Transcripts For BLOOMBERG Bloomberg Daybreak Europe 20240714

From the Bloomberg Global Business Forum. Matt good morning. Interesting to see the impeachment drama playing out, even after the release of what was called a transcript and then a widely mocked and remain renamed memo. I think the dossier that the congress has ordered will be even more interesting. We will see what the full whistleblower complaint was. Investorsctly, and have so much to get their heads around. The biggest question is what it means for the 2020 election and what does it mean for president s trade policy. We had comments from him saying we could see a deal with china sooner than expected. Is he starting to feel the heat . We have the feds Charles Evans saying perhaps no more rate cuts are needed and that may be playing into some of the Market Action as well as the trade and impeachment drama. Matt its interesting to hear that. Lets look at how this has played out in markets. First lets take a look at what is going on in terms of asian equity indexes. We can see the Msci Asia Pacific index rising there, not a huge gain but up. 25 almost. U. S. Futures are down. The changeill see after the european open, but for now it looks like it could get a negative start to u. S. Stocks, even with those trade comments. Does thison is, impeachment process play into the moving of the market, a lot of people of come out and said it will not have much of an effect on markets for now. The new see the new Zealand Dollar rising in terms of u. S. Dollars. Price rising this morning. Bloombergking at the dollar index more broadly, is it just a bid for the safe haven dollar, with all the impeachment drama . The 10 year yield down four basis points. Yesterday we saw it jump nine basis points. Generally it was a risk off session yesterday, perhaps it was the trade headline strong that more than anything. Gold also dropping significantly yesterday. It could have had to do with the comments from Charles Evans that we just discussed, but we bounceback a little bit today. Matt the white house has released details of the phone conversation that triggered the impeachment inquiry against the u. S. President. In the phone call, trump repeatedly implores ukraines president to help him find more details on Vice President joe bidens son, who worked for and owned a stake in Ukrainian Energy companies. Democrats say the release bolsters their case but the president says it shows he did nothing wrong. Trump the witchhunt continues, but they are getting hit hard on this witchhunt because when they look at the information, it is a joke. Impeachment for that . When you have a wonderful meeting or you have a wonderful phone conversation . Matt lets get more from kathleen hunter. His witchhunt defense has worked in the past, and when you talk to republicans, they also dont see anything damming in this memo or set of notes around the phone call. When you listen to to democrats, they say this is a smoking gun in itself. Will be interesting to watch how republicans react in the senate as it goes forward. Beenthough they have keeping in line with President Trump so far, we did hear several republican senators yesterday say they have some misgivings about what he apparently said to the ukrainian president and this phone call. It will be interesting to watch as more information comes out. If the house does impeach the president , it will go to the senate and thats where they would ultimately try the president. So those numbers will be interesting to watch. Nejra do we know what it will mean for the 2020 election in terms of bringing democrats or republicans together . Kathleen it certainly does reshape the congress. It makes it easier in some ways singing from to be that same sheet of music when it comes to impeachment. Before this they were divided all over the map. Think it does give them a rallying cry and opens up steps for them to talk about another reason why they think he should be president. Doesnt resonate with a lot of mainstream americans. I think the risk for democrats this if they stop talking about their bread and butter issues. That is part of why were seeing the impeachment inquiry go forward now, 14 months out from the election. The sense from democrats is they want to get it over and done with prior to the election. Matt those who didnt find anything in the rough transcript, as it is being called, they are waiting to see if they find something in the actual whistleblower complaint. The director of National Intelligence is going to testify on capitol hill. Are we going to see details of that whistleblower dossier, and what do we expect to hear from the director of National Intelligence . Kathleen this is certainly the next big thing to watch today. It will be interesting to hear what he has to say. Any indication of when members of the congress of the public might get hold of this whistleblower complaint and anything that might be in it. Those are the things we will be looking for. But certainly the issue is not going to go away. Finding out what the whistleblower specifically said and getting democratic reaction to that will be significant. Watching the democrats on the panel and seeing how they frame their questions is going to be whative as to how steps they will be taking after hearing what trump had to say yesterday during the press conference. Us is a chief strategist. Weve been reading so many Different Things on how investors should approachs this. It might cause the president to take the focus of and take a less hardline stance against china. It could be dollar positive but some saying it could send treasury yields higher or lower. What is your take on how it might affect your investment approach . Had nixon being impeached and that was clearly a negative, clinton being impeach was a positive that coincided with the tech bubble. So there are only two templates we can draw inference from. In general, the market is taking it somewhat positive. We see that in the sense that there has been a bit of leniency toward china, a trade deal being a higher probability. That is the only thing we can say for now. Geopolitics uncertainty continues to stay with us for a lot longer. Matt but you do see a trade deal as more likely . We heard donald trump saying a trade deal with china is a lot closer than we might think. What kind of trade deal are you hoping for, and what do you think we will get . Probabilities of a trade deal are going up. We have all learned over the last couple of years at making Investment Decisions on the probability of a trade deal is tricky. The story just continues. You hope that cooler heads prevail. I think we need to see on that. Nejra how does it impact how you look at treasuries, for example . No that generally agree with the cautious message that is being set. Does this push treasury yields lower or higher if you expected to have a positive impact on the trade deal . I think it might push bond yields a bit higher. Whereclearly a story growth is slowing. The trade uncertainties dont go push bondu might yields lower in the mediumterm. Matt so how closely do we have to watch this impeachment process . Obviously we will cover it very closely because it is politically important and also incredibly juicy, but how closely will the markets be watching it . Now think the markets for are taking it as binary. In the end, it doesnt really influence the election outcome, and the tricky part is how it would influence Global Economic scale. The story for that is still uncertain. Probabilities now, and we dont make too much of a fuss out of it. The i want to get bloomberg first word news from annabelle in hong kong. Prime minister Boris Johnson came out fighting and refused to resign or even apologize. He said the Supreme Court was wrong and slapping down its suspension of parliament and challenging opponents to trigger an election. Bank member has unexpectedly resigned before her term was due to end. The ecb gave no reason for her departure. She will step down on october 31, also Mario Draghis last day in office. Has beennetanyahu tasked to perform to form israels next government. It comes just a week before he faces a crucial corruption hearing. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra thank you so much. There are 35 days to go into the u. K. Hits its second brexit deadline. Some say fresh food items are most at risk. There is no change in consumer behavior. Do you worry about stockpiling . Aboutdont worry stockpiling and we see no evidence of stockpiling in u. K. At the moment. If there were to be no deal brexit, the issues all around fresh food. Government, customs activity. I think the government has very good information as to the input on industry but their question is what is the actual details. What will happen at the border is the most important thing. In marchsome money that we didnt need. We will spend more money in october building food that has a long life. Clearly that is not fresh fruit. We cannot stockpile fresh food. Some of your competitors saying salad and fruit. Of that time of year, the u. K. Imports most of its lettuce and tomatoes from spain. Should they stockpile anything . The best thing would be to just carry on exactly is normal. That come uphings for christmas are produced in the u. K. We are not constrained by the border for that. The best thing would just be keep calm and carry on. Does it mean for the u. K. . The u. K. Is quite a concentrated market. There are four large retailers that have nearly 80 of the market. There is quite a consolidated market already. A recent attempt to consolidate further was stopped by the competition authorities. Talk about your expansion plans. Do you have any . We do. We have 10 markets around the world. Strong expansion plans in thailand. 50 stores will be launched over the next three years. You see expansion in the u. K. , but i cannot say any more details than that. Matt that was the ceo of tesco speaking exclusively to bloomberg at the Global Business forum in new york. U. S. Farmers and japanese automakers to helping hand as the two countries signed a trade deal. Does this clear the way for a deal with china as well . We will discuss. This is bloomberg. Nejra this is bloomberg daybreak europe. Matt im matt miller in berlin. We want to check in on the markets in asia with Juliette Saly in singapore. Juliette theyre starting to give up a little bit of their gains in the latter part of the session. We have seen the boj trim purchases in that key 510 year bond market with that is the fourth time in six weeks that we saw that happen. Upgrading taiwan stocks today. The Hong Kong Market up by about. 10 . Ateresting data suggesting lot think it will recover by the end of the year. The csi 300 slightly weaker down by about. 3 . Lets look at volatility in china. About 19 calmest in months, since february 2018. Investors have had a lot to digest of late including the trade war. The holiday has added significance in terms of the National Week holiday. Suggesting we have seen a little bit of intervention there to calm the volatility in markets which is the lowest we have seen since february 2018 on the shanghai composite. Nejra thanks so much, Juliette Saly in singapore. Here is annabelle in hong kong with the business flash. Softbanks in talks on whether to increase its pledge of investment in we work, according to the financial times. At whether to provide an additional billion dollars. It is likely to postpone the ipo chiefnext year, with the executive stepping down. Erickson expects to say 1 million to solve a u. S. Probe into Business Ethics in six countries including china. Erickson has cooperated with the probe since 2013. One of the costliest Corruption Cases on record. Palatine pricing shares at the top of its target range pe loton pricing shares at the top of its target range. The firm is expected to raise a one booming dollars profit on its investment. That is your Bloomberg Business flash. There with your business flash. Japan and the u. S. Have signed an additional an initial trade deal on form duties and initial commerce. For now it removes the threat of the u. S. Imposing auto tariffs on tokyo. Heres japans Prime Minister announcing this in new york today. I have received direct confirmation from President Trump that the u. S. Will not slap tariffs on japans auto parts. Matt President Trump people to make a deal. Hes trying to appeal to a key base of u. S. Farmers who have been hit much harder by the u. S. China trade war. Our guest is still with us. Thisve been saying could be a template for the u. S. China trade negotiations, but that relationship is a lot different than the u. S. Japan relationship, isnt it . Roelof clearly, it is also about intellectual property. Its a positive sign, but there is still a lot of work to do between the u. S. And china. Is reflectedaution in a lot of the investment community. Investors are more cautious on equities than back during the financial crisis. A lot of money on the sidelines waiting to be put to work. What would make you want to participate in that upside . What we change our mind is basically their stabilization. Ist we dont want to see corporations continuing to make people work less hours and eventually lay off people. That is the next step in what is normally a late cycle phenomenon. Matt do you see the layoffs coming . This is a question we are asking not just in the u. S. But everywhere because of the trade war. Do you see the manufacturing issue starting to hit the employment numbers . Seeing the first initial signs of that happening in germany in the auto sector which is the biggest sector for now. We expect that to happen in other sectors as well, but you see the slowdown spreading and margins under pressure. Look at what Small Companies in the u. S. , margins are under pressure. Next step obviously would be a reduction in the labor force, which is the normal logical step in a slowdown. If that happens then we bring in recession call further 2020. Nejra the impact on global growth, is it being applied correctly . Roelof i think the bond market is spot on. It is saying that growth is slow, and the short end of the yield curve is telling the fed to lower Interest Rates by more than they are currently saying. Where do you see the 10 year yield . We saw it bump back up yesterday to 1. 74 . This is probably more a qe issue than a trade issue. Where do you see the 10 year yield going at the end of the year . Roelof we have allocated a bit more to u. S. Treasuries. U. S. Treasuries are effectively higheryielding than german bunds so you dont have a lot of risk there. We have seen growth momentum slowing and the fed needed to do more. You dont have very big risks and yields picking up beyond 2 so we are ok there. Nejra does everything you have said contribute to Dollar Strength improving . Coming up, spains Prime Minister tells us a note due brexit is the biggest risk to his economy. Our exclusive interview is next. Matt tune into Bloomberg Radio on your mobile device or digital in the london area. This is bloomberg. Trade wars are not good for anyone, the u. S. , china, they are not good for the emerging markets. Hundreds of millions of people out of poverty. There is the other side of that around the protectionism people having lost jobs. We look at china and a different way. There are serious trade related issues. I look at china as more of a glass halffull. The Chinese Government has many more levers to rely on than most other governments do. They are focused on the effects of the trade tensions and not felt to the full extremes. Starts result of false and a variety of other tactical stuff, they are starting to decouple, which is very dangerous. Beenade has never reciprocal. I hope we get there. I dont expect it to happen before the elections but i hope after that we have a fair deal. Matt World Leaders weighing in at at the Global Business forum in new york. This is bloomberg daybreak europe. Nejra lets check in on the markets around the world. Great to see you. Indian equities outperforming the rest of asia this morning, but india is the most expensive market in emerging asia right now. Can the gains continue . So far you are absolutely correct. We see gains coming on the back of the announcement made last week and this continues to make it more expensive from an emerging market standpoint. A slightlyke expensive bet, but nonetheless, the stage is set for longterm growth. Weve got the finance minister as well as the Prime Minister inviting a lot more investments into the country that could spur a lot more economic activity. There has been a lot more excitement across the board. Higher, also supporting the nifty. Volatility will be a factor to keep and i on. Broader markets continue to contribute. At goldsare looking rising popularity. Thats right, and i will get to that in just a moment. Across asian equities we are starting to flatten out. The Msci Asia Pacific barely moving this morning. There is a lot of Political Risk out there. Exchange, a similar story. Softer andlittle sovereign bonds, we are seeing yields come up this morning, up 2. 1 . 1. 5 but dont let that full you. We are still trading under 90 a time, quite a roller coaster ride. We have gold a little bit higher today after a rough ride yesterday. We saw the push into the etfs. The Holdings Jumped by 22. 2 times. Gold, the highest since 2013. It looks like investors were waiting on a pullback to put more money into boykin back etfs. The says to me that gulbis still key to investors. We are seeing a lot of these risk developments around the world. Matt thanks for that. Grateful to have your time to help us check the markets. Lets bring another exclusive interview from bloombergs Global Business forum in new york. The spanish Prime Minister has told us a note due brexit would be the biggest risk to his countrys economy. The nation has deep business ties with the u. K. In is home to the biggest contingent of british nationals in u. K. We spoke to john micklethwait. I had the opportunity to go to the g7 summit. We had a conversation that was really positive. It will guarantee the rights of our citizens of the u. K. And in spain. Its one of the Major Economies in European Union. We receive a lot of tourism from theain and we appreciate british tourism. That is flight is so important for us to be ready in case we have a note due brexit. Is, if thebig issue british leave in a new deal and the scots have a referendum, the last time there was a referendum, and made it clear they did not want scotland to rejoin the European Union. In your view, if scotland said we want to come back to the European Union if britain is left, when spain now be more welcoming . I think it is a domestic political issue and i respect british politics. We are following closely what is happening in brexit. Andave territorial tensions coexistent problems in catalonia. Referendum is not a solution. Huge fracture in not give and does positive and constructive way out. It is much better to open a to revealn order coexistence. Spain would not be supportive . We will think about it. The iraniansnk were responsible for the drone attack on the saudi arabians . Is not the way you are pointing out. The opportunity i had with president rouhani is to send him a message from the European Union, that it is not a good or positive idea to withdraw from the nuclear agreement. Also willingin is with other European Countries to bring forth our commercial ties or relations with iran. Nejra that was the spanish Prime Minister speaking to john micklethwait. Boris johnson made a defined appearance at the house of commons after he was forced to fly back following his defeat in the u. K. Supreme court. The Prime Minister refused to apologize repeated his challenge for opposition parties to vote for fresh election. Our guest is still with us. How would you feel about a new election . Theaterit is political and from that angle it is good. But lets hope we get to a resolution. A lot of markets are hoping that by now you wouldve reached some kind of a deal. The markets uncertainty is a bit too much and markets dont like uncertainty. Elections would solve it, hopefully. Matt it doesnt look like we will get those before october 31. How much of a problem is Boris Johnson sticking around and pushing for a hard brexit . Clearly it keeps uncertainty there. The uncertainty is also not a positive. With johnson you have the risk of a hard brexit. With elections and maybe corbyn you have the risk of a more leftist government that would not necessarily be probusiness. Sidesternatives on both are not very positive either. No dealf we do get a brexit, does it stay contained to u. K. Assets or does it impact your global Asset Allocation . Impact it clearly does the european economy. You just had the interview with the spanish Prime Minister there. A lot of economies on the continent would be negatively impacted and we dont really they will deal with this, so even more uncertainty. Matt how do you feel about u. K. Assets . Roelof we are sticking as close to the benchmark as possible in this geopolitical mass. Thanks so much for joining us today, we appreciate your time. Its a bumper day for centralbank speakers. Mario draghi kicks things off at 2 30 u. K. Time. The conference opens today in frankfurt. Over in the u. S. , the spotlight will be on the dallas fed president , robert kaplan. He will be the first of many fed speakers to take the stage today. At 3 00 p. M. U. K. Time, it will all fed president s, events will be closely watched for clues on fed policy ahead of its Rate Decision next month. You can follow them all on your bloomberg terminal. The United Nations General Assembly enters its next years french budget will be released to the public. Major tax cuts will be expected to appease the protests sweeping the country. We will bring you to exclusive interviews from bloombergs Global Business forum. Greek primeom the minister on the countrys outlook for 2020. A lot to look forward to. This is bloomberg. Matt this is bloomberg daybreak europe. Im matt miller in berlin. Interview,xclusive we talked about the revised share sale. Our business in asia is amazing business. In china, we are number three in volume but number one in profitability by a wide margin. The ipo is to establish and create the local champion that could be the equal for the consolidation and other things it can do in southeast asia. That is in the process. Shares will start trading day the 30th. So we are very happy to be where we are. Is it a playbook you might use in other places around the world like africa . Or is it a different sort of thing . Its a mirror of what we have in latin america for many years. It was an amazing vehicle to get to deal with local families from Different Countries and expand within the region. We think that same magic could happen now in asia. New think part of the reason is to pay down some debt, how far along are you in that process and pot are some other moves you might consider to keep on that track . For the iporeason was to create the local chapter. We dont need that to get to our year, by the end of next 2020. But to mirror what we have in latin america. The proceeds will be used to pay down debt. As will the proceeds from the australian deal. That was exclusive from the Global Business forum in new york. Lets go to annabelle in hong flash. R the business tesco saying of fresh fruit items are the most at risk. The late october exit date is a sentient time for the agriculture industry. , u. K. That time of year imports most of its tomatoes and lettuce from spain. That will be one of the key areas we will be concerned about. Softbanks in talks on whether to increase investments according to the financial times. Theyre discussing whether to provide an additional billion dollars. The chief executive is stepping down. Peloton is pricing shares at 29 apiece, at the top end of its targeted range. The listing value of the company is about 8. 1 billion. To repo 1 billion profit on its investment. That is your Bloomberg Business flash. Abn amro saying it is subject to probe by the dutch Public Prosecutor, essentially on wednesday, the dutch Public Prosecutor informed them the bank is subject to an investigation relating to requirements under the act on prevention of Money Laundering and financing of terrorism. We understand they will cooperate fully with the investigation. Hasonse new Prime Minister pledged to improve the investor climate in the country. Itsants europe to loosen spending rose. He spoke to Erik Schatzker at the Global Business forum in new york. You have a high debt to gdp ratio but financing needs are relatively low. Greece is returning to the areets and Interest Rates much more reasonable. We intend to repay our imf loans back as soon as possible and we have already filed the necessary documentation. These are very expensive loans soever debt is going to look much more reasonable, taking advantage of the lower Interest Rates, but also our debt is going to be much more sustainable if we managed to restore high growth rates. Feelknow you straitjacketed by that 3. 5 primary surplus, the previous 2020. Ment agreed through have you talked your creditors about bringing that down to a more realistic level in the near term . Have course we have, and i made the case from the very beginning that these primary surpluses are essentially a relic of the plat of the past, put in place at a time when there was little trust in greece. We are moving quickly to restore trust in the government. As i told you before, in a low interest environment, we need to rethink those high primary surpluses and what they mean for sustainability. I have also said i first want to restore the credibility of the government with an aggressive reform agenda and discuss reducing primary surpluses for 2021, not necessarily for next year. We will be submitting our budget within the next couple of weeks. We are in discussions with institutions as we speak but we feel comfortable that we can find a compromise that will not endanger fiscal sustainability, allow us to push forward with our tax reduction agenda and keep alive the discussion regarding reduction of the primary surpluses. I since there is more momentum supporting our arguments. Matt that was the great Prime Minister speaking at the Global Business forum with our own Erik Schatzker. An ecb board member has unexpectedly resigned, more than two years before the end of her term. The central bank has given no reason for her departure. She has been one of the strongest opponents of Mario Draghis latest stimulus drive. She said a new round of quantitative easing was unnecessary and should be used as a last resort. To me thisnk is one of the biggest mysteries of the day. Why do you think she resigned . It would seem as though she is protesting the renewed Bond Buying Program of the ecb, but wouldnt she be able to do that much better from inside the ecb after oreo draghi retires . Roelof that is a fair point. Its the Second Public resigning against mario draghi. Now we have her resigning, we dont have the details yet but i think it will be fair to assume that she didnt agree. She probably would have been more effective internally but what we are reading is theres a bit of mutiny going on at the ecb and people dont see that they have a lot of voice internally, so why not step down and save your own credibility . Listeningthe market more closely to the doves the hawks at the ecb . Oflof for the last couple years they have only been listening to draghi. He was a master of communication. He had to deliver on these statements are otherwise the market would not be very friendly. As an economist, a kind of agree with that view. You reach the point that Monetary Policy will be effective for the economy. Lowering rates even further doesnt do the trick anymore. I publicly saying and handing in your resignation, you are saying weneed a new narrative need a new narrative. Matt so now there is one less person with that mindset in the ecb. So arguablyaving, she would have more power if she stayed under lagarde. So she is abandoning ship. Is Christine Lagarde going to have a better chance of getting fiscal spending packages from governments specifically here in berlin than mario draghi did . Hes specifically asked for it in the last meeting, but the germans dont seem to budge. Honest, i dont really see a change their. Governments are about fiscal policy. You can see the frustration there the last couple of years. Central banks essentially bought time that could have been used for fiscal stimulus which has not been the case the last couple of years. I dont think as the central bank chief you should be saying a lot of stuff about fiscal policy, that is for governments, and the governments need to act now. Nejra you are negative on equity. How does europe fit into the global picture for you . Are you more negative on european equities and elsewhere . Roelof valuations look really attractive. You need a to rise, catalyst. The catalyst could well be fiscal policy but you need a yield curve. Nejra but you dont really see that happening. Roelof not yet. Nejra thank you so much for joining us this hour. Coming up, a transcript released and democrats say their case has been bolstered. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Anna nejra good morning from bloomberg headquarters. Bloomberg is daybreak asia erurope. Transcriptay a rough of Donald Trumps call with ukraines president bolsters their inquiry. An unrepentant and defined Boris Johnson refuses to apologize for suspending parliament, demanding his opponents hold an election. And ecb board member unexpectedly resigned. A vote of noconfidence in Mario Draghis stimulus plan . And dont miss our exclusive conversations with the ceos of as well asb inbev spains Prime Minister and the head of your letter. Unilever. All of that at the Bloomberg Global Business Forum. Nejra welcome. Welcome. We saw the s p 500 jumped the most in two weeks. Welcome. We saw the s p 500 jumped the most in two weeks. The dollar had its biggest jump since march and treasury yields jumped as well. The impeachment story has caught a lot of attention, but we thought to ask what does that have to do President Trumps approach to china and the trade war from here . And there were comments from Charles Evans of the fed in terms of perhaps no more rate cuts being needed, so a lot of the dynamics to digest. Matt for sure. You make the most important point about the impeachment process. How does this affect the trade war . Way we will see it have a direct effect on equities and market. The markets think the harder he is pushed on impeachment, the weaker he will be in terms of these china negotiations with a more willing he will be to make a deal. That is something they will bid up equities for. That is what markets are watching for most closely. Nejra you are absolutely right. President trump did actually say a trade deal with china could come sooner than we think. That is perhaps why we got a lift in u. S. Equities. , isstart to ask yourself now the time to start adding to equities . Investors are generally still quite cautious. Even though the s p 500 is not far from a record high, it has only gained 4 since the tariffs were imposed, or do you want to say look, the Global Outlook is to worrying too worrying. Maybe that is the question. Futures in europe are changed and the u. S. Features are unchanged after the gains. Take a look at what bond futures are showing us this morning. Jumpw, for example, a big in treasury yields yesterday and we still see it yields rising a yields coming down a little bit. As the price rises, yields fall. You see german and italian futures following falling. You could see them rise a little bit today. Lets check in on the markets in asia with Juliette Saly in. In singapore. Looking at the msci asiapacific index about just slightly higher. Japan is pretty flat after rising earlier. Cominghave movement through in yields rebounding from records we saw yesterday. Thats after the boj continued to cut purchases in that key bond market. Thats the fourth time we have seen that in six weeks. Csi 300 under pressure, no surprise. Thats ahead of the week long day of celebrations the Hong Kong Market is up by two by. 2 . Some analysts we have surveyed suggest that many see a rebound in this market and you could see 28,000 by the end of the year. To show you what we are expecting with hong kong trade. Export isexport to see falling by 11 . But Bloomberg Economics is saying the job may not be as sharp as what we saw in july. Some of the data in terms of hong kongs exports to china has been more encouraging. This goes all the way back to 2016. You can see that this year has been a particularly hard one. We are expecting to see yet another monthly decline, particularly in export numbers. Nejra i just got a line from barclays. Fitzpatricking don as nonexecutive director. The white house has released details of the phone conversation that triggered the impeachment inquiry against the present heard in the call, trump repeatedly asked ukraines president to probe former Vice President joe biden. But the president says it shows he did nothing wrong. The witchhunt continues, but they are getting hit hard on this witchhunt. When they look at the information, it is a joke. Impeachment for that . When you have a wonderful phone conversation . Nejra lets get more from kathleen hunter. His witchhunt defense has worked in the past, but is anything different this time around . Differentoving to be so far. We are not seeing the same type of residence when it came to Robert Muellers probe. We saw a couple republican senators saying they had misgivings about the president s conduct. That is a significant and certainly bears watching. If the house does go forward with impeachment, they would have to go to the senate, which we know is controlled by republicans, so they can be very decisive. But the market is not that big. There are only a handful that would need to break away. There is a sense that removing trump from office is an impossibility as long as republicans control the senate. Certainly, that is my steps down this proves to be a little bit different from the rest of russia. I see that Chuck Schumer is saying he thinks the whistleblower complaint in its entirety. Possibly redacted for National Security reasons. Do you think it is likely we see that or will it be more damming . So far, we have only heard from big opponents about the complaint. We do know the complaint was sent on a private basis. We know the director of National Intelligence will be testifying today. Obviously, that will be the next Pressure Point here, a democratic push for the release of the full complaint. It may be too soon to tell whether or not that is actually going to happen. , democratsoesnt will continue to push for and make an issue out of here in some ways, the list of become less interesting, but there are a lot of folks who want to compare what the whistleblower had to say with the summary so that will continue to be an issue. Nejra thank you for joining us. And joining us for the rest of the show is john johnson at newberger berman. Thank you for joining us. There are a lot of ways the story could go. Does it make you worried at all for the outlook for the u. S. . John thanks for having me. It is yet another story that will have a negative impact on confidence and uncertainty. That should not be helpful. We have seen the Business Confidence down quite significantly. Households remain quite strong and we think that is a big story behind our view that the u. S. Is not headed into recession. We see consumer demand is very strong. We see the impact of the fed cuts come through. The Housing Market is recovering. We see new home sales improve. So that is all positive for the economy, but we still have not seen at the bottom of this manufacturing slowdown. This is a story that will be yet another negative as there is increased uncertainty. Matt we have seen a lot of manufacturers from a fedex to john deere complain about the trade war. Others, especially carmakers like ford and gm are having labor problems as well. You dont see the manufacturing weakness playing in a negative way into the jobs picture . The manufacturing slowdown is something we have seen the manufacturing cycle tends to be very short. In 2015, 2012, and 2013 it is no worse than we have seen before. Andre close to the bottom there is a lot of recession fear in the market. Have been using the curve as an indication for an imminent recession. You have to look at what drives the current. , it has been a good indication but that is because the fed has been hiking rates causing an inversion of the curve. The fed has had the intention of slowing down the economy but we dont have that now. This has created a very different conditions. Conditions are much better than they were at the end of last year and were seeing that improve the Housing Market which will incur more spending. So the economy is growing at 2 , even with the manufacturing slowdown. Stabilizes,cturing i think we could see growth take 2 again. Nejra the you think the Fourth Quarter could introduce election risk as a factor for markets. Have you think that to be expressed in terms of asset how do you think that is to be expressed in terms of Asset Classes . Jon a of premium has moved out of the markets. Allocation and have specific allocations the highyield. To highyield. More risk premium will be introduced into the market. I think that is fair given the uncertainty on how the elections play out. He still have a lot of risk factors, even though some of them have improved. Likely andit is less trade talks seem improving. A lot of risk factors are coming out, but election risk is significant. That can have a negative impact onand Business Confidence capex and Business Confidence. The market may have to reassess. Nejra you will stick with us. Matt we will get more from jon jonsson. Barclays has named don mohammedck as well as as nonexecutive directors. You will know Don Fitzpatrick from soros fund management. She is the chief Investment Officer and you will know elerian, who is a Bloomberg Opinion columnist. Both have been named nonexecutive directors at barclays. Are 35 days to go until the u. K. Hits second brexit deadline and the two biggest groceries are warning about crashing out of the eu. Tesco and sainsbury says fresh fruit items are most at risk. Francine lacqua sat down with tesco ceo dave lewis. There is no change in behavior that i can point to at this time, even though there is clearly uncertainty. Do you worry about stockpiling . What does the deadline mean for christmas . We dont worry about stockpiling and we see no evidence at the moment. Brexit is all around fresh food. , we have been sharing our thoughts and insights. Is 30e government, it years since they have had to control any customs activity. We have been helping them understand what is involved. I think the government has good information as to the inputs and cerns of in that industry concerns of that industry. What happens at the border is the most important. How have you prepared . Inwe spent money in march buildingup to october food which has a long life but that is not fresh food. What do you think is most at risk . We have competitors saying salads, fruits. If i gave you an example at that time of year the u. K. But most of its salads and tomatoes from spain, so that is a key area we would be concerned about. If people come out and ask you about christmas, and not to scare monger, but should they stockpile anything . The best thing would just be to carry on. Most of the things consumed for christmas in the u. K. Are consumed are produced in the u. K. Our turkeys are british. The best thing is to keep calm and carry on. There has been a lot of talk about m a. What does that mean for the u. K. . The u. K. Is quite a concentrated market. There are four retailers with nearly 80 of the market. A recent attempt to consolidate further was stopped by the competition authorities. That implies the u. K. Is quite a stable position. Talk to me about your expansion plans. Do you have any . We do. We have 10 markets around the world. In thailand plans and stores being launched of the next three years. You see expansion in the u. K. But i am in a. Where i cannot say in a period where i cannot say any more than that. Nejra lets get bloomberg first word news in hong kong. Breaking news, abn amro is being investigated by a dutch prosecutor related to the prevention of Money Laundering and the financing of terrorism. Is Prosecutor Says the bank suspected of not flagging unusual transactions and a timely matter. They said it will fully cooperate with the investigation. And the u. K. , Boris Johnson came out fighting back in the commons. He refused to resign or even apologize. He said the Supreme Court was wrong and slapping down his suspension of parliament and challenged his opponents to trigger an election, accusing them of cavernous. Cowardice. Benjamin netanyahu has been tapped to form israels next government, granting him a political lifeline after months of stalemate. It comes a week before he faces a crucial corruption hearing. The allegations have clouded the last three years of his tenure. 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 . Matt thanks very much. Saysg up, President Trump a u. S. China deal is getting closer and closer. We talk traded next. Trade next. This is bloomberg. The conversation has amped up materially. We do not have the right to exploit our earth. Time is running out for us to address Climate Change so i think it is right they hold our feet to the fire. I look at Climate Change as a huge economic issue. It is the carrot that has got the ability to get us there. To scale up what we are doing today, we should be working much more closely. The private sector and the Public Sector. Matt leaders from the private and Public Sector talking Climate Change at the Bloomberg Global Business Forum in new york. I am matt miller in berlin. Nejra and im nejra cehic in london. But get your business flash. Lets get your business flash. Talks whether in to increase its pledge of investment in we work. For 1. 5nal value was billion but the paper reports it is looking at whether to provide an additional 1 billion. This comes as we work is likely to postpone the ipo until next year. Ericsson expects to pay 1 million to resolve the u. S. Probe. The investigation went into breaches of Business Ethics in six countries. They have cooperated with the probe and is one of the most costly Corruption Cases on record. Peloton hase raised over 1 billion in its ipo them at the top of its targeted range. The listing values them at 1. 18 billion. It is a big boost for tiger global, expected to reap a 1 billion profit on its investment. Matt thanks very much. Lets get to trade. Isald trump says the u. S. Getting closer and closer to a trade deal with china. The u. S. Leader says both sides want an agreement. Meanwhile, japan and the United States have signed a partial trade deal on farm duties and digital commerce. For now, that removes the threat of auto tariffs on tokyo. But those it still remain in europe. Jonsson is still with us. How do you traded trade . Jon it is an important factor. Hugely important. You could see the Market Reaction hit we are getting close to a deal. I think we will continue to get those headlines and we have been seeing these ups and downs but this is key to the outlook. This has a very significant negative impact on Business Confidence. Any sign of a deal coming through will be very positive for markets. And very key to how things play out. You make a distinction in the gross outlook terms of the u. S. Versus the rest of the world, but you say the most important part is one of u. S. Consumer spending. Is it that you are not worried at the moment . Is that the reason why you prefer relative value trade . Jon yeah. We think the u. S. Isnt quite a good spot. We are not calling for a recession and next 12 months. Consumers are getting higher wages. Consumption is strong. We have seen a Mortgage Rates come down dramatically and we are seeing that come through in improving the Housing Market. That tends to be a good leading indicator for increased spending. Were seeing the economy just chug along. We did see growth at about 2 again. That more than half of the Family Offices in a survey are expecting a recession. Theyre going to cash and looking for safe places to put their money. If you were a riskaverse investor, what would you do for money . The problem in the market is there is a huge demand for safe assets. But you can argue that there is this false sense of safety by buying safe assets. You saw the reaction on the positive news. You could actually have losses on the safe assets. Ends around the globe are quite anchored to something with lower duration is a better play. Longer duration is maybe not the hedge you thought it would be. Nejra jon jonsson, thank you for joining us. That it for daybreak. Bloomberg markets. Is up next. This is bloomberg. 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. Anna welcome to bloomberg markets. Im anna edwards alongside matt miller in berlin. Matt today, the markets say to watch washington. Agent stocks traded mixed as investors weigh progress on trade and the impeachment inquiry. Equity futures point to a negative open in europe and wall street. Cash trade is less than 30 minutes away. Anna