Manus 6 00 a. M. In london. I want to bring your mind back to 2018. Exuberance after the g20. Then we faded to black. Im talking about the drop in the s p 500. Is it deja vu . From the did hear global times yesterday saying there is a will to make a deal. Then in bloombergs reporting, we are talking about the fact china wants december tariffs to be lifted. We are still waiting. Also looking ahead to bank earnings. Big questions over what we are going to see in terms of costcutting. The one positive is the u. S. Consumer. Low rates certainly not helping. Manus let us talk about the various political markets and how they are affecting currencies. The lira, first of all. Battered and bruised. 50 on steel. Three ministers have been sanctioned by the u. S. On turkey. If you wanted a reason to sell the lira, you have it now aplenty. Despite the pushback, defensive play by the local banks, a billion dollars of fx. There is this deep misgiving in the treasury market. Yields popping by 20 basis points. Optimism in the bond market does not make a tantrum. Seemaximum youre going to on the yield pushback is about 2 from Goldman Sachs. They talk about hard and soft data. We will discuss iron ore. It is higher this morning, but the mliv team are saying you are defying gravity. There is huge supply, bearish trends in demand, and thats going to cap out your iron ore back to 70. Nejra china may want talks before signing a deal, but we are seeing green on the screen in terms of equity markets in asia. A lot of that is down to japan. Gains of more than 1 there. U. S. Futures on the front foot. And cable. Brexit deal on a knife edge. A little bit positive after losses yesterday. 1. 2633. The initial trade agreement touted by President Trump between the u. S. And china, but bloomberg has learned china wants more talks. They will hammer out the details before xi jinping agrees to sign. Beijing may send their top negotiator to finalize a deal ahead of the apec summit. Manus does the risk of a recession prevent stocks and other risk assets from rallying, outweighing a trade agreement . Joined the debate. The mliv team are there. Lets bring in our guest host this morning. Dola, great to have you with us. The world seems to be running out of conviction that the trade discussions will manifest in something substantial. The hallmarks of 2018 for you on an equity market rally. Are you nervous . We are nervous, more than a year ago. If you look at the trade agreement for the partial trade deal with china, it lacks substance. It lacks progress towards a real deal. Part, the deal of buying more agricultural products. The manufacturing slowdown trained. This is what we are looking at. Markets can go up and down. Do not invest, hire people, based on tweets. They need to see substance. They need a constant drop in risk. Approach thisyou with equity strategy . Do you sit and wait it out . Do you by the s p 500 along with put options . Do you only by certain sectors . A great question. Stay online at the moment. That means you have to support other hedging opportunities in the market. Riskok at the trade deal on one hand and we can see the election 2020 and the rise of another risk markets have get the price. That will have a significant negative impact going into q1 2020. Manus we look at china, we look at emerging markets. That thisderstand is currency agreement as part of phage one phase one. Citigroup says you need a commitment not to devalue the yuan. You need a commitment not to devalue the one instead of a forced one way you want appreciation. Yuan appreciation. Yesterday i was watching u. S. Berg when the , buying someails agriculture. It is still big. We dont know the details of this. Im not going to speculate on what trump and she might have, but looking at the chinese equity, looking at inflation, im looking at the data that just came out last night. Im looking at gdp for q3. It does not look promising for equity or for china. For example, if you were to start shorting the s p 500, where would you put that money to work . Which equity markets in the world are attractive . Majd you can find a lot of orcks that are undervalued stories that will be recession proof going forward. We look at slightly unique sectors. Companies that will perform regardless of the economic outlook. Such as the Animal Health industry. You can short the broader market. Your stocks, you would be relying solely manus you mentioned the data we are waiting for friday. We had some data this morning. Ls have a look. This is ppi. The ppi is one thing i want to focus on. This is the risk to the world. I get trade wars. I absolutely get that. This is inflationary input. This is one of those areas we have seen an increase in the breakevens. This data to was absorb this morning . It just puts it in the broader picture of the slowdown. Looking at the inflation, the wasrlying call for china still manageable. Under this the ppi big picture of slowdown, i think china needs to do more. They have been doing this for the past year. It did not work out the way they wanted. We should see estimates from china. Broader asian a emergingmarket stimulus that will help not only the domestic chinese market, but the broader asian market. Great to have you with us. Majd dola, Portfolio Manager at first i would double bank staying with us. Dhabi bank staying with us. The telegraph reporting a deal on the irish border appears to be taking shape after a positive day of negotiation. It says the mood in brussels and london is of cautious optimism. The leader of finland currently holding the eu presidency is saying there is not enough time to reach a deal before thursdays summit. Hong kong chief executive carrie lam continues to defy her critics. She denied hong kong is akin to a police state, repeating that violence is not a solution to months of unrest. She is set to present her new legislative agenda tomorrow. Policies are likely to be overshadowed by continuing protests in the city. Retail inflation in india has accelerated to the highest level in more than a year. It might pose a challenge to the central bank the same of maintaining easy Monetary Policy. Consumer prices rose three point 9 in september from a year earlier. A spike ind by vegetable prices after a heavy monsoon season. Australias Central Banks is the case for cutting rates outweighs the risk of running out of ammunition. Saw threats the rba to Global Growth as a reason to take the cash rate 1 for the first time area some policymakers are concerned the move could leave them with little room to address shock. To new york tot sydney flight this friday. At nearly 20 hours, it is set to be the worlds longest. No airline has completed the root without stopping. The question is, how will humans hold up on the marathon . Scientists will be on hand to monitor the pilots and a few dozen passengers. Global news, 24 hours a day on air and tictoc on twitter powered by more than 2700 journalists and analysts in more this is countries bloomberg. Much. Thank you very earnings kick off today. Jp morgan, Goldman Sachs, and wells fargo reported thirdquarter results. It is expected to be a challenging quarter from a revenue standpoint. The biggest banks are taking a hit. 13 billion since the start of the year. Falling Interest Rates and yield curves initial inversion are the major headwinds. On feds cycle has weighed the banks net income results. Today its going to reveal a lot more. Trading revenue might look brighter for some banks, but dont expect Trading Operations to rescue everyones earnings. Citigroup and Morgan Stanley are likely to see a decline. They have already lowered expectations. Finally, ipo drama. A weaker environment could bite into Investment Banking revenue. Wereal big lenders underwriters for an ipo that was postponed. Later today, an exclusive interview with James Bullard. That interview on bloomberg surveillance television and radio at 6 30 a. M. New york 11 30 a. M. London. Nejra this is bloomberg daybreak europe. The asians check on markets with juliette saly. Asian stocks higher for a Third Session, led by japan. Yesterday, japanese markets were closed. We had that euphoria over the agreement between the u. S. And china. The topix up by 1. 5 . We aresaying seeing china weaker. Some data out of there today. The csi 300 down by 0. 5 . An interesting fix from the pboc, moving away from that 0. 703 they have been out for a few months. You are seeing a little bit of weakness in the offshore current , which had been strengthening on easing tensions between the u. S. And china. Also watching the aussie, which is steady after the rba minutes came through today, suggesting the board really weighed whether they should move the Interest Rate below 1 , which they did in october, even if it means they have dwindled their ammunition. Lets have a look at data out of china. This surge in oil prices that lifted consumer. Growth since 2013. That is being driven by that rise you have seen coming through in pork, that redline up by almost 70 . When you strip out food was sluggish. Also talking about deflation on the factory floor deepening. Bloomberg economic say the real risk to china is now disinflation and what that is going to mean for authorities in terms of giving more stimulus to the overall economy. Theyre going to have to keep checking stimulus at that. Thank you very much. The Trump Administration has called on turkey to declare an immediate ceasefire in singapore. They also announced sanctions on turkish officials and raised steel tariffs to 50 . Effective immediately, we have sanctioned three ministers. The minister of defense minister of interior, and the minister of energy. We have also sanctioned the department of defense and the department, the ministry of energy. These are primary sanctions as well as sanctuary sanctioned secondary sanctions for Financial Institutions to for transactions. That announcement comes days after President Trump cleared the way for a turkish offensive by pulling forces out of northern syria. Joining us from istanbul, we have our middle east and africa executive editor on the ground tracking the story for us. Good to see you this morning. Can you contextualize these sanctions . 50 . Tariffs at how do i benchmark this . One has to say the main reaction you are seeing to it is that people are feeling this is quite light given what is happening. If you are looking at markets, you are seeing the lira strengthening. There was not any major reaction , which is not what was expected if the u. S. Is putting sanctions on a major ally like turkey. Its also noticeable the aericans did not ask for retreat to the border for the turkish forces. Theyre asking for a ceasefire and for talks area at the same not stoppedans have the withdrawal of their own troops from the area. Nejra President Trump is coming under criticism from his own party in terms of how far he has gone with this. Forwe call this a uturn falling short of expectations by President Trump . It is hard with President Trump because it was really unclear initially what is policy is. On the one hand, it was suggested he was giving a green light. The admins ration seemed to administration seemed to deny he was giving the green light. The administration felt they had to do something to show to prove in a way it is not they are approving of this operation, but from their perspective, it is more like they dont want to be militarily involved in conflict in the middle east anymore. And i we chatted earlier was quite struck by the reaction on the ground. The political opposition parties, you say, are tentatively vocal, but not strident. Turkey . Ean in know,key in general, you i have obviously talked to some people, but not everyone. The sense is at the moment, the mood is quite patriotic and supportive. There is 24 7 coverage of whats going on, analysis of the military, but not a lot of criticism of the operation. At the moment, like in many wars, there is a sense of patriotic duty to support this work. Eu Foreign Ministers have also agreed to limits on arms. You could argue that rings a bit hollow for turkey, but in general, what is turkey bracing itself for in the sense of further measures in the u. S. And the eu . Turkey, and especially when you think of markets here, they are bracing themselves for more, especially from the americans, which could be more significant. We have been here before. A year ago, it was the issue of the american pastor. The admin attrition was tough on that front. It had a massive impact on turkish markets. There is a feeling this is kind where we already saw the markets yesterday, the stock markets taking a hit on the back of all of this. I think they are bracing themselves for more, particularly from the americans, but at the moment, it is really not clear how far the u. S. Administration will go. Nejra thank you so much. Still with us is majd dola, Portfolio Manager at first abu dhabi bank. Is there an opportunity to buy if you are selected with certain stocks even if you dont want to buy the index . I agree more with the conflict signals coming from the united states. Bipartisan sanctions. We saw the white house with a totally different strategy with turkey. The question we should ask ourselves if those actions will put an end to the military operation. The question in my opinion is no. There are specific targets that need to be accomplished. The turkish army will go ahead regardless of these sanctions. Turkey,s the market in its going to continue to be under pressure in the shortterm and the mediumterm for stocks given what you just mentioned about possible european sanctions and the backlash from the international community. The lira aggressively sold off despite fx intervention by the local banks. My question is, we are trying to understand the context of this disruption. We are nowhere near the levels we were when sanctions came in back in 2018. 688 or thereabouts. If youre looking for an excuse to sell lira, you have it. Why have we not pushed further and more aggressively do you think . I think the news has already priced in the market. We saw possible sanctions. Me, the market is feeling that trump is not as serious as last year or one the crisis with turkey happened last year. He seems just going with the flow from what other republicans are saying, not targeting certain aspects. Nejra i mentioned republicans earlier. Democrats are saying sanctions wont undo the damage trump caused. You were clear you were negative on turkish assets. How much worth couldnt get in terms of sanctions . That is a question to the house of representatives and the Upper Chamber in the united states. We need to see collective effort from the united states. We need to see the white house same page. The at the moment, we have like i just mentioned, trump is taking his own tone. Manus we will see where this goes. Stays with nejra and myself. 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. Manus it is bloomberg daybreak europe. We have been talking about trade. Questions over the deal there. But also the bank earnings. One analyst described it as drinking from a fire hose today. You have four big ones reporting. News. Drenched in bad its one or the other. Here is a stoicism to the yuan the chinese seem to be in the mood for a deal. As you quoted earlier, the global times hinted we dont know how to interpret the chinese nuance. Bloomberg reporting china wants more talks before they reach any kind of deal. You could look at it as a positive that they are talking, but you asked earlier, are we heading into what might look like the Fourth Quarter of 2018 . Global growth concerns weighing on the banks low rate, challenges with revenue, what are we going to see on cost cuts . Lets talk about brexit. Top on that agenda is the Prime Minister of finland. Saying they are going to need there will be no brexit deal before this weeks Leaders Summit after parliament was reopened by the queen speaking to the house of commons. Boris johnson repeatedly pledged to, quote, get brexit done, laid the groundwork for a general election. I say we cannot wait. Lets get brexit done so we can take back control of our money and our laws. Is still withla us. We have been talking about brexit being on a knife edge. Have cable investors gotten ahead of themselves in terms of the rally we have seen in the pound, although it softened yesterday . If you look at last weeks news, the sky was blue and people were talking about a definite deal with the eu. Over the weekend, things changed. The pound retreated from the rally. We think its going to be a shortlived rally. Brexits it is going to be a hard brexit. Agreement on the irish border is not going to pass the parliament. Manus are you short the pound tiago the pound . Are you shorting stocks . We just focus on stocks that will perform in a brexit scenario, a hard brexit scenario versus agreement with the eu. You look at stocks that serve global, they continue to perform. In your base case, would you be shorting i know you said you might not actively short, but with the banks be what you might look at . Rbs and lloyds, for example . Bank has been down significantly in the past six months or so. Taking another leg down from be that is not going to consistent the drop going forward. Most of the bad news is already discounted. We are seeing a small relief rally here and there. Speculation in nature. Translate hard brexit to your perspective on european stocks. Are in aopean stocks very weak position, with exit or without. Myths, whether in the manufacturing side, the inflation. The stimulus. If we assume china and the u. S. Entered into a kind of agreement , it is the European Unions turn to face trump in battle. I think this will have a Significant Impact on the overall economy. Nejra if it turns out you are wrong and it is about the timeframe in which you see hard brexit, maybe you could clarify whether that is october 31 were later on, but if we get an extension and eventually do get a deal, are you ready to put money to work in certain parts of u. K. Assets . If so, where . Majd i am 90 of the time wrong. Absolutely. Out and again, it is just a base assumption. Things are changing by the minute. There is no certainty in this space, but absolutely. Beyour question, we will absolutely buying stocks in the u. K. , buying banks and other because of brexit uncertainty. All sentiments in the euro will benefit as well. Things will look slightly better in the shortterm. Orra whether you are right wrong, glad to have you on the show. Majd dola staying with us for the rest of the hour. Lets check on the markets. Lets kick it off. Indian markets once again in the green. Is that off the back of Energy Stocks being buoyed by bloomberg crude prices . By lower crude prices . Good morning. Yes, part of the reason has to be that. This divestment talk that is going around, Indian Energy has started off well. 0. 5 higher. Last couple days we started off well and went down. Banks are doing well. Energy stocks are doing well. Might be the largest numbers which met estimates largely. Also giving support to the markets. The start has not been bad. We just need to see if it holds on the rest of the day. It is a question of whether you are a believer in the substance of phase one of a deal or not, as the case may be. Asia, the today is in standout has to be japan. They are playing catchup to that rally yesterday. It is a different story when you look at the csi. We have the nikkei of more than 1 . 0. 6 . I is down nearly you could maybe bring this down to china pouring cold water on the trade war, we have data out of china, especially ppi coming in 1. 2 lower that has been a drag on the manufacturing sector. Foreign exchange, i want to draw your attention to the british pound up 0. 2 . It seems like traders are trading off any Headline News area yesterday the headline came dropped. Pound today, possible negotiation of the irish border, we have the pound higher. The u. S. Treasury market is back in play. Yields down 3. 8 basis points. Steel is taking a hit, down 1. 8 . Ore big supplies in iron ringing iron iron ore. We saw a sharp downturn in Oil Yesterday when china poured cold water on phase one. Im looking at something that has to go along with the mliv question, looking at recessionary fears we see ongoing. Bloomberg economics now has pointing to probability of recession at 27 within next year. That is much higher than last year, but much lower than before the other recession. Is line in the sand to watch 30 . If probability is higher than 30 , and right now the feds probability is higher. It is clear the economy is cooling. The big question is, will this morph into something much darker . Clear fear. Is the great work in london. Niraj shah in mumbai. Lets get the first word news. President trump announcing sanctions on three turkish officials and hiking duties on steel. It is a milder punishment than many in Congress Expected as ankaras military operations continue. President erdogan says the operation is necessary to resettle refugees. It has drawn widespread condemnation. In hong kong, carrie lam continues to defy critics. She denied hong kong was akin to saying thatte, violence is not an excuse does is not an end to months of unrest. Any new policies are likely to be overshadowed by continuing protests. Australias Central Banks is the case for cutting rates outweighs the risks of running out of ammunition. Minutes show the rba views the threats to Global Growth as a reason to take the cash trade below 1 for the first time. Some policymakers were concerned the move would leave them with little room to address future shock. First direct to new york to sydney flight this friday. At 20 hours, said to be the worlds longest. No airline has ever completed the root without stopping. The question is, how will humans hold up on the marathon . Scientists will be on hand to monitor the brains of the pilots and a few dozen passengers. In the u. K. , the police have ordered the Extinction Rebellion activists to halt their protests. Extinction rebellion is giving up a Trafalgar Square based camp and says the International Rebellion continues. The group describes it same as halting mass extinction and limiting the risk of societal collapse. Tariff global news, 24 hours a day on air and tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra wework is leaning toward a 5 billion led by j. P. Morgan instead of selling a controlling stake to softbank. Of the riskiest junket that offerings in recent years. We have said its going to be one of the riskiest. Talk us through the details and why shareholders might like this proposition. Shareholders, it depends on which shareholders you are talking about. You have a 5 billion package. Jp morgan will be leading. As 60ave lined up as many different organizations and institutions to be part of that. There would be a very Large Consortium involved. How much each of them would put in would be detailed later if it becomes public. Be a coupon as high as 15 or more, which is a wide coupon for debt. Holders want to see some kind of upside there. Are an existing shareholder, existing shareholders would bbcs, they would be more keen on it than that softbank would take a larger stock a larger stake in take control. That would mean you have been diluted or you are losing control over the company. Barely, the wework board would be favoring something that does not dilute shareholders or make them lose control. Thats why they are looking for a jp morgan that approach rather than a softbank equity approach. Once this deal has been finalized, what next for wework . This would just be the start. Getting this package together allows them to press a restart button on whats going on with the company. They are burning a lot of cash. They are looking to rein in spending. They need time. This is what this Financing Deal would do. It would allow them new management to come in and start looking through the book and looking at the deals they have done, what the longterm leases they have done, see where they can shave costs that may include job cuts and other things, but essentially, this would buy them time to get the Business Model in order so they can see if there is a path to profitability after that. Equity financer deal is the start of the story, not the end of it. Manus lets see how it all plays out. The very latest on wework. Our guest host this morning is majd dola, Portfolio Manager at first abu dhabi bank. The wework story i find fascinating. Its got everything. The toxic mix of a canary in the u. S. Coal mine. Is that being overly dramatic . What do you make of the story . Look at wework and other companies burning cash, at money speed, so the cheap might be able to finance those to putes, might be able a Business Model into work. Youve got a lot of Companies Generating cash flow, you should be looking at those rather than looking at companies as turning cash into negative numbers. Equitywhen as an investor you hear about a debt package like this, just in theory, do you think this gives me confidence this company would ipo, maybe i would consider investing, or do you think this smacks of desperation . Side ofam on the waiting to see when this company will ipo and once they start generating profit. Point, given the cheap , yournment we live in reporter just mentioned one of the riskier bonds, so giving tose kinds of loan packages a company reflects the low Interest Rate environment. Investorssiveness of regardless of the risk. Staying withola us. Here is a look at what you should be watching today. We have an exclusive interview with James Bullard at 11 30 a. M. London time. Before that, mark carney testifies to the Treasury Committee on the bank of englands stability report around 9 30 a. M. London time. U. S. , central bankers gather in washington, d. C. For the annual meeting of the International Monetary fund. Clues of, further economic downturn. The economy has already slipped into a technical recession. That is 10 00 a. M. London time. This is the interview of the day. James bullard, president of the st. Louis Federal Reserve. He joins the Bloomberg Team today. Time, 11 30ndon a. M. London time. Nejra this is bloomberg daybreak europe. Up to speed get you with your business flash headlines. Apollo global is making an offer. The deal could value the timeshare operator at 40 a share. Has 55 resorts and more than 300,000 members. Representatives declined to comment. Ecb itit has told the may create a Holding Company to control private business. The move could reduce funding costs and help shield the italian bank from a future crisis in its own country. Unicredit and the ecb declining to comment. Up aroup is setting securities business in china. After dissolving its joint venture in the country. The move comes as china sets out a timeline for opening its financial sector. Citi saying it continues to look for opportunities to support its clients in china, but even know details. Facebooks remaining Cryptocurrency Partners signed paperwork to join to oversee the new digital coin. Libra has already faced scrutiny from regulators. Original partners got out before it even started. That is your Bloomberg Business flash. Nejra despite a resilient u. S. Economy, the central bank lets take a look at the key worries on the horizon. First up, global trade. The u. S. And china appear to have reached an initial agreement, but china wants further talks. Global activity in manufacturing has contracted for five straight months. Geopolitics tops the tensions list. Oil has been whipsawed by attacks in the middle east. Protests in hong kong continue. Countries including argentina and lebanon faced debt crises. A squeeze on Central Banks with little ammunition left. Putting off fiscal policy. The imf is among those urging governments to loosen budgets. Countries with room for stimulus are holding back. Is still withdola us. There are issues we raise. That is a very long war. Can i deal with something first of all . We touched on the possibility of Recession Risk. The bloomberg probability and the new york fed probability. Lets have a look at this. What does it take in the u. S. . Have we almost double talked ourselves toward Recession Risk being so high . What is it that will happen to push us over the edge and take us to a recession next year . Recession is a trend. If you look at the trend overall , we are seeing things slowing down significantly. Maybe not significantly, but pockets of the economy slowing down at a. We look outside the u. S. In terms of slowing down. We look at china. Those problems you presented and the fed presented is based on evidence out there the economy is slowing. When it will happen, this is the one milliondollar call. We see this as the trend going forward. It is a challenge for the banks. With low rates, they have revenue challenges. We look to costcutting. The strength of the u. S. Consumer, u. S. Banks, enough for you to have hope for u. S. Banks . Majd q3 was the reality check for the united states. Its going to take much more investors to find outperforming companies that will deliver on their growth in q3. We see a broader negative picture will have a mixed picture. If you remember last year, q3, q2 as well, we had a broadbased rally. You are not going to see this this year. We are going to see selective oath. Growth. Tive nejra thank you for joining us. Coming up, and exclusive interview with James Bullard. This is bloomberg. Good morning from bloomberg headquarters in london. Nejra cehic i am manus i am manus cranny in dubai. Tradeding on the bank optimism falters and the imf growth reductions could sour the mood. Is there silverlining in the u. S. Bank results. Jp morgan leads the charge. Ceasefire demanded. United states sanction senior targets officials senior turkish officials and increase iteris in response to military operation in syria. And time running thin. You cape Prime MinisterBoris Johnson pledges to get to break that done u. K. Prime minister Boris Johnson pledges to get brexit done. Talks may need to continue after the east summit. After the e. U. Thumb it. Summit e knee you eu summit. Welcome to daybreak europe. Hermes saying efg that the towers is raising 280 Million Pounds in a london ipo. Heli up towers is a one of subsaharan africas largest mobile phone operators. 125e talking about a million london ipo. Aboutrket cap will be she5 billion pounds and if acted as a joint book runner on the helios ipo. Acted as book runner. Gains in asia, a lot having to do a japan catching up. Green on the screen and european futures. Docs and cap 40 futures higher as well. Getting questions come up bloomberg reporting china wants more talks before they get a deal with the u. S. The Positive Side you can take from that is that at least in our talks. And the global times saying there is will there to come to a deal. Manus stepping back into the breach of the bond traders. Theyre not convinced. Their deep misgivings. U. S. Treasury futures rising slightly. There will be a top out according to Goldman Sachs and bank of america at 2 . Moment, deep misgiving in the bond market. One weeks optimism does not make a tantrum. Therein lies the point. Our way, at the end of last week there was a view we might see a reraising in the bond market, 20 basis points, the second biggest move this year appeared a little bit of caution coming back in. Goldman sachs say deb urgency is between hard data and soft data in 1996 and 1998 resolve the favor of hard data and a selloff by Double Nickel at 55 basis points. Lets get the asian market wrap from singapore. Hires forasian stocks a Third Session driven by what you are seeing in japan. The markets that were closed yesterday for a public holiday. Playing catch up to the euro phoria we saw across Global Markets monday. The topics up 1. 5 . Blackrock saying they will chasing this rally. Sincepics has written 7 august. The cfi 300 down by. 3 . Factory deflation deepening in the month of september. Pork prices pushed inflation to the highest in six years, up 3 year on year. Watching moves in the yield on australias 10year note, down point three basis points. Howboard of the rba weight whether to cut rates below 1 which they did saying it out late risks of having a dwelling ammunition supply. Had for what we expect from the bank of korea tomorrow, expected to cut rates by 25 basis points. Lets have a look at the bond moves there appeared we have seen korean bonds climb ahead of that decision. Swap soak suggesting to bok will be less aggressive than the fed, lowering the rate twice again in the coming year after reduction in july. That is versus the fed projected to more rate cuts after two already this year. You look at the return on korean bonds versus u. S. Treasury yields have fallen about half the pace of those for u. S. Bonds in the tenure range. The 10 year range. Seeing an uptick in bonds ahead of the u. S. Rate Interest Rate decision. By the korean bank tomorrow. Agreement touted by President Trump between the u. S. And china. Bloomberg learned china wants to hold more talks this month. To hammer out the details before president xi jinping agrees to sign. Beijing may send their top negotiator the vice premier to finalize a deal ahead of the aipac apec summit in chilly. Nejra does the risk of a possession recession prevent stocks and other stocks railing outweigh the trade agreement. You can chat with us and the mli v team at tv on your bloomberg terminal. Great to have you with us christopher. Has anything changed for you this week in terms of the phase i deal for your appetite for risk . It has a stinking about it. It has us thinking about it. It is the counterpoint between the Recession Risk which is real and the global Recession Risk over the next 12 months is around 35 , elevated. At the same time, we have what looks like the embryonic stage of a trade agreement. Theres a huge amount still on the table and lack of clarity about where the agreement might settle. For us it is not been a fundamental change in strategy yet and we are thinking about it hard. Many people reprice the probability, can morning, of a rate cut from the fed. If you look at the fed fund futures. Is that a mispricing, will we still get an october rate cut. Given what you said should we get an october rate cut as an insurance policy. The insurance policy rationale is absolutely valid. U. S. Recession is not an every day occurrence but something that comes around every seven to 10 year spirit you would expect if there is even a concern about it, the fed would try to get ahead of it. His october mispriced . Our base case is that they probably do go ahead and october. Thats been no strong pushback against the Market Expectations that we are going to see another rate cut this year. Itre are thereafter becomes tricky because the market has another couple of eight cuts in over the next 12 months. That press is moving beyond the insurance policy area and into the actual recessionary response. We might get there but it is still an open case. Longstandinge a preference for u. S. Over u. K. Inflation linked bonds. You said you are thinking of changing strategy look at the Global Growth scenario and the prospect for u. S. China trade. Is this one you might stand to change at all taking that into account and develops over brexit . Yes i think if we stand back and ask what is the strategy about, it is about the pricing differential between in the shortterm between u. K. Inflation excitations which are still pretty elevated because of the brexit currency Jeremy Corbyn related risks which are putting a premium in u. K. Inflation protection. And u. S. Inflation citations are incredibly subdued despite that we have seen cpi now on a real at life basis pick up and wage growth pick up. Structurally, that is the story we like on that relative to frame it. That is not really affected by the shortterm backwards and forwards we have seen on these two big political stories of the last week. Manus the data from china this ppi. Ng was on the how much does that build the story for Global Deflation risks . A great question. In terms of the two u. S. Inflation chinese inflation metrics, the ppi to us as the one that matters. The cpi story is largely a food price story and therefore im not going to have, cases where policy response. Unlikely to have indications for the policy response. Ppis an indication of slowing pricing pressure in the Chinese Industrial sector we see the same thing in growth trackers of Chinese Industrial growth. France Apple Chinese trade growth. The bad news on this side for example chinese trade goes growth. Next yearws chinese trade growth at 5 a sniff can slow down of the last few decades. For the global economy, this commodity exporters and those most exposed to china on the export side are likely to suffer from that headwind. Is hard to get around that unless and until we see signs of a significant chinese domestic stimulus is not coming through. Frankly is about chinese trade growth. Coming up later today and exclusive interview on the subject of rates and insurance policy cuts are not. James bullard president , st. Louis Federal Reserve bank. The conversation starts on tv and radio at 6 00 6 30 a. M. Near time and 11 00 a. M. Are london time. This is bloomberg. James bullard conversation on tv and radio, 6 30a ny, 11 30a london. 7 13 a. M. In london, 10 13 a. M. In dubai. 46 minutes away from your start of your trading day in europe. Manus i am manus cranny in dubai. Nejra i am nejra cehic in london bloomberg is bringing its equality summit to india, tuna men by. Two mumbai. King at creating an actual actionable plan for inclusion. Of Global Climate solutions at nielsen. Buzz here at the inaugural bloomberg equality summit. Needle,e move the especially in the media and advertising space. Haslinda when you take a look at the advertising and media world it seems the male voice is still the dominant one. First of all the media world is a very individual world. It is quite important to make sure that this world embraces gender equality agenda. So we at nelson we measure what we call the one media truth and we want to reference the voice of the women and met that are actually watching entertainment come advertising, news and making sure that they are represented with what they need and what theyre expecting. What we see in these measurements is that yes, there is some progress in terms of the number of women represented in fields, for example, family the tina daviss institute Geena Institute that showed an equality increase in the number of women and men areesented in films that families of girls and boys. However there still much progress to be made even in the advertising and even in the content that is produced and watched in the industry. Because women are portrayed often with stereotypes. What steps need to be taken to move the needle . What can governments or Industry Leaders do. Is taken 70 or 80 or 90 years to get there this point. The question is how quickly can we improve that, that is the challenge. Most governments can move the needle. By tape making moves that embraces gender diversity and gender equality we have examples in europe. Having women on board for more than 40 and that has created some traction. Now in france, theyre more than 41 of women in boards. We have the local women last year that oblige companies of more than 250 employees to salarythe gender gap in and have a plan to fix it. So governments can definitely do something. We are looking for the european law that is coming on worklife management for paris that is been posted this year. In the community, the European Community has implementing some very challenging different for maternityke and paternity leave. We note Maternity Leave being one of two gaps in terms of womens ability to become female leaders. Haslinda having said that, how much pressure in Industries Like media and advertising, how much pressure are they under in terms of level lysing and media, how much pressure can audiences put on them . This is such a great question. Because this is how we are going to move the needle, selectively each one of us. Us. Ollectively each one of by having a voice. Areanies in the media world very encouraged by having ceos of these companies and bracing gender equality as a target. Just like we have targets to a targetrevenue, have to increase gender equality. Why . It make sense for the business. There are studies all about the place that shows executive teams that have diverse executive teams have better performance. People actionsy that help women within the world and within the working world to be leaders is what is going to make the difference. Haslinda what are the barriers . We know what needs to be done and what policies need to be adopted, yet here we are, still discussing this ways to expedite. What is a key barrier, is that the mindset of the culture or the leadership ec . I think the three of them are barriers. There are barriers within women. Not in ae are usually position to really fight for ourselves. We tend to fight for everyone toe, and we tend to want achieve things but maybe not advertise about what we are doing. There are barriers on the leadership side because of the way the executive teams are structured. And we need to go one by one and confront them to make sure those roles are changing. And then there barriers, social barriers as we know. We see that women are saying they have a very complicated life. They have a complicated life at work, at home, in their daytoday habits. So these barriers are things that need to be changed one by one. Haslinda a commitment to diversity and ask them, inclusion. Hows that affecting the way you deal with your clients . It is a good very good question. At nielsen we believe the one media truth is what can help news, advertisers and change the way they feature women and men in their audience. Very strong at measuring the diversity of the population that we actually research. Is a coreequality components about how we teach our panels and make sure that the voices of the consumers are heard the way they are represented in the population. Haslinda marie, before we let you go, youre the evp at nelson, one of few Women Leaders at the company. What was a big challenge he faced in getting there and what was the biggest frustration . My biggest challenge was actually to lean in and asked for help. Sponsor thata male was at the top of the organization, so that i can have his support. For me to be recognized for the fact that i was having the effect i was having with the company. My biggest frustration, i take it personally. Im the executive sponsor for women in nielsen, so i take it personally to help women and men embrace the gender equality as a way to go forward for the future. My frustration is that even at this position, i do not feel i am moving the needle strong enough. Great conversation. And this inaugural bloomberg equality summit in by. In mumbai. Manus great conversation at the inaugural diversity summit in asia. Solutions to wind up the flagship fund. The Woodford Equity Income fund. It is going to be wound up. To return cash to investors at the earliest opportunity. It has been agreed that it is not possible to lift the suspension and reopen the fund until the sale of unlisted less liquid assets is complete. That is a redhot headline on the ongoing saga by woodford and his funds. Christopher jeffrey from legal and general with us we are talking about the rates market and price data for next year, 75 basis points, the possible resolution of a trade between the u. S. And china. I want you to take a look at the bond market. Theres a line we are using this morning. Theres a deep misgiving in the bond market, oneweek optimism the tail end of does not make a transfer. If there is a tantrum. If there is a trade deal, what scale of tantrum and we expect in the bond market. Our notes say you capped out at 2 . Would you agree with that as a nearterm cap in a bond tantrum market . Toyes i would be reluctant put a precise number on it but something in that range seems resettle to us the question i guess should be in the event of a trade deal, does it fundamentally transform the Global Growth narrative are the global inflation narrative . And as a consequence of that, this elastic get implications for policy which affect the yield curve. Clearly, you could take up some of those because of the short term and if you got a trade deal that was signed and sealed and delivered, but i guess demi like to think of the trade deal as a ming vase. It is starting to look nice but it is incredibly fragile and if they break it then is going to be pretty expensive. Nejra trade talks between the u. S. And china fragile. The brexit deal were beset now on a knife edge fragile as well. In this environment, what are your conviction trades. What is going to hold up, if you put the noise of those events aside, in part as vr are for the goal economy. Yes so one of the things we go back to his asset allocation, where is the relative value . For us, emergingmarket debt on the local and hard currency basis continues to offer that value. There are pockets of socratic risk. Argentina story, the stories. In aggregate, think about first prince post, who are the biggest beneficiaries of a. Ofs in italy loose Monetary Policy in the u. S. And europe. It is likely to be an emergingmarket, given the higher structure of real and nominal Interest Rates. That i think is the go to area for us. We have gone right up the curve in terms of optimism about a brexit. And theres a lovely article this morning and it talks about low pop ability but highimpact risks. One of those low probability but highimpact risks. One of those is brexit and analyst say the halloween horror show could catch markets by surprise. Are you prepared to take a preparatory position for the or howhard brexit . Do i skew the port folio bonds and credit to prepare for that rest if at all . The answer would be different depending on if your eye sterling domiciled investor or a nonsterling domiciled investor. If youre an investor outside the u. K. , your easiest way to protect against hard brexit is to diss again from the u. K. Disengage from the u. K. In the u. K. When people talk about proroguing parliament and the pretty council, it gets pretty of scare pretty quickly. For people outside u. K. Pretty obscure but he quickly. For people outside u. K. Is a horrible hornets nest to understand. Inside the u. K. To protect your portfolio you can take a decent slice of a foreign currency exposure. That inference will is the easiest way to protect yourself against idiosyncratic domestic political and economic risk. This is a great example of that. Nejra thank you for joining us. Christopher justly that coming up later today an exclusive interview with James Bullard president , st. Louis Federal Reserve. That conversation on bloomberg surveillance television and radio at 6 30 a. M. New york and 11 30 a. M. London. View on what would his if you get a substantial trade deal, what would that do to feds view on rates. It will be quickly part to listen to those views and more. This is bloomberg. Anna good morning and welcome to Bloomberg Markets european open. Matt market say we were right to be skeptical. Brexit and u. S. Trained china deal fades. Futures point higher on a day to be dominated by earnings reports from the three biggest banks. Cash trade is less than 30 minutes away