101. 100 a

the second quarter. we will also start to season change in pboc action. think they will take another triple are cut in the second half of the year. soft gins head of global asset allocation -- softbank's head of global asset allocation -- >> should switch to the following thing -- following chapter, the supply-side. i would be very careful about the banking sector t. yvonne: that was a word on china. after surviving two years up low prices, oil producers gearing up for a third. the outlook improves. this is bloomberg. ♪ yvonne: check of the latest headlines. yahoo! may be looking at more job cuts. analysts say the new owners slashup to 3000 jobs -- up to 3000 jobs. yahoo! reports second-quarter earnings later on monday. devaluing the aussie dollar could be the rba's best option. he believes rate cuts will have limited effects as australia's benchmark rate heads toward 1%. aussie is largely irrelevant in a global context. positive for the outlook of the world economy. hedge funds and speculators cut their bets on the gold rally for the first time in six we