Delay of aramcos ipo which made push to be the biggest share sail into 2019. We will ask why. China calls. Economic growth science shows signs of growth. Retail sales taking lower relative to expectations. Does the chinese economy peaked in the first half of the year . That we will be following story this morning. Also looking at european futures. Not a lot to push us around this morning so maybe we will get some impetus from the china data. We see the euro stoxx 50 futures down one third of 4 and dax futures down. 251 . If you take a look at bunds, the yield is rising so investors selling off the perceived safety of German Government debt albeit a miniscule amount there and pushing the yield up right now to 0. 41 percent. We are starting to get a little bit of a firmer picture this morning but not a lot of movement after the drop in asian stocks. Guy that is exactly what we are seeing on the gmm and the currency column telling the story. But how many are in great. A bit of movement in the aussie dollar and movement in the noki. Decentets are in move. We have to figure out what the chinese data tells you. A lot of things the market has to think about, cpi data out of the u. S. And the markets marking time. Which direction we move in next, risk on, resolved. It will be an interesting story. Lets catch up with everything else. Korea has made an exclusive explicit threat on japan. Quoting an official saying the four main islands should be sunken into the sea. Thepanese official said threat was an abominable provocation. E fourth time that a u. S. President has ordered a halt area they maintained the u. S. s tough tonce even as it seeks help resolve the north Korean Nuclear crisis. According to one u. S. Official, the team is zeroing in on how damaging information through social media. Saudi arabia is preparing contingency plans for possible in 2019. An ipo while the government is still aiming for saudi aramco ipo in the second half of next year that timetable is looking increasingly tight. The country may not make an announcement until late next month when it is holding an Investor Conference in riyadh. The face of chinas economic expansion unexpected we unexpectedly [inaudible] slowed. Set investments output rose in august while retail sales expanded over 10 . In the move to rein in credit expansion appears to be working. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Guy thank you. A big day for Central Banks. Join go to singapore and mark cudmore. Good to see you. The pound has been strengthening against the euro five days in a row if we include today. It has been a decent move and i am wondering what is priced in terms of expectations for the vote count at the boe. Is it 603, we raced in the fact of how they may make a switch here . Are 63 andarkets 72. Has shiftedentiment on sterling. In august it was looking negative and people were playing the long same, the brexit negotiations are going badly, there are no negative real yields in the u. K. And people are selling straley on rallies. The theme has james and september changed in some timber. The market wants to buy sterling. Even though the skew, the Surprise Initiative will hinge, the market is looking for positive news and looking to force the bank of england into that rate rise. Euro swiss has been an interesting move. I have the chart up over the last year and you can see the incredible strength of the euro against the swiss. Also coming out with a Rate Decision. You expecting to hear on the currency move . Mark the currency is still overvalued. That is the most important for the s p. The swiss franc is 33 overvalued over the dollar according to imf measures. It does not negate the fact that this was currency is still the most expensive currency in the parityn purchasing power metrics and that still matters. I do not see why the smb will lay off now. The chinese credit impulse story is one that has been worth paying attention to. Where chinese credit goes the Global Economy certainly seems to follow. The credit impulses going negative in china and i should be worried . Mark there is two ways of skewing this, some of the numbers were a little bit disappointing. Fixed Asset Investment goods the slowest rate we have seen this century. Retail sales and Industrial Production are the slowest rate. We are seeing a slowdown, the ping put seems to be waning. These are still superhigh numbers. Youre on your growth is still an immense number. The chinese economy is strong, maybe we are seeing less of the positive credit impulse we saw a earlier. Second bit ofthe change so it is turning to wayne a little bit. Matt on that note, i keep using going back to the great chart i found on the mliv blog this morning of Industrial Metals wi th wti and the two have tracked each other quite nicely since 20 12 only diverting last year after they both hit lows. The Metals Prices have come still has a ways to go. As the market expecting oil to gain back up or metals to come back down . Mark there might be a reconvergence, not a full reconvergence. Metals and oil used to be derivatives of global growth. We saw shifts and that change the dynamics. It was a supply driven market rather than a demand driven market. Have seen speculation and in china, metals got annexed a boost. There are signs the oil market is moving into balance and it might start to be more demand driven and the that provides motivation for the idea that maybe oil can, banks can start trying to close the gap with metals. No one expects to fully close the gap. Guy thank you. Mark cudmore and the rest of the mliv team can be found at mliv. Smart analysis through the day. Pliv can be found at the bank of england. Matt we will bring you that decision at noon u. K. Time today. Wonnacott p. M. For those of you watching from the continent. So saudi arabia is preparing contingency plans to a possible delay of the ipo of the state owned company. The partial sale of iraqi is still scheduled for 2018. The timetable is starting to look tight. s get more on this number on this. What do we know about the drivers of this possible delay . Is some of it aramco waiting for or saudi waiting for oil prices to rebound before they go out with this massive ipo . That is a smaller part of it but the primary driver of it is the fact they had not chosen an exchange. This delay will be a major setback for the kingdom of saudi arabia which is looking to project itself as a country that is seeing some large reforms. It is opening up to foreign capital and this is part of that story. They have not chosen and exchange, they have been talking to the london and New York Stock Exchange and the nikkei trying to carve out the best deal. The regulatory and preparatory work that follows before you sell the shares, that has not happened yet. That is what could push the timeline back, that is why they are drawing up some of the scenarios. They said in a statement the ipo remains on track and the process is underway and they are focused on ensuring that all work is completed at the very highest standards. They have picked advisors for the ipo. Jpmorgan chase, morgan stanley, hsbc, and they brought on the independent wall street consultant Michael Klein to advise the oil ministry. A critical part of vision 2030. Can i read anything from the delay in the aramco ipo, the possibility of it and the vision 2030 plan . The riskeah, that is right there, the execution risk. It is the credibility of the saudi Reform Program that they have been pushing very hard and that is the feedback i have been getting from some of the investors i have been speaking to. While prices are going to be part of that story. The fact that they are not where they would ideally be to help eight 2 trillion valuation, you are looking at a 5 stake of 100 billion, four times the size of the 25 billion ipo from alibaba in 2014. Hey have room to move if you want to keep that credibility and secure the foreign capital they have been going on and on about. Joining us about the aramco story. Trading at 750. We will see how that trades through the rest of the day. Next, we will count down to the german election and talk about where we are in terms of coalition building. It is the snb Rate Decision out of bern. A 30 a. M. Out of london. We will get an analysis aware that frank is headed of where the franc is headed. This is bloomberg. Guy 14 minutes to the start of cash trading in europe on at goodies. We will cut you down to the open and bring you the details. Lets get a bloomberg is this flash. Business flash. Will wipesaid storms out thirdquarter profits and threatened the companys ability to meet its fullyear earnings target. The Worlds Largest reinsurer has given guidance of my 17 profit of 2 billion euros. The storms and north america at two challenges for the new ceo who is [inaudible] lowcompany was pressured by Interest Rates and competition. Apple is playing the role of kingmaker. According to people familiar with the matter, the iphone maker is in talks to provide 3 bidion in capital to bains for the unit. It may exceed apples are just deal ever. Largest deal ever. A former trader at ubs has been charged with conspiracy and fraud over his suspected role of manipulating the price of precious metals. He is the second person charged in the fixing of gold, silver, platinum, and palladium prices. His attorney promised, we are going to fight this case. A u. S. Judge has revoked Martin Shkrelis bail ordering had to be jaile immediately. He offered a bounty for a strand of former secretary of state Hillary Clintons here. He was stonefaced as the judge handed down the decision and he was led away into a Prisoner Holding cell adjacent to the courtroom. Alibabas cofounder said the retail giant plans to push more heavily into saudi southeast asia. Joe tsai spoke to stephen engle. Quickly want to be able to serve 2 billion consumers over the should years and so we be going outside of china to have access, to have touches with these consumers and with a mobile wallet and also ecommerce is the best way to for us to grow that internationally. Exclusiveore of our access to the Alibaba Group including an interview with the founder, jack ma. Businessour bloomberg flash. Green partyys secretarygeneral said Coalition Talks after the election will be difficult given the weekend position of the spd. Bloomberg, kellner had strong views on a grand coalition. Country not good for a on the longterm to have all these coalitions and so therefore, all parties are asked else is possible. What we need to do is having serious talks and to see what is possible and what is not possible. There is a huge difference as to the right wing part of the conservatives and there a huge gap between us and them. This seems to be quite a challenge. The speculation will start after the election at 6 p. M. On sunday the 24th. It will be a situation where we have complicated talks so we will see. Matt kellner says Coalition Talks will start on october 3 or thereafter. Joining us is Bloomberg News germany government editor. We are playing this part of the game of trying to figure out which coalition we are going to see. It comes down to the math. It is very close to when you look at the polls right now. The races what makes for third place in this election soed on the polls right now exciting, if you like. It looks very much like the christian democrats led by Angela Merkel who has had three terms will win the most votes the social democrats our second right now, the two parties as mr. Kellner points out, have been in this socalled grand coalition of the two biggest parties and the question is the whole deck could be reshuffled on election night. Will this election be decisive, will produce a German Government will it produce a German Government . Tony mic most likely yes. There was talk in britain of a Hung Parliament which is much more difficult than to see and germany because there is more parties in the parliament. Is an outside chance of people have told us this of new elections if it produces a complete deadlock. That would be very, very unlike german politics. Matt if the spd does not want to play ball, if they do not want to go into a grand coalition and would prefer to be in the opposition, which could make some strategic sense for the next election, then you have to get the greens and the stp at least with todays polling numbers to agree to a coalition. It does not seem like one of those the smaller parties want to do that. Tony that may be what they are saying now. On that night we will see or i should say after six caught the am after we were just told. As we were just told. Tough matchup. Green party and Environmental Party in this free market and the Free Democratic party. Deals have been cut four and Angela Merkel has governed with two different partners during her 12 years area this one would be difficult. Wrotetony wrote the book, a book on Angela Merkel so he knows what he is talking about. Germanymberg news government editor. We will take a look at the movers in todays trade including meeting munich re that said it might miss its Profit Guidance for the year. The open is seven minutes away. This is bloomberg. Matt we are minutes away from the open. Lets get your stocks to watch. One of them is munich re. It missed its profit target after hurricanes harvey and earn a irma and thirdquarter profit could be erased because of that. You can see the pictures, we watched that the devastating pictures for weeks. Not a good situation for re ins urer. Guy lets talk about next, the stock. The company up grades its guidance. That is the price target here area that is what the price has done in the yellow line over the last few weeks. I wonder whether or not we will see some sort of a shift in the calls surrounding next and whether that white line needs to come up significantly. The market open is next. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Guy welcome. One minutes ago until cash okuns for equities opens for equities. A littlentinuation of erosion of the rally we saw in the previous days. You have not got many stocks. I think it is three stocks going exdividend today in london. London looks like it will outperform. Underperforming. To point out, the most read story on the bloomberg terminal over the last hour is north korea saying it wants to japan with Nuclear Weapons. As a result, you may see avestors getting into goal little bit more. Check out this chart on my terminal. Even see the open interest in bullion has climbed to the highest since last year. It could be near 1400 very soon. Guy markets opening. 2 iscipated, down by what we are going to get. The cac 40, but thats a little bit more down. Well see what stocks are moving us around. That could be an interesting one. What is next today as well . The cac 40 opening south of the london market. It is a flat open. Let us find out what is going on. Anna is standing by. To bethe market is going a little unnerved by the geopolitics that you mentioned. The latest comments against japan from north korea. A gentle downward drift in the market session in asia. Not big moves by any stretch. To what extent are we going to go that way in europe or plow a different for a . Watch out for the key sectors. A bit of a return of cash to shareholders. Look out for that sector in the insurance sector. Keeping on eye on the imap function. A quick look at the gilt market and what we are seeing in the fixed income space. Big day for u. K. Assets. The expectation is not for any change in Interest Rates. That is what the market is expecting in terms of that ninemember nbc vote. When will the hawks be in ascendancy . We have seen a big shift in Market Expectations around the favor a meeting in the last week or so. When will the hawks be on the rise . Theythey when will arrive . Let us move on and talk about what is going on in the chinese retail space. Data out in china. We had retail sales. We had investment in industry and other factors, all weighing on the market open in asia to some extent. All three measures coming in below estimates and coming in lower than the previous reading. How much do we worry about this . Our colleague in hong kong saying yes, it is slowing in the second half. Two months of the second half in terms of data. Perhaps, slowing in the right places. Slowing in that part of the. Conomy everyone has been talking much more about the investment in the chinese middleclass consumer. That is surely part of the future trend. Guy thank you very much indeed. There is a great chance on the bloomberg chart on the bloomberg. Matt likes it. It is shown in metals, which have risen aggressively and the oil stocks, which may be are in need of ketchup. Take a look at todays market moves and maybe you get some evidence of that, especially following suit. With the indexp points. Rio tinto, glencore, billiton, all trading softer, one. 3 , just shy of 1 . You are seeing those moves coming through. On the upside, i have got Royal Dutch Shell mbps well into the mix. Maybe we are seeing some evidence of that chart coming through. We will wait for next to open and see what the Market Makers make of the numbers and the outlook delivered by that business this morning. The bank of England Monetary Policy Committee gets set to deliver the Rate Decision later today. It is grappling with a familiar tradeoff. That is the dilemma facing policymakers. They will decide whether to start unwinding some of the brexit stimulus put in place last year. Last five days, eurosterling has been on offer. The pound has been bid. Is an 80 chance the bank of england will hike in february. Me. S sitting next to i wish i could. It would be such a nons consensus call to say i think that there is a chance they are going to hike rates in the next six months. Im sorry. I think im with the majority. I really do not think there is a great likelihood of a rate hike. Do i think there is a chance of stronger rhetoric today . Yes, maybe that could come out. Do i think there will be a hange in the voting pattern . No. Let us think through the details. How many times in the last two years have we had the bank of england sending messages about getting ready to hike rates by yearend only to disappoint as we get the numbers suggesting something otherwise . England, the bank of itself was talking about spikes. Inflation over the summer. Why should we be suddenly thinking because of a 29. 9 rate this week that this has changed . Exactly thee is same situation we have been in all the way through. These are numbers about the u. K. Inflation roughly where we thought it would be on the back of a weak pound. Well see what happens over the next few weeks and months with regards to the brexit negotiations. In the circumstance, what with the bank be rushing to right now . Matt we see negative real wage growth. We see consumer indebtedness rising, consumer savings basically nil. As far as the corporate move, the uncertainty makes it hard for ceos to do anything. The psa group saying because he is not getting anything out of brussels, he does not know what to do in the u. K. Economic a decision. Is there anything positive in the u. K. Economy right now . Anything in favor of the u. K. Economy . [laughter] simon i would like to say, a cheap pound, because clearly, would feedope that through into manufacturing in certain sectors and services. Tourism, most obviously. In fairness, over the course of the last 20 odd years, the pound has not really fed that much into an improving situation for the u. K. Even that is something of a mixed blessing. I think for the moment, may be the only thing you can say that is good is the negotiations are starting. We are in the process and we start to get a little more clarity in the months ahead. Is ither thing we can say is not a complete collapse in confidence. For those that were feeling particularly negative 12 months ago, it has not exactly been quite the story of doom and gloom. Absolutelys right. It is the uncertainty that will keep sterling on the back foot and the bank of england being cautious for the moment, because until we have greater clarity, until we get to a point where companies can think about the investment process over the next three or four years, how can they do anything . Uncertainty is the worst thing of all. Guy next has opened up, 8 plus. The outlook statement certainly seems to be doing the business when it comes to the stock. A couple of quick questions. Levels of employment we have we have not9 seen since 1976, 40 years ago. It is a discounting mechanism, but Central Banks are meant to look to to three years forward. Dictate,theory should and i know the lowered it, it should dictate that we start to see wage growth. Simon we are not seeing it. Anna they are looking guy they are looking to bank to three years out. Simon all across the board, we are seeing things that do not fit. You think about the lack of inflation over the course of the last 10 years. He would have thought, giving everything with this, you would have seen inflation. The lack of wage growth is exactly the same story. 135 rightarket is at now. There is nothing above 135 to 150. Simon that is where actually it does get interesting. Got ugly currencies. The pound to see above 135. If we get it above that level, it changes very rapidly. It can go through very rapidly indeed. In the market, which has shown its ability, that is where the risk will be. The bank of england will be happy. Whether you favor growth or your inflation target. Simon will stick around. Simon derrick, chief strategist. We will bring you the breaking news the bank of england. Follow the decision that comes at midday u. K. Time. Which way does andy vote today, matt . Matt you can also think of thomas you. Take a look at tv. I have got it up here on my screen. Just type tv. Interactive television. If you click on that panel, you can get radio. If you click on this panel. The third panel, even coverage. You can use that to watch the u. K. s Rate Decision at noon, u. K. Time, at 1 00 p. M. On the continent. Definitely, tv is a useful function. The boe is not the only one keeping a close eye on inflation policy makers at the fed. We will get Consumer Price meeting readings later today. We will discuss. This is bloomberg. Matt welcome back to Bloomberg Markets european open. I am matt miller in berlin alongside guy johnson at our European Headquarters in london. Take a look at the equity trade today. We have red arrows across the board. We are not talking about harsh moves at all. You could call the stoxx 600 little changed right now. Utilities, materials, weighing on the index. So financials at the top, with those two gaining, maybe that is a good sign for equities. We see very Little Movement in the european equities. You see my imap right now, which is how i knew that. Andfinancials i. T. Financial skating. I love the imap function actually. That is what i have been using for a few years now. Beneficial is preparing for next weeks policy meeting will get an update of the inflation picture today cpi data out for our best. It is inspected to show prices rose 1. 8 from a year earlier, up from july is 1. 7 reading, the headline number. With. S. Dollar held gains revived hope for tax reform in america. , bank of new york, chief currency strategist, still with us. Let me get your take on the dollar here. It has been a tough year for the greenback. Is it that you bounce back, simon . Simon it depends on what the fed does next week. What is fascinating about the last nine months is you have a three times sos far and the dollar has done nothing but gone down. You make interesting points about what dies currency. Over the course of the last few about qe ins been one form or another. That is why i think what happens next week is really fascinating. We have a fed that starts directionally signaled us and reduce these balance sheet. The astonishing scale of that balance sheet, you can start to get a lot more interesting. You could have a stronger dollar on the back of that. I am not certain i agree with william from the San Francisco fed and the comments about it being a very boring process. I think it could be a lot more interesting. Guy i want to come back to an argument that was largely discredited but i heard a lot over the last few days, which is the fed needs to hike because the fed needs to hike. I. E. , it needs to get itself back into a position where i can run a reasonable Monetary Policy in the next downturn. Argument had been put to bed six months ago. Yet i am hearing it more and more over the last few days. Recognizehink we all we have markets that are extraordinary. We recognize a lot of what has driven that has been what is happening in the bond markets. I think there is a recognition because at some point, there will be a downside, and the fed means somewhat of a munition to deal with it. It does not have any ability to cut Interest Rates. It will have to focus on the qe they may havelst the ability to answer the balance sheet, there is other Central Banks out there starting to get to the upper limits of what they can buy. Whether is debate over negative to positive rates really work, the jurys still out. You have not gone so far that you can cut with normal rates. You dont know much further you can go with qe. What is left . Are we talking about the terrible world, helicopter money . That is all there is left if they cannot get rates or normalize. Me, i am not hit your negro got helicopter money, as long as they get it here. Whatut the president about the government and really the political impact on currencies . How much does donald trump and the u. S. Congress impact the dollar, and is there any hope likesome of these things tax reform, like regulatory reform, like infrastructure spending, could actually happen and lift the currency . Simon if we go back to 10 months ago and that astonishing few days after the election, a lot of the rally that took place in the dollar was based on the steepening of the yield curve, and that was based on the idea that there was going to be this astonishing spending, these been through these business friendly the yields have fallen lower. Interesting, if you actually look at any of the specific issues that have come , they tended to have only the most marginal lasting impact. Kind of a 24hour blip in the dollar lower. It has kind of come back. I think that is the real story. This is actually a market that to a large degree over the course of the last nine months has become more immune to political issues. Not just in the u. S. , but globally. It has become more immune to geopolitics and the lack of response to what is happening in north korea is a great measure of this. That is the only thing that matters. Guy simon, thank you very much. Cyan derek simon derrick. Up next, 10 days until the german election. We will ask the green partys campaign chief his idea of a grand religion. That is next. This is bloomberg. Guy 21 minutes into the equity session here in europe. Let us take a quick look at where we stand in terms of the markets we are watching. Not getting a clear sense of direction from european equities this morning. Got to refresh. Next is one of the big gainers on the downside. The percentage change set up on the mov screen. Experienced trading a little lower. I think this is more interesting. Rio tinto, glencore, and bhp billiton on offer this morning. Bought stocks are being this morning. Royal dutch shell, bp, both bid this morning. The real standout story, next. Im sure you are extremely familiar with it. Need to reminde our viewers what next is. It is like when we talk about car phone. Ar phon it is like the jc 20 of great britain. Guy sorry, what is jcpenney . [laughter] guy it is an indication of the u. K. Consumer, which i think is interesting, matt. Matt the morrison story that is a Grocery Store in the u. K. Also is a positive one. The u. K. Consumer despite the problems in the economy, it seems to be fairly resilient for now. Let us talk about what is going on here in germany. The green party secretarygeneral and campaign chief said Coalition Talks will be difficult given the weekend position of the spd. Bloomberg, he had strong views on grand coalitions. Is not good for the country in the long term to have all therefore,tions, so all parties are asked to see what else is possible. We need to have serious talks end to see what is possible and maybe what is not possible. Derrick, chief currency strategist with us. Here in germany, it is kind of a parlor game trying to figure out what the next coalition is going to look like. Let me ask you as an investor or currency strategist, as long as Angela Merkel is the chancellor of germany, does it really make a difference . Simon no, i do not think it does. I think that one of the things the market has not worried about this year has been the german election. Theot a lot of attention at start of the year and people were wondering whether there would be some kind of shift. Then everybody realized that almost any meaningful outcome, proeuro, pro eurozone, oe you largelys therefore relaxed. You pull back, and look slightly more broadly at europe, the story this year has been about using political concerns. Once the french president ial election was underway, that became far less of an issue. We have the dutch election which works out with nothing terribly surprising. The italian election has been pushed back. It does not suggest there will be any radical shifts in terms of policy. Market, generally speaking, is discounted in the second half of the year. Guy i wanted to talk about what is happening with the euro right now. Year. S this is one the skew is now positive for the first time in eight years. The market one year route is predicting the euro will be higher than where it is now. That is the short version of that. Would you buy that . Simon yeah, i would. My reason for arguing that is it comes back to the. What has been driving currencies over the last two years . It has been shifting quantitative easing and asset personages or whatever asset purchases. Yes, once you got the first frenchf the president ial election out of the way, things got a lot better. Another thing that happened was the ecb reduced its purchases from 80 billion to 60 billion per month. Lo and behold, the euro starts going up. We are starting to factor in the next move. Are we going to go to 20 . In that circumstance guy isnt it in that price already . That has got to be priced . Why do we go higher . Simon except, is it . You could argue the move has been primarily driven by the previous reduction. I do agree, there is a factor in there, but until we actually see the introduction of that, i still think the interest is not whether it is priced in but how and a job they are doing tempering. The reason simons largest it around is because we need to talk about what is happening next. We will be seeing a decision coming out. We will talk about the Swiss National bank. The decision is out imminently. This is bloomberg. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Matt pride and prejudice. Traders have been buying the pound for five days versus the euro. While the bank of england force a rethink at noon today . Preparedom is said to for a delay of aramcos ipo, which could push what may be the Worlds Largest sale of all time back into 2019. Cools. Economic growth shows more signs of slowing its factory output, investment, and retail sales, all ticking lower. Did it peaked in the first half of the year . Good morning, and welcome to Bloomberg Markets european open. Miller in berlin alongside guy johnson at bloombergs European Headquarters in london. Can go toally, you your screen and look at what they have done. They have done nothing. It is all about tone and expectations. The swiss franc is at this point in time getting a little bit of strength, and the reason for that is that the swiss franc apparently, according to the s p, is significantly overvalued. We have not seen a change in tone. We have seen a downgrading of gdp forecast. S p sees ites just under 1. 5 . The swiss franc bouncing back. This is quite interesting. This has been nothing to see here for so long. What do you make of this . Matt i just wanted a little pro tip for newbies on the bloomberg. You can type in snp. N need to goe to these other places. You can get a snapshot of what is going on at the Swiss National bank. You can see the decision in the headlines and click on events and find out when speakers are coming up here at a number of different ones to give you all the information you need. You can do this with any central bank. O andn type in fed pressures. We had the recovery in the euro over the course. The swiss franc thankfully has weakened a little bit. It tells you how ineffective these external monetary policies have been to contain swiss franc strength overall. That . Ould you argue you cannot argue the counterfactual. Simon it is hard to say what would have happened if they had not done that. Theyact of the matter is, have extraordinarily easy Monetary Policy strategies within switzerland. They had the floor in. Ecorate at 75. That is doing nothing right now . Simon in terms of currency, nothing at all. Just look around elsewhere. Ask what impact you have. Euro in the second half of 2014. The euro went from 140 to 120. It did move against eurosterling and gold. That was a dollar move, about what the fed was doing with tapering, not about negative deposit rate. When they put in their deposit rates from 122 105. Arguing a negative deposit rate will actually help reach a new currency, it is not there. What happened to the swiss franc is exactly the same thing. Int we see flareups geopolitical tensions in asia today. Our most read story on the bloomberg is north korea saying japan should be sunk with Nuclear Weapons. Still the goto currency a lot of the yen along with the yen . Is interest in that we have boiled down at the goto currencies are. Four tod years ago five years ago, you have the dollar in that list your you look at the performance of currencies under political strategies which have risen, the dollar has been under pressure. Yes, i think it is about the swiss franc and a do think it is about the yen. I would argue that maybe Something Like the aussie dollar would do relatively well because gold is well in that circumstance. Guy north korea comes out and says we are going to sink japan, and that is good for the end . Simon i am with you about the logic holiday of this from the of this. Cality yen traded so strong the world Central Banks had to step in for the first time i remember in 15 , to stop themore yen strengthening. That is truly extraordinary. That has been the case all the way since 1995. It is about the fact that there choicending currency of for leverage trades. Matt i am going to rip up the script here. I hope guy is not to put off by this. I pulled up the bitcoin chart and the reason we are talking about currencies there is a debate, is it or isnt it . To 5,000. Up one of the interesting things is a lot of investors are taught about maybe the possibility of people going here to hide using bitcoin for a safe haven. At least chinese investors when they want to get their own money out of currencies. What do you think of the debate over bitcoin as jamie dimon has said he would fire any trader working a move on this currency . Simon i cannot speak for what jamie dimon might say. I think my view would be that i look at bitcoin and in a time when you try to look for a safe haven, im not necessarily istain a cryptocurrency where i would want to be focusing my energies. When you look at the recent performance of bitcoin, you come to suggest the Broader Market has not taken that you either. I think in times of real stress, you want to have something you genuinely understand. Matt can we just keep in mind that this bit of software code, simon, has claimed to even if it has come down from almost trade, it is still bitcoin. If you look at the longterm chart, it is amazing that something people were mining with nintendos is now trading for 4000 a pop. Is this a fraud . Say anythingd not like that. I do not know enough about it. What i would say is that any price that moves like that looks an awful lot like a bubble to me. Guy things tend to go up, and the come down. Isnt the yen strength simplly down to repatriation flows . Simon that is the two points. It is about repatriation flows and about the fact that when it comes to the trade, the yen has been the currency of choice for 20 year years 23 years now. That brings money back in. You can go back to 1998 and you can see there was a move in dollar yen of october of that year, precisely the point you would have thought the yen would weaken. It moved from 130 to 111. Guy we are not going to leave you there really. Simon derrick, chief currency strategist, will join match and i on Bloomberg Radio in 20 minutes time. Nice to get question then. If you are watching, keep them coming. The way to do it, use the tv functionality. Click on the interactive tv. What you get down here in is asked the guest of question. It is in confidence. You can also message matt and i directly on the bloomberg. Up next, you cant implement hit the 42 year low. We will discuss what is happening in the bond market and carneys conundrum. This is bloomberg. Matt welcome back to Bloomberg Markets european open. 40 minutes into the trading day. Let us see how things are shaping up, although we have red arrows across the board. It is interesting if you look under the hood. We have the stoxx 600 down. 1 and slightly bigger drops on the. 025 . Nt of you see a different picture because you have energy, consumer staples, Consumer Discretionary shares, climbing. Everything else falling. Everything is shifted in this market. You have tech stocks, bank stocks gaining, and they are now back down again. You have still got materials at the bottom, but you have Energy Prices up. A very interesting market to watch. It changed inside while on the outside you hardly see anything at all. Bloomberg first word news with sebastian salek. Sebastian. Has made north korea and a closet threat to use a Nuclear Weapon on japan. Agencyterun news an said the four items of japan nked into the sea. In the u. S. , donald trump has blocked chinese back investor from buying a semiconductor, the fourth time in a quarter of a century the u. S. President has ordered a foreign takeover of american owned stock because of National Security risks. Seeks chinas help to resolve the north Korean Nuclear crisis. Russias efforts to improve it is a red hot focus of Robert Muellers investigation into the 2016 election and possible links to Donald Trumps associate. According to one associate familiar with the matter it is also said to be seeking additional evidence from Companies Like facebook and twitter about what happened on the network. Saudi arabia is preparing contents and she plans for a delay contends and contingency plans. While the government is aiming for a saudi aramco ipo in the second half of next year, the timetable is looking increasingly tight. The country may not make an announcement until late last month next month. Pace of chinas economic expansion unexpectedly caused last month. Industrial output rose in 6 from a year earlier. Retail sales expanded just over 10 . Expansion. Reign in global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Englandsank of Monetary Policy committee gets set to deliver its latest policy decision and today. Today. You can inflation on the rise again while wages remain stubbornly low, hurting consumers. That is the dilemma facing policymakers. With us now, the head of rate strategy and economics at ubs. Good morning. He looks at the numbers and he does what . Is a theres certainly fair chance that he joins the hawks for a rate hike. If you look at the speech he made in late june when he suggested he might vote for a hike later in the year, some of the conditions he stated for not voting at that point for a hike have arguably cited to come together. That said, he was very worried about the lack of Wage Inflation. He explained why he thought it had not come through and as we sit here, it still has not. There are reasons for him to join the hawks, but there are certainly reasons for him to stay at this point. Guy the markets have been buying sterling. It started in august and come through into september. When we saw the inflation data earlier this week, it continued. An market is now pricing in 80 probability that they raise rates in february. Everybody i put these numbers to those yeah, but i cannot see that happening. Are you in that camp as well . John we are. We do not think there will be a hike for the foreseeable future. That said, inflation is well above target. On appointment is at historic lows or close to them. And there are reasons for the hawks to be acting or suggesting they should ask, as they are. I think that one of the biggest issues for us is just the fact that activity is not keeping up with either the bank of englands forecast. They have to keep revising them down. Or trend. The reason for that all comes back to brexit essentially. That is not going away. The elephant in the room for the npc. They cannot really refer to it refer to it anymore as a big worry. When they did so, they were accused of interfering with the political process and compromising their independence. It is not going away. The negotiations in our you are not making significant headway, to put it mildly, and therefore, we can growth will be underwhelming. That is what is stopping the npc from turning talk into action. Matt what will they do about inflation if it continues at this pace . Isnt that a problem for the economy that they have to deal with . John it can become one if it starts to feed through into Wage Inflation. Without that, as he are consistently seeing, it is just squeezing the consumer and creating a headwind to consumption in the u k. The other thing about cpi is there was widespread expectations when we published predicted cpiwe would be a 2. 9 in august, which is exactly where it is. We predicted it would peak north of 3 in the next two or three months. Stand by that. More importantly, the bank of england is saying they expect cpi to reach its peak. If that does not happen and for any reason it keeps heading to a for longer and significantly higher rate, there is debate to be had. Inflation is largely on track with where most people thought it would be based on the extent of the fall in sterling last year, and therefore at this point, it would seem the best thing to do is to wait and see whether it levels off, whether it feeds into Wage Inflation, and to what extent Growth Continues to be hit by the lack of progress in brexit negotiations. Matt where do you see gilts . 1. 2 , 1. 1 . John in a word, yes. The 10year is gilts. None is where we are now. Where we therefore have a little bit of a difference of opinion is in these rates. The first hike is almost fully priced for the first half of next year. We do not think that is going to happen, but what we tend to see is the Market Selling off into these npc meetings and as the weaker data prints in the aftermath, we see the height expectations unwind, and we suspect that will happen again. Guy shouldnt they be hiking rates . John if they had some reason to think that Wage Inflation was going to materially pick up soon, then yes. Guy if these numbers keep going down john their interpretation this is interesting. Andrew is seen as the potential. Ext talk off the rank if you look at a speech he made in june, he goes into a long list of reasons as to why the phillips curve does not look like it used to, why there is not any inflation to look at for these rates. He talks about the big impact for my lack of collective bargaining. The visibility of labor, the doubling of the rate of selfemployment, which has impaction with his as well. It may well be that Wage Inflation is going to pick up around the corner of my and if it does, they should act. If it does not, they have to be very careful because if you squeeze the consumer even harder by raising borrowing costs when real earnings are negative, you risk slowing the economy to a standstill without any ammunition to find the next downturn. Guy john wraith, the head of u. K. Rates strategy at economics. We will bring you the breaking newss the policy decision at midday u. K. Time. What will andy haldane do today . Be taking bmw could to secure critical components of electric car batteries. That story, next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. 53 minutes into the session. Stocks are not really doing much , falling a little bit across the board. Bmw has said it is prepared to ines as it looks to secure cobalt and lithium used in electric car batteries. I think this is an amazing story. They are willing to buy mines. Electric powered transport being pushed ahead by the diesel concerns here in germany and around the world. We are taking a special look into this this week in our electric futures series. We are analyzing the risk factors that could delay or derail the adoption of chargeable cars. Joining us now is an analyst for Bloomberg New energy finance. Seems to be all of a sudden an amazing amount of momentum. I was at the frankfurt auto show a couple of days ago. It seems like a sea change. Every automaker is time to outdo the other with how many billions it is going to invest in electric cars. Is this really going to happen . Colin the momentum sure is sideng from a number of street we talked about a few of those the last few days. Side on where this could go wrong, there are still some things we need to keep an eye on, and one of these is policy support. They are dependent on policy support in the major market. The u. S. , europe, china, all have quite supportive policies for evs. If those were to change, some of the inevitability of this, some of the momentum of this, might slow down. We are still depending on battery prices falling further. They have come down a lot over 70 , but they need to come down almost another have to be really competitive on an up front basis with the equivalent internal combustion vehicles. If that slows down and does not keep declining at the same pace, the crossover and Inflection Point for where this stuff takes off get delayed. Guy is it batteries . Why is it not fuel cells . Colin batteries are just getting cheaper faster. That is a big part of it. You have this scale effect. A lot of automakers making commitments. That starts to create this snowball. Guy scale issue . Colin exactly. Mckerracher continuing the weeklong coverage of what is happening in the space. Fascinating stuff to say the least. Stay with us. Up next, bloomberg surveillance. Matt and i are going to bloomberg daybreak monda london dab digital radio. We will have extensive coverage of the bank of england when it comes out. That is coming up a little bit later. The ftse is flat. This is bloomberg. Francine how will the bank of england process inflation was sluggish wage growth . We get the Rate Decision in a few hours. A different dilemma for the fed. 1 30 p. M. U. K. Time. Savvy setback for the kingdoms ipo. We have the latest on what could be the worlds biggest share sale. Good morning. This is bloomberg surveillance. First