President wont participate in the cleveland inquiry, calling it unconstitutional and invalid. Powell sees the fed growing the Balance Sheet again. They suggest this is not a return to crisis era stimulus. And Credit Suisse considers a return to u. S. Wealth management as the ceo seeks to boost growth and Private Banking. A warm welcome. You down to the start of equity trading at just less than half an hour. We are live in dublin once again as issues surrounding the irish continue to dominate the Brexit America narrative. We have heard from ireland how they see it difficult to achieve any kind of deal. Thats why we are here, focusing in on the broader story. Is not pricing in anything happening at the end of ober looking for a timber looking for other market moves to take place. Matt interestingly, we dont see 10year gilts under that pressure. There is very little change from the closed yesterday. They did not drop on Jerome Powell. This is where the yield is right now. They said the fed it will go market tothe treasury buy bonds as money market need to open an outlet for the maturing mortgage debt. Would be a huge a buyer in the marketplace. Normally i would think moves in not incredibly active. Taking a look at the futures, they are pointing higher in europe. As the dax futures are pretty much unchanged. The ftse futures are also unchanged. Active to theg upside, less than a quarter of 1 . U. S. Futures are gaining. Drops ande than 1 the u. S. Market did not do so not quite as poorly. Asse gains are being sedated we get closer and closer to the u. S. Open. But get first word news in hong kong. Turkey says its military will cross the Syrian Border shortly according to a senior government official. Kurdishtended to force militants away from the turkish soil. They have reported the forces will attack the Turkish Military if it enters in syria. And now, to brexit. Irelands Prime Minister says its hard to see a deal being clinched next week. Interview, they say problems remain over the border Northern Ireland this comes as he agrees to meet Boris Johnson for talks before the end of the week. Between washington and pyongyang ended after just one day. The two sides disagree on whether they had broken down with the north korean envoy saying the u. S. Came emptyhanded. They say some sanctions will remain in place until pyongyang read gauges. And here in asia, singapore has beat the u. S. To the top stop top spot in the Global Competitiveness ranking, citing growing uncertainty from Business Leaders and declining other spotsss the went to hong kong, the netherlands, and switzerland. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Anna thank you very much. , we have learned that Credit Suisse is in talks to return. We will discuss how the banks may tap into one of the biggest wealth centers. A fascinating story. Remember, Bloomberg Radio is also live on your mobile device or dab digital radio. They will also be bring you uptodate on brexit, dublin, and the Credit Suisse story. This is bloomberg. Matt welcome back to Bloomberg Markets. We are just about 21 minutes away from the start of cash trading. You can see futures are relatively mixed and not moving very much. Lets get a check on the markets with mark cudmore in singapore. , imrade war issues surprised we did not see a bigger deterioration in equity ,arkets in the u. S. Yesterday in asia overnight. Do you think it is just already priced in . That has been an ongoing theme of the last two months. The resilience of equity markets and the deteriorating situation in the u. S. You are right to say that it is very hard to deny the big division and it will be very hard to hold an optimist outlook. Yet we only have u. S. Equities four or 5 off the record high, that seems resilient. It was in line with the consistent messaging. Fundamentals dont matter for equity markets and the Central Banks will continue to pump liquidity. Ifwill come again, even palace and the boj has said they are prepared to do more. , thats theal banks new narrative for why investors expect resilience. At some point, it will come crashing down. But the parallel between emergingmarket fx is very similar. The idea that fx was making record highs until august is is only one month before Lehman Brothers went down, 10 months after the equity market collapsed is clear the world is going towards recession. The narrative to explain emergingmarket fx resilience. It was very much creating a and sure enough, once the Lehman Brothers were down, the emergingmarket fx collapsed. At some point, they had a catalyst and realize the stock market would also collapse. Its hard to know, but the u. S. President has a twitter account and the countless can come at any time. Catalyst can come at any time. Anna thinking about the currency north of the border and the pound, its interesting to see the colleagues overnight seeing how the market is not pricing in a no deal departure. Seem to have moved on in its thinking, despite what number 10 has said. The possibility of general elections, is that where the market should be focused . No deal in october is not priced. Wherewas a post yesterday Boris Johnson move the odds again. Time, the price of a note yield there was around 17 only 12 priced into the betting market. Obviously, they can diverge, but not that significantly. So this probability is priced in the betting markets but not the financial markets. So they are saying is a lot of negativity riced into the markets even if we get a worstcase scenario, how bad can it be . That cataclysmic shock will be tremendous to many u. K. Assets. And as we say, the conversation to go back to include a no deal brexit, for maybe not this month. Enforced delayan leading to a general election which Boris Johnson may win on the mandate that he is driving the no deal brexit for that narrative is very new to the discussion. Before it was assumed a delay would be resolved or stopped. So it is a new narrative, the idea of a delay. They have not looked at have a some of the tenors on the maturities in the coming weeks if that starts to become the dominant narrative. Jerome powell says not to collect quantitative easing. A mature why it matters if thats the effect it has. What kind of affect can we expect getting back into the treasury markets . Hes worried about the message because quantitative easing has been associated with the financial crisis and a deep recession. Hes trying to say this is just massaging an economy midcycle. Many are increasingly not believing that, but it is what he is trying to maintain. Its clear he is pumping more liquidity into the market which should boost assets. Isnt enough to control the narrative . Is it enough to control the narrative . That is what people are debating. Are not getting enough liquidity to counteract a severe slowdown. Thought that one of the bets that held mentioned would be less talked about because he talks about rebuying. I thought it was interesting how clear he was that they will cut rates towards zero. But to me, he was going look, we will cut aggressively. He may not have the knowledge that, but they will be forced to acknowledge it. And when they have to, they will cut aggressively. But to me, that was assigned to price in significantly steeper rate cuts because the fed has said they will react. Anna im guessing you see many reasons to buy bonds and treasuries. What kind of responses have you been getting . What is needed to revise the global rally . It does seem yields are having trouble. If the market were to go along with your way of thinking, maybe rates should be a little lower. That is the 10year part of the curve. Something people are struggling with is the steepness of the curve. Just because front end rates needs to become lower, they can become lower elsewhere. Some argue that this might turn ito a steepening and whether is a ball steepening of the back end rises is unknown. People are coming around to the idea that after fighting this bond rally for so far, they are saying this is not a bubble. It is justified by the data. What does that mean it needs to go much further . The treasury market is certainly advanced in pricing in the data. It other assets that are in denial. When other assets play catchup, does the treasury market need to go further . As i said that the next dynamic might be that we get worried about the debt profile and steepening. I think thats why we could see treasuries in a new rain range. We might see treasuries and a 1. 2 range, and i just emphasize those numbers are arbitrary. Levelscan go to lower that have times when it bounces back up. It is the front end with there is still room to come lower. Matt thank you very much for joining us. Cudmore, our managing editor at of singapore. You can join our discussion on the global bond rally and the mliv team. Credit suisse is considering a return to the u. S. Wealth Management Market after a fouryear absence. We have learned talks have focused on the ambition to add a 50 billion of assets under management. Mostly catering to wealthy latin americans. Joining us from zurich is our swiss ranking reporter. He wants to prove he does not need it well, around iqbale big moves need khan around to make big moves. Bigger movesof the in recent years and is symbolically important. They actually exited the u. S. Private banking market, this would be the first return. ,ince then, a fairly bold move though they would not be necessarily looking at servicing. U. S. Clients are more catered towards wealthy latin americans. Anna tell me more about that. Why picking on this particular . Egion this tells us that the u. S. Is fast becoming the new switzerland for offshore money, especially in latin americans. This is where they want to have their money and that means other offshore locations, like the bahamas, are losing out. A sign of this is that credit , but ins even thinking the future, you will see more swiss banks doing the same kind of thing. Matt we see this Wealth Management business, one of the only successful businesses that banks are in, how important is this to Credit Suisse and ubs . Banks, this will be the key business for the next five or 10 years. Investment banking is is going into decline and Wealth Management is where they will need to be. For credit squeeze they will be thinking about the u. S. , where they can have some kind of angle and make money without going. Holesale into it anna thanks, patrick. That was our Swiss Banking reporter with that fascinating story. Itslooking to get back into , such as the changing nature of the u. S. Lets get the Bloomberg Business flash in hong kong. Thanks, anna. Saudi aramco is inspected to publish its ipo prospectus by the end of the month according to the wall street journal. It will come out in arabic on october 25 and in english two days later. The decision to go ahead it will probably be made after november. Aramco did not officially comment. Johnson johnsons unit has been forced to pay the largest sum of this year over the alleged mishandling of an antipsychotic drug. They wrongfully market of the drug to teenagers and the verdict is unlikely to be upheld on appeal that sounds an ominous warning. The Company Still faces more than 13,000 students over the drug. Boeing has broken the drug for its grounded 737 max 8. The order is from an anonymous customer, the first since the managerial mega deal in june. 184 for the at year. Stocks that has held talks with other groups as the swiss asset manager works on its turnaround. Yearrisis started last when a fund manager wasnt suspended. It triggered a flurry of withdrawals and the ouster of the chief executive. That is your Bloomberg Business flash. Att thanks very much we are minutes away from the open. Well take a look at your stocks to watch next, including commerzbank amidst reports the lender is planning to cut more jobs. This is bloomberg. Anna looking back. Six minutes until the start of cash equity trading. Where are coming to you live from dublin and related. Berlin. Lets bring you our stocks to watch. Lets go to commerzbank first. Annmarie more job cuts look to be in store for the banking industry. This time, its commerzbank. They are saying it is a four digit number for these cuts. Ting the setting ci numbers but details are not final. Gdc what is the story with gvc . Guidanceave raised about 4 above analyst estimates. Both the online betting business is doing very well compared to last year. Declining u. K. Retail is no worse than feared. This was mentioned as a possible counter bitter for stars group, so keep an eye on any headlines about possible consolidation. Anna we will. Latest on again on gam gam . They are looking at m a no longer. Matt thank you for joining us. You can get all of these stocks stories from our Equities Team on bloomberg. This is bloomberg. Anna a minute until the start of cash equity trading this morning. Welcome to the European Market open. Lets look at what the markets are telling. Annmarie hordern has the market open in london. The msci asiapacific, down. 6 . Some weakness with the trade war rhetoric ramping up but the s p fell more than 1. 5 . Eurodollar trading 1. 09. Anna, you are in dublin and looking at the question that defies the Brexit Debate, the irish border. Oil trading lower than before the saudi attack. In the futures picture, ftse 100 to the downside. We had futures pointing firmly in the green earlier. Dax futures also softer and the cac eking out a gain. U. S. Futures mostly pointing higher but a mixed session. 8 00 here in the city of london and lets look how equities are opening. Ftse 100, relatively flat. The have a Brexit Debate coming front and center some of the Prime Minister saying not sure how we will get to a deal next week. Zero stoxx 50, relatively flat. Front and center of the market overshadowing Jerome Powell yesterday is the trade war. Rhetoric is really starting to ramp up. We have the german dax relatively flat. Days like a relatively flat after the weakness in asia, a selloff in the united states. Foreign exchange, the swiss franc and pound off, turning 1. 22. Across the wheel, mixed picture. Health care firmly in the red, energy in the red as well as materials. Anything exposed to china we could see move this morning. That includes financials, technology, and mining. He had iron ore down 1 . Financials are looking in the green. We want to keep an eye on u. K. Financials given the debate on brexit and whether or not we get a deal before the october 31 deadline. On top of that, more cuts in the Banking Sector with commerzbank. What are you seeing across individual movers . Matt we are seeing a pretty even split. 300 stocks up, 270 are down. It is half and half. In terms of the companies that are taking the most points off the index, hsbc and then youve got roche and novartis. Heavy companies that are weighing adding points to the the indexghing on youve got nestle, royal dutch shell, and sap. You dont see a lot of big movement. There are not a lot of huge movers in the top 10 gainers or the top 10 losers. Gvc is moving more than 1 , up three and one third percent. Keep an eye on stocks. We may see more developments through the morning but right now, the trade is relatively mixed and relatively tame. Tensions built between the u. S. China, this weeks finally highly anticipated trade talks. Here is what our guests have been saying. If the rhetoric gets worse, you may be in recession simply because the consumer will lose faith in what is happening. The concerns about unreliability of supply chain we have seen in and around the chineseu. S. Conflict. We are going to be talking about trade peace, not trade war. Everybody is loser in a trade war, therefore, everyone would be a winner in trade peace. Matt joining us now, the cio at saxo bank. It seems the news only gets worse on the u. S. China trade relationship. Days seem likeve head fakes for traders to take some gains. Where do you stand as far as your expectation and trading on this . Im very concerned about the development over the last 48 hours. This is clear that both the chinese and u. S. Side are getting ready for an escalation. Premierhe fact that the vice prayer is coming not as a special envoy, but without envoy status, meaning the chinese have already downgraded talks before they start. In china, there is a rumor they will leave early by leaving thursday night after the talks are over. The initial a talks. Both sides are playing a game of mexican standoff in terms of the strategy and i dont see how they will come back to the table and get something. The u. S. Wants a big trade, china wants a small trade. No trade is probably the most likely thing. Anna good morning to you. Fascinating how this started narrowly around trade and still, a trade agreement obviously remains elusive but amongst all of this over recent weeks, we have been talking the possibility of a capital war and seem to be edging into a culture that started in trade spilling over into nba basketball, into the gaming culture. It seems this is morphing into something bigger and the bigger it gets, the harder it is to fix, the longer it takes to resolve. Steen i agree. I am concerned about the new strategy from the white house and the hawks in the white house, which is to go after specific areas to make it more targeted. It seems to be a change of strategy by the u. S. Side and is itason i am concerned has bigger ramifications. It hits individuals and companies, and it is a strong escalation of what goes on because as long as we are talking macro environment, tariffs, it is more generic in nature. Now we have almost an itemized list of things they attack each other on. That really concerns me, and the market is doing remarkably well considering this nervousness and to some extent, being who i am in the market, that is really giving me a lot of concern for the downside. Matt you do think President Trump is going to want to come back with a deal before the november elections before next year. At what point do you think it is a good point to buy to replace that bet . Is summer next year. I think the trade will be on and off all that time if it doesnt break altogether down this week. It will be kept alive, it will be kept all the way through until he needs to come out and say i have a deal with the chinese, which in essence would be a no deal but i am certain that anything that happens in u. S. Politics, will be in the context of getting trump reelected or whoever his opponent is in that race. We will suck all of the air out of fundamentals and the ability of the market to navigate relatively to earnings and everything else. We will be waiting day by day to see tweet, updates on what is the next step up or down in terms of these trade talks, unfortunately. Anna ive read quite a lot about earnings expectations last couple of days and some colleagues are writing about how 2009 expectations seemed to be back but 2020 expectations have stayed firm. Maybe analysts or businesses have had their heads in the sand about these trade tensions. Earningspect expectations marked down or are we awaiting clarity either way . Steen i think q4 will be used a lotot of cfos and ceos, of bad results out in order to make the like for like 20192020 look good. We have a serious downgrade coming in terms of q4, in terms of earnings. It is a classic move, and of year, it has not been a good topline year and as we talked about, there are external factors. Trade talks, the fed Balance Sheet that has been in the way of creating the results they wanted companies to report and we will see an adjustment downward in terms of earnings. Very much. S we will talk about the fed Balance Sheet in a moment. Cio at saxo bank stays with us. Next, stocks on the move , said the halt sales talks. The stock is down 7 . This is bloomberg. Anna welcome back to the european moment open. 11 minutes and he are trading day, a fairly mixed picture on equity markets. The fed will grow its Balance Sheet. Jerome powell said the central bank plans doing treasury purchases to ensure calm, that stressed the move shouldnt be seen as a return to quantitative easing. I want to emphasize growth of the Balance Sheet for reserve management purposes should in no thebe confused with largescale asset purchase programs we deployed after the financial crisis. Neither of the recent technical issues nor purchases of treasury bills we are contemplating to resolve should materially alter the stance of Monetary Policy. Anna Steen Jakobsen, cio of saxo bank stays with us. What is significant to you about what the fed announced . The scale of what they are buying, they dont see this as qe what are your thoughts . Steen basically you are taking the operation back where it was be or the great financial crisis. There is nothing new in that respect. I think the market will be disappointed because the gradual ramping up the Balance Sheet will be too slow to deal too big to fail banks that need to reduce Balance Sheet. The fed failed to realize the run regulation is one of the main causes of shortage of funds. We would have to have 50 basis points if they dont reduce the Balance Sheet at the end of the year. That comes at a time when treasuries issuing a huge amount of bills due to the debt ceiling going away. I think the Federal Reserve is behind the curve in Monetary Policy and understanding the plumbing of what is going on with their daytoday operations. I think the market is not seeing this as a pickup. Response to something that needs a bigger amount of ammunition to flow back. Still think there would be tight overnight liquidity . You dont think the issues will be solved by the fed going back into the treasury market . We have two moving pieces and one is the fact the ramping up of the Balance Sheet will be too slow to deal with the incoming need for liquidity in the system to yearend and overall, the dog letter liquidity is dollar liquidity is still quite tight. There is pressure on the Federal Reserve that we will see it increasingly address this issue again and again. The changesk yesterday, although expected, are big enough to deal with the real issue, which is the plumbing they are doing at the Federal Reserve is very they need a guide to look at it. They need a repair man, basically. Anna they need to get the call in for that. You sound gloomy. You sound like somebody who stocking up on fixed incomes and treasuries and yet, when we look at global bond markets, the 10 year yield seems to find it difficult to drop below the 1. 5 level. Why is that . Mi looking at the wrong bit of curve . What is stopping yields from dropping further . What is needed to revive the global bond rally is the question of the day we are asking . Steen increased probability of a recession, which i still think is likely to happen in the u. S. And is happening in europe. There is also academically in central bank circles, and increased questioning of the fed fact whether low interestrate works. They accept the fact lower Interest Rates will do nothing. Interday, we saw five years the u. S. Trading at 1. 11, new lows despite we promised more ecb action. Similarly, it goes down. Stoking inflation will not come through low Interest Rates. The ability and addressing of the issue will be moving to Something Else with fiscal expansion. Tooal expansion will be late in terms of growth, impact, and that leaves the dollar as the only tool to create global liquidity, but narrowly, the question is it is only a recession probability of further riskation of geopolitical that could get yields down from here. Matt do you expect recession and because you sound fairly gloomy capital preservation mode . Steen very much in a capital preservation mode. Moving from fixed income to mutual, increasing cash because this is q4. I think a china deal is not dealt with correctly, overall the complacency in the market we have seen and back to earnings. Earnings will be gradually moved down and the company will be aggressive courting targets for the end of year. Anna Steen Jakobsen, cio of saxo bank stays with us on the program, live on set in london. Lets get your stocks on the move this morning. Dani burger has been looking at the details. Dani starting with the biggest movers. One is jvc. The Online Gaming company, raising its fullyear outlook saying even though comps were tough given the world cup last year, ahead of expectations including the u. K. We television. Seeing peers like william hill rising. Prices at over a 2 gain, trading at a oneyear high. Away. Com said thirdquarter orders were up 87 . Rbc said the results were a touch light but there is a clear route to profitability. Gam, trading to the downside nearly 2 . They confirmed reporting they are no longer in talks with suitors. That includes generale. Deals toed about m a happen but now they said they will focus on the business as a standalone company. Matt thanks very much for that. Dani burger, looking at movers. Pimco has been weighing potential threats to the global economy. Manny roman says a hard brexit is better than the Current Situation of limbo. He says the trade war could push the u. S. Into a recession. He spoke exclusively with bloomberg editorinchief John Michaels light john micklethwait. You have a trade war with china and we dont think it gets fixed in the near future. I think the best parallel you can think of is the 1950s where there will be improvement, contagion, ups, downs. This will be interesting. Do you see two economies emerging . A division between the two. Do you see two internets, two supply chains, more regional economy . More regional economies and a global fight for some of the sectors. So you think the u. S. Will slow down. The first half of 2020, gdp will dip to 1 or something. If the rhetoric on the trade war gets worse, you may even be in recession simply because the consumer will lose faith in what is happening. What are you more scared of out of brexit and Jeremy Corbyn . Thank you for the question. Im not saying you cant get both, by the way. Manny we think a full on labor government with the program they have would be very bad for risky meets and it somehow reminds of what i grew up with in 1981, theyocialist in france and had to do a 180 and decide it was not a good idea, but the ive come to think is the government is not very good at running things. It doesnt matter how bad other people are, the government is not good at running things. A do you see Jeremy Corbyn as mutual he would come in and run into trouble . Manny if you look at his program, it is quite extreme. Do you think that is worse than brexit . In terms of the effect you buy a lot of government bonds. Manny we do, and we like the u. K. We own a lot of u. K. Banks. Hard brexit . Manny what you need is resolution at this stage. We are in limbo and being in limbo is not a good thing. You have a situation where between the politics, the government, the house, the voters, it is so fragmented and so discombobulated and i dont have to tell you this, that you need a way to get to an outcome. Itn if it is a hard brexit, is better than having two more years in a situation where nothing gets decided. Anna that was the pimco ceo manny roman speaking with editorinchief john micklethwait. They touched on brexit and so does the irish finance minister, saying the irish must continue to engage with the u. K. We dont want customs checks anywhere in irelands. These lines are crossing the bloomberg. We dont want to trap Northern Ireland in the eu. Extent ofto the separation from a customs perspective and the republic. Next, is europe showing signs of negative real . Yields . We will get Steen Jakobsens call next. This is bloomberg. Matt welcome back to Bloomberg Markets the european open. Im matt miller berlin in berlin. We are seeing gains across equity indexes. Up almost the dax. 25 and the ftse gaining. 2 after a little change to a downward start to the session. We have headlines coming in out of china, repeating the issues in change on shenzhen are an internal affair. The u. S. Has banned eight companies in the u. S. Because of their treatment of muslims in china. China repeats no human rights issue it doesnt see a human rights issue regarding its treatment of muslims there or treatment and says the u. S. Is deliberately making up excuses to interfere. Lets get back to Steen Jakobsen of saxo bank. You brought up an article in focus magazine saying german savers are being pushed by Interest Rates into the stock market at high valuations. What are the choice today have . Other choice do they have . Steen not a lot and when i talk to investors in europe, they asked the same question. A lot of people come to the conclusion i have to be in equity. What is interesting is germany, one of the most conservative countries in the world, were saving is a big chunk of your net assets, the focus groups are coming out saying to safeguard your money, you need to move into equity. We think it is radical. Im making the point that this is the market. Weve seen a number of creative product. A product called stronghold where we are trying not to lose money. It sounds defensive and boring as an entity, but there are more people in the world trying not to lose money than to make money on that side, but what the model does is get zero or slightly above returns for capital preservation of your money. What this model is buying it is buying inflation, high volatility develop market with different angles. Anna thank you very much. Steen jakobsen, cio of saxo bank. The souringtest on start of trading talks. More on that next. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Trading day, lets get your top headlines. The white house says the president wont participate in the impeachment inquiry, calling it unconstitutional. This is not to be. Qe. This isowell stresses not a return to crisis era stimulus. Ad Credit Suisse considers return to u. S. Wealth management as the ceo seeks to boost growth and Private Banking in Private Banking. Welcome to Bloomberg Markets. I am matt miller in berlin alongside anna edwards in dublin. About theave heard brexit process, thinking it will be difficult to achieve any kind of deal by next week. That remains crucial because that is when eu leaders will be gathering in brussels. We are here in dublin but very focused on both sides of the irish border. That land border is a real focus and is where a lot of the disagreement remains. How you extra kate Northern Ireland from the customs union,f that ends up being the plan and the extent to which you allow any kind of a veto over what is going on. This is also an area of contention right now. 30 minutes into the trading day, lets get back to you. We have not got a lot of huge movers. There wont be a lot of huge movement. Come ownside downside, only 178 losers. Thats why you see green arrows. This is adding points to the stoxx 600 novartis. On the astrazeneca winning side of the ledger. It is a pharmaceuticals helping to boost the index. In terms of losers, nestle is at the top. Its only down. 5 . Bap down. 3 . Not a lot a big moves to the downside. The only one you see their moving more than 1 is flutter entertainment. Theirr is down 2 of vc raised fiscal year earnings guidance. Lets get first word news in hong kong. Thanks, matt. Credit suisse is considering a return to u. S. Wealth management after a fouryear absence. That is after the ceo looks to boost growth in Private Banking. A new basefocused on in miami for wealthy latin american clients. They say no final decisions have been made. The fed is resuming its Balance Sheet growth but Jerome Powell sense dont confuse that for qe. I want to emphasize that the growth of our Balance Sheet should in no way be confused with largescale asset purchase programs we have deployed after the financial crisis . Crisis. Billsr the repurchase of maturely altering the stance of Monetary Policy. How also hinted at the possibility of another rate cut. Theas confident that Economic Situation can be sustained. Stocks with other groups as the swiss asset manager works on its turnaround as a standalone company. The crisis started last year with a fund manager was suspended, triggering a flurry of withdrawals and the ousting of the chief executive. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Anna thank you very much. Ande talks between the u. S. China are set to start on what seems to be an increasingly sour note as the worlds biggest economies continue to fire shots. It wills warned continue taking forceful measures to protect its security. This comes after the u. S. Blacklisted eight tech firms china responded by saying stay tuned for retaliation. Then, state tv and tencent dropped the nbas preseason games and the Trump Administration has slapped travel bans on officials linked to the crackdown on muslim minorities. We have heard from the chinese pushingfor the u. S. Back on allegations around that province. More on the state of relations, lets bring in salina long wang. How could china retaliate . How could these responses impact the talks . Inheard to stay tuned language that echoes donald trump. How could they retaliate here . Thats right. We have continued to hear harsh words coming out of the out of china, asking them to stop wedling in internal affairs could also provide more details on the unreliable entities list, which was first announced when huawei was black with blacklisted. It could include Companies Like for its involvement in the huawei case. A swath oftarget u. S. Companies because it is a vaguely worded as any company deemed to be hurting the legitimate interests of chinese companies. When it comes to trade talks, the mood music could not be much worse than where it is. It was already a tank mess before the blacklist and visa restrictions, reports about limiting fund flows. This just further condemns the possibility that even a small deal can be reached. Matt what is the significance now . Is not just nba fallout. We seeing it with activisionblizzard as well. What is the significance of the see that kowtowing we the backlash you get from the public . And the backlash you get from the public . Who would have thought a single tweet could wreak havoc on the nba, which has spent decades building its business in china with 800 Million Viewers last year. The fact that this can happen means it could happen to any company. Beijing is resorting to this timetested strategy of targeting a business that it deems is challenging its political interest, especially around what it claims to be its sovereign territory. This shows the balancing of political risks at home and abroad is getting more difficult for western companies. This adds another layer of complexity to the trade wars and exposes some cultural differences in these core issues. Matt thanks very much for your help. Beijing talking to us about the deteriorating relationship. Lets get to the impeachment inquiry and President Trump. In a scathing letter to nancy pelosi, the president and his administration have refused to cooperate, calling the proceedings unconstitutional and invalid. Joining us is our Senior International editor to talk about this. I guess it is no surprise that they react this way. What is the core of their argument . Counsel ine house the letter says that there has been a lack of fundamental fairness and constitutional due process in this impeachment inquiry that the house is leading. There is no need to cooperate. They have also said that this is simply a way to try and rewrite the 2016 election that they are unhappy with the results and trying to undo them. Here anda real effect a senior white house official told reporters that there will be no corporation by the white house, that they will not be responding to requests for documents even subpoenaed documents, or allowing Administration Officials to testify in an impeachment inquiry. Anna thanks very much. Bloombergs international editor, jodi schneider, with the latest on impeachment. Up next, we renew stocks on the move. Bring you stocks on the move. This is bloomberg. Anna welcome back to the european open. We are 40 minutes or so into the trading day. European equity markets are holding up pretty well. Brexit talks have hit an angry stalemate both sides of blaming the other for refusing to budge. Any hope of a deal now rests on a meeting this week between boris give ground on the crucial issue of their shared land border i visited the border to see why the issue continues to derail negotiations. Anna the 310 mile border looks unremarkable now. On this road from ireland into Northern Ireland, the only clue you are leaving ireland and headed into the u. K. Is this road sign, reminding you that speed limits will now be in miles per hour. But the border has had a history. Bloody battles between Irish Republicans and prot u. K. Unionist escalated in the 1970s. The troubles of actually more than 3. 5 thousand lives. Single market the meant that customs checkpoints like this one were allowed to gradually fall into ruins. It meant security checks were increasingly unnecessary. Products flowand seamlessly over more than 2 hundred rd crossings. Road crossings. Trade is worth 1. 1 billion a week and an estimated 15,000 vehicles cross every day with no stops and no checks. So what would happen if, after brexit, custom checks are restarted . We have no borders, no controls. We will be faced with technically to borders with a fiscal and Customs Border and another across the sea. Tape,resents a lot of red administration, and costs. Because we are a service provider, if we see manufacturing output dropped in Northern Ireland there are less goods to move and we see that is a huge threat. Anna communities fear division. The border runs right down the middle of this country lane. Thats ireland on the side, the United Kingdom on that side. If the open nature of this long and historically troubled border makes taking the u. K. Out of the use of her difficult. Anna edwards bloomberg, on the irish border. And later today, i will be speaking to the finance minister here in dublin around 1 30 p. M. U. K. Time. Will get his governments take on the latest in the brexit negotiations, a crucial week for ireland and the u. K. We pick up the conversation with the cio of a hotel group and the president of the ibec, a business and Employers Group here in ireland. Good to speak to you here. Me ask you about the preparedness of businesses. You run hotels that operate in the u. K. Ireland come and you are expanding. How ready are you . Bloomberg markets. Patrick good morning and welcome to beautiful, sunny dublin. All of this ish there is a lot of noise. Businesses have to work through that and cannot respond immediately to every little peace of news. News. Ce of making sure businesses do not become paralyzed by political events, understanding what needs to be done is critical for us. If you look at the issues, it all hinges around essentially a good fiveyear agreement. We have a process in place which has been going on. Wants to allow anything to derail that. That is where the key issues live and that is where they will have to be resolved. And crucially still around the border and the prospect of any customs check. We spent a lot of time talking understandably about that. Industryn the service and we dont spend a lot of time talking about the service industry. Is that an oversight . It is and it isnt. These industries are much more protected because of the ability to maneuver into other areas of business. At the irish context, where you essentially have two economies, our food and agriculture business and the drinks this, which will be the most severely hit, then you have of whichces industry, looking out behind you, we are overlooking google docs, our telecom docs docks. Servicesery large which will not be impacted the same way. ,n the event of a hard brexit urban areas will tend to do better and rural areas will struggle. That is the really big challenge. Anna that is because they rely on the agribusiness and other things. We heard from the finance minister about cushioning those communities. It could be very effective. Is there anything else that dublin could be doing in terms of selfhelp . At this point in time, it is difficult because we dont know what we are planning for. In the business world, unless you have a clear view of what you are planning for, it is difficult to make any decisions. Invariably, they will be the wrong ones. We encourage businesses not to allow themselves to become paralyzed by the events that are happening. So that is the real challenge. Anna certainly a lot of uncertainty around what happens here. Just three weeks and a day until the end of october. Thank you for joining us, ceo of the dalata hotel group. Lets get to our top stock stories. Lot ofe are seeing a losses this morning from plastic a minium plastic omnium. This will be the biggest drop since december. They had to cut profit margins, citing operational difficulties in the rampup of their South Carolina plant. Flutter entertainment also declining. This is surprising because gvc had a strong upgrade today. Flutter is not, however. Sell ratingted the despite a planned merger, saying it has lost momentum in court markets. After mergingsing with takeaway. Com by the end of the year. That salesnfirmed orders in the Third Quarter were up. So we are seeing them rise ahead of the planned merger some 2 . Matt dani burger looking at the individual movers there. Up next, what sort of reception will the chinese delegation received in washington as it prepares for another tough round of trade talks . Can any sort of agreement be hashed out after this weeks escalation in bad fives . Vibes . We discussed further. This is bloomberg. Matt welcome back to Bloomberg Markets. This is almost one hour into the trading day, we are looking at gains that continue to increase. The dax is up, the ftse 100 gaining. 4 . Jerome powell says the central bank will resume purchases of treasury securities in an effort to avoid a repeat of recent turmoil while hinting at the possibility of another Interest Rate cut. Joining us is our mliv fx rate strategist in berlin. I know you expect for rate cuts through 2020. Market isout that the not rushing to price in those rate cuts. What is going to push them over the edge . I dont think i am being unfair in saying the fed is reluctantly being dragged in the cutting rates. Rewind nine months ago, they were talking about raising rates. Ratesd is going to cut and our reluctance to do it. The market is not going to go ahead of itself and price fed easing. But we have already started to see cracks in the u. S. Economic data. It is going to put increased pressure on the fed and maybe step up the pace or match the paces theyve done this year. They will do for this year if the markets are correct. But we are not price there by the market. Matt anna . Anna richard, i wanted to put to use the markets live question. Is it difficult for treasury yields to get below the 1. 5 level . What is the thinking . I think the bond market rally is still alive and well. In any big rally like we have seen, they are going to see retracement. Last month in the u. S. Curve was a retracement of a very big move. , twote 10year gilts years, about a hundred 40 points. In rally is in fact track. The yields will to continue to go lower. Matt what do you expect the Balance Sheet to grow to . They will inject liquidity to avoid the short and problems. Probem problems. Does a lot of talk of them highly into the bond market. Funny palace is not to review do it as qe and that it is a merely referred to as quantitative easing. You can join the debate. This is bloomberg. U. S. China relations worsen as washington posts travel bans. Beijing calls of interference in internal affairs. The white house says the present want participate in the impeachment inquiry, calling it unconstitutional and invalid. And brexit talks turn angry. Can Boris Johnson and leo radtke red car find Common Ground tomorrow . Welcome to bloomberg surveillance