Gains rise inocks july and a rrr cut in china boosts sentiment in asia. Pushback. Boris johnson will press again for an election is the Prime Minister suffers yet another highprofile resignation. In nofly zone. Its 850 majority of daily flights today and tomorrow are set to go on strike because the parent could hit nearly 100 million. From westminster, good morning. Good morning. Out, i read that you can get a flight if you were coming in or out of london city, that will be operational because they operate with a different carrier through the fabulous city airport. Lets take a look at futures. We saw gains in most asian equity indices on the back of that rrr cut out of the pboc. Now we see dax futures rising, and ftse 100 futures up more than half a percent, although cac your own futures are little changed. Continue drama out of westminster. Boris johnson looks as if he is pushing on with this strategy at the end of last week, having lost his majority in parliament. He lost another highprofile colleague from his cabinet and amber rudd said 80 to 90 of the time was being taken up by no deal instead of being in brussels and negotiating. He is hemorrhaging cabinet ministers and today we will be looking at if we get any further resignations, looking for the bill that was cast last week. That is the bill that should push Boris Johnson to ask for an extension if he cant get a deal by the middle of october. He says he would rather be dead in a ditch then ask the eu for an extension. Now a lot of folks are looking at the legal advice being thrown around, the government threatening tough talk, or at least unclear talk as to whether Boris Johnson plans to adhere to the legislation, forcing him to go back to brussels for an extension. There is an interesting word from the foreign secretary, saying they want to test the limits and what it lawfully requires. Boris johnson is making his way to dublin to see if he can make any progress on that thorny issue. All right. We will continue to stay across that. After the pboc said it will cut the amount of cash bank they have to hold in reserve to the lowest level since 2007. U. S. Treasuries were steady after fed chair Jerome Powells latest speech s cemented views. Lets get in with mark cudmore, our mliv imaging editor. West off on the rrr cut, also expect some action from the ecb on thursday and from the fed on september 18. Is it starting to look coordinated . Not something they are saying is that even if the ecb cuts we might see the boj cut as well. The four largest Central Banks are easing. Im not sure if it is directly coordinated. They are reacting to a Global Situation which is rapidly deteriorating, and that means the Central Banks have to respond and do what they can do. Weve known that this could be coming and the fact that it happens to coincide in one month or the next shouldnt be over interpreted. We know the ecb and boj we know theres a lot more room to go which is where the bigger question lies. The pboc has many tools it can still use. I think overall it is providing a little bit of positive sentiment it is a very flat range but it is starting on a positive note. Positivitythat coming from what weve seen in china, the rrr cuts in looser amountsreducing the that people hold and increasing the amount they can lend. Which asset will that benefit . I know this is our question of the day on the markets live blog base metals are continuing to fall. Hasne of my colleagues commented that metals will continue to stay soggy it doesnt matter that they are getting extra Interest Rates, the outlook will continue to weigh on the factor in the supply side isnt helping. Overall metals will stay soggy. Theres a chance that we see chinese equities outperform over the last period, and theres a chance for that to continue. Chineseally think equities will fall less far. It will really help domestically. One of the big themes we are seeing in recent weeks, the China Economics Team put out a great piece showing how a lot of the chinese supply chain is really going to the rest of asia. Plummeting in terms of the trade deal with the u. S. , multiplying quite quickly and becoming more insulated. Asia is becoming a tighter region with a massive Consumer Base and asia could do quite well, even if there is to the strongn asia Consumer Base. If these cuts we are seeing or expecting arent bolstering the Global Economy, what is behind the run in oil . We have seen it rally four days in a row, is this because we boost theulaziz to shortterm crisis . From the fact that it has moved out of nowhere, it implies saudi arabia wanted to do more. There might be a risk of some other action taken by opec, but i think the Economic Outlook will dominate, and certainly the news is helping in the short term. Bloombergs mark cudmore, remember you can join the question of the day which assets will benefit the most from china cutting the trip, making changes to the Balance Sheet . Lets get to the bloomberg first word news update with the studios in london. Thank you. Boris johnson is pushing on with his hardline Brexit Strategy despite the risk of being taken to court and the threat of more resignations. A senior minister quit the cabinet with a ferocious attack on the government which she said is no longer serious about the deal with the eu. Dotson will visit dublin to meet with his irish counterpart. I supported Boris Johnson and his approach and i believe i was right to do that. It is because of the consequences now 21 senior colleagues expelled and the lack of planning on getting a deal it has made the position untenable. China is cutting the amount of cash they reserve to their lowest level since 2007. It will release 126 billion of liquidity as chinas exports unexpectedly contracted in august, dropping 1 in dollar terms. Shipments plunged 6 from a year earlier. In hong kong, plans to drop the china extradition bill failed to stem protests. Tens of thousands marched to the consulate to appeal for help for President Trump stop the city was also hit by small pockets of violence, starting fires. Official,to one visitors dropped nearly 40 from the same period last year. The u. S. Is moving ahead with an investigation for a new tech tax despite an apparent agreement at the g7, the senior trump official confirmed they are looking into it for u. S. Companies including facebook and amazon. French wine could be hit by retaliatory american tariffs. Global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thanks very much. Naomi with your first word news. Folly has been dismissed what will the latest leadership shakeup mean for oil market . We see the price rising for the fourth day in a row. We are live in abu dhabi next. And Bloomberg Radio is live on your mobile device or on dab digital in the london area. Tune in. This is bloomberg. X that was my interview, talking about the possibility of a four seat offered vehicle from the ultraluxury carmaker, and it was pretty fascinating yesterday i was hanging out saturday night and sunday morning with a Massive Group of millionaires and billionaires, who bought his 30 car production run of the worlds fastest vehicle, when 304 Miles Per Hour on the test track in sold out in one night. Very nice. I can appreciate just how exciting that sounds. In talking of things you would find exciting, what have you got coming up . We have a ton of great interviews after the program, dont miss the lineup. We will talk to the ceo of audi, the, the ceo of ,hief finance officer at bmw all of those interviews and a lot more coming up throughout the week as the Frankfurt International auto show kicks off and we have it fully covered on bloomberg television. Lets get over to the Bloomberg Business flash in london. Thank you, matt. British airways has canceled hundreds of flights ahead of the first pilot strike in decades. There was no progress in pay talks this weekend nba says it canceled most of its 100 daily flights today and tomorrow. The disruption will mainly witht heathrow and gatwick flights operated by an affiliate. Bework is reported to lowering its advanced valuation even further. To Parent Company intends launch, saying it is talking about how to attract interest, reporting that valuations could be below 20 billion. Goldman sachs as they could be worth 55 billion. Apple and foxconn have violated rules by using too many temporary staff. It sendsor watch says undercover investigators to the Worlds Largest factory. About 50 of the workforce. Apple says it has worked with suppliers to take immediate corrective action when it finds issues. Thanks very much. Oil is paring some of its gains after saudi arabia ousted its Energy Minister. He has been replaced by one of the kings sons, abdulaziz bin solomon, who has been a long Time Ministry official. This comes ahead of an opec meeting later this week and abu dhabi. Lets talk about whats going on in the oil sector. An opec member in Energy Minister says he expects things to continue. I dont think there will be changes. Im not expecting vast changes. I think with the personality that i know of prince abdulaziz, he is very decisive, he has a strong personality when it comes to the market. The uae Energy Minister joins us now from the world energy with oure in abu dhabi daybreak euro banker, manus cranny. What does a shift been for saudi policy . Very good day to you messages a very clear who said yesterday in that interview that the relationship between opec and nonopec was institutional, and there was a wonderful praise from henry ford that i think encapsulates everything we want to think about. Abdulaziz didnt achieve the 25 that but think about it this these were the words of someone much more important, henry ford, and therein lies the power of the palatine. Will they go for deeper cuts . Thats the question we need to ask ourselves. Right now continuity seems to be the byword. He came out and said that this is what we need, continuity. My question is will the saudis push longer and harder and more substantially for more aggressive cuts . Since i cant hear you, im going to roll question two as well as question one. He is aware of additional cuts. He talks about the risk of recession. One piece to go back and look at deputy Energy Minister in the United States of america. America is targeting 13. 5 Million Barrels of oil next year. Risk tothe biggest the opec plus deal. Energy in the United States of america is a dominant force and they are not worried about the cuts that opec once implemented. Begs very much. Our daybreak anchor, dennis cranny, talking to us about loyal and the changes, or lack thereof, an appointment that has helped to boost oil. Minutes away from the open of european equities trading, and we will take a look at the stocks to watch, including lloyds. The bank is halting its Buyback Program as its rising ppi costs. This is bloomberg. Seven minutes to going till the start of the European Equity session. The first of the week. Roth larson is looking at lloyds, covering the aviation group, and dani burger is focused on hedge funds. The story around ppi and retaliatory shareholders. Thats right. Statements have been going on and on. This seems to be the final hit before the deadline for making claims it appears to be much bigger than the bank had anticipated, even only a couple months ago when they released the sixmonth result. It is a very big number. They have cut their capital increasing targets, the return on equity targets. It is a big hit in there could be a market reaction, but at the same time, this could be the last part of this nightmare for all the banks and the u. K. In the longer term it may be positive, but they have a final figure. Letsaking of nightmares, go to sam and talk about whats going on with British Airways and iag. Sam . Pretty major strike. It is worth noting that you get used to the notion of airstrikes. This is the first major pilot strike since the 1970s. It will be a pretty significant event for them. Lets have a look at whats going on with man group and the latest. Be quitting, according to reports from the times. In, is another issue coming and in the first half they lost 1. 1 billion so theres already some strike force in the company, only been there for about three years, and interestingly it could be the x head that would replace him, with official statements saying that no decisions have been made yet. Thanks very much for joining us. You can get all the latest stock stories from our Equities Team you can also get the first word news on your bloomberg mobile app under the new staff coming up, it is the market open, futures are pointing up with a half percent gain. This is bloomberg. Minute away from cash equity trading for another week. Im covering the westminster politics story. Dani burger is holding the fort in london. Dani setting us up for the week, chinese equities. Some gains after the pboc cut. That banks have to hold. Gains only 6 10 of a percent, largely expected and some weaker Economic Data also. S p 500 futures up to tenths of a percent. Powells last feet last speech cement rate cuts. Some optimism there, oil getting over 1 after saudi arabia hosting the Energy Minister. Were seeing gold, some gains, as well. Looking at the features, green across the board futures, green across the board. The ftse in focus here. A few seconds until the market opens. The ftse 100 is interesting because of the brexit news going on. Even so, only 1 10 of a percent. The trick is because its such a big, global amount of firms, it doesnt have the daytoday movements affecting it. What does is the British Movement in the pound, down 1 10 of a percent. Perhaps thats why were seeing the gains, up nearly half a percent. The ibex, overall stoxx 600. The other focus besides brexit is the ecb rate decision. Economists see them cutting, so the stimulus, will that be enough to stimulate growth . The market says it might the enough as were seeing the dax up to tenths of a percent. Its also going to set the tone for the rest of this intro banks deciding on rates. Lets see what some of these companies are going are doing. Print is to the upside. When we look at the names, it should be no surprise we have oil related names leading the games. Today after saudi arabia of sting is Energy Minister. We see barclays group, Berkley Group rather, these big names, u. K. Stocks gaining as the pound starts to fall. Other u. K. Names seeming to do well. On the downside, there arent exdividends, so we arent saying that reflected. Strikes hitting aig. We also have the passenger numbers. Lloyds kpi taking a hit. Today, matt. Matt by the way, youre right to assume its Berkley Group because its spelled with an e, but the british pronounce that as if it was an a, and steve right there, perfect timing, stop brexit. Brexit. The pboc said it would cut the amount of cash banks have to hold as reserve to the lowest level to the triple cut, lowest level since 2007. Inning us is the cio wavered at waiver 10. What do you think at that cut, especially in the light of the ecb and the fed . Others cuts going to boost Global Growth . Guest i certainly think they will boost Global Markets in the shortterm. Theres a lot of question marks about how they will boost growth with massive monetary stimulus, negative Interest Rates, et cetera, but they will be likely to do more of that. I think the fed is the most important. But chinas move is another stimulus. Theyve done others so theyre trying to stimulate the economy at a time where indications are the economy is suffering from the trade war. I think it will be good for markets, not sure it will lead to a boom and growth, though. Anna good for markets. Good morning to you. Let me ask you about another stimulus that could be on the cards this week. Were looking ahead to the ecb meeting. Mario draghi. What are you expecting from him . We heard a lot of from the council, a lot of voices coming out speaking against the idea that further qe will be necessary. What do you expect from the ecb . Bill i think i suspect they probably will try to do more qe, but probably more of the same. Theres been speculation about whether qe could expand into corporate debt or specifically bank debt, bank issued, bonds issued by banks. That would be a stretch. I think its quite likely theyll announce further stimulus in the form of asset of asset they purchases they tried to stop. It looks like they might start that again. After all, the fed has gone from running down the Balance Sheet from increasing the Balance Sheet. The ecb is probably going to do that, along with a rate cut. Whether or not this will have the impact they desire remains to be seen, but were probably going to see some qe, yes. Matt although mario draghi certainly getting a lot of pushback, especially from the core european countries. If i could go back to china, i want to ask you our mliv question of the day, which is in regards to the triple are cut. Cut. Rrr benefit the will most from the loosening of the chinese policy . Bill i think weve seen some reaction in asian markets and china itself. Excuse me. More,k well probably see probably again have more of in impact on financial markets. In terms of growth within china, there are indications china has been slowing down. But theyve tried to used domestic boost domestic consumption. Its aimed at keeping the domestic economy going at a time where theres challenge in the global market. Exports have been weaker, and they are trying to boost demand in the domestic economy. It should do something to stabilize or boost the local start market. Whether it local stock market. Whether it does much remains to be seen. Its about keeping the chinese economy growing, domestically, rather than anything else. 500 u. S. Stocks, the s p not far from alltime highs, holding itself above that 50 day moving average, as well. Do you think we ride higher on the optimism may be china and the u. S. Contract cap strike can strike a deal underwrite . On trade . Bill weve got the ecb and the fed easing monetary policy, and that will be supporting for the market in the near term. We have to take into account the market is approaching an alltime high. The market has struggled to make much of a move up, relative to where it was a year ago. Valuations are stretched. The focus continues to be narrow. That dispersion between growth and value stocks continues to widen, to levels we havent seen come 2000 and the dot bubble. I think in the short term, positive momentum. Were neutral on equities because the earnings story is slowing down. Valuations are relatively full, particularly in the u. S. Strategically, i dont think we should be bullish, but we need to expect this week it will get support. Matt were going to keep you with us. More to talk about with you as youre making those comments. It leads me to think about what would happen if there were a trade war truce. Thats something well discuss. Bill dinning stays with us. Up next, well bring you the stocks on the move. You may have expected lloyds to move. The bank is falling after suspending the Buyback Program. This is bloomberg. Anna welcome back to the european open, 10 minutes into the trading day. Lets look at how the european session to shaping up. And up is the right word. Europe going higher as a result of stimulus measures and china. Lets get to individual movers. Plenty to look at. Back in the studio, dani burger. Dani lloyds definitely one of the bigger stories, the ppi nightmare finally putting it to bed, claims much higher than expected. This also means theyre suspending buybacks. Thats why were seeing the 2 hit to shares. Thyssenkrupp down, one of the biggest losers on the stoxx 600. Previously, the elevator unit, the ceo floated the ipo. This is what markets were expecting. Instead, the ceo signaling equity firms should take a Minority Stake to raise cash and maintain control. Thats on the ipo, so shares moving lower. I ag suspending 100 of flights over the next two days. This is a big it. Analysts say this could take 8 Million Pounds of this hit to the carrier, as it strikes are ongoing, shares down 1. 7 . Matt, anna . Matt thanks for that. Lets get back to bill dinning. Think of the possibility of a trade war truce . Prolonged time, there was an assumption the president would do that sometime before the 2020 election to goose the economy and help chances of getting back in office. Does it look less likely we get a comprehensive agreement before than or at all . Bill if we think about comprehensive in the sense of not just talking about manufactured trading environment, but also intellectual property and some of the other things that were originally behind the imposition of tariffs, thats going to be very difficult. In the shortterm term, there are sounds coming out of china, but the peoples republic of china wants to do a deal. I suspect President Trump wants to do a deal so he can declare victory. There continues to be, behindthescenes, some desire to do a deal. But in terms of the actual trade part, the tariffs on various manufactured goods, et cetera, im not sure this has a huge impact on the u. S. Economy. I think it has more of an impact on the chinese economy. They may be more pressure on the chinese to do some kind of deal. But what they can do i dont know. They can make promises to buy more u. S. Goods. But one of the problems has been they dont buy many u. S. Goods and its difficult for them to buy more. I have a feeling this could ramble on into next year. Certainly, the desire to do a deal, whether they can do one, is the big question. Anna conflict of worldviews, as well as trade policies. Where does that leave you in terms of appetite for havens . Looking at the yen, we see bullish yen positioning the highest in four years. That doesnt suggest the market is ready to give up those havens in a hurry. Bill no, and i think theres a dichotomy. On the one hand, stock markets are drifting higher. But things like gold are doing better. The dollar is a bit weaker the last few days. But the trend seems like its higher. Thats normally more of a defensive decisioning positioning. I thing on the yen, there are interesting things happening. I dont think thats why currencies are going up. I do think japan is an interesting market, one of the ones weve been focusing on. In terms of the currency markets, the big thing to watch is, will coming off the dollar, the dollar being weaker in recent days, if that continues, that would be another thing that gives us relief. If the dollar starts to resume its uptrend, that would be a negative for a lot of things, including emergingmarket equities that are associated with risk on environment. Were looking at the dollar very closely. Matt will fed codes achieve that . Our fed codes you cuts you expect already priced in . Fed ive got to believe rate cuts are priced in and it does look like there will go to 50 basis point cuts. Whether we can interpret chair powells comments over the weekend about maybe there will be a conversation about increasing the amount of quantitative easing they are doing, the fed easing is abundantly in the price. Just a question of record around it rhetoric around it or other things they do in terms of qe program. Anna thanks very much, bill dining joining us this morning on the european markets open. British airways has granted most flights for the next few days after it faces the first pilot strike in decades. The walkout could cost 98 million. Joining us is bloombergs airlines reporter. Sid, good morning to you. Remind us why British Airways pilots are striking. Sid good morning. The reason for the strike is better pay and benefits. They give up a lot of pay and benefits during the financial crisis when they were doing badly. Now they want higher pay and benefits restored, including profitsharing. Matt what are the effects of the strike, then . Sid there have been 100 of flights from heathrow have been canceled. Flights from london city airport, operated by another subsidy after operating, but flights have mainly been canceled and the airline saying for two days, there will be disruptions. Anna ok, so plenty of disruption for travelers around europe and beyond. What is British Airways saying about this . Sid British Airways is saying they are looking forward to talking to pilots and they are trying to negotiate with the unions. The unions said the same thing. Its a question of whether the pilots union and the airline can reach an agreement, which doesnt seem likely at the moment. Matt thanks for joining us, said philip, bloombergs u. K. Sid philip, bloombergs u. K. Airlines reporter. They have already canceled flights today and tomorrow out of heathrow, among other airports. You will be able to fly in and out of london city. Coming up, johnson stance defiant. Hes refusing to back down on his all in Brexit Strategy despite the threat of court action. We are live in westminster next. This is bloomberg. Anna welcome back to the european open, 20 past 8 00 in europe, 20 past 9 00 in some parts. Lets have a look at markets, equity markets moving higher, pushed higher by optimism around global stimulus. We heard from the chinese as far as rrr cuts go. That some form of stimulus. Pushing higher on that, looking ahead, thinking about what the ecb might deliver. Centralbank stimulus in some form or other looks like it will stay on the agenda. Lets talk about what im doing in westminster. Boris johnson is pushing on with his brexit plan despite the threat of legal action. The Prime Minister plans to defy richest defy legislation requiring him to ask legislation. Cio is still with us. Joining us, bill, let me ask you the thoughts on u. K. Assets at this point. We seem to be on a roller coaster ride in the u. K. Have you got a lot of exposure to u. K. Assets . What has your strategy been up until now . Bill we dont have a lot of exposure to the u. K. Stock market. We think its reasonably priced. If you look at it on a simple price earnings ratio basis, its the cheapest major market in the world. We do have exposure to sterling as it because sterling has been so weak. Although theres risk it can get weaker, a lot of the bad news is in the price of sterling. The equity market not necessarily, but weve been increasing weightings in cash and bonds and alternative assets, a lot of which are sterling based. The uncertainty is going to continue to keep the stock market down. The problem for the ftse, the stock market looks valued, but if theres a resolution to brexit, one of the things that will happen is sterling will go up. Thats not good for ftse 100 companies. The stock market less keen, but sterling has gone down a long way and theres bad news in the price of sterling. Ftse so have seen the far this year only gain about 8 . Weve seen other european indexes gain, the cac is up 18 for 5 year to date 18. 5 year to date. Why the like . Is it the lag . Is it down to brexit and the hurt on the economy . Bill its a combination of the problems around brexit, also the composition of the u. K. Market. There is defensive type assets in it. I think the future for the ftse is that there are a lot of goodwill companies in the u. K. , smaller Midcap Companies in the u. K. If theres a resolution to brexit in the shortterm, it would be ok. The other problem is the political uncertainty. Its so difficult to read how an election might play out. The possibility that the conservative party loses an election is quite high. That would create even more uncertainty for the stock market at a time the labor and party the labour party is going to run on policies that would be regarded as negative for business. Theres a lot of problems for the u. K. Market. I dont think the ftse is somewhere well be focused on, but there are a lot of worldclass companies, but valuations are cheap, will make it attractive. But not for us just yet. Policymakers, monetary and fiscal, do if we saw a no deal brexit . Although lawmakers are trying to take it off the table, he could come back. What can policymakers do . The resolution has a foundation for macro analysis. They put out a report saying macro and fiscal can only offer a quarter of the amount of support needed for an average sized recession. What would your assessment be of the amount of room policymakers have in the u. K. . Bill from the fiscal side, weve already seen the government hundred Boris Johnson talk under Boris Johnson talk about the austerity and starting to spend money. Thats something they certainly want to do and they will do more of it. On monetary, although weve got low Interest Rates, theyve got a plus sign in front of them. The bank of england is one of the Central Banks that stopped doing qe. There could be further monetary to millis. The insert monetary stimulus. The uncertainty will have an impact. But theres room for policy support in the u. K. Economy, fiscally and monetarily. Analysis says it might not be enough to offset recession is probably accurate. Sure a nocessarily deal brexit is apocalyptic. I just think it would be rather difficult. Matt yeah, bill, thanks so much for joining us. Up next, ecuador starts its 5 billion buyback. Well have an exclusive interview with the finance chief. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Matt 30 minutes into the trading day, the top headlines. Reason for optimism. Stocks gain as exports arise in july, rrr cut in china boost sentiment in asia. Pushback. Boris johnson will press again for an election as the Prime Minister suffers another highprofile resignation. And no fly zone. Vast majoritythe of the flights today and tomorrow as pilots go on strike. Nearly 100ld hit million. Good morning and welcome to bloomberg markets. This is the european open. Im matt miller in frankfurt for the auto show, alongside anna edwards in westminster for the brexit drama. Anna . Anna yes, matt, here in westminster following the politics once again. Lets talk about whats going on one nor aqua nor. Equinor. They gave investors what they asked for. They held off longer than rivals like shall to compensate shareholders for the dilution during the downturn. Joining us for next for an exclusive is the cfo. Very good to have you with us. Talk about the timing of this buyback of returning this cash this way. Has this been linked to the start of start up thats coming soon . Have you linked the buyback operationsstart of at that giant field . Lars good morning and thanks for having me. The cost of the share ibec Program Share buyback is launched based on strength. Thats been in two dimensions. First of all, Balance Sheet strength. To keep thected range the next couple of years, even in the share Buyback Program. Secondly, based on Production Growth and outlook growth in cash flow. And of course, the highquality portfolio theyve been executing is part of that. Month,ve started next the second good news we announced last week. Of course its part of that. The what you think of Price Development weve seen thus far in terms of the underlying commodity, lars . Lars well, when it comes to the Price Development, theres uncertainty in the market, downward uncertainty on the demand side. And thats reflected in the gas prices and oil prices. Appointmentoes the of prince abdulaziz of the new oil minister of saudi arabia say to you . What do the saudis want to do with this shakeup . Well, i think first of all he needs to take on the job and then we look at it to play an active role in opec. You announced this share buyback, lars. Than some ofater the other companies in your sector to return cash this way. Do you think some of the volatility in prices, does that justify waiting longer longer . What explains why others went before you . Lars i think they see they years theres a variation and why they launched a share Buyback Program. We launched it off of strength, and that strength is due to a real turnaround in the company the last couple of years. Come outhe downturn to of the downturn as a strong company, even more competitive in a very competitive global world. Think that the market is under has underestimated it . Market isink the waiting for it to start up. I think this is a huge, giant field, very profitable next summer, 440,000 barrels a day. I think you dont find many assets like that. That, and we did some calculations, 70 a Barrel Oil Price assets in 2020. It will provide us 50 cash flow from aftertax. Very good. Matt there were other assets and play. Its emerged exxon is in talks with seo for its norway portfolio. Why did you pass on that . Were you too busy on other things . Not interesting two expensive not interesting . Too expensive . We have a very good equity in those assets. Whether we looked at the portfolio for sale or not comment on, but as any other company, we are pursuing opportunities. But we have 20 billion barrels in resources. So we are not distressed and have to buy. And thats a very, very good position to be in. Matt can you talk to us about plans explains capex plans . Target. Ced your what does it look to you right now, nearing the end of the year . Lars the most precise number we can give you is between 10 11 this year. Usually we have higher activity level as we come out of the summer and approach year end. Thats the best estimate. Average, we that on have [no audio] dollars. Matt great to get some time with you. I appreciate you coming in, lars, the cfo at at one nor at equinor, very busy, talking to us about oil. I will talk to and not because shes got a justice to anna because shes got a Justice Minister joining her. Anna former conservative Justice Minister, one of the former members of the conservative party, removed as a result of rebelling. David, good. To have you with us good to have you with us. Youre the witness withdrawn from the conservative party, left of the cabinet some time ago. Amber rudd resigned. Do you hear more possession nations are likely resignations are likely . Guest its possible. Its always a difficult decision to decide to resign. I resigned in july. Amber riley resigned amber rudd resigned. You can contribute towards making the right decision, but there comes a point where enough is enough. That was the point amber reached. Anna do you see a way back into the conservative party . Squad,nt members of that different views. Some say they will fight to maintain their place. Other saying no, thats not going to happen. What are your thoughts . David im not in a position to speak for everybody, but the impression i get of most is that we would like to continue to be conservative mps. Some of us have been conservative members for decades. Kenneth has been a conservative mp for 50 years. We would like to continue to do that. But we have a problem with the strategy being pursued by the government. Its a strategy deliberately to monitor. It seems to be to transform the conservative party into being the no deal party. And that is an approach thats not just going to alienate a few members of palm it, but of parliament, but millions of voters. And that is one of the problems here. And it is a policy, a no deal brexit, that is irresponsible, that would leave this country less secure and less united. Anna so you and others are clear you dont want to give orest johnson the general election unless no deal is Boris Johnson the general election unless no deal is taken off the table. The bill is going to get percent today assent today. Is that enough . David what we need is not just the bill to get royal assent. We also need to make sure the extension is delivered. Anna isnt that in the eus hands . David the government does all it can do to achieve that. That means parliament will need to fix the end of october. And without that, we run the risk of almost anything happening. I think it is right we seek that extension on one of those voted consistently to leave the european union. The referendum result should be implemented, but it should be implemented in a responsible way. That requires us to get a deal, and thats what the Prime Minister should do. He should focus on getting a gameplayinglitical and empty threats. He needs to get on, set out his proposals, exactly how he wants to leave with a deal, have realistic redlines, and get to brussels and negotiate. 8090 has rudd said been preparing for no deal, not in negotiation. Weve heard about what the government wants on the backstop, but the eu suggests talks are not substantive. Simply nothing has been done on the actual negotiations. David thats exactly right. The reports that have come back is essentially what were asking for proposals. Were not hearing them. We dont know what they are. There have been no meetings. Theres been expectation of proposals, only to turn out to be general chitchat. Anna are there proposals lurking in somebodys safe and was mentor . David very good question. Supposedly there were some proposals last week. Was the old merge set of proposals with difficult paragraphs deleted. It was about five minutes. That was pretty well it. If that is the sum of the efforts after six weeks of the new government, then seems to me whatever the Prime Ministers intentions, and i believe he wants to get a deal, the fact is the work isnt happening. The proposals are out there. The work isnt being done. The redlines are unrealistic and we are just heading inevitably towards no deal but the fact that parliament has intervened. Anna thank you for joining us. Matt . Anna, thanks very much for that. Coming up, the u. K. Prime minister refusing to back down on Brexit Strategy. Well keep across the story and talk about possible court action, potential impact of a no deal brexit with a new report from kpmg. This is bloomberg. Anna welcome back to the european open. European equity markets looking positive, slightly better gains around europe. Lets talk about the u. K. Economy. Joining us is the chief economist at kpmg. The Company Released annual report detailing the impact of a no deal brexit on the u. K. Good to have you on the program. Lets talk about the no deal brexit scenario. What are the assumptions you make and the resulting impact of a no deal . Guest our assumption is the main impact will be around the trading relationship. There will be a lot of difficulties with an export and import transactions, as well as potential shortages in food and medicines that will impact consumer confidence. That will be a relatively shallow recession around four quarters. We see gdp fall 1. 5 next year. On earlier is based estimations and modeling and weve taken that and adapted that to what we are seeing at the moment. Anna why asap a shallow recession . Is that the assumptions you put in . Guest absolutely. When you look at consumer spending, where they are in holidays, theres no need to go any further. There could be unknowns that could trigger a worse recession. But the economy is relatively resilient, operating around for capacity. For capacity. We dont see further risk. Global slowdown . Brexit is not operating in a vacuum. Theres a global slowdown happening, which you have to put across the brexit impact. Guest overall, exports are relatively weak. But this will give it a big hit in the shortterm. Anna you come up with a no deal scenario expectations, house prices dropping 6 in 2020, some of that more extreme scenarios. Why would you steer clear of those scenarios or do you think they could still happen . Guest when you look at earnings, looking at the housing market, when you look at the employment levels, when you look at what underpins demand for housing, when you look at infrastructure, and for the potential for government to spend more, theres quite a lot of positive there. In thewhy our model event of a no deal, correction of about 6 has prices, but we also say if you look at historic president president , it could precedent, it could be 1020 decline. Anna what do you think it could do to cushion that scenario . Guest we think they will cut rates aggressively. We dont see a major inflationary pressures, even if the pound is as expected, likely to fall further in the shortterm. We have weaker oil prices, weaker demand. There will be no need for the bank of anglin to be hawkish. England to be hawkish. It will be the only game in town. It will take time for fiscal policy to act. Anna whats your assumption about the future trading relationship between the u. K. And the eu . Do you have an estimate how long it takes to get clarity on that . Guest unfortunately, it is likely to get quite wrong quite long. The transition period is two years before a potential resolution, but it could be longer than that to reach this stage. You should prepare for six years before you know the full new trading relationship of the u. K. With its main trading partners, including the eu and u. S. Yael thank you very much, joining us on the green in westminster for analysis. Of next, well get analysis from the markets. Richard jones from the mliv team. This is bloomberg. Matt welcome back to the european open, almost an hour into the trading day, looking at gains on the ftse, 4 10 of 1 , the dax and the cac a little changed. Ftse mid not mushing debt not moving very much. Joining us is Richard Jones. Talk to me first about the german data. Its been pretty bad. Is it getting any better . Richard we just had a bitter export print for the month of july, which i think is something that will be welcome. What i would warn against is reading too much into one data point. If we look at factory orders, industrial production, the forward indicators from the survey, and were really at levels that are sort of pretending an upcoming recession in germany. The export data, while encouraging and it eat expectations beat expectations, we need to see more of this to sound the all clear. Given the trade uncertainty germany and the rest of the world is facing, i dont think anybody is facing that anytime soon. Anna i saw this great story this morning, that j. P. Morgan has launched a new index in honor of President Trump and his tweets many months ago. In all seriousness, its about how his tweets affect Interest Rates expectations in the u. S. We could be busy watching for trump tweets september, couldnt we . Richard yeah, i think weve been busy watching those tweet and its something thats going to continue, not only this month, but the coming months. As we get closer to the u. S. Election, twitter is going to be a strong medium President Trump is going to use his messages. It is something that has driven markets, and thats not going to change anytime soon. Matt what about the chinese loosening, the triple are cut on friday rrr cut on friday . Thats probably going to combine with loosening of monetary policy, if you can see it that way, here in europe. And the fed comes in with a rate cut. Is that going to help boost the economy, richard . Richard i think its too soon to say whether it will boost the economy. Maybe the best we can hope for is it can boost sentiment among investors and corporate. I think if Central Banks were not to ease policy, that would be a bigger problem if they didnt at least signal they were there and trying to do everything they can to boost the economy, to boost business investment, all of the things that have been weighing on the Global Economy the past six to nine months. Matt thanks for joining us. Bloomberg mlivs Richard Jones joining us out of berlin. You can get us his work by typing mliv on your bloomberg terminal. Thats it for the european open today. Stay with bloomberg television. Weve got a lot of interviews coming from the International Auto show. Im going to talk to the ceo of himswagen later, and ask whats going on with the group, the sports unit. Will we see a possible ipo . Ill probably ask about ducati, as well. Up next is bloomberg surveillance with francine lacqua. This is bloomberg. Exceed, Boris Johnson will press for an election today. The city suffers another weekend of violent tests. The extradition bill does little to stem the situation. Pilots go on strike. Hitcost of the iag could 100 million. Good morning and good afternoon. Welcome to bloomberg surveillance