The Prime Minister prepares to ask lawmakers to support his brexit deal. Does he have the votes . We will be live all morning from westminster and brussels. A sterling outcome. Goldman and Credit Agricole remain bullish predictions for the pound, seeing a mediumterm rise to 1. 35 or higher. Kicks off european earnings season with a reiteration of its strong preliminary result. We will speak with the cfo, luka mucic, shortly. Less than half hour away from the european open. Im looking at a three day trade of the pound. We are holding at the high levels we have seen the highest levels we have seen since may. The pound doing quite well at 1. 2925, at one point reaching on 1. 30. Trade to almost it is getting there for sure. Take a look at what we see in terms of the futures trade, just 30 minutes away from the start of cash trading across europe and in the u. K. 0. 2 after s. A. P. Earnings. Ftse futures relatively flat right now. You also see futures gaining in terms of the u. S. Trade. Those gains continue to climb throughout the morning. If you look at s p, dow, and nasdaq, these are the many contracts, now up 0. 2 in the case of tech stocks. Lets get back to brexit. Boris johnson makes the renewed attempt to win parliaments backing for his brexit deal. He was forced to write to the eu seeking a threemonth delay after losing a crucial vote on saturday. Confidence is growing he has the support of 320 mps needed to make progress this week, either through his socalled meaningful vote today or legislation in plummeting the deal tomorrow. Labor could back the new deal as well as long as it is put to a second referendum. The pound fell a little bit in asian trading, but really it is one dollar 29 cents, almost 1. 30, levels we have not seen since may. Joining us from brussels is maria tadeo. Forced to send a letter asking for a delay to brussels. He also said, by the way, i dont want that. Doesnt the European Union basically have to grant this . Good morning. The mood, i have to say, is wait and see. One of the things we are being told is that the Prime Minister has not lost the vote. He has not been defeated. A lot can happen from now to october 31. In terms of the extension, they make note of it, but the European Union does not want to preempt moves the Parliament May make. There is a debate how long the extension should go on for. Im sure you saw those lines out of the times of london saying until will grant time february 2020. That means extra time can seal the deal and the u. K. Would be allowed to leave before that if any deal goes through. To answer your question, can this still be blocked . Member states have a rate a right, but it seems unlikely a single state would push the u. K. Out of the eu and precipitate a series of events no one could control. The mood is wait and see. Lets see what the parliament does and then we will make a decision. Matt lets get over to David Merritt right now at westminster. A key question, maria and everybody else in brussels is waiting to see the answer to, does johnson have the votes to get this deal through . Yes and no, perhaps. Yes, we have the foreign secretary dominic raab saying yes, the government does have that magic 320 number. That is what they tried to do on saturday and failed. They may get another chance. But that is not the end of the story. They need to also get the Withdrawal Agreement passed into law. Thats going to be more complicated. We are already seeing the labour party talking about amendments they might put on that legislation. Is like committing to a Customs Union, which rips up a big chunk of johnsons deal. Even a second referendum or a peoples boat. At peoples vote. There are many more hurdles than just getting a simple majority. These are the big questions. Getting anything through is far harder than it might seem. Matt when are we going to know if john bercow allows a vote today, when will we seeing all the amendments tabled for tomorrow . It is complicated. We are getting into the weeds of the complex procedures we have in the place behind me. The speaker will rule later today, possibly not until this afternoon, whether or not we are going to get this meaningful vote the government wants. He says it has already been asked on saturday and rules of Parliament Say you cannot ask the same question in the same sitting twice. These are fairly exceptional circumstances, so he may lead that boko through. If that does not happen or even if it does, tomorrow we are going to get the first of the votes on the actual withdrawal. That is amendable. We expect the labour party to table first of all this question about a Customs Union. They are going to try to make the deal a lot softer, much closer ties Going Forward with the European Union, and rumors the dup might be on board for that. Keeping the whole of britain in the Customs Union will take away the debate they like so much, this question of a border. Today and tomorrow are going to be crucial days. We are going to get a sense for what position they are going to take and whether they have the numbers to stop mr. Johnsons deal in its tracks. Matt thanks very much. ,avid merritt, maria tadeo joining us. This is an issue we are going to continue to follow day in and day out this week. Possibly through 2020. Stocks in asia were mixed, but slightly to the upside. Wes goodman, bloomberg mliv strategist, is standing by in singapore. What is the outlook for the pound . Morning. The Prime Minister is seeking another vote on his brexit plan. He seems to be indicating he has enough votes. That would be good for the pound. You mentioned the Goldman Sachs forecast of 1. 35 if that passes. The opposite is also true. I repeat my admonition that brexit has disappointed us so many times, and i think one very likely outcome here is that it all just gets delayed. Taking the can down the road kicking the can down the road. If that is the case, all these uncertainties over the u. K. Economy will still be there. That will be bad for the pound. On the mliv blog we are seeing if there is just a delay, the pound could go below let me check my notes. Below 1. 28. Matt i want to ask you about german bund futures. Both of us were surprised to see ecb policy makers opposition to further easing. Itself,interesting in but we are seeing also bund yields at 38 basis points. I was surprised to hear this, too. Opposition to further easing. I thought based on their last statement they would be open to further easing. That does come as a surprise. The 10 year german bund yield at 38 basis points. Tot in august it was closer 70. Those deeply negative numbers, closer to 70, are probably ancient history now. This sets up an interesting contrast with the fed. The forecast, the odds for a fed rate cut are growing. It now looks like the ecb is on hold. If you look at the u. S. Spread over germany, around 200 basis points now, the u. S. Premium over german bunds will narrow in the weeks ahead. Matt thanks very much for joining us. Wes goodman, bloomberg mliv strategist. You can access his work by typing mliv on your bloomberg terminal. New management pledge continuity after a strong thirdquarter. One constant is the cfo. Luka mucic stays at the German Software giant and talks to us about their plans for the future. Dont miss that interview, next. Remember, Bloomberg Radio is live on your mobile device or dab digital in the london area. Matt welcome back to bloomberg markets. This is the european open. A big stock on the dax and the stoxx 600 has confirmed its forecast for 2019 after final numbers for the Third Quarter sales and revenue topped estimates. The Software Company had reported its preliminary figures earlier this month on the departure of its ceo. Joining us from waldorf, the german headquarters of s. A. P. , is luka mucic, the cfo. You will remain a constant, saying on with your new coceos. Let me ask you what it means to lose bill mcdermott. He has been a force behind s. A. P. For a decade now. Really a legend in the business, in the industry. What does it mean for you to lose bill . Thanks for having me, first of all, and thanks for the question. The and i and the rest of executive cohort have been partnering for a long time. Bill, also a team of course, performed remarkably well, have set s. A. P. On a new strategic path and we are continuing to benefit from strategic choices. While it was surprising for all of us that bill announced his decision to not renew his contract, at the same time, one of the biggest qualities of a great leader is that you leave a sustainable legacy behind. I feel that we are very well placed with a strong executive team. We have two new coceos, who have been on board for a long time, who have helped to shape the strategy we have all embarked on as members of the executive board. Continuity will see and leading from a position of strength. We had great quarterly results. We are on track to meet shortterm and midterm ambitions. While of course bills departure is a lot, we are well set up is a loss, we are set up to take the torch and run with it even faster than in the past. Matt not something she wants to focus on, but for jenna morgan, this is a milestone in germany. She is the first female ceo of a dax company. What does it mean to you to have coceos again . Andp. Seems to go back forth between coceos and soul leaders. Leaders. Is it important to have that split . Luka let me put it this way. We have a good history with coceos as the company has always been thriving on innovation, but also empathy with customers. German christians by the nature of their upbringing bring that to the table. Jenna morgan has been focusing on our Cloud Business is lately. Christian comes with this focus on the innovation that he is responsible for Solution Development or a while now. I have been working closely with him as a member of my Team Previously on the executive board. That balance and very couple mentoring skills set they bring to the table will be benefiting s. A. P. A lot and at the same time of course we have the team that has been around for a long time. Running the organization with myself and the other members of the executive board who can support jen and christian as they embark on the exciting mission. This is a Complementary Team we have put together. Together we will continue to ride the success story. Matt i have this function on the bloomberg, im sure it is a screen you are familiar with. ,t shows you have debt here almost 11 billion in , actually 10. 2 billion in corporates. You have said you want to deleverage faster. What are the goals you are looking for . How do you balance that with share buybacks . We will outline in greater detail our Capital Allocation strategy for the next couple of years at our special Capital Markets in new york on november 12. From a highlevel perspective, our priorities from Capital Allocation have not really changed. We have always said we want to sufficiently invest in organic innovation and we are doing so. Luckily, our needs for capex investments have come down. We havef course, investment needs in this respect. We will continue to pay a strong and growing dividend. We will have enough room to make small expositions if enough opportunity presents itself, even though our strategy for the next couple of years will be organically focused. If then there is enough space left of course, deleveraging is a continued priority. S. A. P. Has always had a conservative balance sheet. At the present time we are having roughly 1 , one point ratio, we want to continue to push that down over the course of the coming few years. Historically we have always remained at the 0. 5 mark. That would be a reasonable target for the future as well. Left, wee excess cash will consider additional options , whether it is additional dividends or share buybacks. We are still in the process of finalizing our corresponding set of actions. We will communicate it when we are ready and definitely a great deal at the Capital Markets. Matt im sure you are set up exactly the way you want to be right now, but if you are going to make any goals on acquisitions, in which areas do you think you can see the most opportunity . Luka frankly, we have no concrete plans. It would not be possible for me to cite any concrete areas. We are focused on organic innovation. Some optionality is always important, but nothing concrete at the moment. Matt thank you so much for joining us. Luka mucic, the chief Financial Officer of s. A. P. We are minutes away from the open. Next, your stocks to watch, including wirecard, the german Payments Company has hired kmpg for another independent audit following further reports of accounting irregularities. Matt we are just six minutes away from the start of trade. Thats get your stocks to watch. Looking at wirecard, u. K. Midcaps, and the latest in brexit. Whats the story with wirecard . Wirecard shares are indicated up this up, decently morning in premarket. The company just issued a statement this morning saying they hired an auditor to look into the latest allegations reported by the financial times. The auditors will have unhindered access to all Company Documents and investors seem to be happy with this move afterrease transparency those allegations of accounting irregularities. Matt joe, you are looking at u. K. Midcaps. Is this really brexit uncertainty . Or is this the most certain we have been in the last three years . Good morning. As you said, it is unsure which direction the markets will take this, but certainly the u. K. Midcaps will be in focus again today. There may potentially be downside given the pound slipped in the sector does track the sterling against the dollar rate. It might be contained. The deal may well get through according to what we are hearing later in the week. The move to the downside might be contained. We will certainly keep an eye on the u. K. Domestic banks like rbs and lloyds and also the homebuilders. With that sector, there has been good data on the London Housing markets. We have seen a rebound in the london house prices. All those sectors have been weighed on by uncertainty in focus again today. Going to bee are watching the Property Companies after berlin gets ready to pass a law saying you cannot raise the rent for the next five years. The open in two minutes time. Matt we are just about one minute away from the start of cash trading across europe and the u. K. Lets look at the markets this morning. We dont see a heck of a lot of movement. I guess we could try to dramatic size the moves around the pound as much as possible, but the fact is, we are at the highest level we have been since may. There was a spike upward on friday almost a 1. 30. Right now 1. 2921, so right around there. The market is fairly confident theres not going to be a nodeal e. U. No deal brexit. Oil relatively little changed right now. S p futures are up, as our european are european futures, although the gains are not huge, to say the least. Now getting to the markets, lets see if the futures were indicative of the actual numbers we see on the screen. In terms of the u. K. , the ftse is completely unchanged right now, but otherwise we see very few markets open. The cac and dax will take a little longer. Kindbex up 0. 2 , so spain of leading, even after those protests continue in catalonia, in barcelona. We see spanish stocks continuing to rise. Duchess stocks up 0. 1 as well up 0. 1 asocks open well. As far as on the continent, starting to see movement. Cac down 0. 1 . Still waiting for the dax, which could take a little longer for stocks like s p to open. Take a look at the breakdown of the bloomberg 500 index. Pretty see we have a even split between gains and losses in industry terms, what you would expect with such Little Movement on the actual stock index prices. In terms of what we see here, financials doing relatively well this morning, staples and health care doing poorly. That could be a positive sign, as you see stocks that are, Industry Groups that are typically defensive like consumer staples, health care, moving lower, and Industry Groups you want to see lead a rally up, financials for example if you are long stocks, are a great leader to rallies you expect to be sustainable or hope. The stoxx 600, the individual stocks, seeing where we are going. 315 up, 244 are down. So a pretty even split. Were yet to see the dax open, but we see some of the german stocks trading. . A. P. Currently up 0. 2 at the top of the screen, asml gaining 0. 8 . Tech stocks to the upside with the financials we saw. Santander, loyds, bnp paribas, aviva, zurich insurance. Almost all the gainers with the exception of asml, daimler, sap, are financial stocks, in the top 10 at least. The bottom 10, those taking the most away from the stoxx 600. Smith and nephew at the top, down 3. 7 this morning. Keep an eye on whats going on there with smith and nephew. Looking at the other losers, danone down 1 , unilever down almost 1 . These are the defensive stocks we looked at, that are not doing terribly well, but thats not necessarily a bad sign. Deutsche of own and wonen, one of the big Property Owners in germany, down as berlin decides owners are not allowed to raise rent for the next five years, stocks like that will suffer. Now, Boris Johnson will make a renewed attempt to win Parliament Backing for his brexit deal. The Prime Minister was forced to write to the e. U. Seeking a threemonth delay that he clearly doesnt want, after losing a crucial vote on saturday. But confidence is growing he has the support, even without that negotiating tool, of 320 mps, the number needed to make progress this week, either through a socalled meaningful vote today, which is just answering the question of whether they want to do it, or the more complicated legislation implementing the deal tomorrow. Labour could back a new deal as well, but it will table an amendment to put all this to yet another referendum in the u. K. Joining us from westminster, David Merritt, bloomberg Senior Executive editor. David, without the negotiating tool of either this or no deal, does Boris Johnson still have the votes for the package he put together with brussels . David well, the government said yesterday, the foreign secretary told the bbc the government thinks they have the numbers, but you know that it is incredible he tight. The magic number is 320, but some Analysis Shows it is very tight. What it is not is a stable majority, for any sort of brexit. Even if they got that vote this evening, passing that, they still have to get the Withdrawal Agreement act, the legislation that makes Brexit British law, through parliament as well, and that will be incredibly complicated. As you said, the opposition has all sorts of ideas about whether they want to amend the legislation over the coming days, things like insisting on a Customs Union, perhaps even mandating a second referendum, none of which mr. Johnson wants to do. Of course, only 10 days until his preferred exit date of october 31, so looks very hard for him to get there. The extension that has been to thelbeit reluctantly, European Union, so probably brexit will have to go further than october 31. Matt david, after everyone gets through putting amendments on the brexit deal, is it still going to look like a deal Boris Johnson and his conservative colleagues can support . David well, that is the question,matt. Things like the custom union, thats one of the big red lines for this conservative government, that they want to pull britain out of the Customs Union. So anything amendable in the deal to a closer deal with relationship with the European Union, they would say thats not the brexit we are looking for, so we would be back to square one. In fact, then mr. Johnson will say, this is not the deal and negotiated, and we have to do something else, and probably we will be back in a situation where he will try to push what he was trying before, a general election. Saying, i cant get any version of brexit that i recognize through this parliament, and we have to reset the numbers. Labour of course blocked that election, saying we dont trust you not to force no deal and we want that extension. That request has been granted, or asked for anyway, so what will labour do to stop that election coming . Maybe thats where we are heading in the coming weeks. Theres just enough time to get an election done this side of christmas. Matt thanks very much. David merritt, Senior Executive editor, down on the green at westminster. Lets look at gilts as they open. Right now, 73, 74 basis points. Gilt yield jumping as investors feel comfortable enough to let go of that paper. At the same time, its interesting because we see the pound still with a slight red arrow, but keep in mind with the high levels we went to on friday, the pound trading currently 1. 2918. If you have been planning a vacation to the u. S. , might be the time now to lock in one of those flights. Joining us is the senior european rate strategist at Toronto Dominion bank. What does this tell you, as we see gilt yields rise . Does it mean investors are less concerned about a possible no deal brexit . Looking at weekend events, they were an anticlimax, but mps havent rejected the deal. They just wanted an insurance policy. With Boris Johnson submitting an extension letter, markets are brexit for nodeal we went to the weekend with a lot of and saw a 30basis point selloff, but we could see some choppy sessions through the end of tomorrow, depending on how the mps tried to amend the deal, but i think that the direction is towards a higher deal. Matt does it look to you like thatost likely scenario is this vote passes and you finally cana brexit done, or more kicking and extensions, and it will be 2020 before we move forward . Pooja so, in the last three years, we know brexit always comes with a new twist, which is likely this time as well. Theeems Boris Johnson has numbers for the deal in eight in its current form, as you mentioned, and we had news newspapers reporting Boris Johnson had a majority of five or six members. Not a big majority. But i think now it comes down to whether the deal gets amended. If we see opposition looking for a Customs Union, or a referendum, it is very likely labour would go for the customs on option, meaning we are knowing it is Boris Johnson, i think instead of accepting that new deal, he would head for an election. Thats a bit negative for markets, but the initial reaction is basically a nodeal scenario can be avoided right now. U. Tosaid, we need the e. Approve that, and they are likely deferring their decision this week to see how things develop. But i think markets are not as nervous now as they were in early august regarding brexit. Matt you are our favorite kind of guest. Not only did you do your masters in finance at lse, but studied mathematics at cambridge, so we get to ask you a lot of cool statistical questions. What are the chances we get to an election . And if we get to an election, what happens that the markets should be afraid of . Pooja i think for that i dont even need to do my maths. The markets are pretty good protecting that. Markets are looking for 90 odds of elections by next year. The question is whether we get it in december. I think if Boris Johnson does avoiddeal, he will try to an election in december, but right now the government needs to get its act together and get the formalities done for brexit. The scenariod to where parliament has no consensus with respect to the brexit deal, it seems very likely that at the end of november, early december, elections could happen. At this staghee going by the polling, it seems likely the conservatives have a small lead, so an election would favor them given that labour has not performed well in the recent polls. Kumra, from Toronto Dominion bank, our guest host for the hour. Sharesup, wirecard rising after the Company Announced an independent audit into allegations of accounting irregularities. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. We are 15 minutes into the trading day, and you are seeing a lot of individual movers here, especially here in germany. Wirecard right now up after announcing an independent audit allegationsounting from the f. T. Although it should be pointed out they hired kpmg, which will answer to the supervisory board. Wirecard moving. N owns a lot of property in berlin, and germany is working on passing a fiveyear rent freeze. They think price controls are the best way to deal with the supply problem. Interesting to see how that turns out. If it turns out anything like price controls typically do, it will not really solve the problem. Smith and nephew, down 4. 8 , as the ceo steps down. Smith and nephew, a big mover, in fact the biggest reducer of points on the stoxx 600, although the stoxx 600 still up, but smith and nephew taking almost. 25 away from the broader european index. Thursday sees Mario Draghis final policy decision as the head of the ecb. Im definitely going to frankfurt to check that out. He will pass the throne to former imf head christine lagarde. She inherits a european economy with stagnant inflation, slow growth, rates far below zero. Will she follow in the footsteps of her predecessor, and do whatever it takes . Kumra from Toronto Dominion bank is still with us. I was going to say, whatever it takes hasnt been enough, although we are not in a deep what a lot oft people are calling pejoratively the japanification of europe. How has draghis strategy worked . What will his legacy be . Pooja in the september theyngs, draghi has said no matter how much the ecb says they have unlimited tools, they are reaching a limit of how much the tools are available, and there is also a growing diversity within the ecb counsel, council, something that is clearly evident. Last week, we had comments from ecb members saying they did not see the need for further easing at this stage. As far as the largest concerns, she comes at a time when its not just domestic growth suffering, but global tensions are affecting growth. The ecb does have limited tools,. Lagarde hasstine been accommodative. She wants to follow the policy set by draghi, and it is likely she continues. The ecb members cannot ignore the fact the world is deteriorating and inflation is nowhere near their target. So i dont see much change in the policies under the guard, agarde, but there is a growing sense of needing to focus more on the fiscal side of the policy, because monetary tools are limited. Qe, for be done with more rate cuts, they actually hinder growth for banks. That is where we are right now. Matt when we talk to people about christine lagarde, a lot of the hope is that because shes more of a politician than your typical economist, she might be better at convincing other leaders, like Angela Merkel for example, to loosen the Purse Strings and release the fiscal stimulus into the economy. Is that something you think is important, or is that overplayed . With respect to fiscal easing, i think markets need to understand it doesnt all come at one time. She is a politician, has been the french finance minister, and she has had exposure, has worked with the imf programs with spain, portugal, greece, so she knows how to help revive growth in the euro area. That has to come from fiscal easing, but the euro area needs to do it as a whole, not just italy or germany. We need all the e. U. Leaders coming together, working together with respect to how we can use our budgets to stimulate growth. Ares why the e. U. Members moreng on how to make it flexible to enhance growth in the euro area. Budgetse saw the 2020 submitted to the european commission, there hasnt been much change in issuance. 27needs to be, all the e. U. Leaders need to Work Together on this. Matt pooja, we will keep you with us for a little longer. Torontomra from Dominion Bank stays with us. Mathematician and lse grad. As well as Mario Draghis final meeting, we get a look at how european banks are faring in the falling rate environment. They complain about that a lot. Tomorrow, investors get their first indication from ubs. Analysts expect revenue at the Investment Bank to decline. On wednesday we will watch for updates on the sweat Bank SwedbankMoney Laundering scandal, one of the many laundering scandals in scandinavia. Thursday, we see earnings from nordea and royal bank. Friday, we will see if barclays can extend their hat trick of sabadell beats , and will report as well. Up next, chinas top negotiator liu he offers positive signals as both sides work toward a possible agreement, phase one so to speak. We get the latest next. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. 25 minutes into the trading day, looking at green arrows. Evenup 0. 5 this morning, as the pound has posted a little bit of a drop from the high we saw on friday. The dax up 0. 5 , helped partially by sap, but also by wirecard showing gains this morning. Toronto Dominion Banks pooja kumra is still with us. Your focus on rates at t. D. , what should investors be doing to protect themselves from the uncertainty of brexit . Is there even perhaps a way of getting some kind of return . Pooja i think with respect to scenario was ak nodeal scenario which has been reduced. We believe the e. U. With approve the extension. From a rates perspective, i just see, even though this week we could see some choppiness, the direction toward higher yields. Either way, if we get a yield, deal 10year yields would rise faster, and markets are positioning themselves to elections. Lets say that both conservative and labour are ready for big spending, and we would see excessive issuance next year, so brexit. Trading trade, convergence trades between the euro and the u. S. We see a fed october cut and further cuts coming, as they arent enough right now to fix the issue with the economy. With respect to ecb, i think they are done for the shortterm, and markets are pricing that in. The conversion trade between u. S. And euro is something we like doing. Matt great to get that intelligence from you. Thank you so much for joining us this morning. Pooja kumra, senior european rates strategist at t. D. Matt 30 minutes into the trading day, lets get your top headlines. One last push. Boris johnson prepared to ask lawmakers to support his brexit deal. Does he have the votes . We will be live all morning from westminster and brussels. A sterling outcome. Goldman sachs and Credit Agricole maintain bullish protections for the pound, saying a mediumterm rise to a 1. 35 or higher. European banks are back in style. Morgan stanley upgrades the sector as we expect results from the big hitters this week. The sector is the biggest again or on the stoxx 600 30 minutes into the trading day. To bloomberg markets. This is the european open. Lets see how things are shaping up in terms of the industrial or industry sectors, i should say, this morning on the stoxx 600. Screen. Ull up the grr that is the move screen. There is the grr. You can see banks the biggest winners here, up 1. 1 this morning. Insurance, basic resources, big gainers. Gainer. Ts are a big you have a bullish feel as these sectors are gaining and the defensive sectors are the ones investors are selling. You can see health care, food andgoods, beverage, getting sold off. And then real estate. Rents. Moved to cap not sure thats going to work out the way they want it to. Lets get the first word news. For that, we go to london. Lets get you straight to those headlines. Protesters have unleashed another wave of destruction on hong kong. Arsonists use petrol bonds as chiefset off executive carrie lam heads to japan today to attend the enthronement ceremony of the emperor. Lebanese officials are scrambling to avert nationwide protests. Held two days after he gave them 72 hours to bolster confidence. Tens of thousands of people took to the streets for antigovernment demonstrations. President trumps allies are making a list of potential replacements for mick mulvaney. Sources say includes matthew whitaker, chris christie, and a veteran political upper operative, wayne vernon. Some white house aides were unhappy with his performance at a press conference, and that was on thursday. 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. Anna matt thanks very much for that. Week sees Mario Draghis final policy decision as head of the ecb. He will pass the throne onto christine lagarde, who inherits the european economy that has stagnating inflation, slow growth, rates that are deep below zero. Is the chiefw Economic Advisor of a firm and the thanks for coming in. First off, of the surprise message that we are not going to get any more action in terms of lower rates from the ecb, what do you think . They did come out with the renewed Bond Buying Program that is openended, but it was only a 20 billion a month. Are they doing whatever it takes . There is not that much they can take in the current framework they are applying. You buy 20 billion more or less, its not going to move the needle. By has been artfully leaked internal critics. The internal committees advised against reopening. Their argument, which is hard to refute, is that longterm rates have come down so much regardless. Pushing is not going to do much. I would expect there is really not much to be decided upon. I think this will be a lovefest for mario draghi. Before, ifrgued there were to be the deeper recession and deflationary threat, the arsenal they are currently deploying is not going to do the trick anymore. It has been maxed out. Matt are there tools they can use, or do they have to convince governments to spend . They have to convince governments if there is a real recession to do more. Im confident they will. Toking and screaming, trying stick to the balancedbudget, but if under blame it goes up, they will go ahead. I am confident with that. It will be too little too late, but they will do something. Ecb itself on top of that, the traditional and what used to be called unorthodox instruments have been pretty much used up. Whether lower rates for 50 basis points to 70, 80, what difference can it possibly make in terms of stimulating investment . What you could envisage is that the ecb goes full throttle investigatesl and various possibilities of helicopter money, sending checks to all the citizens of the euro area with a checking account, the size of which will depend on how far away they are from the inflation target. This would go more directly to consumption and quite possibly push up the inflation rate. This is unproven, untested, but the question is, do you want to do something untested that might work or do you consider continue doing something that is tested and does not work . We know that spending works. Sometimes has unintended consequences. The germans have made clear they do not want to shoot until they see the whites of their eyes, to use an American Revolutionary phrase. Apologies to our british viewers. Until there is a real recession threat is that not here yet . There is a recession threat. Some would argue, and i am on the fence, that germany might be in a recession already. Certainly manufacturing is in a recession and has been for quite some time. Berlin, ifliving in you go across the country, it is near full employment. If you look at the argument of the government, they say, we would like to spend more on investment. Capital expenditure. Actually, what we have already allocated we cannot disperse because we do not find the Construction Companies actually do the jobs. They are all sort of fully booked. That is true. By and large. This is why i think investment push is not really feasible because you dont have the capacity to do so. While this environment exists where you have a recession normally nominally, but everyone seems to be bubbling along quite happily, there is no sense of urgency. Matt like japan. Moritz some parallels may be. Matt people talk about the japanification of europe. Moritz i think we need to define what we really mean. Japan is not such a bad place, right . It has full employment, it has stable and coherent society. It is a wealthy country. It is competitive. To isk what people refer the lowinflation trap and what is really different in japan obviously is that japan for a long time has tried to solve this deflationary spiral through expansionary policies. It has not worked. Matt it is an important point. Thanks for joining us this morning. Oritz kraemer at acreditus london asking prices rebound amid a scarcity of new listings. We will speak to write moves commercial director miles shipside next. Matt welcome back to bloomberg markets. This is the european open. We are 42 minutes into the trading day, looking at decent green arrows. Well, orning as the ftse gaining i should say, the pound comes down. You have the continuation of that inverse correlation. Oris johnson will make a renewed attempt to win Parliament Backing for his brexit deal. The Prime Minister was forced to write to the eu seeking a three month delay after losing a crucial vote on saturday. Confidence is growing. Ishas the support of 320 mp needed to make progress either through a meaningful vote today or legislation implementing the deal tomorrow. Labor could back the new deal, but it also wants to put it to a second referendum. Joining us from brussels is maria tadeo. Joining us from westminster, David Merritt. Johnson forced to send that letter, but clearly he does not want the delay. Does the eu want to give it to the u. K. . Positionstrengthen his if he said, it is this or no deal. Right, and that would pile pressure on to get a deal through. Grant 27 do not have to more time. There is a fair and balanced deal approved last week, but in real terms, it is unlikely to see how the eu does not respond to this request for more time, especially if that means you can see the United Kingdom crash out of the European Union. Summit,ook at every every time we have faced a deadline, a make or break moment, the European Union ultimately has agreed to provide more time to take a step back from the brink. They have always been much more willing to engage in a negotiation. Also i would point to those lines we got yesterday from the times of london suggesting already that the eu would grant another three months all the way to february 2020. If that means a deal could get through, it would also allow the u. K. To leave before that if a deal is approved. That this could get vetoed at this stage is very unlikely. The question is, does johnson have the votes . Even if he gets the votes, after all the amendments, does he want to see this go through . Dominic raab said, yes, the government is confident it has the votes to pass this deal. The magic 320. But you know, they are just squeaking it by one or two. It is hardly the stable majority they like. It is not just about one vote. It is about approving the whole of the legislation, the Withdrawal Agreement bill. That is looking difficult in the next 10 days. We have labor chiming in, they are going to amend it. Perhaps even a second referendum. That does not look like anything the brexit mr. Johnson or the more brexit leaning parts of his party want to push. Where are we going to be then . We have to be taking up that extension offer from the European Union. Then mr. Johnson is going to have to try and get this deal through this parliament, or if he cant, try again so he can get a bigger majority. Matt what preparations are they making in brussels . Are they expecting this deal to go through and start implementing at october 31 . The numbers are very tight, but one of the things we have been told in brussels is that the eu does not want to preempt the moves the u. K. Parliament may make this week. They also tell us the Prime Minister has not been defeated. He has not lost this vote. A lot can happen between now and october 31. There is time to get the deal done. That is a line we are hearing from the french government this morning, saying there is still a possibility we may leave with a deal october 31 and the Prime Minister is able to get this through the finish line. See here increasingly is that the eu wants to move forward. They want to move into different issues. There is a lot happening in brussels. This is not just about brussels. There is a sense of frustration that there is very little clarity that comes out of the u. K. In particular, the new commission at the end of the year. They want to focus on other issues at this point. Matt thank you very much. Now, asking prices for london homes rebounded in october. Right move says values climbed 2. 4 amid a scarcity of new properties, but new u. K. Listings were down 30 on the year. Showing how brexit has made prospective sellers reluctant to take the plunge. Joining us now is miles ships ide, commercial director of right move. What do you make of the Current Situation . Assuming johnsons deal goes through and we get some sort of brexit clarity, how important is that the Property Market . Clarity and certainty is important for the Property Market. If people are going to make one of the biggest Financial Decisions of their lives, quite rightly, they probably want some certainty around the political and economic outlook. Jobs, interest rates, all important factors. Market,hy in the london we have seen 30 fewer sellers come to market than this time of year this time a year ago nationally in the u. K. A greater sense of reticence in restn, but a sense in the of the country as well. You have had scarcity on the supply side just because of the uncertainty. What about the demand side . Does it look similar . I imagine uncertainty affects buyers. More, at least as much as it does sellers there are a couple of stories here. From a national perspective, the sales only down half a percent. You have a real paradox. Down,mber of new listings but only half a percent down on the number of sales agreed. What we are seeing is speculative sellers not coming to market, but serious sellers and buyers still managing to make things happen. In london we have actually seen a year on year rise in the number of sales agreed. Signs of a slight recovery. Compared to the numbers of a year ago. Brexit is partly to do with the reticence, but also we have had high stamp duty, large prices rises. London is looking to recover from that. Signs after several years in the doldrums of coming out on the others. Matt when you look at the kinds of buyers and sellers you are dealing with on a regular basis, im sure a large proportion of that of them are financial in nature. How is the finance industry looking to you . The health of the finance capital of europe in london. Obviously it is fairly well cemented, the very important center. Some of the moves have been taken by banks already to shift their staff into euro. To a degree, some of that is priced in if you like. Obviously, its very hard to read. Of an agreement or a deal rather than it being drawn out for several more months what actually at least give People Killed give people clarity even if they dont like the outcome. Matt im going to throw you a curveball. I would love to get your take as berlin moves to freeze rent for five years because of a dearth of supply, because of the complaints of the people here, how do you think thats going to affect the market . The outcome of a fiveyear rent freeze. German rented property sector is very different than london. There is a lot of longterm investors, whereas london and the u. K. , a lot of smaller investors investing in the rented sector. Anything like that i think would stop more investing. It might force landlords to leave the market. For a return. Ng we have not yet got the bigger institutions investing in the u. K. Rental market. That can take a fiveyear freeze with perhaps they can take it on the chin more than the smaller private investors. It would spook the private investment market. Obviously from a tenant perspective it is good to have certainty. Some landlords do like their tenants to stay for a long time. Rising rents are not really what it is all about. It is about certainty of income and a fiveyear freeze could give that. Matt very good to get your take. Miles shipside, thank you for coming in this morning. Later on this morning we are going to speak to allianz chief Economic Advisor and Bloomberg Opinion columnist at 2 00 p. M. London time. Isnt he a cambridge professor now . I believe he is a professor at cambridge as well. Definitely one you want to tune into. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. We are 55 minutes into the trading day, looking at gains as far as the equity index are concerned. The fx and rates strategist here in berlin joins me now. Theres a lot of talk about last night. Also, is the pound going to drop . The pound falls, from almost 1. 30. The analysts are saying, get in there. What do you think . We have to see what the real news is with regard to brexit. There is room for optimism, but in the longer term, what parliament is considering is a bandaid or plaster or the longerterm considerations. We dont have a no deal cliff edge brexit on the 31st of october, but the Withdrawal Agreement only has a transition period until the end of next year. That is where the decision has to be made. In the short term, i can see why people are bullish. The prognosis to me does not look as bullish. We are not going back to anyone forecasting parity. That is behind us. For the near term, yes. You get that talk as things turn pearshaped next year. The deadline is looming large. Thats when it becomes a problem. For the near term, i dont think so. Richard jones, mliv fx and rates strategist with us in berlin. Thanks for joining us. That is it for the european open. Stay with us. Surveillance is up 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. One more push. Boris johnson tries for a new vote on the brexit deal. A sterling outcome. Goldman and Credit Agricole maintain bullish predictions for the pound seeing the mediumterm rise to 1. 35 or higher against the dollar. And holding steady. Beijings top trade negotiator says progress is being made on a progress on a u. S. Trade deal. A major speech on china policy this week. You are watching from