Looms. President trump says talks with china will happen. Not ready yet. Warning against stimulus. The cpi today is likely to favor them. The case against no deal. Legal battles over boris key decisionns, a at 10 00 a. M. Less than half an hour away from the european looking at german bunds. Weare down a little bit but clawed back some of the negative yield we have given up. The ecb is on my radar. Equityake a look at the futures. Green arrows acrosstheboard. Green, too. Was now it is next. Dax futures are gaining. Ftse futures unchanged. What do you see playing out . We are seeing that mixed picture. Maybe there is a line being drawn. The asian section has looked a little more positive. Markets rallying after wall street did so. If the clues are light. Nightent trump last talking about how conversations in trade were happening yesterday. We will see what comes of those. The south korean kospi higher they did suggest maybe there would be further cuts to come. Movement in the south korean currency. Lack of movement from Central Banks reflected in a bit of a move and the south korean won. U. S. Gdp coming in weaker than expected. Side ande to the other have a look at what is going on. This is a picture for a mixed session when it comes to fixed income. Movements ine big oil prices. May be avoiding some of the bigger oil installations. Is not going to hit miami. The first word news update. Selina wang has us has that for us. And argentina, global ratings have cut the countries countrys rating to selective default. S p says this constitutes default. Since new terms came in immediately, the s p will lift the rating. Three leaders of the hong kong protests have been arrested ahead of planned rallies. They are part of a broader push back against the demonstrations. At comes the day after authorities decided to ban a mass protest planned for saturday. The u. S. Could face resistance to ultra long bonds. Stephen mnuchin floated the idea, but it will probably not get the backing of the elite group of the treasury secretary. Views have not changed. The bank of korea hinting at further action to support the economy if risks continue to rise. That after leaving the key rate unchanged. As an indication of growing concern, more must be done to prop up growth. Well meet ministers to try to keep the Iran Nuclear Deal alive. They will talk for two days in Foreign Policy challenges. Europe is trying to salvage the deal that the u. S. Pulled out of. Global news, 24 hours a day, powered by more than 2700 journalists and analysts. This is bloomberg. Selina wang. Up next, new tariffs. The story through the asian section. Session. The latest on the trade narrative. Bloomberg life is live. They are certainly covering that story for us. The latest overnight developments. This is bloomberg. His is bloomberg. Back to Bloomberg Markets. We are 21 minutes away from the start of cash trading. In terms of futures, we see some green arrows although not really any movement. Dax futures up about 0. 1 . Nearing its end and markets are teetering. No more sleepy currencies or tiny swings in bonds. It is historically the most volatile month of the year. Here with more is dani burger. That thin trading does tend to exacerbate price moves. The vix has seen the biggest increase. I want to compare this to other august. We saw the u. S. Float the idea of longterm bonds. That means 30 year yields tumble to the lowest on record every that gave them the biggest august move since 2011. We saw traders rush to hedge these moves. Largestst spike, the since 1998. A lot of movement and currencies. Deadline the no deal approaches. We have seen traders move into sterling. We saw the yuan come under pressure. This month saw the biggest increase since 2007. Either this was a really good month, or you came back to markets in turmoil. If you blame low volume, that is it. Thank. Dani burger. Lets get to the markets with another conversation. Our market live strategist. Lets start with the strengths in the Asian Session. Flat to negative expectations, the u. S. Stocksasking how far can rise . The expectation pushed us along way, didnt it . Good morning. Investors in asia believe a bit of peace would be a good thing for equity markets. Their hopes of looking back to what we saw in june and part of july when there was relatively little communication between the u. S. And china. Not much throwing dirt at each other. In trade talks, equity markets were able to do well. Totaldex rose about 7 during that time. Hope whene kind of pete people are looking at. They can look at the fundamentals of the earnings, what companies are doing. Hoping, really just there is a bit less noise coming between the politicians and the negotiators. They can look at equity fundamentals. Which have tended to be a good thing. It has led to steady appreciation. I think that is what people are hoping for. It may need to both sides to keep quiet. Lets see whether or not the u. S. Plays ball. I was asking if somebody could decide the trade issues as noise. Look at the markets based on fundamentals. He said no way, jose. I am sure he would have been happy to do that if he could. We are asking the question on the blog. Will global stocks enjoy how much of a game will they enjoy if there is peace between the u. S. And china . What do you think of the idea of long bonds . Mnuchin like steve wants to buy these. The u. S. Wouldnt be able to issue them the way they would like to with other bonds. Does the market have an appetite for this . Not a huge one. If you look around the world, there are not that many examples of bonds that go beyond 30 years. One cited regularly as austria. They have a long issue. Have seen a couple of dollarbased sovereign related issues. Mexico and china, not particularly big issues. I suppose that is a concern for the u. S. When treasuries are auctioned, we are talking about billions of dollars at a time. It is questionable whether they could get the size to make it worthwhile. A 50 year or 100 year bond. Market asave a developed as a treasury market, there are mechanics that people get used to. If you suddenly throw in a superlong maturity, it could disrupt the way the market works which might not be a good thing. Whether or not there are investors who would consider holding something for such a long time redmond there were so much longterm is in. Longtermism. They may say there are too many doubts about this. We are probably just not ready to do such a thing. They may say go back to 30 years. Some of our colleagues raising the question, how this would fit with relatively weak demand. Ecb. E ask you about the saying, he is not ready yet. No surprise, he doesnt want to do more qe. Is the expectation more qe comes from the ecb despite plenty of people saying it is not going to be needed it next time . Ecb is a large group of people and there are always diverging voices. Even when mario draghi speaks. There is no uniformity the way they speak. This is standard fare for the ecb. Spoke andlagarde also she was much more in line with mario draghi. You always have these people who do not completely agree with one another. Once they get around the table and the leader of the pack tries to push them in a certain direction, the ecb comes around. Not everybody is in the same page. Lets see how it goes. Poor,ta for europe is especially germany. From that point of view, they can probably justify another lowering of rates. It needs a few more people to come around. That is what she is therefore. She is there to win hearts and minds. The question is, is going more negative on rates going to quantitativeas easing . Thank you for joining us. A bloomberg mliv strategist. The tradeback to story. The u. S. Chamber of commerce xiing president s trump and to withdraw tariffs. Footwear and other apparel will be the target. China will slap a duty on u. S. Soil. Joining us for more, judy schneider. Keep tabs on which tariffs for which goods. Waserday, donald trump saying there were talks scheduled for last night. Lot about heard a possible talks. President trump did say in the last day, there were talks on the phone. They were scheduled between the u. S. And chinese officials. He offered no more details. We have not heard about this from the china side. Talks aboutnning may be talking again . Talks planned for september in washington. People are waiting to see if those are going to occur. Nots highly likely we will see serious negotiations until 2020, given the calendars and things happening in both countries. That is the real question. Are the september talks going to happen . It looks like the tariffs are set to take effect. China not looking to retaliate. Not thinking that is the way to go. They had the means to retaliate. They preferred not to see the tariffs go into effect. Markets have taken this to mean maybe we will not see this set of tariffs. Seem to the u. S. Does be going ahead with them on september 1. Are market ask participants expecting them to kick in . Case must bease that they do take effect. Focusing on whether talks will happen in september . There is a lot of speculation about it. People are somewhat hopeful. They are taking the chinese side. Talking about the terrorists being good news. Likenk the markets would something to happen. Donald trump knows that. He has done this in the past where he has walked right up to a deadline and then said, lets give it more time. Thank you very much. Our International Editor and hong kong, talking trade which is clearly what drives markets. Minutes away from the open. Atare going to take a look stocks to watch. The countrysing credit rating. This is bloomberg. Welcome back to Bloomberg Markets. Seven minutes until the start of the cash Equities Trading day. Us. Burger has joined. Focusing on the mining business. Annemarie, lets go to you first not the first time we have been dealing with news, bad news around argentina but this involves a credit rating. They are back in focus, European Companies with exposure to china. It is not just the bva, which has a stake in the local argentinian banks. Santander as well. Basically in the name. Definitely one to watch. What is the story . Sayhe iron ore minor, they a review is showing some funds to a charity in the ukraine cannot be accounted for and some funds may have been misappropriated. They reiterated their directors and employees were not involved and they have suspended their relationship with this charity in the ukraine. Company, ther the offices and minds were searched. Is about 25 ce down. Given the decline in iron or prices. This is likely another negative driver for sentiment. Lets go to dani burger. Lets go to antwerp for this story. We are going to talk about belgian construction businesses. Reporting first half earnings. Nothing really in the first half specifically alarming. Second half, they said it would grow. Picture, they said it is likely to be weaker. Business Activity Revenue weaker than last year. Calls down as much as 3 this morning. Thank you very much for joining us. You can get all the latest stories in your bloomberg terminal. You can also get the first word news spirit coming up, the market open. Much thise not doing morning, but we do have green arrows. En arrows. Anna hey minutes until the current start of cash Equities Trading. It is the end of august. Lets see what markets have in store and look at things feeding into the session ahead. The Asian Session was positive. How much can we rally on optimism around trade . Maybe not much further in the short term because futures in europe looks different. The pound still falling around the 121. 70 level. Advice fromt legal belfast that could be interesting on brexit story. The u. S. Picture looks flat to negative. We are focused on hurricane dorian, category four storm headed toward florida, perhaps avoiding oil infrastructure. Lets look at futures. Session was buoyant on optimism around trade but that was picking up from yesterday in the u. S. And in europe, drawing a line in that under the story and asking for more clarity on trade before we rally further. Will we see a benign and to a roller coaster month . That is what the futures suggest. The ftse 100 opening pretty firmer. E spanish ibex the euro, moving lower despite ecb Board Members cited as saying they are not interested in doing further qe at this point. It is not yet time. This is the focus and the euro has been heading lower despite that. This is the picture for these markets as we open up probably positive, but only modestly positive on these European Equity markets. The dollar, up around. 1 . From a sector perspective, looking mixed. Financials look broadly positive. Basic materials broadly positive, oil stocks look negative. Health care mixed, industrial in the green. Not a great deal of clear direction being given by what we see on the floor in london. What do you see in individual members . Matt i see a lot more stocks up then down, actually and we did see a little pickup and futures heading into the open so maybe you see more of a risk on trade today. Now, 315 gainers, 215 liters losers and 73 to go. As far as the winners, asl holding at the top, chip equipment maker doing well. Rio tinto also putting up a gain of 1. 2 . Astrazeneca and lacks a smithkline both gaining, as well as cnh. Watch that, the fiat related company and daimler. Watch carmakers today. On the downside, bp is off two thirds of 1 as is louis vuitton, hsbc falling as well as novo nordisk and richemont. More winners than losers is the basic message. As a result, european markets urging higher at the moment. Traders have been grappling with some end of the month volatility and the him as an imminent imposition of tariffs on china on sunday. With us, the cio at Royal London Asset management. Let me ask your take on the trade war right now. Does it look like we are getting closer to a truce between the u. S. And china . Not so. In short, ultimately, you will have a constant battle. The critical thing is to observe whether they are engaging in e ussions of helping th move things forward. It is interesting that the chinese have backed off from the escalation race. The important thing is getting down to identifying the Critical Issues that are causing the problems and how do we resolve it . For me at the moment, it is not obvious from trump himself what the two or three things we need to action that actually start to diffuse the problem rather than she further escalation. I was taken in your notes by the relationship you draw between the president ial cycle and the state of the u. S. The point that reelections dont really happen if you dont deliver strength on the economy. I call up this chart which has to do with the probability of recession. Probability fed apperception recession measure suggests something not very good coming. Bring about a change in behavior from president trump, i suppose . Is that what you expect . Piers one thing to be careful about with this chart is direct correlation with actual underlying yield curves. Part of the reason that has been rising is the fed was in a period of rising rates environment. More just turned over to a accommodating cycle. The risk of recession if you over raise rates and if the world didnt follow the u. S. On the journey and they didnt. Powell has either had to pause or accommodate the trump pressure. Youely, that chart got to move it on to reflect what has been happening in the underlying markets. The big question for us at the moment is what has happened to the long end of the curve. Inve got to be careful august because not much liquidity around. A couple of active investors can move things more aggressively, tend to see better liquidity in december september. The u. S. In europe and but more importantly, upticks in corporates in how underlying trait looks for the rest of the year and we look forward to 2020 and start pricing of next year. Anna it is interesting. We still have such a role for people being at their desks and not on vacation. Thehat do you think u. S. Has had some not failed on 7,ns, but poor ratios 5, three recently and a survey of investors would rather own 20 than 50s are 100s. Durationou think about and why cant the u. S. Get a good bid on the bonds, even as good as the on the run bonds are getting . Fact wherethe cash rates are. Ive talked to you over the last year about a relative crescents preference for cash versus g10 government bonds. We retain credit because we dont see yield spreads widening at this point because particularly in investment corporateerlying earnings and cash generation are accommodative to that trade. To me, the question you are asking yourself is do i want to invest in government bond. It is a vote of no confidence. I find odd after one of the biggest task cuts in u. S. History and part of the reason the u. S. Consumer is strong is the second round of the effect of those tax cuts came through this year. Annag back to the point raised a minute ago about that chart in terms of if you dont get reelected and have a recession, that is ultimately trumps key focus. If you look to the turn of the last century, if you had a recessionary period in the europe to election come you dont get reelected. August tod equities. How much further can we rally . A 6 correction so we didnt necessarily add aggressively but we tactically see opportunities to add and at this point we look to where is the relative return opportunity across . Asset classes quality equity . Asset classes . There is a really important statistic coming in. We really see the benefits of active management at the moment. One of the things that has made us cautious in adding to that is there has been a liquidity movement into the larger parts of the market. Most into the u. S. Activity around etfs and passive funds, especially buy largecap. 500 relativey s p to do thousand. There is more 2000. There is value line around. We like that in the u. S. And the rest of the world. Anna a story yesterday talked about one of the traders made famous by the big short with that theory. Cio at royal, london Asset Management with us on the program. Next, the stocks on the move this morning including cnh after the tracker maker was sent to assess options for its truck unit. Keep an eye on german real estate business, as well on the back of further headlines surrounding rate cap rent caps. This is bloomberg. Anna welcome back to the european open. 11 minutes into the trading day and things looking broadly positive, up. 3 . Well take that went futures suggested flat. Another week of news and quite an eventful one. An opinion piece that shocked fed watchers, an italian political drama, and constitutional move at westminster. Lets look at the people behind the weeks news. Tuesday, bill dudley called for the fed to stop enabling president trump. The opinion piece by the former fed president drew a wave of criticism for suggesting the central bank should ditch its political neutrality. Italy left us with unlikely winners and losers, a Coalition Deal at the 11th hour handed conte in mandate as prime minister. The loser was salvini, who wanted a snap election and is in the opposition for the foreseeable future. Grips onrther to wednesday, Boris Johnson asked the queen to suspend parliament in an apparent attempt to prevent rebel mps from blocking a no deal brexit. Were awaiting a decision on the first legal challenges this morning. Those will come from edinburgh and belfast. The u. K. And eu are stepping up brexit talks. Officials will meet twice a week in september and both sides are playing down the chance of an imminent rector. The irish breakthrough. Bringish saying us some details. Piers hillier is still with us. It has been a busy week, hasnt it . We started with the fed and moved to italy and brexit conversation. Let me ask about europe from a central banking perspective. Weve got a couple of voices talking about how it is not time for qe yet or even again. Argue with either way, but what is your expectation of what the ecb does come september . Piers it is different what i think they will do when what i would do but they will probably hold for a little while in a way to see type aspect. The nervousness for me is what you have seen in europe a showing negative Interest Rates dont really work because they create a structural problem within the system. You are starting to see loanloss rates rising in germany and other parts of europe in an environment with negative Interest Rates because credit discipline in certain areas has gone out the window and my worry is that european monetary stimulus is the only way of drying the european economy and same i am going to lose less money by lending to the German Government as opposed to sticking it in the ecb overnight is madness. A way of to find stimulating the european economy by actually encouraging investments into it and that is what trump was trying to do last year. Youve got to use fiscal stimulus with monetary stimulus and part of the discussion at , we want to set a domestic agenda of how we will drive the u. K. Economy forward and invest in the u. K. Economy. Why wouldnt you do that when you long bond yields are so cheap . If you dont believe we cant generate a better return in the u. S. Than 2 , you have a real problem. Matt i just read this study by the university of bath. It shows, at least in their study, negative rates do not encourage bank lending. Banks lend less in negative rate climates. I want to ask what you think the ecb could do since berlin is not coming in with any fiscal help anytime soon. Weve heard from some people about the possibility of helicopter money. Do you think that is really a possibility . Could the ecb give notes or some kind of spending power directly to consumers and have them put it out into the economy . Tried thatjapanese before and history tells you it didnt really work, so part of the reason i come on is to remind the european government about fiscal stimulus and that is where they have got to go. The mantra since the Second World War has been about discipline and the nervousness about fiscal them it stimulus is you encourage inflation. There is no obvious significant inflation in the europe. There is more in the u. S. So why at this time he wouldnt use that lever seems odd to me. Anna that message coming through from some in the investment community. You talked about u. K. And a political spread perspective, the uncertainty around where the politics go for the next two months, this is the latest Consumer Confidence index and it has come down. U. K. Consumer confidence hit a sixyear low. I guess thats not a surprise when you see the headlines. Your expectations for the u. K. . Do you have a base case . Piers you hit the nail on the head. The headlines everyday are negative, negative, negative. Unemployment is lowest since 1971. The only Thing Holding the consumer back is imported inflation around the weakness of sterling. If we didnt have brexit anna Business Investment has dipped. Piers why would you invest when you dont know the outcome. Whether we get a hard deal or no deal, business will say we need to move forward. We need to understand what is the outlook for investing in the u. K. Economy and curiously, that may be one of the things that helps johnson is raising what are you going to do . What are the plans . How do we encourage the investor into the u. K. With a hard deal . What will you provide in fiscal stimulus to support the economy in that backdrop . Anna piers hillier, cio at Royal London Asset management stays with us. Lets get to our top movers with henry harder. Annmarie annmarie hordern. German Residential Company is moving off a field report that berlin claimed a less strict rent cap than expected. Industrial, up more than 4 on the stoxx 600. This is a Tractor Company backed by italys billionaire family and people close to the matter say they are thinking of options for their truck unit. They could be spinning it off for combining it with a competitor. To the downside, a Small Company in the u. K. But it is plunging. Shoe zone, down nearly 38 . They issued a profit warning talking about the tough street environment and their ceo is departing. Matt annmarie hordern, thank you. Is all industrial, relateddo with anything to cnh. Up, knot yet. Resuming worn about two weeks before there is a meeting to bolster the eurozone economy and now there are three. All our seemingly against qe. We discuss next. This is bloomberg. Matt welcome back to Bloomberg Markets the european open. We are now 22 minutes into the trading day and looking at decent green arrows. Anddax gaining. 4 , the cac ftse up. 2 . We were talking about klaas knot , we heard from him yesterday that he no longer doesnt think the eu needs quantitative easing, the ecb needs to go into quantitative easing just yet. Such a fun play on words since his name is knot, but we heard the same from jens weidmann. Ecb is going to be swayed by this . I had a guest earlier who said you cant believe klaas knot said that out loud and the central bank is going to go back into quantitative easing. Yes, they may well but the answer i dont think it is it has not been working and the sign of madness is doing things that havent worked in the past. You got to understand why is what is apparently a stimulus not driving the economy . That is because we are not actually encouraging investment. We are in the game of financial arbitrage in debt to equity. To commit longterm capital come you think about committing to the economy, it requires investment as well as shortterm Debt Financing to do that. Weve got to get the balance right in terms of cost to capital differential. Debt is super cheap by any historical metric in my career and centuries. Why are we not seen the come forward, because people are concerned do we get the longterm structural support, that committing longterm capital gets rewarded . That is not the case. Anna will italy get support, because the italian political story some people suggesting nearly the market has moved on the latest developments that some suggesting what matters is the level of ecb support and that is what btps are backstopped by. What are you expecting for italy . Do you have exposure to italian assets . Piers it is supposedly the value trading europe but yes, youve got a coalition. Yields are compressed for Italian Government bonds. The reality is, are we clear about the fiscal discipline this new government will apply that the previous one were not . Im not convinced. At the end of the day, would i rather lend to the u. S. Government at 1 for 10 years or the Italian Government . It is not the italians at this point. Myself thecro question, it is good news you got some resolution in italy and i suspect europeans will want to help the government have some stability or definition or strength around its monetary controls but it is not evident yet that is the case. We are pricing in the good news and not reflecting there is some risk about discipline in terms of spending. Matt and a downgrade, still going to hurt. Let me ask about the corporate side. Rates are so low, everyone is asking why germany doesnt take advantage of that situation or Steve Mnuchin is asking if he can go along in the u. S. Why dont we see more corporate issuance and why not more Corporate Investment . Piers we are. This is the point. Weve had huge amounts of financial arbitrage over the last decade. That showed the structural longterm buyer of equity since the financial crisis has been the corporate sector, and it has done that by issuing relatively cheap corporate debt and buying back equity. That is not longterm investment. It is sensible financing. But if you are trying to encourage longterm investment, youve got to get that balance right around debt and equity. What mission is saying is sensible. To not saying we go back roosevelt new deal type encouragement but at that point with the cost of money and you need to stimulate the economy, anyone who goes into the u. S. , you need to fly into new york, you see they are struggling with paul rhoads, the airports are frequently frankly underwhelming compared to the rest of the world. The u. S. Could easily invest in infrastructure. Variations of intermodal transport in the u. S. , there is matching federal funds allow you to invest. Why we dont see that, i dont know. Ata piers hillier, cio Royal London Asset management still with us. The European Equity markets up. 4 , u. S. Futures pointing higher. Real estate stocks doing well in europe. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Trading day, lets get your top headlines. Market street higher. They shrugged off the threat of further trade escalation. President trump says talks with china will happen. Not ready yet. Knotcb class not klass joins colleagues, but the cpi is likely to favor the cubs dubs doves. Over borises loom johnsons planned suspension of parliament. A key decision hits at 10 a. M. London time. Welcome to Bloomberg Markets, this is the european open. Anna 30 minutes into the trading day, lets have a look at whats moving on these markets. 471 stocks going up. We do see quite a lot of movement to the upside. Even if the move who are not enormous. They are getting bigger as we go to the first half hour of trade. The games we are seeing have become larger. This is the biggest gainer. Operating in the german real estate market. This is in regards to the extensive caps on will see in berlin. That is a story that really moves the share prices. Moving ons us is the news this week. Ambu up by 8. 4 . Approval of their products seems to be whats behind that. Moving to the other side, lets have a look at whats on the downside. Metro in germany is down. Swiss re is down. On monday, we might be watching insurance businesses on the back of dorian. We are expecting this hurricane great for to hit florida grade four to hit florida and that the turn into an insurance story. Lets get a Market Update with selina wang. In argentina, s P Global Ratings has cut the credit default. Selective thats after the nation said it would delay payments on more than 100 billion of debt. They say this constitutes default under their criteria. But since new terms for shortterm debt came in immediately, s p will lift the reading. Johnsons suspension of parliament will get an early test today. On courts are ruling challenges from opponents to say the decision is an affront to democracy. What while the rulings will give a sense of the legal issues involved, they are unlikely to be the last word. The case may end up in front of the supreme court. The u. S. Could face resistance to issuing altra long bonds ultralong bonds. It will likely not get the backing of the elite group that advises the session the treasury secretary. They advised not to issue these bonds and the views have not changed. The bank of korea hinted at further action to support the economy if risks continue to rise. Two of the seven Board Members dissented, calling for an immediate cut. It is an indication of growing concern that more must be done to prop up the growth. Eu Foreign Ministers will meet in helsinki to keep the Iran Nuclear Deal alive. Officials will talk for two days on Foreign Policy challenges. Europe is trying to salvage the deal with iran. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Matt thanks very much. Selina wang in beijing. Ray dalios Flagship Fund is missing out on the rebound that some macro managers are enjoying. The alpha fund at Bridgewater Associates has tumbled 6 through august. Others fared even worse. This as the msci world index was up 13 in the same time period. Bloomberg the losses were fueled by bearish wagers on global Interest Rates. Joining us is a Bloomberg Opinion writer. Its not just ray dalio, some really big names have made wrong way that and lost out this year. Yeah, but bridgewater is one of the absolute biggest. That he orsting alpha fund has taken such a large bet and got it so wrong has takenlpha fund such a large bet and got it so wrong. Almost a record short out there. So this is fighting against the tide. This is a story about u. S. Treasury particularly, but bonds in europe as well, have been fighting against what most think is an illogical move lower. They have looked at this and gone that this cant be right. The market will right itself, and it hasnt, it has kept going. Everyone keeps scrambling and having to go with the tide. Slow money come in this sense, has almost managed to beat fast money. Fast money is trying to get clever and got called out. Anna so there are limitations to what you can do with being clever. The market seems to be moving endlessly in one direction. How many years have we been hatching how much lower can Interest Rates really get, how much longer can the trend continue . We were thinking tenyear u. S. Treasuryss would go to 3. 5 or maybe for. All of a sudden, we are at 1. 5. It is all about Short Covering and scrambling. The index funds have had to go and buy. The hedge funds dont have to do that and theyre the ones who have been caught out. Not all of them, but some of the big ones have fought this. Plus, all of the Mortgage Backed securities that it had to hedge themselves. At a certain level, they have to buy. Rally. Etuates the anna just like ray dalio, you have also been asking questions about how long this can continue , suggesting trades on the other side. And yet we dont see a turn. Exactly right. We have had a cautious view and work isity none of the done, we have hedge yourself from this issue hedged ourselves from this issue. Schemes in the and the u. S. Are getting closer to buyout opportunities. Them, take immunize them off and write an insurance contract, you have had that structural demand. It still live in the u. K. Today. That has been the problem. You can be aggressive, but the reality is markets remain a lasher a rational. Irrational. A sharp right, what has cost us out is the change of the from a hawkished stance of raising to them cutting rates, the underlying data was not suggesting it is an issue, its got a lopsided. Its got us lopsided. Matt i want to get your opinion on the long bonds. It looks like everyone is telling mnuchin not to do it. Why, but if you can grab money for so cheap over such a long time, why wouldnt you do it . The point is you can do it once and maybe look clever like belgium and ireland, but that is not how the u. S. Treasury market works. Matt its not clever. It is the most liquid benchmark rate in the world. You cannot have a 100 year bond left up. It has got to be a regular, sustained issuance program. Tips took a long while to get going, but now it is a fully integral part of the market. The reality is that the primary dealers dont want this. They will say it is because the 30 year will lose liquidity and create confusion. But the reality is, if they will be setting the situation through auctions and pricing against big Pension Funds coming in and buying 500 million of a 100 year bond, they cap hedge themselves that cannot hedge themselves they cannot hedge themselves. Anna but if it did become a regular feature, we dont have 100 years of insight maybe, but maybe the new normal is lower Interest Rates so why not make this a regular part . Absolutely. All sorts of other things could come off the back of this. But the president may not be here in 1415 months and a new president and new treasury secretary. Matt thanks so much for joining us. Bloomberg opinion writer marcus ashworth. You can get the work of his team under bloomberg terminal on the bloomberg terminal. Us,s, thanks for joining cio at Royal London Asset management. He will be continuing the conversation with us on radio. Tune in on the dab network in the london area. Otherwise, try bloombergradio. Com. Up next, we bring you our interview with the ceo of uber. Thats next. This is bloomberg. Matt welcome back to Bloomberg Markets. We are 44 minutes into the trading day, looking at green arrows across European Equity indexes. It has been two years since Dara Khosrowshahi took the reins at uber. In that time, they have gone public and faced criticism and have posted billions and billions of dollars in losses. Emily chang spoke exclusively to the ceo and he says he is happy with the companys evolution. We have resolved all of the governance conflicts that a company has. There were many legal issues the company was involved in. We have softbank as a partner and you want them to be behind you. We have a great investor base. We have taken the Company Public and Company Revenue gross bookings have grown 75 since i joined. We now have a path to profitability, i believe. So while we have had bumps on the road, i like where we are, especially where we are now for the next few years. Emily there have been bumps on the road and these companies have been transformational. The big question for you is can uber be as transformational over the next decade as it has been over the last . Dara i think so. Really, what uber has done is brought transportation and opportunity to what we believe is a small segment of the population. We have got over 4 million partners all over the world, which is a huge number, unparalleled. But we want over to be available uber to be available to everyone. We have always gone with pools, but we are testing buses in cairo to even bring the prices down to the next level. We are introducing bikes and scooters for personal electric mobility. Essentially the anyway you want to get around, we will be there with you. It will be mostly over governance, but will also have other third parties such as transit or lime. Anyway you get around, we want over to be there uber to be there. Other services will be there for you as well. Emily the question is can you be so transformational and stop losing money . Butprices sound attractive, can you create Good Business when the rides are a dollar . Dara yes. We are taking the pressure business, the cfo talked about it, if you look at our rideshare business it covered our overhead less about 100 million. So the rideshare business itself is turning quite profitable and we believe profits are not only going to grow topline but bottom line as well. Then there are other businesses. Eats, autonomous, these are extraordinary opportunities. But i do believe will prove to investors we can take big parts of our business, turn them profitable, and use the parts of the business to Fund Investment in other areas. Emily still, there are execution issues. He does have your biggest quarterly loss ever in the stock is trading below price more often than not. Investors seem to love shorting. You have had hiring freezes and some of your top hires have left. You said he believed uber can be profitable, but how confident and how quickly can uber be profitable . How confidence and how quickly confident and how quickly . Dara i am very confident. It was a loss from an accounting perspective. If you live in the county world, it is a big loss, but i live in the real world. In the real world, our losses were lower than q1 and we are on good paths in terms of our losses. But you are right but none of this will be easy. This will take excellent execution from all of our teams. We are going to be demanding our employees to do even more with less and to execute incredibly effectively for us to grow the topline and the bottom. Anna that was ubers ceo Dara Khosrowshahi speaking to colleagues emily chang and san francisco. , bloombergon set tech opinion columnist alex webb. Eally fascinating conversation emily pointing out a number of bumps in the road. Looking at the share price, that looks like another bump in the road. What kind of story is the share price telling us . Alex there is concern among investors that uber does not have a competitive mode. Is having dreisers endusers a to protectgh moat others from coming in and stealing their pie . A lot of the rides uber offers today are subsidized by the company. That is why they are cheaper. They are taking some of the costs out. The moment they stop doing that does that mean people will stop taking cougars . Ubers . They often talk about themselves like amazon, which was unprofitable for a long time and ultimately has become a real success story. Differences among when amazon invested in it built a real infrastructure. Does not have this fixed assets driving those losses. It is very transient where it is spending that money. Matt the ceo also addressing the ongoing legal battle with google. Has implicated a former engineer. What are the lasting implications or have we not yet seen them . Alex i think we have seen them significantly. Attempt tout ubers make a self driving car or system, it pushed it back by a year or more. It really stopped them in their tracks. It has also had broader implications for autonomous driving as a whole. Namely, there was huge personnel transferred between these Top Companies years ago. People were going from google to apple to tesla and back. This ended that, sankyo got to be careful that you are not going to take your ip with you saying you got to be careful that you are not going to take your ip with you. Matt it looks like hes a intellectual property from google did not necessarily use it at uber. Why take it unless you are going to use it . The thingan, thats thats been in the courts for two or three years. There are all sorts of conversations between Dara Khosrowshahis predecessor and levandowski before he left to join uber. What he did was leave over and set up uber and set up a company that was then acquired. But if it was not being used, what are they stop ubers self driving operations for an extended time while they worked out exactly what was going wrong and what they had or had not taken. Anna alex, thanks so much. Alex when, joining us webb, joining us with the latest. Up next, we track storm dorian and assess the potential impact. This is bloomberg. Anna welcome back to the market open. 54 minutes into the trading day. Equity markets are a lot more positive than anticipated. Features suggested a flat open but things moved rapidly to the upside. Buying into what can be delivered in the trade talks, perhaps, as we see technical conversations continue. Slappingnday, china is a 5 tariffs on u. S. Oil. What china can find oil elsewhere, it is already disrupting physical trade. Annmarie hordern has more. Annmarie i want to start with the numbers. Beijing is the ninth largest buyer of u. S. Oil. About 1 of chinese crude imports came from the u. S. In 2019 according to the administration of customs. But Bloomberg Energy points out that china does not depend on the u. S. But the u. S. Does need to find a buyer for its increasing exports which is important for president trump. However, the u. S. Oil china has already purchased is becoming quite a headache. The trading arm of chinas isteowned oil giant sinopec trying to find crude that will not arrive before import tariffs take effect. At least four or five vessels can see here are spread out, carrying as much as 10 Million Barrels of oil are en route to china, a journey that takes almost two months. The tariffs make cargoes from the Permian Basin around three dollars a barrel or expensive, so they are more expensive, so they are keen to sell. The problem is finding a buyer. This race to find u. S. Oil highlights just how the trade war is disrupting global commodity flows. Matt all right, thank you. Annmarie hordern taking a look at oil and china. Thats it for the open, stay with bloomberg television. Up next is surveillance. I will stick with you for another hour on this riskon friday. Rise. Es continue to anna indeed. 600, the the stoxx ftse 100 up. 3 . Markets seem to be buying into this optimism around the trade conversation. Hurricane of dorian on call to dorianrida hurricane on call to hit florida, we will watch that. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Matt new year as the new u. S. Tariffs on china are set to go live on monday. Beijing says it will not read immediately retaliate. The ecb joins colleagues in warning against stimulus. Ing it is not time that yet. Hong kong tensions rise as key activists are