Could be cut short. A truce could be included in a partial deal. Turkish enters Turkish Forces enter syria. President trump orders his forces to stand aside. In an exclusive interview, olli rehn reports that mario draghi ignored advice on qe, says that is greatly exaggerated and stresses the need for togetherness. Olli i value team play. If you are divided you tend to lose games, if you are united, you tend to score. Anna less than half an hour to the start of the trading day, lets check futures. Looking at some futures that suggest some upside. Keep an eye on what is going on in u. S. Futures, incredibly volatile. U. S. Futures, the overall picture does not tell the excitement of the story. Over the last three hours we 1 e seen four more than swings. A great deal of volatility. That is what the Asian Session is telling us. The Chinese Markets up 0. 7 . South korea down 0. 9 . A lot of action in the expectations or lack of expectations. Currency markets moved around by that. And the Australian Dollar on the back of these headlines. Worries thated on maybe the talks would be shortlived, then our colleagues reported may be a mini currency deal could be achieved, and next week we might see tariff increases that are planned not taking place. All of that is seen as positive by market. It is affecting a number of asset classes. Lets get a perspective from the mliv team. Garfield reynolds is with us. I do not know to try to take a coffee break, you probably sensed it is hard to keep track of what is going on in trade. Garfield it has been hard to keep track. Every time we thought a move went we thought it would be a headline of the day. Then everything is scurrying back down. Grumpy wereing tired out, that is why because it was very rough and it wouldve been rougher if you are trying to trade any of this. We sort of went through where markets have gone over trade over the last ask month in about three hours. About last six months in three hours. You have been talking about the best way to trade u. S. China negotiations. Many times i feel the guys on trade ontry not to headlines, but some people have to. What answers are you getting on this question . We have not had many answers coming in yet. Volatility has stayed surprisingly low for stocks. It is not really low historically, but it has not picked up. Markets do not look as anxious as they did after the beginning of this month when we had the Global Growth scare. Also some talk about how you might want to go looking for bonds or stocks that offer attractive yields, because whichever way actual securities go in price, you have some cushion because you will get dividend or a Coupon Payment that will tide you over on what will be a volatile few months going into the end of the year. Anna tell me about expectations for the fed. It does seem that the trade headlines are moving expectations. Ofwere at 40 at the end september for a cut in october, and now we are up above 80 . What is the thinking . Garfield the thinking is that none of this, what has become clear, if there will be progress on trade, it will be partial, gradual, perhaps even glacial. We had an interview out of hong kong from blackrock saying that is the best you can hope for. There is such a big abide between china and the u. S. That a small amount of good news is the best you can get. That seems to limit upside for the global economies. That seeds into the thinking why this great expectation for a fed rate cut, and this volatility, this uncertainty, if you are thinking traders are having problems wondering whether to take positions that they should decide on something because the uncertainty is such that the situation could change from minute to minute, how are businessman going to make decisions about what they should take when they are looking at projects that might take a month or a year to come to fruition . If there is any impact on those decisions, they are completely in the dark. Throw that into the mix and Central Banks look more likely to ease because economies look like they will be more fragile going forward. Anna thank you, garfield reynolds, head of asia markets team. Lets bring you breaking news, out of the japanese food and ,rug business that is 7 i saying this morning they are cutting 3000 jobs at various units, closing 1100 stores. Examining the impact of reforms on their fullyear forecast. Pushed, Turkish Forces into northern syria, but confusion reigns about where the white house stands on the issue. We will get you an update. Bloomberg radio is live on your mobile device or dab Digital Radio in the london area. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 7 40 in london. Theres suggest an upside at start of the trading day. U. S. Futures have been whipsawed by news out of the trade story. Lets get a bloomberg update. Governing Council Member olli rehn is hitting back at reports at the European Central response to a Financial Times story that mario draghi ignored advice to restart qe. Rehn does not know what the fuss is about. Story ishink this greatly exaggerated and misunderstood. Doesonetary policy qe isatory work, resuming definitely for the governing council to decide. Prime minister Boris Johnson is set to hold lastditch talks to secure a deal. With only three weeks until u. K. Leaves the eu. The atmosphere has turned sour with both sides planning each other. If the leaders cannot reach an agreement, brexit talks could collapse entirely. More trouble for boeing, inspections on their 737 jet, they will have to be grounded with an issue connecting the wings to the fuselage. They are setting up a repair orderedfter the faa checks on planes that have taken more than 30,000 flights. Is moving samsung the quantum dot. Operations will have an annual capacity of 30,000 panels larger than 65 inches. Two rugby matches have been a typhoon. E to organizers are not ruling out further disruption. It has beenird time canceled. Global news, 24 hours a day on air and at tictoc on twitter, powered by 2700 journalists and analysts in more than 120 countries. Anna thank you very much. After a week of drama featuring blacklists and in nba uproar much trade talks between the u. S. And china resume later today. The u. S. Is looking at rolling out the currency pact. This would see next weeks tariff increase suspended. This is something that has been whipsawing markets. Currency is coming perhaps tied to other conditions. On the negative side there have been other reports about conversations being cut short which were later denied. What are you hearing on the trade conversation . I think it is as you summed it up. There are a lot of moving parts, and a few people are making productions on where it goes. On a headline basis you have to say the chinese delegation traveling to washington would not be going unless they were serious about putting something on the table. China is willing to talk about more agricultural produce, so there could be something there. Looking at. Could be something of a partial deal. Nonetheless, despite all of that, the background remains negative. The broader relationship continues to deteriorate. It has gone beyond national security, and to the culture wars with the backlash against the nba. There is some prospect for a middle ground, but that remains to be seen. Anna it goes from trade war to fx more and the capital war and a culture war. What about the currency dimension . Is this part of a mini deal . We certainly know it has been a hawkish toward the currency, President Trump accusing china of cheapening the rates. It has been a concern for them because they have commented in the past. In a trade agreement with china, we have reporting saying currency is back in the mix. Details are something we do not know. Commitments to not weaken their exports. Anna thank you for the update. Topic in washington, geopolitical tensions are wrapping up ramping up in the middle east. Turkey began a ground incursion in syria. Extent torough the which the u. S. Is standing aside. What is happening on the ground . On the ground the u. S. Has removed its troops from close to the border. Videos of troops withdrawing. It still has about a thousand troops in the kurdish area. The u. S. Position now seems to be hardening again. We hear comments from pompeo saying they never gave the green light. When trump was asked if the turks try to destroy the kurds, he reacted firmly saying, we will hurt the turkish economy. Anna we have heard this line from mike on pao saying the u. S. Did not give turkey a green light in syria. The perspective is not united in washington. There is certain activity away from the administration that suggests there is a lot of confusion in the washington position here. Atyes, the key thing to look is why President Trump doing this, and you want to look at his electorate. He is catering to his electorate, he has called these silly wars and he wants u. S. Troops out of it. Anna thank you very much. Business back to the agenda. Concerns about the impact of the hong kong protest on luxury goods, throwing down a gauntlet faster than expected on Revenue Growth in the third quarter. Lbmh continues to shine. I want to show you the share price up 30 pretty up 38 , clearly beating the s p 500 globe are a luxury index and one of its main rivals. They were out with a sales sales camerdquarter in at 19 . Analysts were expecting 15 . This is the letter division which is seen as a bellwether for the luxury space. Ands defined the trade wars the hong kong protests. Performance of , and the centering issue a new products is bestsellers for women and now to menswear like the saddlebag. When you couple total sales including dom perignon, we have those numbers coming in at 11 . Analysts were looking for 9 . They said it is a reality check for the Global Growth momentum for the luxury space. Luxuries will only make up half their sales from hong kong. They are not out of the woods yet. This is the perfect way to look at the headwind they are facing. Then the hong kong potential for recession. You can see the Second Quarter dropped into contraction, and is likely to again in the third quarter. Hong kong retail sales fell to the worst in august as well as exports some of that will be a big factor for the luxury space moving forward. Anna we will keep an eye on lvmh and others in the luxury space. We will tell you in a moment your stocks to watch at the opening. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Six minutes until the start of equity trading. , and arehordern Equities Team is covering boeing suppliers. Basf. Nk between thehe last suitor for construction chemical unit, basf is looking for 3. 3 billion for the chemical unit. Anna on the boeing story. Boeing supplies could be in focus in europe after the old boeing jets were told they have to be grounded after inspection for cracks. It was followed by news that one of brazils airlines has taken the aircraft out of action. Companies in europe will be to boeing as their biggest supplier. Melrose counts on boeing for 20 of its revenue. Anna what is the latest . Dani the hospital equipment maker warns it will miss its profitability goal. Citingested its margins, higher tariffs. Shares are lower by 3 this morning. Anna european futures higher. The market open is next. 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. Equities trading. You are watching Bloomberg Markets european open on bloomberg tv. Volatility that we have seen in ber, as itets, volto has been dubbed, plenty of assets whipsawed certainly in the Asian Session, and the oil prices, and the chinese currency. We heard the trade negotiations could be shortened. That was later denied the. That was later denied. Fx. Ty of focus on european futures tentatively higher. Dax futures pretty flat. Slight moves to the upside. U. S. Futures look more negative. How long until we get another trade headline . Hours inace of three the Asian Session we saw four moves of more than 1 . Euro stocks up by 0. 2 . Spanish ibex fairly flat. The euro is up by 0. 3 . The dollar is generally weaker. The british pound up by 0. 2 . Boris johnson will be having a meeting later. By French Market opening 0. 4 . Boeing suppliers are hurting. Euro stocks up by 0. 2 . ,onsumer discretion looks mixed but with a huge slice of green going through. That is confusion for sector. Health care in the red, financials in the green, staples look to be green. It is a mixed bag for European Equity markets. On individual movers, a few names we should bring to your attention. To the upside, 367 on a stoxx 600 going higher. A lot of luxury names. Lvmh up by 4. 9 . Lvmh earnings very strong. Moncler to the upside. To the downside, this business cutting its estimate, the volatility in u. S. Ethanol catching up with that is this. Hsbc. R next to that end, down as you might expect on that news. European markets opening slightly higher. After markets were whipsawed through the Asian Session. Negotiations between the u. S. And china begin again in washington later today. Peter chatwell, managing director, head of rates strategy, Mizuho International joins us. I hope you did not need to sleep through the Asian Session because there were a lot of headlines on what to expect from trade. We heard we we get a side deal and it goes to highlight how thatexpectation there is something is achieved this week. Peter unfortunately you have to price news. Is the most we can hope for, the best is the tariff increases do not happen. Will still be in place and tension will be in place, and the most optimistic outcome is there will be more constructive dialogue. The fact that both sides are aiming for a narrow agreement, that shows this cannot go away. It will be a drag on Global Growth, just maybe less of a drag than a week ago. Anna i have a chart that shows onenue, this is weighted china revenues, and that has dropped in the past week. Bar pretty low. You do not expect much this week. Avoiding anint is escalation of tariffs is not good for the global economy, it just means it will not deteriorate further. We still have late cycle dynamics that mean we continue to deteriorate. It is a case of expectations management, rather than thinking there could be an acceleration of the slowdown. Maybe it continues on the current path, which is still a slowdown. I think deescalation is not a truce. They are not rolling back existing tariffs, all they are saying is they will not increase tariffs in the future, and that might be the best to come out of this. For awhat about prospects deal on currencies . How significant would that be . It is something President Trump has mentioned often. Any constructive dialogue with regards to currency could be helpful and beneficial. Agreement,come to an what metric do you use . I can construct a variety of models with a fair value of currencies, and i would include there will still be upward pressure on the dollar. It is difficult to say there can be something constructive for both sides. Anna if we are still in a phase were rates are being cut . Why do you say that on the dollar . Peter still it is one of the most attractive developed major currencies in terms as a yield play. It is a relative value story. The others will have negative rates whereas the dollar is looking attractive as an investment that gives you a positive nominal return. Anna Peter Chatwell, managing director, head of rates strategy, Mizuho International stays with us. Up next, stocks on the move, including lvmh, the luxury maker posted that are than expected growth. We should see numbers from hong kong. This is bloomberg. Anna welcome back to Bloomberg Markets european open. A lot of stocks on the move this morning. Down by 7. 9 for that particular business. Stock movers other than that, Annmarie Hordern has them. Annmarie i am going to start up montclairshing and the luxury space. This defies the headwinds of the trade war and hong kong protests. 90 sales, quite healthy. Analysts were looking for 15 . They had a profit warning, and this may cut into their credibility because their expectations were based on a conservative view of the market. 11 . Ansen down they missed the lowest analyst estimates. Anna thank you very much. Farfed began debate on how the rate Reduction Campaign should extend while agreeing to cut last month. Show they generally agree Downside Risk to growth had increased since july. Signal thet to limits of the easing cycle, and that is where we pick up the conversation with Peter Chatwell , managing director, head of rates strategy, Mizuho International. What did you take from the minutes last night . Several officials were pushing for some signal on the limits, how far they would go with easing . Peter i think that is what the midcycle Adjustment Phase came from. We completely disagree. The way we look at the fed Monetary Policy, they are in restrictive setting, and it will only be once they restart a large amount of asset purchases to alleviate pressure on the lack of bank reserves, about 500 billion of short term paper. 1. 4 , thattes below is our estimate of where neutral is. They have a Monetary Policy setting which is neutral. Until then, Monetary Policy in the u. S. Is still tight. Probability by the end of october for a rate cut, this has come up substantially since the end of september. Is it all about the data . What is it that makes you convinced of more rate cuts . Peter it is a bigger view, it is about the persistent strength of the dollar and excessive tightening of the balance. Heet. Peter that definition would be because there is little duration , it would not fit into their definition of qe. Qe aseople would look at expansion from the central bank which is what they will be doing, hence why there is confusion. The qe program they executed in the past including operation twists and did make references to a desire to reduce term premiums and get data yields down. Will not be making the effort this time, but that is the difference. To not call it qe is an oversupply nation. Anna let me ask you about corporate profit. One of my colleagues is writing a story on the subject suggesting analysts have brought down expectations for 2019, but 2020 they have left intact their expectations. What is going on there . I can only speculate as to why that might be there is the expectation that 2019 deteriorates but there is a magical rebound in 2020. The rebound in 2020 does not tie up with any macro data we have seen. Possibly it ties up with a desire to preserve valuations as well, perhaps that is the guidance analysts are being given, and maybe they are heating that guidance heeding that guidance rather than looking at the macro picture and factoring that into the corporate picture. Anna Peter Chatwell, managing director, head of rates strategy, Mizuho International stays with us on the program. In the markets, European Equity markets not moving anywhere fast. The stoxx 600 almost entirely flat. Some sectors are booming. Sector tied to the trade tensions is bouncing on positive headlines, ignoring the negative headlines on trade that we have gotten in the last 24 hours. Luxury goods doing good on equity space. That is a sector we are watching. Plays down a rehn report that mario draghi ignored advice on quantitative easing. That is next. Anna welcome back to Bloomberg Markets european open. 20 minutes into the trading day and the european and a story is flat. Stimulus package has caused a split among policymakers. Governing Council Member olli causes anthe split impact, but it is natural to have different views. Olli it has an impact on policy because communication and further guidance is an important part of Monetary Policy. At the same time it is natural there are different views in regards to the Economic Outlook and Monetary Policy. Of football teams , so i value team play. Divided, you tend to lose games. If you are united, you tend to score and win games. Ancine a story suggested more division with mario draghi not listening to advice from the committee. What does that mean to markets . It is a story that is greatly exaggerated and misunderstood. The Monetary Policy committee does preparatory work. Presuming qe and asset purchases is definitely for the governing council to decide. Extraordinary in this sequence of events. Francine there seems to be a governing council split, do we need an urgent policy review . Is important that to discuss, and something Christine Lagarde, the next president of the ecb, will decide. Start a review of the Monetary Policy framework. I find it important to analyze the longterm natural rate of interest or population aging, how they affect the conditions of Monetary Policy. Mandate is the strength in the eu treaty. Find this discussion will enhance ait common understanding of our Monetary Policy, and improve communication by the governing council. Anna that was olli rehn speaking to Francine Lacqua this morning. Peter chatwell, managing director, head of rates strategy, Mizuho International is still with us. A really interesting question there, and it raises questions about what Christine Lagarde needs to do when she arrives to at a handle on this group policy makers. Does she need an urgent policy review . Peter i think for sure she needs to take into account all financial actors, not just whether it is correct or desirable to make refinancing rates lower for corporate, and the rate at which banks will lend credit, keeping that low. But what impact does Monetary Policy have on banks . Also on the longer end of the curve, what impact does it have on Pension Funds . Positive is it not as to keep borrowing cost low for corporates as it was at the start of this qe experiment . Peter keeping borrowing costs a stimulative thing as long as it does not turn them into zombie companies. Keeping those alive. The lesson from what we have seen in the u. S. Is that can happen quickly. Then you get u. S. Corporate Balance Sheets at such low and tight yield and spread environment for such a long time. The same is happening in europe but advanced. Anna and we need to look at japan and lessons there. They are doing other things to steepen their curve. What are the lessons from japan for europe . Peter when you are so deep into easingetary policy, experiment, you have to consider the financial actors and the need for there to be positive yields and steepness at the long end of the curve. Pension funds to have assets to buy within their mandate, whereas in the other part of the curve, you can cut yields low. That is how things are being worked in japan. Its mandate is evolving as it goes, allowing them to buy more foreign bonds and to classify them as domestic bonds, giving them greater capacity to buy european bonds, u. S. Bonds. That is interesting. Capabilityfar more to take on risk than a german are dutch pension fund. Anna let me ask you about fiscal stability in europe. Skeptical tomain the amount of fiscal stimulus that will be forthcoming . Peter this is because i think about Political Capital. When does a government feel it has the Political Capital it needs to enact a policy which may not be popular amongst its voters . Before have one now there is a deep recession in germany . Possibly not. Anna isnt that when you need stimulus . Run byit is, but democrats, they have one i on current policy and another on the next election. Because our cycles are slam, the ability for politicians to make the farreaching changes they need is slim. Anna thank you for joining us. Peter chatwell, managing director, head of rates strategy, Mizuho International. Peter will continue his conversation with us on Bloomberg Radio at 9 00 a. M. U. K. Time my he will be joining me. Up next, last chance saloon, Boris Johnson meets his irish counterpart for crunch talks on brexit. We will speak to the u. K. Minister. That is next. Anna here are your headlines. U. S. Stock futures tumble on fears trade talks could be cut short. They stabilize as bloomberg reports afx traders could be included. Losses as turkey launches an incursion against kurdish militants. President trump orders his forces to stand aside. ,nd in an exclusive interview the ecb says reports that mario draghi ignored advice is greatly exaggerated, stressing the need for togetherness. Play ande team communication. Toyou are divided you tend lose games. If you are united, you tend to score and win. Anna welcome to Bloomberg Markets. Lets tell you where we are. And 250ks to the upside to the downside. To the downside and the market is a little bit weaker. We had a fairly flat start to the trading day, maybe losing a little bit of ground through a big focus on luxury stocks with an update after hours. As a result, other stocks are being pushed higher. Despite the weakness in performance in hong kong, lvmh is up by 4 . Caring keuring higher. We understand they are not interested in buying that unit anymore, and as a result, we see a positive impact on the business . Hugo boss and richemont are in their. In there. Luxury names to the upside. Lets look at the downside and see where we are in the profit story. The packet food business in Christine Hansen put out a warning. We have also got phillips, down by 7. 4 . They warned of what they would be able to achieve. Ethanol market has been volatile and that particular business. We also see packaging businesses moving lower. We have news out of monday 2. 75 . Down but get your first word news update. A currency pact with china is part of a partial trade deal that is the latest policy the u. S. Is looking into. The move could also see a tariff increase. This be the third phase of an agreement with beijing and would be followed by more negotiations on core issues such as intellectual properties. Turkey has launched a military cannoton into syria repeatedly warning they wont allow the creation of a kurdish protostate on its southern border. President trump was asked what he would do if turkey wipes out the kurds and his response was that he would wipe out turkeys economy. When should the fed stop cutting rates . That was the key debate last month. Several officials pushed for stronger signals on how to limit the currency path of easing. You member back in the september meeting they reduced rates by 25 basis points howell described the move as an insurance cut. To Rugby World Cup matches have been canceled, including a key englandfrance game due to the expected impact of a typhoon. Tournament organizers are not ruling out further disruptions. Its the third time the matches have been canceled. All games will be logged as scoreless draws. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you. Has joined the free trading party, offering the zero commissions for Exchange Listed securities. They are the fifth major player to roll out some form of Commission Free trading but the move to zero has threatened industry revenue for brokerages like schwab and td ameritrade. Lets get more with dani burger. Dani the strategy behind this has been fidelity needing to keep up with its competitors. It is known as a brand that offers Cheaper Products and trading. But you could almost think of it as an advertising fee, a marketing fee. Brokerages are slashing their trading commissions so they can get more assets to make up for it. But when everybody is doing it, you essentially have a level playing field, so its hard to see any sort of bump from that move. Today,y announced this offering higher rates on cash accounts. Thats likely the next frontier. What does this mean for the Money Managers who brought up those Commission Free platforms . Dani previously, if you were an etf provider, you want Commission Free trading blackrock had a deal with fidelity where their products traded free of commission on fidelity. It was one of the most exclusive arrangements of its kind, but now we have a level playing field. All of the competitors also get to trade Commission Free trade that means competitors like vanguard might surpass blackrock. Over the past five years, blackrock has continued to be vanguard and they are likely to get a bump here because of an added distribution. This is likely to benefit smaller players who can afford to pay these platforms. Anna thanks so much. Dani burger on the latest developments towards thefree trade. Feefree trading. We are down by almost half a percent. Futurestoxx 600 as u. S. Decline. This is really gathering pace in the last few minutes. We heard from the Chinese Foreign ministry about how the u. S. Should stop addressing chinese companies. The euro has also been strengthening this morning and we get more from our team shortly. Finance ministers have agreed on the final key elements of their meeting, capping years of fraught negotiations. What have you been hearing, maria . Thats right, two years of negotiations. We know that this budget has actually been watered down many times and fostered the aspirations put forward by the french government two years ago. There is an agreement nonetheless. We are looking at 20 billion euros being used to essentially finance investment and reforms. Having said that, we know it was a contentious issue. Theres still plenty of this agreement and the question is can this really saved or serve to devastate the european economy . Obviously, it is tiny and not good enough to do that. The french finance minister i spoke to said that they are aware of this still see it as a positive step. Of course, they think any agreement at a european level is always good news. Thanks very much. Maria tadeo joining us there to reiterate what we were saying about the equity markets in europe. Worsening by about half a percent, just a continuation of the with some we saw to the Asian Session review and we markets are down. 5 . 4, u. S. Similar down futures down. 3 . We had conflicting headlines around the trade tensions between the u. S. And china coming through the Asian Session. And looks as if that is continuing into the european mind, lets that in get back to the brexit story. Boris johnson meets his irish counterpart for lastditch brexit talks. Turned sour inve recent things with each side blaming the other for lack of progress. Is the u. K. Conservative minister for business and industry. Good to see to. Speak to you. Today,e meeting later on is the u. K. Going to bring anything new to the table . Dublin andback from it seems we are in a stalemate. Nadhim it is a positive move meetvaradkar has agreed to Prime Minister johnson. I dont think we are in a place where we can confidently say there is a deal but we are trying. What has put forward them as you know, a proposal that actually is a compromise from the British Government on the movement of goods to treat the whole of ireland as one entity. In terms ofg shift the British Government. We need to deal with the backstop and remove it from the agreement. That is the only way to get through parliament. So what will happen today is the Prime Minister will outline why it is in both of our interests to get a deal. A no deal, which is where we will have to end up will mean that europe and the republic of ireland will have to put up a border from which is not what varadkar once wants. Anna they certainly dont. Is there any possible solution that avoids any kind of customs checks . I appreciate you can use all kinds of technology, but the Brussels Team says that what the u. K. Has proposed are untested details and they cannot go along with this vague language about what customs checks might look like. All, one of the important pieces of the proposal we put forward for more detailed negotiations. We are saying this is the complete proposal, but we need to sit down and go through in detail. Is there an exemption for Small Businesses . So that movement is as frictionless as it can be. But you have to step back and think that the starting point has to be that the United Kingdom has to be kept whole. We cannot have one integral part of the United Kingdom somehow be in in a different customs arrangement with the European Union the rest of the kingdom. Which is why the proposal is, as i said, a compromise. At the heart of the proposal is the belfast agreement which we have to honor and will honor. We hope the other side feels the same way. Anna they said they didnt want on that. It was said overnight that a second letter could be sent if there is a delay. Boris johnson could send instructions, as he has to do by law, but could send a second letter. Can you confirm that is something the government is looking at . Confirm ist i can the prime or will absolutely obey the law. But lets cross that bridge when we get to it. At the moment, the focus has to be clear head and focus on trying to get an agreement. We will absolutely over the law of the land, but if we cant get a deal on what i think is a fair compromise, we will have to leave without a deal. Anna no business groups i was talking to like the deal on the table. You have the business brief. What do you say to businesses that object to this . Nadhim first, it is not a physical border. Company,e a large offering an exemption to mediumsize companies, moving thennery to the republic you can have inspection at delivery. That is very doable and is something that can work. It has worked in other parts of the jurisdiction. So look, we are trying to deal with a complex issue. At the heart of this is the belfast agreement and making sure they keep the borders open. As well as making the u. K. Hole in the u. K. Has to be whole. Imagine any other european country where youve asked them to carve out a bit of a country and leave it behind. Thats just not right. ,nna thank you for joining us the u. K. Conservative minister for business and industry. Up next, we bring you stocks on the move, including philips. More on the market moves to the downside for european equities in general. This is bloomberg. Anna welcome back to Bloomberg Markets. We are bringing you live pictures of ukraines president currently speaking in key kie v saying there was no blackmail from trump. A diplomatic channels to unlock usaid. Military aid is very important for ukraine. He also said they did not discuss military aid in the trump call. We know some of what happened on that call because the transcript was released, of course, by the white house. Controversy, to say the least. Lets move on to other news on the corporate front. Food delivery remains a tough market the challenges tough market. Big challengers remain unprofitable what we are also seeing consolidation with a step established giants. Delivery hero is a keydelivery n player. They sold their business earlier and are seeing Customer Growth in new markets. Police say the joining us this morning is the ceo of delivery hero. Could speak to you. Tell me why you dont think you need to play a role in the m a that is taking place in the sector. Our focus has rather been on business and being able to invest at a good return and improving logistics and our restaurant network. That has seen us growing organically. For us, that is the core focus. M a, we have been open in the past, we are also staying in making sure we get a good deal. Anna you got some money from takeaway shares. I putting that towards deals in asia with that part of the world . We did a sell and we got a billion for that business. There was a controversial move. They invested the markets that have bad returns. Thats why they seek wedding of we are on path to be the largest food platform by the end of the year. And at the time, but less than 500,000 orders in a country like taiwan. Later, we doths 7. 2 8 million orders per month, three times the orders in germany we see the investments we have been doing with the proceeds are really paying off. Anna so you see more of a future in emerging markets . You have gotten out of developed markets recently, germany and others. Will you be selling more developed businesses . We are generally focus on markets where we see the best return and the highest frequency of customers. Thats what we have in the middle east, latin america, and africa, but also Eastern European markets. Right now, we have a very good footprint where we have no general interest of selling in the markets. Anna doubling down on the markets you are active in. And what you are trying to do is deliver more stuff. Not just the food, but there i said, like an amazon. Are you not concerned that the margins in that business are a little bit on the low side . Our main focus is to deliver what customers really want. Thats why we look at groceries and payments. Example oftake an this, it would be turkey. We started to deliver our own warehouses where we can deliver in 13 minutes. That is way beyond amazon. And we work from there to improve economics. That, in particular, our efficiencies are improving profitability per order. That is very encouraging. Anna as you look into the future, what percentage of the business the sea being in food delivery and what is and other logistics . Food isnk food and hot the main vertical. I do believe i believe about 90 that. Iness is but time to time, you need something and we want to be there. Anna why the and Something Else if it is just 10 . Our bestt to make sure customers can go and stay on the platform when they need something. And having done that, it gives value. Youhat time, it can deliver what you really need and you will discover a strong love for the brand. But you might order food and get that delivered. Anna i will be grateful, im sure. What makes a successful market for you . Is it a culture of food ordering or a lack of traffic . What differentiates the really profitable markets from the less so . We look at customers who frequently come back and the margins. What we see is markets can drive good contributions per order. And at scale, we turned good profits. In europe, we reach breakeven. So its just about scale. Once you get the economics, things look good. Anna thanks very much, ceo of delivery hero. Up next, how should you trade the trade war . We check in on the market moves we have seen. We have been whipsawed by trade headlines and European Equity markets are now down by. 5 . This is bloomberg. Anna welcome back to the european open. 55 minutes into the trading day, we want to check on the markets. This is what we got for the euro. The euro is gaining ground against the dollar and the pound is a little stronger. Dollar weakness is part of the story when it comes to trade volatility and we have seen a lot of volatility around the straight headlines. Trade headlines. A lot of conflicting headlines on where we can expect to go. That in mind, lets check out whats going on. Weve got stock markets under pressure. The Asian Session has whipsawed. This is a result of the volatility we saw. We got headlines that suggested trade talks would be curtailed and and early. That was end early. Then we got reporting that suggests a currency deal can be on the way. The European Equity market moving to the downside this morning. We have headlines lines out of the ministry of foreign affairs, but nothing concrete. The cac and dax move lower. This is bloomberg. 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