Anna relief in hong kong . The hang seng stormed toward the close after reports the chief executive carrie lam with withdraw the controversial extradition bill. Boris, beaten. U. K. Edges toward a snap election as a cross Party Alliance moves to block you know deal brexit. The antieasing brigade. Noc rosengren says he sees need for immediate policy action and the chorus of voices against bond buying grows at the ecb. Good morning. Matt good morning. Less than half hour from the european open and looking at the japanese yen to see what kind of effect the removal of the extradition bill is having on risk sentiment. This is a threeday chart. Maybe a little easier to see what is going on in those terms if i put it in a oneday chart. The yen is weakening. More willing to take risk after the extradition bill has been removed. That reaction should show you how important these hong kong protest have been to Global Markets. Look at what we are expecting in todays trade in the European Equity index futures. We do see green arrows across the board here. Dax futures are up more than 1 right now and cac futures are up. 75 . To riseures continued in the face of a climbing pound after yesterdays hip. Dip. The hang seng is surging toward the close after reports carrie lam will withdraw the controversial extradition bill. Lets get over to david inglis in hong kong. Hes been covering this since day one and david, how important is this to the protesters . They have a list of demands. This must be one of them because all the bill was shelved, it was never removed. David this does at least alleviate part of those concerns. Six, one of the five or depending on how you look at it. Is theg kong markets, it trade war, bad data, sometimes bad weather, that retail sales and you have these protest. An Property Index this is amalgamation, symbolism of hong kong. Retail, rent,om house prices, commercial rent, that is reflected in the index and we are on track to the best day 2015. 90 minutes left, here is where we are on Msci Hong Kong. Just yesterday, entered a death cross, 50 over a 200 day moving average. Pretty much everything is up. I will run a sense of where volume is right now. Perfect illustration. Below average volume. News hits, and that is the projection to where we are. There is a lot of buying right now. 90 minutes left, 40 higher than average. In terms of the oneday move, this is on your bloomberg library. We have measured daily price change and we are on track for a 3. 3 pop, which if you look at it, is a two standard deviation move. Markets were waiting for a reason and excuse to buy this cheap market. They are getting it somewhat today. We will see if this holds and let me end on this. Downside projection protection. The people didnt really want to sell out but they were buying protection and it was really getting expensive to hedge your bets. That is also coming down slightly as we speak. This is a big story in this part of the world. In hong konginglis with the latest Market Reaction to the Dramatic Development politically in hong kong. We will see if the reports from the South China Morning Post are confirmed by the government in hong kong, the leadership. Lets talk about Political Drama a little closer to this home where i am, westminster. As theay, high drama government was defeated. We edge closer to a general election, it would appear. In the short term, we will see parliamentarians vote on whether to block no deal. That will be one of the things on the agenda later today after the rebel mps managed to gain control of the order paper in yesterdays vote. Vote takinge the place and now, Boris Johnson will start plans for a general election. He said he didnt want this, but arguably the cabinet and all the headlines he has generated with since becoming Prime Minister, arguably that seems to be pointing in the direction of the general election for a long time. Thes listen to some of Heated Exchange about the possibility of an election from Boris Johnson and Opposition Leader Jeremy Corbyn. I dont want an election, the public dont want an election. I dont believe the right honorable general gentleman wants an election, but we will have to choose who coaster goes to brussels to take this country forward. He wants to table a motion for a general election. Fine. Get the bill through in order to prevent in order to take no deal off the table. Anna some of the high drama in westminster just yesterday as the Prime Minister Boris Johnson loses his majority, now leads a minority government. Lets talk to mark cudmore in singapore. The volatility in the pound, quite stunning. Interesting sisi the movement there to see the movement there. Lets ask about the broader implications. I noticed on the markets live team, you have been asking the question of the day, how would a harder brexit hit global assets . How much read across is there, really . I think ultimately, if we do get a no deal brexit, it will be a big event for markets. There are many out there who say we have been talking about this for years, preparing for it, mentally many markets have moved on from brexit, in the u. K. , many are bored by the story but no deal brexit, there are so many ramifications for supply chains, or small investors who flock to the u. K. For a store of wealth. I think it will disrupt things if we get the no deal brexit. Yes, we talked about it for a long time but no one is expect it. I think it will be a global event if it actually happens. I wonder what you think about the Global Implications of the hong kong news. Japan markets moving from through europe to new york on this. Obviously, you see hong kong but forriced changing example, euroyen, tom keenes favorite pair, the pros use it, what do you think the removal of the extradition bill means for Global Markets . Mark it clearly removes one of the tail risks in markets. I didnt think markets expected a disastrous scenario in hong kong. There wasnt expected military remainsn but until that resolved, it remains a tail risk. You seem to have made a step toward progress, and that is positive news. If you look at the gmm four hours ago, early this morning, the hang seng index was already the outperform or in asia, which suggests to me some locals thought this might happen today. Maybe aere was a leak, few already knew about the move because it already outperformed before the news and jumped again. It does remove a tail risk for Global Markets but i dont think it is a sustainable story for Global Markets. We will move on from hong kong and in 24 hours or 48 hours, go back to the global macro story. We will not get any longterm tail risk from this but it is positive short term for tail risk appetite. The i wanted to stay with hong kong story but youve tempted me in another direction, to talk about the global macro story, for the u. S. Story, because a colleague sent out a chart with no comment but the u. S. Isn numbers, asking the question how easy is it to win a trade war . How much do you think bond markets will rally on the week this in the u. S. Data . I think the bond markets were already pricing in the isn. Bond traders are macro guys. Theyve been looking at the data for a while. Theyve been noreen ignoring these optimistic forecasts. They been pricing for this. Isn print yesterday validates were 10 year yields are trading and it says they are at roughly the right level. Bonds are not misplaced. Sure, they can go 10 or 15 basis points either way but the overall theme of 10 year yields if. 5 , that is fine and the isn tanks lower, 10year gilts could. Laggingo point to the indicator of employment or the coincident indicator of Consumer Confidence rather than the forwardlooking indicators of willnd isn manufacturing be disappointed. Not into a recession at the start of next year, at least close to one. The growth slowdown in the u. S. In the Fourth Quarter will be severe and the assets that are not reflecting that will regret that by the end of the year. Matt i have to point out, Robert Burgess has a great column. I will tweak it out, pointing to out the credit markets may Say Something different. Check out the column on opin go. Mark cudmore is a bloomberg mliv managing editor. Type mliv on your terminal. Coming up, interviews galore today. You wont want to miss these exclusives happening on bloomberg tv. You can also hear them on bloomberg radio. We will speak with the ceo of the Worlds Largest Sovereign Wealth Fund, the eu trade commissioner, the president of Emirates Airlines ahead of the World Aviation festival. Dont miss these exclusive interviews and much more. This is bloomberg. Matt welcome back to Bloomberg Markets the european open. We are 15 minutes from the start of the cash trade and we see a bump in risk assets around the globe as hong kong chief executive carrie lam is officially removing the extradition bill. She is now going to withdraw is officially according to the and ashina morning post a result, the hang seng rising, the hong kong dollar rising, yen weakening. Futures, up 1 euro stoxx 50 futures, up 1 . Risk on is the move after that happened and there was news in london we will talk about, as well. Lets focus on Leveraged Finance. More than 75 issuing companies are in london this week for j. P. Morgans european highyield conference. So far, it has been a lackluster year for highyield bonds and leverage loan sales in the region, but with rates poised to stay lower for longer, or go even lower, it could leverage finance could Leveraged Finance markets come out on top . Office, j. P. On morgans conference in london, kevin foley, the banks head of Leveraged Finance and highyield capital. Kevin, you are at the conference. That is fantastic. I guess lower for longer is kind of the same of this years conference because private equity firms can get the financing and if rates are the slow, it has to be an easier job. Kevin good morning, matt, and thank you for having me. We are quite excited about the next few days. Weve got a great turnout, almost 90 issuers coming to the conference today. Weve got almost 1600 registered attendees. Weve got over 450 institutions joining us, so it will be a good stock of the market in terms of where we are and the lower for longer impact. You are right, that will have a catalyst in our market. Jpmorganlook at the highyield index, we are 225 basis points tighter since the start of the year. We are 100 basis points off the alltime low. When you look at the bb portion of that index, we are at alltime lows. This is as good an environment as we have seen the past couple of years and issuers should be taking advantage of it. Is weallenge we have had are coming off the greatest refinancing wave on record. The need to come to the market is limited. Out,ities have been pushed so you are dependent on m a for that activity and globally, m a activity is down 8 yearoveryear. In europe perspective, it is down 30 , so in an environment where you are seeing limited m a, where we are dependent on that for supply, we are seeing m a activity in the leveraged market down 45 . Anna clearly, companies have been tempted to refinance already and as you suggest, you wait to see whether demand continues or starts to come from in the future. I want to ask about the curve across Corporate Credits. A lot of focus on the Corporate Treasury curve and if that is forecasting some recession. One of our colleagues, pointing to the fact that in the Corporate Credit market, we are seeing a more normal credit curve. Do you think that tells an important story or does this not tell as much about the Global Growth story . It is definitely a mixed picture, when you look at historically an inverted yield curve has been an indicator of economic slowdown. Is it different this time . Perhaps. There is a lot of policy we are still learning, so it is hard to say if there is an artificial impact. Right now, most would make the case that it is an artificial impact and it will have less of a predictor in the past. In credit curbs, there is a growing gap between the haves and havenots. With seasonedcal issuers, they have a nice tailwind going into the market and tapping at attractively low rates. The more cyclical issuers are seeing more of a headwind. Concerns about the trade wars, what the geopolitical environment will have on the economy, where we are in the cycle. It will be credit specific. Deals are getting done but it will be leverage dependent and those are coming at premium yields and premium spreads right now. Matt what do you think about the sectors we will see the most action . I was talking to one of your colleagues earlier who said health care, tech, these are the exposed Growth Industries are where we will see the pickup in the second half of 2019. High anything that has visibility in terms of their Business Performance will be favored by the market, so if you look at a tech business with recurring Revenue Streams or health care where it has more to theity, less subject ebbs and flows of the economic cycle, those will be favored. Chemical,uto, manufacturing that will be tied to the general gdp performance are probably going to have tougher going. Thanks for joining us. Kevin foley, j. P. Morgans head of highyield Capital Markets joining us from the conference on that subject. We are minutes from the market open. Next, a look at stocks to watch at the open including richemont, luxury stocks in focus amid reports hong kongs carrie lam will formally withdraw the controversial extradition bill. This is one of the key protesters demands. The tension over the bill has really dented appetite for all kinds of retail, including the luxury sector and its exposure to this region. This is bloomberg. Matt good morning. Welcome back to Bloomberg Markets the european open. Five minutes until trading starts around europe. Lets get stocks to watch around the newsroom. Looking at richemont, hsbc. What is the luxury watchmaker up to . And otherrichemont names like lvmh and these are luxury names that are exposed to ing kong, and given the news the last halfhour about carrie lam looking to withdraw the extradition bill, these stocks are going to pop. Anna those stocks will pop. Hsbc, what is the story . Tom the resolution of the problems in hong kong would help hsbc because hong kong is its biggest market. Hsbc, standard chartered, all called up in premarket trading based on the report out of hong kong. Obviously, that will be an exciting event to watch affecting assets everywhere. It is already moving markets in the u. S. From asia through europe into the United States of america, the hong kong decision really roiling markets around the world, if you can royal things up. Roil things thank you for joining us. Get the latest stock stories by typing first go on your bloomberg terminal. You can also get first word news via the mobile app on the news cap. Coming up, the market open. Futures are pointing way higher this morning after hong kongs chief executive carrie lam withdraws the extradition bill. This is bloomberg. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is 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 an eligible phone. Click, call or visit a store today. The open of cash equities trading. Lets take a look at the markets. Annmarie we have to begin with hong kong. The hang seng is up 3. 5 . Carrie lam is looking like she plans to get rid of the extradition bill. Msci asiapacific is getting a boost their list getting a boost. Euroyen getting a pop. If you look at this chart, you can see how much the euro has weakened. Note the Msci Hong Kong index is gaining the most since 2011. Look at european futures, they are said to open up more than 1 . Given whats happened over the past hour or half lets see how the markets are shaping up. , they waitening up for their other markets to open. European futures are pointing to a higher start. Euro stock also higher this morning. And on the foreign exchange, you can see the british pound. 1. 19. Yesterday was france is up nearly 1 and spains ibex up. 7. No doubt, it is a risk on day. Look at the wheel, completely green. The sox im focusing on we talked about before the open were financials like hsbc and standard chartered. And luxury. Yesterday, rbc had a note out saying swatch and richemont are moving their price targets, saying they are too exposed hong kong. Those stocks are expected to open higher. Take a look at things like lvmh and caring kering. The stocks are really exposed. Matt no doubt. Rising,t 519 stocks only 53 are down. Headou hit the nail on the , the big gainers are those that are connected to hong kong. Points adding the most to the stoxx 600. Lvmh is up there and kering. These luxury stocks or anything touching hong kong is rising. Of course hsbc is the banking corporation. We do see a lot of british names subtracting points from the stoxx 600. Vodafone is up at the top, all taking away from the stoxx 600. European markets opening up strongly to the upside after this hong kong extradition bill story. Anna indeed. Sentiment in asia got a turbo boost from the reports we might see carrie lam with job the extradition bill. That is what sent so many people into the streets in protest. Lets kick off our conversation with the head of fx strategy. Have already seen fx markets reacting to this a little bit. Weve seen a on moves, essentially. Yen selling is certainly a feature. When would you expect that to take us to . How far can we rally . In the shortterm, i believe we could continue through the selloff we saw in august has led to some unique positions. Better news for asia. The fact these banks bought the supportthe ecb could this momentum further. In our own flows, we have seen investors in the last one or two weeks selling yen and positioning high beta currencies. We believe this is a tactical move and uncertainties remain. For now, this can continue. As far as do you see the second affect move after protestss reversal of that have caused so much turmoil in the asian market. How much of a boon is this for the Global Economy . Youefinitely it will help the markets have been short em assets more broadly. But i really believe the main driver in asian fx is trade tension. So the most important, in order to have a sustained move into the middle, we need to see progress on trade negotiations. This is by far the most important. Anna while we are seeing all of the protest activity take place in the reports carrie lam will withdraw the bill, the market is reacting to it. As we saw somebody people , itsting in the streets whether this will last or endure. Was that ever really in question for you . Not really. Kong, not only recently, even in doing this in the financial crisis, they were able to survive. China was always behind. So i dont think this was really at . Over here. China has the power defend itself. From this point of view i dont think it was really a risk beyond a low probability of scenario. This give china a little bit of an edge in the trade war . Donald trump was trying to tie in the hong kong problems with negotiations. Can china effectively remove that from the picture . You could argue that, to an extent, it reduces one of the possible risks for china. I think the substance of negotiations and disagreements remain. And lets face it can at this point, they are not even talking. Theyre talking about how to restart negotiations. They have meantime increased rates further so trade tensions have been escalating. The market is looking forward to restart discussions to see where we go from here but a lot of damage has already been done. After an extent, increasingly, the weak u. S. Data has to do with the trade tensions that have been escalating. It is very important to see more progress between the u. S. And china and important to note that even if there is a deal, the question is are they going to remove the tariffs they produced and i went by when . Impacts ofu see any that week u. S. I sevenday to u. S. Sevenday data . Saying that this will change things politically and change the tactics of the u. S. . What is your assessment . I think it is an indication that u. S. Manufacturing cannot remain immune to trade tensions. Extent, one would hope the this will increase incentives for the u. S. To have a trade deal with china. That,r, having said manufacturing is part of the u. S. Economy and the overall performance has been strong. ,t has been weakening this year but this is consistent with impact for fiscal stimulus last year. U. S. Growth is strong and employment is still low. Inflation is slightly below the target so i dont think the u. S. Economy is a major concern. But having said that, even if they continue, the u. S. Economy would not remain. Matt you will stick with us. We have more to come. Up next, stocks on the move this morning including swatch. It is amongst the luxury stocks surging amidst reports carrie lam is withdrawing her controversial extradition bill. This is bloomberg. Anna welcome back to the european open. Just minutes into your trading day. His a picture of the markets bouncing on that hong kong story. Report suggested he is about to with job the bill that has caused so much protest activity. Reacting. Arkets are they are also reacting, particularly to whats been going on in westminster. In westminster, we saw the humiliating defeat of Boris Johnson and his government. They have triggered an election after voting to block in a deal brexit. We will see more of this today as they bring the bill to the floor. Thanos is still with us. Even i was surprised to see the extent to which the markets are pricing in uncertainty. Monthslook at two volatility on the pound against the host of emergingmarket currencies, you will see that two months in sterling is higher than the argentinian peso. Thanos its not really a surprise given that there is tremendous uncertainty. Deal and sterling can appreciate and we can go even. Bove 1. 35 low as 1. 05. As we are in the middle is very likely that one of the two scenarios will be very short. So unsurprisingly, the bond market reflects this. Matt so you dont think we could see moves like that in eurosterling or pound yen . An emerging markets, we have such moves only when there is a crisis. I would argue that they are underpricing, and definitely, there are not going to move as much as sterling. But if we see how the euro moves before and after the referendum and what the volatility market seemsicing back then, it the market is underpricing risks for the euro. I argue that in the worstcase ,cenario we dont have a deal the economy will suffer, but other economies will also be affected. In such a case, it can weaken as much as 1. 05. I want to ask you about Jeremy Corbyn and what impacts you would see a corbynled government on the pound. Will gonk the pound higher if no deal is ruled out and corbin seems clear on that. You think a corporate government would still be positive for the pound . Thanos thats actually another uncertainty. Such a government would very likely lead to a soft brexit or even to a second referendum and avoid brexit altogether, which is by far the most important outcome. But one has to worry about some policies in his agenda that are not necessarily business friendly. A lot also depends on what kind of coalition we have very which parts of this agenda would be implement. The shortterm impact on sterling would dominate, but beyond this, the taste of government would be what drives sterling. What do you see in terms of the european sterling relationship . We have seen it come down to 1. 09 and change. Clearly, its bad news, but there is other bad news headwinds as well. Euro is undervalued by about 10 but we do believe the shortterm risks remain to the downside. Brexit is clearly one of the debt is another one. The debt is fully consistent with the data. The ecb is about to ease policies further from a normally a very loose stance. We expect them to cut rates by another 20 basis points in september. This might also be on the table, though it is uncertain. Most likely, there will be a small tv initially. They keep the countdown. But all of the reasons that have been keeping the euro week. At this point, particularly i would mention trade tensions. Not only between the u. S. And china also between the u. S. And the euro which are likely to keep the euro week. Anna thank you. Hanos stays with us this morning. Here are your movers. The report the carrie lam plans to withdraw the extradition bill has reverberated in markets across the globe heard your in europe, we are seeing a lot of movers. Swatch to the upside up nearly 5 . Just yesterday, it was suffering from rbc lowering its price targets, saying it is too exposed. That stock is getting a huge boost today. The italian luxury maker very well known for their trendy ski jackets, also getting a boost. 4 , the Company Behind gucci. And not just luxury makers, hsbc, standard chartered, and credential prudential. Up nearly 4. 5 . So any of the stocks that are touching hong kong are moving off of that news. You know, i count on you as a style icon. Annmarie [laughter] those chinese left over from the 80s montclair jackets, are they still fashionable . Annmarie they are still quite fashionable on the slopes. You will see when you go skiing in austria this winter. Matt thank you very much. Maybe we will hit the slopes together. Annmarie hordern with a wrapup of all of the stocks that have been affected by the hong kong news. Really affecting markets and asset prices around the world. We will continue to cover everything out of hong kong and the risk on sentiment. This is bloomberg. Anna welcome back to the european open. Astrong session in europe the number of corporates are exposed to hong kong move higher. Thats on these reports that the chief executive of hong kong plans to withdraw a controversial extradition bill. These reports are coming from the South China Morning Post. It would satisfy one of the major demands of the democracy protesters who have demonstrated against the government for almost three primarily and initially around this bill. Joining us from hong kong, stephen engle. Juliette saly is also with us. Lets come to you first. You have been following the story for a long time. This would be a real game changer in terms of hong kong authorities and, by extension, the chinese authorities bowing to the demands of protesters. Yeah, this is big news. To,again, as we just spoken the prodemocracy legislator, he says it may be too little too late, but it is a little step forward. Obviously, the markets are responding quite jubilantly to this news, they are up sharply. News came out of the carrie lam, within this hour, is meeting with her cabinet as well as probeijing lawmakers which control the legislative council. Plans tos her reportedly withdraw this extradition bill. Led to the spark that the crisis weve had over the last three plus months she said the bill was suspended, it was dead, but she was steadfast in her refusal to withdraw. , prodemocracy protesters said wait a minute, if youre not officially withdrawing, that means it could be resurrected anytime during the current session which does not end until july of next year. , andould not withdraw whether she was being told by , butng, she has not said now, were learning she will perhaps back down with the blessing of beijing or of her own volition, but it is big news. That is the number one demand of the protesters. Matt hard to believe she would do anything of her own volition. What is the likelihood she steps down at some point . She has just said that she has no plans to resign. She has said a number of times that she feels that she needs to walk this path and hold down the fort. Again, she has never tendered her resignation to the central government. We cant speculate on that, but withdrawing the bill looks like its going to happen. Anna we will keep an eye on whether we get confirmation. Lets move to Juliette Saly who is with us from singapore, tracking the Market Reaction. I should also say the spokesman speaking in beijing declined to respond when asked about the withdrawal. So we will wait to get the china view. What kind of Market Reaction did we see . Still got 35 minutes of trade left, but have a look at the hang seng. Its up, jumping the most since november. It already was a pretty good day for hong kong stocks. A lot of analysts out there are saying there is some argan hunting going on because of the stocks. A big rise in property stocks already today but this news has certainly spurred a lot more buying in late trade. The hong kong index up the most since october 2011. , one ofcathay pacific those companies that was caught in the crossfires of these protests. We also saw a new ceo come in on the back as well. He said to staff that revenue has been hit hard cap they stocks are rebounding, of the most since 2009. And is having a quick look at the dollar, i just want to quickly show you in terms of the standard deviations. It has been a big one and gone from a death cross yesterday to this. Matt thanks very much. Juliette saly with a look at your markets. 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. Matt 30 minutes into the trading day, lets get your top headlines. Relief out of hong kong. The hang seng storms after reports that carrie lam will withdraw the controversial extradition bill. Luxury stocks in europe surge. Boris and badly beaten. The u. K. Edges towards a snap election as a crossparty election moves to block a no deal of brexit. And ecb bond buying divides opinions. We hear from christine lagarde. Yieldsow are negative impacting the worlds biggest Sovereign Wealth Fund . To a guest in an interview you dont want to miss. Im matt miller in berlin ngside anna edwards in well, normally shes in london, but now shes down on the green in westminster. Im going to go ahead and say your be there for like a week youre going to be there for like a week. Anna [laughter] you never know. Of course, its raining so we picked that day. The conservative party is still reeling from the events of yesterday. Boris johnson being beaten in parliament under his premiership. He lost his majority and now the a minority tory government. He wont get the general election he is called for. , sure corbyn has said yes we will go to the polls that have an election; got to block no deal first. That is what the Rebel Alliance is trying to bring. They will try to get that have to take is a step forward to blocking that deal. What happens after october 31 is still unclear could that unclear. It takes is at to january 31 and there is little the Rebel Alliance agrees on. What the future direction would be would still be a big question. Politics. E latest on seem to be heading towards the general election but the timing of all of this is still up in the air and the markets react to every movement. Lets get a first word news update. Lets go to Tom Mackenzie in beijing. An island a 50,000 people is 70 underwater after being added by hurricane dorian. They are still conducting rescue missions on the grand bahamas and the deputy Prime Minister says it is quote not looking good, we expect catastrophic damage. Meanwhile, the u. S. Has declared an emergency in North Carolina as dorian heads to the coast. Minister ise prime said set to form the next government after the fivestar movement back to the alliance with the Democratic Party in an online vote. They are now due to bring a list of ministers and Government Programs to the president today. This friday as minister met with officials in washington as part of a plan to offer iran a 50 billion economic package to keep the deal with tehran alive. The Trump Administration says that would be a nonstarter. And economists are down getting their forecasts for growth in china. Oxford, bank of america, and bloomberg have all cut gdp forecasts for 2020 to below 6 . It is a result of increasing risks of trade war and it is below a level beijing sees as necessary to its goals. Saudi arabia is edging closer to allowing tourists access to the kingdom. Plans to opend it these applications at the end of september. One person told us it will be available to people from around 50 countries put another says the final list is still in flux. Local media reported the visa could cost around 120. 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. Matt tom, thanks for much. Very much. Holding markets are gains after sentiment in asia got a turbo boost following reports that hong kongs controversial extradition bill joining us toped talk more about this is the cohead of swiss and Global Equities from union bug aircrew the cohead of swiss and Global Equities. To globalant is this markets . World,he fourth in the obviously an asian hub. Up how important is this tailwind . Lot fornk it makes it a companies to interact with china and for governments to interact with china if a resolution can be found between hong kong and china mainlanders. Government wishes to support antidemocratic but obviously, china continues to be an extremely important part. Same goes for companies. Recently, we see the economy taking a hit. When we go from our luxury good companies, we have a deals that have a lot less traffic. So resolution would be in everybodys interest. I think it was suggested emerging markets in hong kong player are an important and are easier to invest in without the political turbulence around. We are seeing a reaction in hong kong and european stocks. Many parts of the economy are. Eacting to the latest news have you had concerns about some of the Global Companies you are in . Sted and of their exposure what difference does that make you all caps . We have been somewhat for emerging markets in general, not necessarily just in china or Hong Kong Listed chinese stocks. We have been more cautious of our investment, notably to do with the traded differences between the United States and and the political unrest we see more recently. Thats on the global site and across the sector. ,hen i look just at switzerland clearly, we have been watching with some concern the continuance of these demonstrations in hong kong because it does not necessarily encourage people to get out and buy it luxury goods in hong kong is one of the most if not the most important market for hard lectures. Alreadysaw a rish more very early in the demonstration saying to be careful. That probably has materialized since then. Matt how does the strength of the swiss franc, when i see Something Like this, i feel like there will be less of a bid for safe haven assets. How does the strength of the swiss franc affect your clients and your bank when you look at investments outside of switzerland . Being a swiss equity investor, we are always happier when the swiss franc is a little bit of weaker. It does provide a head headwind. They will have quite a lot of high valueadded activity based in switzerland. They say that Swiss Companies have demonstrated very clearly very clearlytory in their ability to overcome a strong currency. In terms of their ability to think carefully about their cost , they will situate their costs. They also have a very liberal economy. We are regularly testing the will of these swiss electorates and the government and politicians to withstand an overly strong currency and to encourage Economic Activity i being created at the company level. What i find interesting and the current dynamic is that the labor costs in switzerland. It is one of the only countries where that cost has decreased despite wage inflation, showing how keen the swiss worker is to continue to be highly productive , again because of the discipline that strong currency gives. If we had less Political Tension , less economic tension around clearly the safe haven status of switzerland would not be quite as strong. There are a number of swiss equities investors who would a sigh ofwhy relief. The National Bank would also be really they would not have to intervene as much. But that strength of the swiss franc is because the economy is very strong. Much. Eleanor, thanks very the cohead of swiss of global equity. Thank you very much for joining us. Up next, we bring you some of the stocks on the move including hsbc. It is amongst the stocks of jumping on reports carrie lam is withdrawing a controversial bill. That has been the source, initially, of all of the tensions and protests. This is bloomberg. I dont want an election, the public does not want an election. I do not believe the right opposition does not want an election. The public will have to choose. To sort this out and take this. Ountry through. E bill in order to take no deal off the table. Johnson and Jeremy Corbyn changing blows on the likelihood that britain we headed back to the polls for the third time in four years. Lets check in on the Market Reaction in the u. K. Thate have to point out this is heavily influenced by the things we see going on in hong kong. But the ftse is up. The pound bounced after dipping below 1. 2. Now stronger. And you are seeing gilts rise. S p futures up more than 1 . That has to be a lot of it due to the the situation in hong kong and the optimism that you will have less of a headwind now from hong kong protests. Dollar of what may be a safe haven bid germany to discuss this and more, mliv columnist Richard Jones. The pound has been predictably a volatile. We did see it dip yesterday and i was so excited, i thought we might get to the lowest since 1985. Not because of the strategy, but because of is not getting his way. We are kind of where we were before the selloff began. A feels like its a bit of temporary reprieve for the pound. Quite frankly, its messy politics is what got us down to these, i look at the u. K. Right now and it is no less. Less messy. Politics remain murky and this bounce we are seeing is a temporary reprieve. I think we need to see more evidence that politics have stabilized for this to grow your legs. We are focused, of course, on what is going on with the broader implications. The markets lifelock, we have been asking how it would hit global assets. Is thismore broadly, something that every now and then starts to be picked up by the global audience . Everybody is sort of interested in the narrative, but it a really see it as having an impact on global assets . Brexit could not come at a worse time. Politicalgot tensions, trade tensions, geoPolitical Tensions sort of weighing on the Global Economy. If you add brexit into that mix, you will see a bigger demand for havens. And you dont even have to go back that far. 10 year u. S. Treasury yields printed at their lowest levels. We are approaching that now. If we do get a no deal brexit between now and october, i think the moves we saw in 2016 will be amplified, so a drive into havens and lower treasury yields and brexit being the thing that catalyze that. Matt you can hear steve in the background with anna, which amends me. Reminds me. We thought it would be all brexit all the time for the next few weeks, but actually, there is breaking news out of hong kong that changes the picture for the whole world in terms of asset prices. What do you think about carrie lam withdrawing the extradition bill . Hong kong is one of those things i would as part of the geopolitical backdrop. , and i think that if this is a ray of hope coming out of hong kong, thats a good thing, but not sure this can be extrapolated further. Thanks so much, Richard Jones joining us from the markets live team for the latest on which there is plenty, looking at the the government. Weve sort of seen it coming from having to wait coming, havent we . Lets take it up on the hong kong news. Annmarie im looking at all of the European Companies that have any exposure to hong kong because they are certainly moving. Lets kick off with swatch up nearly 5 . Just yesterday, rbc lowered its price targets every shot, saying its too exposed. Kering also to the upside, this is the Company Behind gucci. A. H as well, even so for the makeup shot is also getting quite the bounds. And then there are financials and insurance players. Hsbc is up nearly 2. 5 . Standard chartered heavily exposed by 3 . From what we have been seeing in hong kong stocks is jumping the most since 2011. We are this reverberate around the world in europe. Thanks very much. Annmarie hordern walking through some of the movers, so much affected from that hong kong headline. Saying that we should not extrapolate further, but markets are definitely breathing a sigh of relief as carrie lam says she the controversial extradition bill. This is bloomberg. Anna welcome back to the european open. We are 52 minutes into the trading day and this is the picture of European Equity markets, up. 8 . Seeing a break down in that inverse relationship between the pound and the foot. We will see ftse. We will see if that holds them up that bounce is to do with whats going on in hong kong and the news flow there. Turning to trade, donald trump is trying to get china to injury to agree to a deal. Dealeeted that if he won a , im sorry, that a deal would get much tougher. This comes after china launched a wto complaint. Joining us from the World Economic forum in capetown is the Deputy Director general of the wto. Good to have you with us. I wonder if your assessment of have damaged the wto is right now given in the attacks its received from the white house. Well, i think the challenge is not just the wto. The challenge of the current is of the Global Economics which does not detract and the fact that all members of the wto believe that trade is important for economic development. For us them all the benefits from the Global Trading system, we need stability of the regime. In the regime. On that, there are agreements in a manner that contributes to global welfare and global crude. What we have seen is the uncertainty in the trading system. I think this is not in the interest of all members and the Global Trading system in general. Matt when i heard china say it would go to the wto with some of its complaints, i thought of president trumps longstanding critique that the wto just takes too long. How long would you say it would take for a country to file a complaint and actually get action from the wto . Well, disputes between the members are governed by a settlement. That for consultations around on that agreement which also has to be relented. Visavis the economic impairment that they may have. Usually, once it faces through, you request for a panel to be set up. They have the material to go. Hrough the process you have 180 days to reach a decision. But most of the time, it is up to the applet body. Appellate body. It should take some time, but it depends on the apple let body. Appellate body. Matt we dont have any more time. Thank you joining us. Matt killing the bill, the hsi sores after hong kong imbalanced leaders scraps for china extradition plans. We are live in the region. And johnson loses control, the Prime Minister is stripped of his majority and defeated in a key vote. Parliament moves to prevent a no deal brexit. Drama in westminster continue. Plus, less than two months i had of taking over as ecb president
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