Stay in negotiating the terms. Manus you are welcome to daybreak europe. Mnuchin isnt too worried about the dollar. The chinese are exporting like it is 2010. Equity markets are focused on the data rather than the revenue. There is the bond market that is telling us a little more interesting. The bond market simply doesnt believe the data. It didnt get the memo. You had the gdp number which is retrospective but the bond market lost 16 basis points. That is the steepest monthly decline. Since june has had 2016. We are within spitting distance of the lows set last week. Analysts said you should be 50 basis points higher than where you are now. They said we would be at 3 but the bank of nova scotia summed it up beautifully, this is uneconomic. 1. 4 . Ality is pc, it is the fifth straight month of being below the target of 2 . If you are in the bond market, you are in the 1 . , on thee in stocks verge of 1. 2 . China delivered the numbers, the reactivation. Youve got the eighth month of gains on the msci equity index, the longest winning streak since 2007. We got the jobs report today. Singapore, philippines are closed. Yes, youve got the data versus harvey disaster, tax reform skepticism and the north Korean Missile launch but still the stoxx trade higher. The yuan continues to strengthen. The highest export orders since 2010. This is the 12th consecutive day of rally in the yuan one day short of the record set in 2010. The dollar, youve got the secretary mnuchin not too worried about the dollar. Yet the weakest tce in two years. The bloomberg dollar index, the First Six Months fly. Lets see what else we have got in store. Some cracking conversation to had. 7 00 a. M. , tune in. Lets talk about the limits of the ecb. His is a man that knows jeanclaude trichet. I would ask him is it time for draghi to really challenge the euro and we get an update on euros. In the meantime, in singapore, rounding up your week, new slope it is Juliette Saly. Juliette manus, in the u. S. Donald trump is considering a decrease in the u. S. That limit. Just u. S. Debt limit. According to two officials, the request could come as soon as today which would includes include 5. 5 million to the federal Emergency Management agency. We will be spinning to gary cohn. Speaking to gary cohn. U. S. Customs and Border Protection has selected to build concrete prototypes for Donald Trumps promised border wall. The company will build prototypes at a location near san diego. The construction could begin next month with the government paying as much as a halfMillion Dollars. Theresa may is coming under increasing pressure after the latest round of exit talks ended in a stalemate. The negotiator, Michael Barnier says britain is refusing its financial allegations. London mayor told the government needs to get its act together. I think the Prime Minister and the cabinet needs to raise their game. I have been saying they have got inmake sure they negotiate good terms with a sense of positivity with the eu. Juliette in mexico city, as second round of talks with president trumps rhetoric to take up time. He has threatened to pull america out of the deal. In a twitter post and in a news conference, the president of globalindia three news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. As manus mentioned, a few Public Holidays but the markets are rallying quite well. Nursing the nikkei rallied flat we are seeing the nikkei rally flat. We do have that betterthanexpected pmi number helping out the us trillion and helping out the australian and the msci markets. In terms of stocks we have been watching in the region, synnex coming through. Net incomeedible come through. There is concern about its debt levels. Acau leading gains this after j. P. Morgan upgraded beginning stocks on what they call a beautiful opportunity which is too attractive to ignore and cba, australias largest bank, under a bit of pressure. Internal review found billions of dollars of transactions in the u. S. , europe in u. S. , europe have not been properly monitored. A little bit of a dichotomy between the trade and also gdp. Gdp Holding Steady at 2. 7 but you are seeing the korean won depreciate against his largest export markets. A little bit of concern ahead for the south korean economy. Manus Juliette Saly, thank you very much. It got to friday. Weve got more data. Manufacturing pmi hit 51. 6. That topped the estimate. That is the third month of expansion. The Chinese State media has said the communist party is likely to begin a much anticipated congress on the 18th of october. Then, good to see you. Dan, good to see you. What will investors be watching at this meeting . Daniel the big thing on the political side is whether xi jinping signals he wants to stay on for a third time as party leader. The top three alltime is one of the most powerful chinese leaders we have seen in decades. That he stopis after 10 years or does he go on to five years. He could signal that when the Standing Committee is revealed, in the people he puts on that will show what his intentions may be. Manus what his intentions may be Everybody Loves a little bit of power and he has it in spades. What kind of policy statements do you think we can expect. A great deal has been made of his accessing exceeding to Global Status as trump fumbles around with foreign policy. What do you think we will hear from a policy front. Question appears to be whether he is serious about economic reform or he is trying to enhance the power of his communist party we have heard under his tenure, he says the market needs to play a leading role in determining outcomes but he is expanded the parties reach over companies and the economy in ways that we have not seen before either. Rift anda major policy people will be watching that to see if he is going to go toward more market reforms . Is he going to use his power to really bring china in a new direction . Or is he going to use it to enhance the parties control over the economy . Manus daniel, thank you very much. Jenna me now, jeffrey you. Welcome to the program. The hearty congress, we have a core leader, that is a most deity in my reading of it. Will it be about serious reform a what do you think the emphasis will be on the 19th. Geoff it is a companies of things. We talked about the future of the party where what direction fourth. That has gone in terms of policy as mentioned earlier, what is the role of the state in particular. China is going to be the test case. It is a strong state of national champions. Compatible with the market economy. Can you have a strong state presence and have a Market Driven framework . The west we talk about the denaization tionalization . Will china showed it can succeed . Manus i had a guest that talked about the one built one belt, one road. It is 12 times larger than the marshall plan. This is his legacy. His living legacy in terms of the driver of the chinese growth story. One by one road one belt, one road has died down a little bit. Geoff is invoked when it is in vogue is one china is in power. I think that Economic Needs to be taken into account. Manus maybe i jumped into late. A little more data, have we . The starkest export data since 2010. The numbers are strong. The numbers underpin a global conversation and the Global Support for the equity markets. Is that a fair judgment . Geoff it is a very fair judgment. Expectations, look how you are leading indicators and you look at the mnb versus expectation. Surprising to the upside is it sustainable . Manus you are very good guest. You let into the turnover of the leaf. This is the offshore yuan and it has been cracking offshore and onshore as well. Many analysts are moving to a stronger estimation for the yuan by the end of the year. The question is is the pboc really treading water until he gets october out of the way . This market looks stretched by a number of factors. Overall, if there is demand on the back of it, the fundamental justification on the back of exports, there is more especially there is more demand for buying because of the assessment. . Hy shouldnt it be strong the question becomes as a Monetary Policy indicator when it comes to managing inflation, china has been tried to reflate for a while. Does a strong you one suit chinas situation . Manus they have a challenge in terms of what the fed does. He strength in this renminbi it hasnt really affected the numbers thus far, has it . Geoff if you look at it on a trade weighted basis, it is offset the weakness of the dollar. Emerging market economies have been doing well. Overall, not too much concern but once the reflation numbers or indicators start to roll back, the pboc will need to do a double take. Manus geoffrey, you stay with me. What can on daybreak, you expect from the latest jobs data . We will tell you what to watch, the consensus numbers. Has the market delivered for trump . This is bloomberg. Manus a live shot of singapore. Msci asia pacific, 100 cc 1. 11. 161. 11. We have eight months of gains, the longest winning streak since 2007. What happens in china and the United States perhaps underpin emerging a market story emerging market story, as well as asia. These markets are strong. The data is getting stronger. Juliette saly is doing very much. She is in singapore and always brings a ray of sunshine. Juliette Southwest Airlines is working to ensure a steady supply of jet fuel after Hurricane Harvey shuts down pipelines along the gulf coast. Jerry kelly said i do not expect any problem but this is an evolving crisis. The rush to guarantee the fuel after record rainfalls. Shares in lululemon have jumped after it reassured investors that the Athletic Apparel trade is not dead. The Company Posted a secondquarter profit. It delivered a forecast for the year. The indian billionaire is it seeks to grow its aluminum operations overseas. Shares of consilium jumped more than 8 to close its highest level in two years. For a group did not immediately reply to eno queries. That is your Bloomberg Business flash. Manus thank you very much. To an economy that is growing at a moderate base matter it moderate pace, the u. S. Jobs market continues to shine. It is a number for august, the forecast on your bloomberg, 180,000. Michael mckee has more on what we can expect. Michael government and private data suggests the u. S. Data market desk u. S. Jobs market is still u. S. Jobs market is still healthy. Jobless claims remain near record low. These adjustment problems as the summer ends and school year begins. Just how many jobs were created in the month back of payrolls have come in below consensus for six years in a row. While the headline numbers will get the headlines, it is the Unemployment Rate and earnings with will grab the attention of traders and Federal Reserve officials. Fed policymakers still expect a falling jobless rate will eventually trigger higher wages which will push up inflation. That will affect if, when and how much the Central Bank Raises rates. What will not be in the august report, any impact from harvey. Michael mckee, bloomberg, washington. Manus lets get geoffrey yus thoughts. 180,000 is the consensus estimates. It is all about wages. Growth are you surprised with the durability in the numbers . Warned in january about the sustainability of adding these jobs and we have on average added 184,000. Still a durable expansion. We think unemployment is going to go to 4 . People are still confident about the economy and there is still some agree just still some degree of investment still some degree of investment. Signs of aed see tight labor market on a numbers front is generating and upwards squeeze in wages, unless they see that, they are going to be as cautious as possible. Manus when you talk about wages, a chart, no writing on the charts everybody. I want everybody to pay special attention. I havent scribbled in it but i am focused on wages. Rolling over, we are adding wanted to 84,000 jobs come almost as much as we did last year. Squeeze. Ot felt the that is the issue, conundrum, paradox. Look at how many papers on phillips curve is being they are as confused as anyone else. U. K. We say theres a productivity issue. You really have to segment in a different size. Artificial wage restraint. We have a meeting in germany throughout the last 10 or 15 years. Manus the bond market, i did this at the start, the bond market traders didnt get the memo. I talked about virtues of gdp. Let me show you. Talk about a strong u. S. Economy, can you sustain 3 . If you are a bond trader, bond markets simply dont believe that the ability of this market to perpetuate. If you are in bonds, you have had north korea, you have had a whole variety of thinks. North korea will blow over but bond traders really have seen a tty big drop in terms of should that concern me more . Ill year 2001 in stocks. Geoff it will concern many people in terms of growth. At our forecast for example, this year, it is about consistency rather than shooting for the moon in terms of numbers. It talks about 2 for this year, so i think the focus, the expectation have changed somewhat into rather than from the administration, rather than aiming for higher numbers and letting that drive wages, lets just make sure we dont get a downside. Harm. If you do not harm, you make sure thinks tick along nicely and you generate conditions. Build up a savings buffer. If you become a savings economy, which the u. S. Seems to be doing now. Manus economic risk that something jolts the americans into sitting more. Geoff has it been people being scarred from the experience of 10 years ago . They want that cash buffer. People will say on the positive side, number no more leverage in the system. On the negative side, have to revise lower. Manus a revised lower trend growth, however the cio Office Linkedin which was about you do assume a reduction in tax. My issue with the tax reduction, give me the levels that you see. A quick progrowth a quid pro quo for growth. Geoff what you do with a tax reduction . You need not only the cash incentive, you need the regulatory incentive, a comprehensive package. Manus not to spend it on dividends and buybacks but to spend it on investment. Geoff we cannot repeat . 90 of every dollar went into buybacks and evidence. Manus we have more to talk about. Bloomberg, we will have a great conversation. Team at 2 30ns the u. K. Time coming up on the show. As brexit talks hits a stalemate, what is the message from the mayor of london . We have the message. This is bloomberg. Manus tokyo, 2 30 in the afternoon. Did they achieve anything . Buying for my time more time in the brexit negotiation. The dollar a little behind in the yuan a little lower. Lets check in on the markets because things are moderately healthy. Equities are fair. By asian equity index is up. 8 . The gains you see in asia, were waiting for the jobs report, 180,000 is the consensus. The philippines are closed. Remember the remember, geoff yu is beside me. The strength in renminbi is there. It doesnt seem to have repeated the growth story. Theres dollar down, that is yuan. Youre looking at a fairly strong run on the yuan. Youre looking at one of the strongest runs on the yuan in a number of years. The new find my fact of the day. You are also seeing a new addition. It on the mobile. Lets take a look at some of the stores that are making the front cover. Losseslar extending its while he did late into the evening it we managed to turn around ever so slightly this morning. The dollar index is just traded at 92. 73. It has turned around since we wrote this. The judgment on the front of it is steven mnuchin. He is the treasury secretary and he said a weaker currency somewhat battles the u. S. Trade. Somewhat batters the u. S. Trade. Lets ask a geoffrey yu about his view on the dollar. A little irony in the dollar, isnt there . I think every treasury secretary has grappled with the notion of needing a strong dollar policy. Versus the fact that having a weaker dollar is reflationary. Put into context, that is 45 of s p 500. That is a healthy number but compare with the likes of japan, the reflationary aspects of the u. S. Is less. 77 of the u. S. Economy is consumption at the end of the day. That increases the purchasing power. He has to balance this out. Manus he has to balance this out. The affordability in housing, that is going down. The second story involves harvey. Hurricane harvey which has now turned into storm harvey. This is the second one in the fallout is going to continue. Daybreak reports that u. S. Has made its first emergency draw of the strategic reserve. The storm could keep as much as 3 Million Barrels a day out of the refining system. This is when we begin to not only help the cost and the human side in the human side but also the squeeze in gasoline prices. That has been aggressive. In terms of the assessment of Hurricane Harvey at ubs, what is the thinking . Geoff our colleagues, 25 basis points. We really have the split of 15 basis points from unemployment, loss of employment and 10 basis points from trade. It is spread out over two quarters but there will be a recovery process. With natural disasters, things spread out over time. A very careful in looking at inflation until we get a night a nice upside from energy prices. Those are not the kind of reflationary or inflationary things you want to look at or desire. Manus the bond market will look through that. The fed will also look through that. The final story focuses on the u. S. And on the debt ceiling. President trump is considering attaching an increase in the u. S. That feeling for disaster funding u. S. Debt ceiling for disaster funding. I suppose this is one of those moments really where a horrendous personal and human raise the trump debt ceiling, at some disaster funding and maybe even remove the wall issue from the agenda. Been talkedhas about and i dont think markets really putting on any assumptions yet. As a sayof volatility in treasury markets at this point, the direction it should be going on the margins, talking very margin packed. This smooth ends the path to making sure there is no volatility. Less context, this helps things. This will help the riskon story. What we are looking for is a longterm, fiscal adjustments, tax and policy changes and investment being delivered to the u. S. Economy infrastructure. Is that going to happen . Manus those are all the facets 2. 2 growth to 3 . Lets change the direction of travel. Lets talk about round three of the brexit discussions. They failed to deliver any kind of it through. The eu in British Government remained loggerheads over Citizens Rights and their frequency of talks. That puts rusher on the u. K. Prime minister to step in and negotiate a deal. Caroline hyde caught up with mayor khan he says they must raise his game. There is some uncertainty around brexit. One of the things ive been lobbying the government about is more certainty. One of the things that is not by march is to deals 2019. The government is listening, will know they they should now be reassured the needs. Ent listens to the the government should say sooner rather than later, that means continued membership at least doing the great race. Have left the eu, we should be numbers of the Single Market. Government recognizes why the Single Market is so important. Whatever there is no need to make a plan b. Caroline the negotiations seem to be stumbling at the moment. I think the Prime Minister has to raise their game. I meet directly with the members of the british cabinet it ive been saying they got to make sure that they negotiate in good terms with a sense of positivity. Theres a huge amount of surplus that exit place before the negotiations that takes place before the negotiations. You better recognize your indices of the eu, it is not possible for someone who leaves the eu on better terms. Recognize the deal had to be done. We should as soon as possible give a guarantee to citizens in the london in london and u. K. We will give you the cars i guarantee you want. That will lead to a goodwill. Interested in a bad deal. Manus sadiq khan speaking to airline yesterday evening. He is the mayor of london. Us. Frey yu is still with and very clear message from sadiq khan. Raise your game. It looks like around three came to the end and we are going nowhere quite quickly. Enoughnowhere near through the arrangements for the prospect of a discussion on trade. Theater or reality . Geoff a combination of both. We dont know what is happening behind the scenes. He said dont big as conference, im sure the uks picking up on the legal arguments. His stances, fine, tell us what your position is. There are creative ways around this but at some point, it is in both sides interest to move forward. Push for some kind of an agreement. It might be later than october. Expectations apply right now so be surprised to the upside. Manus that is what you are banking on potentially. What do you make of this story . The possibility dont underestimate the extent to which leaders do not focus until the last minute. Theresa may is theresa may capable of a grand bargaining . She has ineffectual capacity in her domestic parliament. She is a has been leader. Just hanging in there. Geoff i think that is speaking from experience. Self interest of europe to hold the eurozone together. Manus what is this . Geoff this is holding the eu together but Holding Together a payment system. And financial point of view is more important. It is just how things work. On the device excited things, i think at this point, especially given what has happened on the domestic front, can she show her hand before the Party Conference sees it . Once that clears and we know with that paternal assessment is, we can move on. Heading towards i think there will be greater progress. Manus have a look at this. This is the pound. Theresa may, the currency itself is a muchmaligned currency. Down 2. 7 in the month of august. This is a very tortured month for us. We be surprised to the upside . Are we just so positioned for do and gloom that we could have a whistle . Geoff cable is a reflection of rate expectation coming back. We were at a 60 chance of a rate hike by yearend. Berin . A natural move move there. Is a sign the euro is being stronger. It is done well against all currencies. I wouldnt malign sterling too much. I will say that as a reflection. Manus can ask you one final question echoed you reflect back to markets themselves in terms of dividend and how important dividend is to the u. K. s story. Give me context around that. Geoff that is a story that is relevant to the u. K. If you look at it being generated. If you look at how sterling has performed on the International Demand side and growth side which we have been talking about throughout the day, that is supportive and will translate into a decent performance. In a position to have a relative approach. In u. K. We will like to divert their investment and allocations. Manus geoffrey yu. More brexit analysis on bloomberg radio. They are going to speak to steve time. K at 9 20 u. K. I will be on Digital Radio at 8 00 a. M. London time. We are months away from a regulatory event. Are you prepared . What does it mean for legislation encompassing your world . How big of an impact could it have . Two. Thod to this is the European Unions second big push at red lake markets. It is set to relight push it it starts very soon. Methods first iteration was in 2007 and harmonized wars to start trading than the financial crisis hit and policymakers decided more was needed. Extend that harmonization beyond equities to bonds and derivatives and beyond. Regulations records much of this on to open platforms. With automated trading make up half of all trades in several high flash crashes blamed on this, they will not only be tested but will have to include circuit breaking to shut them down. It is not just the machines under scrutiny. Research long provided by banks analysts and paid for by teddy commissions will now have to be paid for separately. What happens in europe doesnt stay there neck of the regulators will extend to any institution trading european securities no matter where they are. None of it comes cheap. It will cost Financial Firms over 800 Million Dollars to implement the systems to be compliant. The clock is taking for the deadline. Methods, for more on shaping the landscape, make sure you catch bloomberg markets, the First Episode tonight at 8 00 p. M. London time and it features the key writer of the death, taxation and regulation. A reminder that if youre a bloomberg customer, you can catch us on tv. Sit down in a desk and you can get all of the charts and functions. There is an ivy chat function down there waiting for your participation. Coming up on the show, as a Merkel Angela merkel, what are the options were successful coalition . This is bloomberg. Manus it is new york city on this thursday night friday morning. You are seeing equity futures nipping into the green on jobs day. An estimate for the number of jobs added to the u. S. Economy. What will the wages be . Debt ceiling, anybody . Those are the issues that america will deal with. Ok, where are we now . Lets get to Juliette Saly pc standby. Southwest airlines is working to ensure a steady supply of jet fuel after Hurricane Harvey forced a shutdown of crude Oil Refineries and pipelines. Said i dont excite any problems as this is an evolving crisis. Along the texas and louisiana border after record rainfall. Khiem income fund Money Managers erasing the pot paid by investors. It will increase its fees for most share classes bring the cost for the institution classes to . 50. Investors have been blowing this moving money, raising pressure on Money Managers to compete by reducing costs. Shares in retailer lululemon have jumped in late trading after reassured investors that the of poetic that Athletic Apparel retail is not dead. Spotify is the move comes after the music streaming companys initial round of graham failed to catch on with audiences. Spotify will focus is video efforts around that. That is your Bloomberg Business flash. While Angela Merkel is expected to keep her position as chancellor in the german election, key uncertainties remain about forming a government. Possible outcomes can include continued spd. Another option, Jamaica Coalition. What is that . That is the government a green party in the free democrats. Matt miller caught up with the leader of the free democrats who destined to make alternative. I think this is the least likely coalition. The grand coalition is more likely and that has to do with the situation with the green party. They ask for maximum conditions expanding the ftp because they dont have any momentum at the present. They are losing support. On the bigger questions, the greens are stuck in the year 2015. Manus the Jamaica Coalition is something we are going to talk to geoffrey yu about. Never read headline on jgb. We have a read headline on jgb. For anybody in any doubt about what is going on in terms of control, we had a conversation with kuroda last week. Everything is working fine as far as the japanese are concerned. Yields falls below zero for the First Time Since november of last year. Geoffrey yu, we will get to the german story in a moment. Does that mean anything to you . If you made money for the jgbs in the last 30 years, good luck. He story is from the u. S. In japan you are seeing good internal dynamics. It is sustainable in the longer term. Dont challenge the boj, please. Manus lets return to the story that we heard from the ftp leader with matt miller. Great interview. My impression is ms. Merkel has agreed with mr. Macron to set up new money pots and transfers in europe for the first time after im election and that contrasts the ftp position which is euro crunchies just countries must be responsible for their own economy. It is not a done deal, ms. Merkel, if you want me in your coalition. Geoff despite what he said, the fact is on the social issues, all the parties are not that far apart. It has to be on the economic side. You can do but higher minimum wages or you can talk about the future of the euro and the future of the eurozone. This is where the ftp, theyre learning from expenses. They want to be very clearcut about where they spent. Manus they want to be very clearcut about where they stand, growth is there in germany. There has been a definite qe is workingope,. The quid pro quo, we have talked to lot about. This is about the earnings 4407 is the chart on this. But they earnings profit estimates for the region have been cut. The number of upgrades the number of cuts and profit estimates are out chipping the. Umber of upgrades this the reality of higher euro. Geoff this is something that will feature quite commonly at the upcoming ecb. What is good to stop projections when it comes to cpi. If you look at their assumptions, they were looking. 4 the index to be down, and that generates enough inflation for next year. Just mathematically, you have everything else. We go back to a Global Growth picture. Volumes are going to even expand given where it is right now and that helps europe. Manus geoff, thank you very much. A sound voice in the midst of all the numbers. Geoffrey yu is with us from u. K. Investment office at ubs wealth management. Business leaders gather in chernobyl. We got the former ecb president , he joins me very shortly. Manus china manufacturing pmi rises for Third Straight month, underscoring a robust economy. Preparing for payrolls, we look ahead to the u. S. On implement data after better than expected year with americas jobs reports. Give mccormick. Keep it coming. Theresa may raises her game at the third round of brexit talks. I think the Prime Minister members oft the british cabinet. I have been saying for a while they need to make sure they are negotiating good terms. Manus welcome to bloomberg daybreak europe, our flagship morning show in the city of london. Futures at set for a mixed opening at the moment, slightly higher around the rest of europe. London is the shape lower. Asia has had a good run. , the economicbody data you are looking at. For the exports rising strongest exports rise in nearly seven years. What is is really underpinning the perspective of growth. London down 0. 2 , the rest of the European Equity markets are higher. Asian equities are up, ate straight months of gains. Can that continue . Sincengest winning streak 2007. Singapore, malaysia, indonesia are closed. The question for you as you look at markets is this. Do you at on implement data in the United States, one await 08,000. D 1 will that data add to the fact that it can raise rates . The dollar yuan story is incredibly important. Chinese data is rising. That is giving breath to the market, export orders are the strongest since 2010 and you are seeing a strength in the yuan impededsaid to not have growth. You are looking at the 12 consecutive session, one short of a record set in september 2010. The bottom of your screen is the dollar index. Steven mnuchin commented yesterday that a weaker greenback would boost trade and it was not worrying him too much. The dollar index has managed to turn itself around, perhaps deflected of the weakest consumption of core inflation in 2. 5 years. That did not help things either. Did that change the feds perspective . For the First Six Months, the dollar index will slide for the First Time Since 2007. Are we sure we do not know what else to do . Lets look at the bond markets and have a look at bund. London, paris, back to flat. The dax is up 18 of 1 . Bond markets are higher. Japanese bonds, but we had a take on the buns. Jgbs fall back below zero for the First Time Since november. The bond trade, going back to the conversation i started at the 6 00 a. M. Show with, you earn nearly 1 in the month of august in the bond markets in the United States versus barely eking out 2 10 of 1 in the equity markets. Juliette saly is standing by with your first word news. Juliette in the u. S. , donald trump is considering an increase in the debt limit to 5. 9 billion for Hurricane Harvey. According to two in ministration officials, the request would include 5. 5 billion to the federal Emergency Management agency with a balance going to the Small Business administration. Atwill speak to gary cohn 2 30 p. M. U. K. Time. U. S. Customs and Border Protection has selected for vendors to build concrete prototypes for Donald Trumps promised order role. They will build order wall. It will build on a location near san diego. It can have the government paying 500,000 for each mockup. Theresa may is coming under increasing pressure after the latest round of brexit talks ended in stalemate. Saiduropean negotiator britain is refusing to acknowledge their obligations. London mayor sadiq khan has told bloomberg the government needs to get its act together. They have to raise their game. Ideal regularly with members of the british cabinet and i have been saying for a while now, they need to make sure they negotiate in good terms with the positivity with the eu. Juliette there has been more evidence in china that the economy may remain robust enough to offer policymakers more room to curb financial with. Estimates for the third consecutive month of expansion. The Chinese Communist party is likely to begin its anticipated congress on october 18. They officially start the clock on the biggest clinical reshuffle since 2012. It comes after a meeting of the parties politico and it requires approval from the committee. The peso fell 1 after the economies ministers said the nation needs to prepare for an alternative with the north American Free trade agreement. Brickt trumps a red features prominently. Since it wrapped up, hes threatened to pull america out of the deal four times. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. Asia,Public Holidays in including here in singapore. Lets look at japan and australia. The nikkei higher at. 25 . You are seeing strong by coming in the csi 300 and over in india, the nitze up for tenths of 1 . Asian stocks on track for a weekly gain as we await u. S. Payroll numbers. Quite incredible, a huge net income. These are stocks that are short target and cimb is saying its core loss is almost doubled from a year earlier. A lot of worries about debt level. This after a note from j. P. Morgan that they are too attractive to ignore and they are a beautiful buying opportunity. Cba in australia, the largest bank, there reports found leads of dollars of transactions in the u. S. , europe, and asia had not been properly monitored. Fair bit of data coming out of south korea. Gdp for the Second Quarter remaining at 2. 7 as expected. The incident economy between trade and gdp. What we are seeing is appreciating the nations currency against its main export ours, flagging a few sites. There is a few risks to the outlook. That is the latest on koreas economy, 2. 7 gdp for the Second Quarter. A beautiful buying opportunity. Juliette saly with the very latest in singapore. Round three ring a bell . Brexit talks failed to deliver a breakthrough. Governmentthe dish remain at loggerheads over citizens of rights, the u. K. Financial obligations, and toss. This is putting pressure on theresa may to step in and negotiate a deal herself. Caroline hyde caught up with sadiq khan, who said they must raise their game. Other things i have been lobbying the government about is more certainty. One of the things, it is not lifting its deals by march 2019. I am pleased the government is listening. That means hopefully banks and Financial Institutions when out know there will not be a cliff edge fall in tort in march 2019. They should be short they listen to the needs. They should pay sooner rather than later, continue mentorship with the zynga market at least until the traditional arrangement. After we leave the eu, should be members of the market. As for the negotiations to carry on, the government should recognize why the market is so important. Base and others will have the certainty they need that we will not follow across the cliff edge. Negotiations seem to be stumbling. Is that a concern for you . I mean with i meet regularly with the british cabinet. I make sure they negotiate with whatterms with recognizing takes place before negotiations. David davis and his team should be raising their game. Its important to recognize, you have to recognize issues with the eu is not possible for someone to leave the eu on better terms than those inside the eu club. We have to recognize that. Goodwill needsze to be done. Guaranteee castiron that resources in london and the what theyspective of say, we will give you the tiron air t that castiron guarantee. Look, it is in nobodys interest to have a bad deal in the u. K. And eu. Its bad for the u. K. And bad for the eu. Manus sadiq khan speaking to Caroline Hyde on brexit. But pressure on the british Prime Minister, to raise the deliver. The quid pro quo that sterling has delivered a fairly tough month to say the very least. This is sterling under pressure. We have fallen just over 2 in the last month. The risk of no territory seemstion very agreement to increase with the strong words of barnier. Pound losses are accelerating. 2. 7 . Therey you, who has spent past hour with me on set talking about the pound and expectations, they are fairly low to say the least. In terms of where we are. We might be surprised. Could it be theresa may actually walks in to the negotiations and deliver what some people are saying is a grand bargain . Does she have the political reptiles to do that . Gravitas to do that . They are all coalescing in to know via in italy. Joininga special guest us. He judges with the latest. He joins us with the latest. Good morning. You are the former president of the European Central bank. Welcome to daybreak, certain. Sir. Y good morning a very good morning. In 2007. Ing you outt time for us to roll the trichet handbook and talk about brutal moves . Sayt first of all, let me that we have both. Strong, that is quite that comes out of the great economy in europe which is now very high i have to say. That is good, i have to say. The confidence is very high, highest in 10 years. A lot of positives in this respect. On the other hand, you have a weak dollar and that is part of the issue. Clearly the dollar is weak against all currencies, not just against the eu not against the euro, i see the same phenomenon. A very complex phenomenon with multiple dimensions, of course. Including political ones. Manus the story that you tell is reaffirmed in the data, isnt it . It is strong data. Things are recovering. My question to you then would be, should we expect a more aggressive policy maneuver from the European Central bank . We saw the governor lift the lid on that concentric just a few months ago. Given what you have just said, should we expect a more aggressive form from the ecb . Is that a fair take . Guest the paradox is that we have a very good economy now and i hope there is no time for complacency, i hope it will go on. Havee same time, we inflation, which remains abnormally low. The headline inflation has been 1. 5 in the last reading, but the core inflation is 1. 2 . So we still have a phenomenon which would call the central bank to be cautious in its own policy. Everybody knows the accommodating policy cannot last forever, neither in europe or the rest of the world. So the government, the social partners, the private sector, has to cope with that and know , the policy will be less accommodative and that calls for Structural Reforms that are overdue in many countries and certainly, particularly in europe. I hope very much this window of opportunity will turn out to be utilized for Structural Reforms. Again, which are overdue. In my country and all over europe. Manus indeed, and we will talk about your country in just a moment. One final inside which i would like to gleam from you. We in the media will spend the next five days ruminating about whether mario draghi should have been really in the value of the euro. You did. What did you learn and what would you advise anybody running central bank in terms of that . Do you regret having gone for that take verbal intervention . Is there a warning you would pass along in terms of wisdom to this ecb government . Regretknow, certainly no to have marks on the intervention. I remember very much the comments of linguistic nature. Surprising in the years of anguished speaking friends, they told me they were strong. For me, it was not that strong. Anyway, what is important is to be sure that you are capturing something that is not only your own position, but the position understood by the international immunity. As i already said, the problem andhat the dollar is weak that is, in my opinion, one of the main problems we have. The dollar is weak and it is not only for reasons that are economic or financial in nature, but reasons that are also of a political nature. I hope very much that this be corrected progressively. Manus i want to reflect on your own country and the challenges of the reformation. Challenges, decades of economic reform, have proved beyond the countrys last three leaders, the words of many analysts. What makes us believe from has the wherewithal, the ability, to deliver reform that you refer to that is so badly needed . Sayt first of all, one can that he was elected on the basis of a program of reform. So there was no trap. He was not hiding what he wanted to do. That of course gives him quite a lot of Political Capital to receive. Second, he has a clear majority in the parliament and third, he has convinced himself that reforms are overdue. If france wants to eliminate the massive unemployment that has been there for so many years. It seems to me that he has a window of opportunity. Say, with, i have to elaborating on labor market reform. We will see. But he has all the cards in his hand. Direction andthis im sure that it is not beyond reform that is badly needed in my country. We will see, but i think we can give him a lot of credit for embarking very actively and from the start, not waiting. Part of the problem of his predecessors was that they were waiting and waiting and waiting and as experience has them straight, you have to be up front in reform. Manus and there is a great difference between the rhetoric of yourself and delivery. What is the rhetoric of macron . Is not going to be a straight forward road. How long to see happy for you and others say, he is delivering. . Question, not of semantics, but of decisions. And decisions are put into action. We will have that a new post at the end of september, i expect quite rapidly, we can say on this particular domain, which is so important of labor market reforms, things are not done. That it takes time for the economic sequences. Again, as i said, there are many other areas that are overdue and i would say personally, one of the most important ones after what has been decided already, would certainly be the youth unemployment, where france has a very highto eliminate youth unemployment. Manus thank you so much for being with us today. Cernobbio, i hear the food is very good. Up next on bloomberg, we will get an update on the business flash. These are some of the business headlines we have for you today. Southwest airlines is working to ensure the city supply of jet fuel after Hurricane Harvey caused a shutdown on crude Oil Refineries and factories on the coast. The ceo of the largest American Airline said, i do not expect any problem, but this is an evolving crisis. The rush to guarantee a field the fallout. Eighs record rainfall. Pimco founder is raising its fees when most Money Managers are slashing costs. 92 billion fund will increase five cents per 100 in october for most share classes, institutional class shares are brought up to 50 of 100. Investors are moving into their money to low fleets, raising pressure on Money Managers to compete by reducing costs. Billionaire is a valuing possible bid for consilium and alaris. Aluminumto grow operations overseas. Consilium constantly am sales ium sales havell increased considerably. They do not reply amy lee to email queries. Immediately to email queries. Those are your major headlines on first word news. Cernobbio. K to great to see you this morning, jim. I hope you had a good time in cernobbio. Theerday i waxed on about market and there was new low after low and the brunt of the market is something we should be worried about. Are you worried about the breadth of the market in the unites states of america . Guest not really and its great to be with you. I think the variation of returns between different securities with the market hitting new highs but still quite a lot of stocks at a 52 week low is in a perverse way, good news. The charts wouldnt agree, but if you are an active stock selector, this is good news. Some are going up and some are going down. The scope for active stocks to be successful for a while. That has been true so far this year every month. I think, innocence for some people, the lack of bread in the inket is actually breadth the market is actually good news. Manus we have the jobs report later today. Disappointing pc. Market, if, the bond i am in bond markets, i would have earned nearly 1 and i will have only earned. 2 in equities this month. What is the bond market telling you . I just showing you the stocks versus bond market. Was just wondering, is the bond market sending me a bigger running shot that i am aware of . Guest it could become a menace. One of the things it could be, manus. One of the things im concerned of is a on looking for signs of inflation. They want an excuse to normalize Interest Rates. There is a lot going on in the economy, notably the implementation of technology at a rapid pace and the aging demographic. Prices are under pressure, there is relatively little Pricing Power in the Global Economy for manufacturer commodities. The hope of inflation that many policymakers have might be disappointed. Aboutggesting that run we will seeyields, low inflation environment. That is not to say that this should not raise rates. It still should raise rates. Even as zero inflation, a point or two of Interest Rates is not about idea. , time hasortunately stolen against us. One quick line. About the fed, it was like shooting fish in a barrel in 2008. It harder. In a word, its getting harder. In a word, what does that mean to you . Manus i was talking about warren buffett. Sorry, the great clock has ticked down on us. He will have more to say when he is back in the studio with us. The reform continues. Welcome to bloomberg markets, this is the european open. Cap check is about to start trading here in europe and i have our time, we will bring you the first trade of the day. Im guy johnson in london, matt miller in berlin. What are we watching this friday morning . Jobs day in the usa. Payroll matters after yesterday. Weak inflation number