Transcripts For BLOOMBERG Bloomberg Daybreak Europe 20240713

Good morning. This is bloomberg daybreak europe. We are getting pmi numbers across right now from india as well as news that apple is going to boost its output of the iphone 11 by up to 10 . Reports coming out of the nikkei news agency, so it looks like apple has gotten good feedback on the iphone 11 in terms of sales. Its going to boost the iphone 11 range by up to 10 in terms of production according to nikkei. Have pmiof india, we figures. Now, 48. 7 versus the previous month of 52. 4. Good news from apple. Bad news from india. Here you see the rupee losing strength in terms of the u. S. Dollar. The u. S. Dollar can now buy more thanthan before rupee before, though there is very little change in todays session. Lets take a look at some of the other data points you are going to be watching. I noticed the pound this morning climbing. You can see it right now, 12336. We are going to keep our eyes on the development in terms of the brexit. All of our eyes collectively. Ftse futures are doing better than most futures contracts in the major European Equity indexes this morning. Even with strength in the pound. I thought that was fairly interesting. The u. S. 10 year yield says unchanged, but it has come down considerably. Right now, 154 after bad Services Data for the u. S. Bad manufacturing data and bad Services Data. It has certainly been a gloomy week in terms of the u. S. Economic data. Now we are focused on the labor market. In terms of the manufacturing jobs, the gauge is the lowest it has been since 2016. Slower private hiring. A sharp drop in business hiring plans. The worst u. S. Ism Services Index in three years. Take a look at what fed speakers had to say. You have idiosyncratic factors that affect the labor market. It is not just the labor market. Beenade uncertainty has important for the weakness in manufacturing. I have talked to so many business executives, manufacturing executives, who have indicated there is a good deal of uncertainty. It certainly is correlated with the labor market. We are seeing the economy slowing somewhat. We want Monetary Policy positions to keep the economy growing at a stable pace. Everybody has felt much more cautious and we have not seen an increase in investment we expected on the heels of very aggressive tax cuts and Corporate Tax reform. Are just some of the fed president s commenting on a weakening u. S. Economy. Disappointing data forms a forstic backdrop of the jobs number coming out later today for the month of september. Let us look ahead to the nonfarm payrolls number. Dani burger joins us with more. You said it. Its hard to remember a more highly anticipated job report than the one today. The trade war and manufacturing recession are stirring to permeate throughout the economy. Already we have companies struggling. These forces have really pushed down the median estimate for private payrolls to a gain of just 130,000 for the last month. To see the last time that forecasts were the slow, we have to go back to when hurricane slammed the country in 2017 and close businesses, or we can go back to 2013 during a government shutdown. Outside these months, this is about to be the weakest projection in seven years. This is obviously problematic when it comes to the fed. We have to remember manufacturing has been the hardest hit. We see weakness of that reading in employment. This is a three month rolling. We can see it as its lowest since 2016. The question is going to be is it going to spread into the wider labor market . That has caused traders to price in an 80 chance of a cut this month. Job data comes in worse than expected. That probability could get to a near certainty and perhaps the price cut for december. Both of those would completely reverse all of our hikes from 2018. Stuff. Ery interesting thanks very much. Dani burger looking at what we have seen so far. The jobs number coming out later today. I want to get the bloomberg first word news now. We will give you a week. That is the European Unions message to Boris Johnson. Brussels is asking him to improve his brexit deal or risk delay. Said in a private meeting the planes fall short, but there are positive signs or the Prime Minister at home. Both sides of the conservative party seem to be uniting around the deal. The u. S. , President Trump says chinas president xi jinping should investigate the bidens. The remarks coming after he reiterated his call for ukraines president to investigate the president ial candidate and his son. Trump says the conduct in china was just as bad as ukraine. He offered no evidence. Bidens campaign dismissed the remarks. Ishong kong, the government said to ban facemasks for protesters after months of violent unrest. The move is controversial, in part because it invokes emergency rule for the First Time Since the city was under british rule. Local media say the ruling will come into force after a special meeting of the executive Council Later today. India, where the reserve bank is set to cut rates for the fifth straight time. The question is, by how much . Forecasts range from 15 to 40 basis points. The rbis borrowing costs are 110ady at a nine year low, basis points of easing so far this year. A u. K. Artist banksy has shattered his auction record. A painting depicting members of parliament as chimpanzees sold for nearly 9. 9 million pounds. The piece had a presale estimate of up to 2 million pounds. The last time banksy set a record, the painting famously shredded itself. This time there was no monkey business. 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. Much. Thanks very now, let us get back to the u. S. Nonfarm payroll data. Joining us is michael kelly, global head of multiasset at pine ridge investments. Considering the news in considering the bad Services Number we got yesterday, what are you expecting for the number today . I do not have an exact figure. Expectations are low. We are in a manufacturing recession worldwide. And the consumer are hanging in there. And the consumer are hanging in there. They are the big story. You put that altogether and it seems to us like the third many lowdown. Minis i dont think it will be shockingly week. All these things remain very strong. Already weak enough. A slow glide path down. Some sort ofh talk, and im hopeful that coming up at the end of october. Matt you think we will see a trade detente . Michael in that vicinity. Both have bloodied up each others noses. They are starting to feel the pain. Remember the last trade talks, the may walk away by china. Not the u. S. China has changed the mood music. As larry kudlow likes to say. They are making many gestures of goodwill. China. Ve symbolism in i think President Trump understands that the trade you thinken if longterm, will be helpful to the u. S. Economy. They are hurting quite a bit right now. The numbers are showing that. Not enough to tip us into a recession. Many st the third minislowdown. Matt european stocks underperformed all over all other markets over concern about the data, concern about the trade war. Some would say concern about the u. S. President using terms like civil war on twitter. What you say then that is a buying opportunity . Michael our cash position has been on the upside for a while now. We do think now that the two period,s this recovery out of those were born big rallies. There will come a time when we start feeling the data is totoming where you do wish move in the direction of buying more stocks. We are not pessimistic. Theythink markets are going through a lot of angst. The question is, when we reach that Inflection Point or bottoming point, u. S. Stocks, you are right, since august, have slowed down. They have been for a couple years now. Most believe, we would share the belief, that in the next upturn, you want to move more in the direction of select emerging markets. And other markets that are more economically cyclical than perhaps the United States, which tends to be the last economy and the last market to feel the weakness as they have here. They probably will not feel a rebound when it comes. Around the turn of the year, early next year to the degree others do. Since august, this is a very long period to be lagging, but i would not expect the u. S. Market, while i do expect it to be higher a year from now, if that is the case, and it is a mini slowdown, not a recession, most other markets will do even better. Your outlook at cautiously up to mystic right now. Michael kelly, pinebridge investments, our guest cohost. More from michael on the other side of this break. Open but unconvinced. Eu leaders expressed doubts over Boris Johnsons new brexit deal. They tell him to improve his offer or face a humiliating delay. We are live from brussels next. Plus, when you are traveling to work this morning, tune in to Bloomberg Radio on your mobile device anywhere in the world or if you are in the london area, you can tune in on dab digital radio. Good morning. This is bloomberg daybreak. I am matt miller out of berlin. Lets check out the markets in asia. Cautious here ahead of that u. S. Jobs report. We are seeing a mixed bag when it comes to asian equities. Slightly higher, above 30 before the end of the week here. We are still on course for a Third Straight weekly decline when it comes to asian equities. The hang seng higher on reports they might be enacting this emergency law that may restrict facemasks in public gatherings. Profit developers recover. We are down 0. 3 . The sensex down ahead of and r. B. I. Decision. They are going to cut rates, but the question is by how much yak on the forecast range from 15 basis points to 40 basis points. We are watching the aussie 10 year yield continued lower by three basis points. We are hovering around record lows of 89 basis points for the aussie tenure. 10 year. December could be a real possibility the rba will cut rates once again. Speaking of the bond market, we have been watching yield curves in the u. S. The boj is watching japan as well. They have been cutting bond purchases to steepen that yield curve. We are getting closer to the inversion point. You are hearing more of the calls to that say despite this yield pickup, there is still some Institutional Investors out there willing to buy up bonds here, especially the long end. Perhaps these attempts could actually fail for the boj. Matt thanks very much. I look your markets. Lets get the Bloomberg Business flash. For that we go to hong kong. Cuts are coming. Bosseswhat weworks new told staff, and they could be happening as soon as this month. The cochief executives told a meeting the layoffs will be handled as humanely as possible. This as the Company Moves to cut costs and focus on its core business. We work declined to comment. Hp is slashing as much as 60 of its workforce as part of broader restructuring to cut costs and boost sales growth. The personal computer giant will cut 7000 to 9000 positions. It expects the reduction is to say 1 billion by the end of fiscal 2022. Rea it is boosting dividend by 10 . Apple is reviewing a recent decision to reject a Hong Kong App designed to track police activities. This amid increasingly violent protests in the city. Hk. Live andalled helps users avoid areas. Apple says it was rejected because it facilitates, enables, and encourages activity that is not legal. That is your Bloomberg Business flash. Matt thanks very much. Now onto brexit. Overaders expressed doubt Boris Johnsons brexit deal. The president of the European Council donald tusk says he is, quote, open, but unconvinced, about the british Prime Ministers withdrawal agreement. Keepons plan would ireland in the eu Single Market for goods but leave the customs union. . Hat about the border the Prime Minister told the house of commons it is up to the eu to compromise and agree to his deal. If our european neighbors choose not to show a corresponding willingness to reach a deal, we shall have to leave on october 31 without an agreement. And we are ready to do so. That outcome would be a failure in which all parties would be held responsible. Matt with more on this, maria tadeo is live on the ground. Are the negotiations taking a step back . Have they ever taken a step forward since Boris Johnson has been Prime Minister . Maria this was supposed to be the breakthrough. Europeans asked for a proposed a proposal from the United Kingdom and they finally have one. There are a number of issues. You can see the conundrum facing Boris Johnson. The more he moves away from that deal theresa may negotiated to appeal to brexiteers and the dup , the more questions that raises in brussels. The europeans now have 24 hours to really digest. There are issues that are, quote, problematic. The fact you stay in the market but pull out of the customs union, at the same time, it is almost implied there would be checks. This is something the irish said would never happen. The Irish Economy was their priority. Essentially the europeans will tell Boris Johnson, we need Something Better in a week or actually there is a big risk we may not make it in time for the october 17 summit. One thing has been made clear many times. European leaders do not want to find themselves in a position where they are in a panic to get a deal done on that night. They want to come into that summit was something that is clear will be approved. Tadeo int was maria brussels giving us the latest. Michael kelly is still with us in the london studio. It seems like it is always crunch time, and yet, i dont think anyone ever expects a breakthrough in terms of brexit. How do you invest around it . It is very difficult. Asset are not a resident owner, if you are a global investor, and you dont have to be invested in the u. K. , and at pinebridge, we are global investors, we have lots of choices for high active share investors, one tends to just stay away. It is not in our view i dont want this to sound crass, but brexit, and understand it is a terribly serious situation for the u. K. , but the issue really is systemically important globally for the economy and the markets. Think abasis, we dont bad event would be some sort of systemic trigger for the global. Conomy or Global Markets that leaves you with the unfortunate conclusion that you just stay away. Ise ridge pinebridge between asia and north america. We have london colleagues. I spent the week open very hard to get some clarity from my local colleagues, these brilliant people i speak to around london and the countryside. How have convinced me unknowable the situation is. For High Conviction investor, you just stay away now. It is a shame, but that is just the state of play. Away, iu can stay guess, from the u. K. Can you stay away from europe as well . Or are u. S. Concerned that euro europe will be hardhit by whatever kind of brexit we get or dont get . Europe will be dampened. Not as hard as the u. K. We have not been overly enthused about the euro zone. There are many issues. We are hopeful that after nearly a decade of trying to impose austerity into a weak environment, austerity which sapped the power of Monetary Policy to do anything, that there are glimmers of light coming from up in the northern euro zone, potentially fiscal response. We would love to see structural response coming from countries like italy. It really is time for global policymakers on the fiscal side to step up to the plate. You are going to stay with us. Our guest cohost. Coming up, trump pulls china into the impeachment saga. The president calls on beijing to investigate the bidens. More on that next. This is bloomberg. Matt this is bloomberg daybreak europe. I want to go out to hong kong to get your bloomberg first word news. U. S. Services retreated, joining the manufacturing slump. The ism nonmanufacturing index falling to its lowest in more than three years. The focus now falls on jobs data expected to come in stocks. Traders are ramping up bets on another fed rate cut. Richard clarida says the labor market is in a good place. On that market pessimism, gold is extending its push by 1500 an ounce. Investors are putting assets into gold backed etf. Kong, theng government is set to ban facemasks for protesters. The move is controversial because it invokes emergency rules for the First Time Since the city was under british rule. Local media say the ruling will come into force after a special meeting of the executive Council Later today. U. K. Artist bank see banksy has shattered his auction record. A painting sold for 9. 9 million pounds. The piece had a presale estimate of up to 2 million pounds. Set ast time banksy record, the painting famously shredded itself. This time there was no monkey business. 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. Thanks very much. Now lets check on markets from around the world. Joining us from mumbai is niraj shah. In london, we have Annmarie Hordern standing by. Economists surveyed by bloomberg see the r. B. I. Cutting rates today. How are markets gearing up for the decision . Good morning to you. Maybe in line with what the World Markets have done. You are seeing green on the screen. Thats not unwelcome. Indices whichhe now,move, 27 minutes from the banking index and the 10 year yield. As you can see on your screen, it has pulled back a little bit. Areahree a few days back a few days back. They would most like you to go out and cut rates. Anticipation, has gone down so far in the past few days, it is also shown in uptick. Has also shown an uptake. Uptick. Matt annmarie, you are back from moscow. Excellent job moderating that panel yesterday. , prices upoil slightly at the moment. It has been a rough ride. Think about it, we are just two dollars below where we those oil attacks. We had that brief panic in the market. The market is certainly focused on demand now. Smooth economic data, weakness coming out of the United States, weakness in germany. Of course the ongoing trade war. Brent and wti, though they are up this morning, they are down nearly 6 this week. Its the biggest weekly decline since july. That is one of the Big Questions i asked a lot of opec and o let opec plus ministers. What are the growing risks to growth demand . All they have acknowledged there is this gloom and doom, they were not ready to signal a change in strategy. Take a listen. About some forces we are seeing. They are not focusing on supply. Im sure demand will be growing. We will be able to take a decision to reduce or increase the production. However, a gloomy picture. How soon we will leave the volatility of 2019 behind . We will have to stay and watch how things develop before we react. It calls for our meetings to take any decisions. The biggest question facing this group is what to they do in the first week of december . Is the status quo deal enough . Are they going to have to cut deeper . Coveringmarie hordern oil. The r. B. I. Looking at decision coming in the next few minutes. China has found its way into Donald Trumps impeachment saga. The president called on beijing to investigate joe biden and his son publicly on television. He claims the bidens may be the reason china has had, quote, such a sweetheart deal. Pres. Trump im sure president xi does not like that kind of scrutiny where billions of dollars are taken out of his country by a guy that just got kicked out of the navy. Got kicked out of the navy. You know what they call that . A payoff. Lets bring in our Senior International editor jody schneider. Lets break down specifically what donald trump is saying. Hunter biden and his father took billions of dollars out of the country . Is that fair . Well, there is no evidence to support that. There is no evidence to support that hunter biden profited from this deal whatsoever, let alone by billions of dollars. Whats interesting about this many things are interesting, but also the fact that he is saying this, kind of doubling down on some of the criticism and asking foreign governments to investigate joe biden, a rival for the 2020 president ial election, when there is an investigation, several house investigations and an impeachment inquiry into that now famous july 25 phone call with the ukrainian president , where he asked the ukrainian president to investigate joe biden. Now making these claims on National Television to china. It isly will leading to a lot of criticism of the way the president is doing this, throwing things out there that have no real basis in fact. Biden camen for joe out with a statement that said they felt the president was melting down on National Television and just trading in conspiracy theories. They obviously deny any of this. Likely will this affect the president s impeachment inquiry or congresss inquiry of the president . It is likely to fuel it at this point. There are three different house committees the house is controlled by democrats into that phone call. Other things surrounding it. They are also asking for documents, subpoenaed documents from rudy giuliani, the president s personal lawyer, about his contacts on behalf of the president with ukrainians. They have also subpoenaed documents from the secretary of state, mike pompeo, who was listening in on that phone call. The investigation is not only into President Trump asking the ukrainian leader to investigate joe biden and his son, but also how that phone call was handled afterwards. What the security surrounding it, whether it was properly handled. Have investigations on a number of fronts, all under the umbrella of an impeachment inquiry. The house would, if they decided to bring charges, they would be the prosecutors. It would have to go to the senate, controlled by republicans, who would be the jury. It is highly unlikely the Republicanled Senate would vote to impeach a republican expands, but as this the political damage to the president could be significant. Matt i wonder about the damage as well to joe biden. And if the story of Hunter Joe Biden taking billions out of china is full of holes, we do know from bloomberg reporting that hunter biden was paid at in ukraine. 00 he was not an energy expert. He was not an Eastern European expert. Family enriching your once you get to the white house is par for the course, how can this hurt joe bidens reputation . That is a fair question. , putting ones name in the sentences with corruption cannot be helpful. Poll numbers to indicate how it has affected him. Others have been raising more money than joe biden lately. That is a real question here. Trueif allegations are not , does having them out there her his campaign . We will have to see how that goes. Jody schneider on the current state of the impeachment inquiry. The newest claims by donald trump about joe and hunter biden. Francine lacqua caught up on a different note with the ceo of sportswear giant adidas. Francine asked him what he sees as the biggest global risk to his business. What we are mostly concerned about his global trade war that can move into because is all global companies, if you start having a war on who can devalue currency the most. We are less concerned about issues between one country and another, but a currency war would have a devastating impact on the Global Economy. Against swings . We hedge on input costs, but we cannot hedge on a revenue line. What does that mean for the possibility of recession getting closer . Europe we are seeing in is the economy slowing down. Believe ouree, we industry is better positioned than most because our price point, we have less exposed to recession. Earlier this year you struggled getting products in the u. S. We were in a situation where we have under capacity. More demand than we could manufacture. Be a wayh quarter will and next year will be mobilized does the trade war make you think where you need to manufacture . Quickly manufacture 95 of our products in asia. 22 in china. We have a quite good natural hedge position. In the trade war starting, it will be an irritation, but it will not be a devastation. The sportingieve goods industry is a strategic industry for most regions. Those industries impacted our technology, energy, high r d related industries. That was the adidas ceo speaking to Francine Lacqua. You can catch the full conversation on leaders live leaders with look while leaders with lacqua later this month. A reversal on trumps tariff is, quote, very unlikely. Top trade negotiators from the u. S. And china are preparing to meet on october 10. This view of President Trump has been longstanding, that the United States is getting short shrift on trade, he believes he needs to rectify that. The genie is so far out of the bottle that i think a reversal seems very unlikely. Kelly is still with us. We talked a little bit about the possibility of detente. How do you see this Going Forward beyond that . I realize we are getting to the great unknown, but we are headed for a president ial election. Does donald trump want to make some kind of field for next november deal before next november . Detente does not mean reversal of tariffs. Businesses keep complaining to the white house, it is possible to plan for the future, to make investments as the landscape changes at an accelerating pace over many different theaters, so in our view, detente is a theing of the certain current status quo. Longterm issues work out a reasonable period. Does he need a trade deal before the election . No. Hes made his point. He very much ran on a handful of principles. As long as he is shaking things up and making a lot of noise on those principles, i think his base is with him. With or without a deal. What he like one . Of course he would like one. This is is it necessary for the Global Economy . As long as the deal stops the slowsting issues and things down, i think that is enough for business. Businesses can deal practically with any environment as long as it is somewhat predictable. What a deal in our view should look like, would look like, is intended to look like, out of these october deals is just a more predictable situation. Morellback, but a protectable situation, lending confidence this is not an everfastermoving kaleidoscope. Matt outside of the u. S. , how does this trade war affect the way you invest, for example, in emerging markets . Directly, we are living in an era of uncertainty. People are still emotionally scarred from 2008 and how they invest in both most business expansions, we have panic attacks. These are where stock market dropped 10 for no reason whatsoever and several months later, you have the just kidding rally. Signs of emotional scarring are everywhere. Trade lends itself to that. How do you invest in emerging markets . How do you invest anywhere . Its always the same old same old. This time is much more necessary. Trying to separate noise from signal. Is less the intent here to have a trade war then to have a trade reset. We still have a world war ii architecture underneath the trading system. No one certainly in america supports bullying on trade, but much of the country thinks that world war ii was if you are strong, give everyone else the damages. Those areas of the United States that have been hollowed out as a result went for donald trump because they are very frustrated with the america last policy that seemed to have been in place for so long. Republicansts and support the intent of a trade reset, just not the methods. The ever escalating hostilities and how this is carried out. Matt thanks so much for joining us. Michael kelly, head of multiasset at pinebridge investors. Coming up, making moves. We take a look at the comings and goings this week. Matt this is bloomberg daybreak europe. Now to an exclusive. Europe is a huge priority to Goldman Sachs. They spoke with Francine Lacqua Goldman Sachs 10,000 Small Business event. 2 ,ith the u. S. Just below potentially on trend, there are issues going on. Some of the data recently, we have seen bad german data. Negative data,. 1. 2, the issues on trade. You have the wti ruling. The trade discussion is beyond u. S. China now. It is u. S. Europe. You also have to separate the technical moves. Talk to me about your commitment to europe. Are you hiring anyone in the region . Growth is one of our priorities. We continue to hire coverage people. We continue to build our business out. A new office in geneva to expand our Wealth Management capabilities there. Wealth management is a huge priority in europe. Are you worried about europe . Are they worried about investing . There are two questions there. Open. L markets are wide they are wide open in the u. S. , they are open in europe. We have Debt Financing at record levels. The equity market is open. A Software Company out of germany. Really the equity markets are there to support companies. There is a decent amount of m a activities. There is lots of movement in the secondary markets. The underlying Business Performance for us continues to be really pretty healthy. The broader economy, you obviously like to be stronger. Germany is a big one of course. China, a slowdown in Global Manufacturing data. The consumer is really the dominant player. The financialbout system. I dont know whether thats because of negative rates or something happening such as no deal brexit. I dont think so. The authorities on both sides of the channel are focused on the preparations for no deal brexit. In march. E ready they are more ready now. The really important to she was going to be the immediate aftermath. What happens in those first two weeks of november. Do they go well or not . Those are going to be the weeks that set the tone. Did people underestimate the issues . Or was there too much noise . If those two weeks go well, confidence will build. The Central Banks on both sides will be i think the government and portfolios will support to minimize the downsides. Sachs is goldman preparing for no deal . Do you have extra traders . It will be only through. We will be she will be all night through. It will run as long as it needs to run. Now, moving on to the shuffle we have seen this week, starting with the spy scandal that rocked the Swiss Banking world. The chief operating officer at Credit Suisse resigned on tuesday. Tesco, dave lewis, is stepping down. Leaving after is a nine year 10year. Metro bank is saying goodbye. Martin gilbert is leaving. Matt good morning from berlin. I am matt miller. This is bloomberg daybreak europe, and these are todays top stories. Payroll pessimism. Data points to a bleaker picture ahead for todays key jobs report and comments from jay powell. Giveso the wire, the e. U. Boris johnson one week to revise his brexit deal or risk a humiliating postponement of the u. K. s departure. Is drawn into Donald Trumps impeachment drama. Beijing tolaus on investigate joe biden and his son. Good morning. Well bloomberg daybreak europe. I am matt miller in berlin. Look at futures. Even after the disappointing u. S. Services data we got out nonmanufacturing gauge disappointed. We still see futures rising here , ftse futures doing quite well at. 6 . In london, we have breaking news on bp. Shuffle of the csuite we have seen, bob dudley is reportedly going to retire. He will be succeeded by bernard looney. Bp ceo bob dudley is going to replaced and will be by bernard looney. It is interesting. We have seen so many moves in the csuites across europe yesterday, or in the last break, we were talking about martin gilbert, the ceo of imperial, the serial ceo of tesco. We have seen moves all over the place, and now, we are seeing from bp as well. A lot of these csuite shuffles have been centered in the u. K. In any case, we see that bob dudley is going to stay on as group ceo until february 5 next year, and then, he will be succeeded by bernard looney. We will continue to give you updates on this big, important story. Obviously, it is a massive company. Bp is worth 100 billion pounds, and it is also waiting on the ftse on the stoxx 600, so it is the kind of thing that can definitely move markets, which open up in less than one hours time. Speaking of markets, lets check in on the numbers in asia. For that, we go to Juliette Saly in hong kong. Juliette. Juliette we are seeing asian stocks a little mixed ahead of the key u. S. Jobs report. You have the nikkei closing out the session, up by. 3 and gains in australia as well. The rba cautioning the banks not to be too cautious in lending to consumers. We have seen the rba cut rates to a record low. Hong kongs market is lower. We are hearing news that hong facemasks. Ban the hang seng is on track for a weekly gain and we are watching india, up by. 5 . Worth noting that urge in asian stocks are off with a weekly loss. Their third weekly loss. India, we are awaiting an r. B. I. Rate decision. The central bank is expected to cut rates again. We are seeing the borrowing costs already at this low of of through 110 basis points easing so far in 2019. The question really is how significant, how deep is this cut going to be . We have the unconventional rate cut of 35 basis points last time, and then of course, the impact on the rupee. On inflation. Prices pushing up inflation. Most analysts we have spoken to expect some further weakness in the rupee, pushing back towards 72 to the dollar, Holding Around 70 the moment. That coming around shortly. Matt. Matt Juliette Saly, giving us a look at the data ahead of the r. B. I. Decision, which we expect in just a few minutes time. Now, speaking of data, it has been a gloomy week for u. S. Economic data, and for the labor market specifically, we have the lowest manufacturing jobs gauge since 2016, slower private hiring, a sharp drop in plans, and the u. S. Worse ism Services Index in three years. You have idiosyncratic factors that affect the labor affect but in fact the inflation rates. It is not just tightness in the labor market. Trade uncertainty has been important for the weakness in manufacturing. I talked to so many business executives, manufacturing executives, who have indicated theres just a good deal of uncertainty. If you do just look at this up global cyclical part, it is correlated with the labor market. Monetaryt to get policy positions to keep the economy growing at a sustainable pace. Increasee not seen an in Business Investment that we had expected on the heels of very aggressive strong tax cuts and Corporate Tax reform. Matt those were just some of the fed voices that we has been hearing so far. The fed president commenting on a weakening u. S. Economy. And the disappointing data forms a pessimistic backdrop as we wait for the big nonfarmpayroll number coming out later today. Lets look ahead to the u. S. Data. For that, we are joined by dani burger. this is such a highly anticipated jobs report. They are starting to permeate the american economy, and already, companies are struggling with a shrinking pool of qualified workers. All of those forces together means that the median estimate for private payrolls last month the last30,000, and time that forecasts where this low, we go back to 2017 when hurricanes had slammed the country and closed businesses. We can go back to 2013, when there was a government shutdown. Outside of those two, love last time the last time we had projections like this week was seven years ago. Manufacturing is where the weakness has started. We have seen some of the lowest ratings are manufacturing jobs in three years. Months those three addition of manufacturing jobs. Looking at this, has manufacturing spread more broadly . Traders are pricing in 90 chance that the fed cuts rates this month, and lets say the jobs data this month comes in even worse than expected, that probability could change to a near certainty along with another cutprice in december. If that happens, that would completely reverse all of the for hikes in 2018. Burger, looking at and previewing for us the valves number coming out later this afternoon. Joining us now from frankfurt is an ethics strategist at Commerce Bank. What do you expect from the number and how important is it . To become ahas focus of the markets because the acus now is on the risk of much stronger slowdown of u. S. Economic growth than i think the markets impression has been so far. So far, it has been more concentrated on what is happening in europe and china. A Significant Growth slowdown. U. S. Economy has been staying relatively well but the view is crumbling following the week index. A couple days ago, so i think the numbers today will be a big, major mover for Dollar Exchange rates, because if it is confirmed that the u. S. Economy is slowing much more strongly than the market, it has to factor in rate cuts by the fed which should be weighing on the dollar, which so far has been relatively strong throughout this year, reported by a rather robust u. S. Economy. Matt i mean, we are not looking at the 201620 yet. But it is Still Holding up quite well. I have the bloomberg dollar 3. What do you greenback andthe put it in terms of the job number today. Is the fed less likely to cut . And the dollar gain strength . If we get a week job number, job it leave weak number, does it lose strength . Thu lan i am not so sure if the labor market is that decisive. Even if we get the strong labor Market Report, i think what you are seeing in recent months is that the fed is concentrating growth risks looking forward, so against this background, i actually believe that the weak ism index is weighing in more than possibly even the labor Market Report, but certainly, a weak labor Market Report would only support the concerns among fomc members regarding medium to longer term growth in the u. S. , so i think the risks are to the downside for Exchange Rates rather than the upside. Matt how about in terms of the u. S. Economy . If the developments beyond the jobs number continue to come in twist, do youe see the dollar weakening in that case or does everybody kind of freak out and run to the greenback for safe haven . Actually, even at current levels, the dollar is excessively strong. It should have been a lot weaker, and my view, considering that rate expectations and u. S. Rates have already declined quite significantly since the beginning of the year already. Toticularly in relation europe, for example. Yes, the ecb has also cut Interest Rates, but you are talking about a 10 basis point cut against 50 basis points by the side, and what is essential is that the fed has even more room to cut Interest Rates while the ecb really does not, and i think this should be weighing on the dollar already, so yes, i am anticipating some sort of dollar weakness on weaker u. S. Data. But that even would be just some catching up of dollar weakness. Something surprising from the u. S. Data. ,att all right, thu lan nguyen thanks for joining us. We will keep you with us longer. Thu lan nguyen from Commerce Bank, talking about fx. We go to hong kong. Thanks. This just in, bps chief executive bob dudley is retiring. He will be replaced by the oil giant chief bernard rooney. He is capping a 40 year career with bp. Than nine of those as ceo. He will retire on march 31. And in the u. S. , President Trump says xi jinping should investigate the bidens, the remarks coming after he reiterated his call for trump says the bidensconduct in china was just as bad as in ukraine but offered no evidence. Bidens campaign dismissed the remarks. Kong, the government is set to ban facemasks for protesters. It is a bid to quell months of violent unrest but the move is part controversial because it invokes emergency rules for the First Time Since the city was under british rule. Local media say the ruling will come into force after a special meeting of executive Council Later today. 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. Matt thank you very much. Rate cuts. Another Indias Central Bank is set to reduce rates for a fifth straight time, but the question is, by how much . Times, theythat at have done almost unprecedented sizes and shapes of rate cuts. That decision, next. This is bloomberg. Here in berlin, seven 17 in london. We are 43 minutes away from the market open no matter where you are. I am matt miller. This is bloomberg daybreak europe. We got the r. B. I. Decision. Another cut from india. The central bank cutting its key Interest Rate for a fifth time this year, this time 25 basis 540 down to 515. Not unexpected. A majority of the 39 economists we surveyed predicted the move. The rest forecast cuts ranging from 15 basis points to 40 basis points. I believe the last time they cut it was a 20 basis point cut, which is why said they sometimes do things in odd shapes and sizes. Statement saidk there is policy space to address these growth concerns by reinvigorating domestic demand, so it looks like they are saying even after this cut, they still have room to do more. Joining us from mumbai is bloombergs harsha subramaniam. Bank iswhat the central essentially saying, especially with regards to the outlook, the foreign guidance. Harsha the key headline number is 25 basis point cut. Here is the context where this cut is made. Mader this year, they have 130 five basis points lower in borrowing costs. Growth has been consistently falling in india from a level of a percent in fiscal 2018 we are below 6 the bank of india has backed the growth at 6. 1 , lower from the earlier forecast of 6. 9 . That gives you a sense of the demand the sagging demand in the economy. The other aspect is the rate of inflation has been consistently under shorting the mediumterm target of 4 . The committee has enough space for to continue with this accommodative policy stance. The most interesting part of this is the timing of this move. This is the first one that comes after the Modi Government announced a cut in Corporate Taxation rates as a master to boost measure to boost demand. It raises concern on how this might fiscal deficits are out of whack. What the market will be watching out for is the tone and commentary of the bank of india governor will be addressing the media. On is financial sovereignty, whether these rate cuts will relate to the market, and the third is the health of the indian banking system, which has not been at the peak of health. Corporate banka has gone under. These are questions the reserve bank of india the governor of the reserve bank of india will be asked. Much. Thank you very india cutting rates for i think the sixth time in a row, the fifth time this year, down 25 515s points to 5 15 from to 540. Apple told suppliers to increase production of its iphone 11 by as much as 10 . That is to meet stronger than expected demand for the new handsets, according to the nikkei news agency. Joining us now from tokyo is bloombergs tech editor, vlads evolve vlad. Do suppliers hold back a little bit at first to try and build the hype . That is what they always did when i was a kid. Elementybe there is an to that. As you say, this is kind of a breaking news story. Summer, apples estimates together with suppliers was going to sell 70 iphones. Lion that seems to premuch be in aace, so it is really just case of an incremental increase in improvement. Maybe apple was being conservative. Maybe it strategized to say the new iphones are so popular, people want them so much, that demand dictated we should increase production. That is not beyond the frame a possibility. Matt these are very expensive phones. We are talking about the 11, not one of the cheaper models. Bunchthat they are just a of rich people who need the newest thing . What is driving increased demand . Desley a couple vlad a couple of things. Apple has lowered the price of an iphone. The iphone never went down by 50. It is not going to be the biggest driver, in my estimation, just because it is dipping in for what is already an expensive product. Once you have memory and other abovees, you can go well 1000. But with them, the big upgrades are the cameras. They have an ultra wise lens for photography, battery life, and the durability of the devices. Apple has made longerlasting devices with this new generation. We did power in the bloomberg review. It was a glowing review. If you want to know what what is driving this increased demand, maybe its that. Matt maybe people are listening. I will tweet out that review as well. Thank you so much for joining us, bloombergs tech editor in talking aboutvov, apple increasing production of the iphone 11 10 . That according to nikkei. On to brexit. Thankfully, e. U. Expressed doubt over Boris Johnson brexit deal. The president of the European Council, donald tusk, says he is open but unconvinced about the british Prime Ministers withdrawal agreement. Johnsons plan would keep Northern Ireland in the e. U. Single market for good, but leave the e. U. Customs union. What happens to the border between Northern Ireland and the republic . It is obviously a central sticking point, as it always has been. The Prime Minister told the house of commons that this is up to the e. U. To compromise and agree to his deal. If ourm. Johnson european neighbors choose not to show a corresponding willingness to reach a deal, then we shall have to leave on october 31 without an agreement. And and we are ready to do so. But that outcome would be a failure of statecraft, which all parties would be held responsible. From Commerce Bank is still with us. We get conflicting signals about brexit all the time. I usually watch the pound to see if the markets anticipating anything close to a nodeal. At 123 and change, what will it look like for you . Beenerling recently has relatively calm, relatively stable on the volatile brexit deal, and to me, that suggests that the majority of Market Participants again expect a postponement of the brexit it isne, again, and that a fair assumption, in my view. Yes, now the British Government a new solution to the irish border, but obviously, this is a completely new border regime that johnson is proposing. And obviously, the e. U. Is not going to agree to it easily, so i think it is a fair assumption that more time is needed, and if you look at options markets, for example, and they have already for some time priced in the higher sterling volatility in two months to three months time, so after the end of october deadline, which suggests they are expecting an extension of the deadline again. The you know, bertens ons areto which brit affected by this is traveling for vacation or work. We have issues with the euro zone economy as well. What do you expect for the Euro Pound Exchange rate . Thu lan well obviously, this is a very, very difficult one. Because it depends, essentially, on what will happen with brexit, and as you know, i think by now, anything is possible when it comes to brexit. But our base case, too, is that brexit will be extended again, because with the current constellation of the government and the parliament, it does not seem like there will be a solution. If the u. K. And how the u. K. Might exit the e. U. , i think the most logical stack would be to have new elections. We would see an extension of brexit, and the new elections, and that it depends on what the new elections will bring. Matt right. All right. Thu lan nguyen, thank you so much for our time. Strategistyen, fx from Commerce Bank. The European Market open is up next. This is bloomberg. Welcome to bloomberg markets, the european open. Im anna edwards, alongside matt miller in berlin. Too bad . Bad is european futures point higher as they wait for jobs data, and features from Jerome Powell and his colleagues. The cash trade is less than 30 minutes away. Anna payroll pessimism. Thats on a Third Straight cut theed