Hour. Manus warm welcome to daybreak europe. The recommendation for shareholders. Quite a discussion. The board proposes no diffidence for the past fiscal year, so they are promoting the current offer, saying no diffidence for the current year. Ebitda. It is all about oil where i am on the ground. The ceo last night talking to me about volatility in the oil markets. He would not give me a price. 15 is the range. Sub 60. Pec, the call from morgan stanley. We have got the indian oil ministry. One of the biggest buyers of crude from this region. It is the air, it is not good. Nejra when you talk about oil, the line to be drawn for the trade war is clear. He might talk about sub 50 oil. Let me get the deutsche numbers here. They are saying the guidance for 2019 and 2020 is confirmed. The ebit guidance is reaffirmed. The context, the last earnings, the forecast with 5 billion in ebit for 2020. Then what we heard was basically the target. Post what, when deutsche said that in october, a slowing trade war. Important questions to put to frank appel when you and i speak to him. 15. 55quarter revenue at billion euros, that is a beat. Ebit also beats. Ebitill sees fullyear that 4 billion to 4. 3 billion euros. That guidance will be key when thepeak to frank appel, Deutsche Post ceo. Lets turn to hong kong. Chief executive carrie lam has condemned protesters for blocking roads and traffic. Clashes between police and protesters left two men in critical condition. Ended, ase to where it sharp selloff. Elections will be as scheduled on november 24. We still hope we can haul we can hold the election because it is an important election with the rights of 4 million voters. We have to work hard to satisfy these two requirements. Discuss hisng us to bloomberg reporter Sophie Kamaruddin. Give us updates on the disruption today. Imf the Central Business district where there are different pockets of activity as protesters are hunkering down with umbrellas, forming walls. Teargas could be used if protesters do not disperse. That has not yet happened. Asterday, it was used in heavily populated area. Teargas has not yet been used in this area. Neighborhoods, such as one across the harbor. Disruptions. As hubs such as the station well as prince edward. Carrie lam, her desire to maintain stability. The disruption to traffic by the protesters. Manus carrie lam had a press conference. She sounded quite surprised at. He start of it sophie Police Action was confirmed on friday. Shooting ona monday. At todays press Conference Ahead of the executive council meeting, carrie lam did not detail any plans around restoring law order, saying however that the government will continue to not give in, to be paralyzed by the actions of these protesters. Some questions from reporters during that very brief press briefing, which was only about 15 minutes long. The question posed to her was about a call for an independent inquiry into Police Action. This was interesting given that just recently, on november 8, an independent panel of investors said the watchdogs not have the resources nor the authority to effectively look into the allegations around police conduct. Earlier, we had that soundbite from the press briefing around the District Council elections. So, there still is not much in the way of firm, tangible direction from her. It seems like the status quo is remaining. Nejra bloombergs Sophie Kamaruddin in hong kong. Joining us for the hour, global economist at cavanaugh capital. Futures flat after we saw a little weakness in the s p 500. It was a remembrance day. 10 year treasury yield dips a little bit. Yes, the gu the geopolitical risk was front and center but we are still waiting for any moves either way. One we gone as far as we can the optimism and markets . Our view is that the markets are already pricing in trade optimism. The comments yesterday from chinese officials that the two sides will draft a phase one deal, the tariffs will be rolled back on a torsional basis. Obviously, President Trump is not on the same page yet. We think the markets could be vulnerable. The whole situation is still very fluid. We have not gotten a definite answer. There is still a lot of uncertainty going on. The markets are at record highs. We think that could be some vulnerability. Good to see you this morning. There are vulnerabilities around, we have a big centralbank meeting with the kiwis. We touched on this several times. Them to cut. Many people are suggesting global Central Banks, the ammunition is spent and they would like to pause like the fed might do. The Central Banks have already been quite accommodative. Our view is that probably , they probably have done enough. We thinkto remember, there are some green shoots. The data is still weak but it is peter ring out. We do believe that Central Banks would like to pause and see how the stimulus is going. Tora we start to look out 2020. You are neutral on equities at the moment. Be that yout upgrade or downgrade that from neutral . Janet a lot of uncertainties in the market. The most obviously is the u. S. China trade tension. The impact is quite binary at the moment. ,he reason why we are neutral we have been observing the data from inhouse analysis. The euro zone, very trade sensitive. We have started to see data going into the recovery space. However, there can still be materialization of downside risk. It is still quite binary at the moment. Unless we get a more definite. Nswer on the trade agreement manus we are keeping an eye on the credit slump in china. You are looking at this aggregate financing number, quite dramatically lower than anticipated. Does that send you a disconcerting signal that maybe you need more substantive policy reaction . Janet our view is that the Chinese Government is acknowledging that growth is slowing. But it is less than neutral at the moment. Aboutre still concerned the financial leverage, they dont want to create another financial bubble. The debt level in china is already very high. Markets have been optimistic on the aggregate financing numbers. Perhaps they were expecting so much from the Chinese Government. We think china is not going to embark on major measures. The pboc, they have cut the lending rate by five basis points. They are doing it in phases, not the fullblown measures markets are looking for. Nejra are you expecting a significant backup in bond yields . If so, would that make you as positive on equities as wanting to perhaps add to equities . I am wondering how you would . Ork through that janet we previously have been cautious on the rise in bond yields. I think the key to watch with inflation in the u. S. , the core inflation is rising, but next year, if we start to see more inflation coming through, then the central bank will be put in down. That could lead to a rise in bond yields. There is still a lot of uncertainty. A deal, inflation coming through, there could be a case where bond yields continue to rise higher. We pull the ripcord on the end of the world trade a little too soon. It might look like an attractive yield after all. Capital, from cazenove our market source this morning. First word news, lets get across to my colleagues in asia. Donald trump may delay decisions on whether to slap tariffs on european autos and parts. He gave himself a deadline of midnovember but the white house is now reportedly talking with carmakers in the region. Signaled support for a european banking union. The german chancellors approval of her finance ministers plan expressed a willingness to explore the policy. A key pillar of europes strategy to overcome the sovereign debt crisis but years of debate have failed to produce results. Voicedign ministers have concern over irans uranium enrichment activities. Tehran says it continues to cooperate with the International Atomic energy agency. The threat of wildfires in australia is intensifying. Strong winds fan the flames. Authorities have issued multiple warnings. The flames are about 300 kilometers north of sydney and further up the coast. Day, onews, 24 hours a area at tictoc on twitter,powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Droulers inelle hong kong. The streaming showdown heats up this week. Disney plus launches today. 6. 99 per month, undercuts rivals by a few dollars. Bob iger built his reputation with purchases like pixar in 2006, marvel in 2009, and 2012. Ilm in disney is still on the back foot when it comes to streaming. Competitors have bigger budgets. He is not letting that worry him. Streamingked what the service means to his legacy, he said, too late to worry now. Manus coming up on the show, we will speak to another top s4cutive, martin from capital. If you are traveling to work, the team are ready, live on your mobile device. In the london area. This is bloomberg. Nejra this is daybreak europe. In abui am manus cranny dhabi. The u. K. Chancellor of the exchequer, some new fiscal rules. They will allow tax cuts as well as investment in infrastructure. Javid told us that the Party Remains fiscally responsible. Already added to the growth figures. Up mymonths ago, i set Spending Review which increased spending by 13. 4 Million Pounds per year. I think it was a welcome impact into the strength of the economy. You need to keep spending like that under control. The plans we have for an infrastructure revolution, rail, fiberoptic, that will give a real big boost to the economy. Under labor, they will be out of control. Detail . Ont you give some of the worlds biggest bond funds are avoiding u. K. Gilts because they are worried that whoever wins the election, there will be more spending and more issuance. When i said that our fiscal rules should be to win the election, it is precisely to give that confidence to businesses and international investors. I am a former business person myself and i know that you need to show very clearly what the Economic Policy is. That was the u. K. Chancellor, sajid javid. Lets get the Bloomberg Business flash with annabelle droulers. Owner of the Jaguarland Rover making new attempts to find partners for the beleaguered brand. It is hope and alliance would help jlr with save on costs. But, they said no talks have been held. Says the company he helped start is not guilty of gender bias. The credit card was alleged to discriminate based on gender. Wozniacki said the cards algorithm was not at fault. I dont believe looking into the algorithm or changing the algorithm is the solution. It is being able to get individual attention in the case that algorithms miss. Wework looking for a new ceo and they are considering the tmobile ceo, john legere. Burgerkings faux meat has landed in europe. It will start serving it in more than 2500 outlets across the region. It is one of the biggest product launches in burger king history. That is your Bloomberg Business flash. Nejra thank you so much. Boston fedthe u. S. , president Eric Rosengren says he doesnt believe in using negative Interest Rates in a recession and would not choose to use them in another recession. We will be watching out for other fed speakers later this week including jerome powell. Janet is still with us. Is the fed on pause . The effect ofght three rate cuts look like . Janet ultimately, they have already delivered three rate cuts this year. The impact, for low Interest Rates, it should stimulate investment being held back by china trade tensions. Removed to a certain extent, course households as well. What we observe in the data is recovery in the housing data generally, and of course housing in the u. S. , some of the more positive data coming out in the region. We do think it would be quite positive, but we have the fiscal stimulus from the u. S. , now fading. Overall, we still believe that growth in the u. S. Is going to flow despite the rate cuts by the fed. Is going to slow despite the rate cuts by the fed. Manus can we talk about inflation . This is a global disinflation story. I am looking at the breakevens. It is interesting, it is beginning to turn out. Obviously, we have got this upturn in premium. We have at this late turn higher on the breakeven. Is that a shortterm phenomenon or something that has a more we think that inflation right now is quite contained. ,n the u. S. , the core inflation 2. 4 . We willsomething that watch next year. The may not have reflected tariff increases yet. We do think that we are in a late cycle in the u. S. Economy. The wage growth is still quite robust at the moment. , ifould have more momentum a u. S. Recession is avoided and growth remains quite stable. Janet mui from cazenove capitalist and with us. We will stay with the developments in hong kong. A day after one person was shot by police and another was set on fire. Demonstrators earlier disrupted the morning commute for a second straight day, blocking subway lines and clashing with police. Plenty more coverage to come. This is bloomberg. Manus this is daybreak europe. Exclusives get to an interview. It is exactly one month for the u. K. Votes in a general election which will set the path for the eu. Our next guest founded a company that went on to become the worldsgest advertising agency. He is martin sorrell, from wfp and now chairman of s4. Martin executive chairman. [laughter] nejra a lot of optimism has been priced in. Martin relative optimism. I would not describe it as optimism, i would say a rebalancing. I suppose, if Boris Johnson gets , it would be around 1. 45, if he doesnt, it would be closer to parity to the dollar. I would say a little bit more realism. Nobody knows what will happen in the election. To withdrawesterday candidates from the tory seats, probably netnet helps the tories, but you could draw an argument that it is not so helpful. What is happening in the advertising market, it has been thee sort of ok since referendum. Fixed Capital Investment, fixed capital expenditures. The holding companies, a pretty tough and torrid time, all six holding companies, the u. K. Results, by and large, are on the more positive side. Assumption, on the they come out, i look for a singapore on steroids. I look for a regulationlight, taxlight u. K. Economy, open for business than ever before. It has to be the home for google, facebook, not the regulatory nightmare. Singapore on steroids. That, i suppose, for some people , is nerve on a. Nirvana. If that is the land forward, what does that do for investment . Carney says it will return. You are a global ceo. Does it return with gusto in. 020 what do you make of that . We started a year ago, we have it 1. 1 billion, 1. 2 billion. We are very pleased with the progress. 26 countries. U. S. ,two thirds, 70 , about 20 western europe, and the balance in asiapacific. I would like to get about 40 and 40 in asia and the americas , to when he percent in western europe. And 20 in western europe. It makes the u. K. A more attractive investment destination going forward. Driven. European u. K. Ing the pattern in the , get on our backsides, and change the exportimport patterns. And theific, africa, middle east, maybe even eastern europe. I think that is the difference we will see. A starter in Capital Investment for the last 2, 3 years. I think once brexit is out of the way, there will be investment. It will take 5, 10 years. Process, aongterm very big shift that is needed. It is going to take a long time to get it right. Slow but steady i think will be the orders of the day. Sorrell, weartin will come back to you in just a moment. At the beginning of the year, Deutsche Post ceo frank appel said it would be a big year for the delivery giant. They beat all the top and bottom lines for the Third Quarter results. The company is one of the best on the dax this year, with shares up 37 . Joining us is the ceo of Deutsche Post, frank appel. Great to have you with us on the show as always. We have sort of given the positive out that positive outs the positive aspect of your outlook. That the shares price took quitting it that day and you had a Capital Market day that caused some caution for analysts. Have you been able to turn around that message for investors since then . Frank i think we have a strong story to tell anyway. Our broadfoot and around the world, strong positions, very good market positions, has given us stability, a record quarter. We are optimistic that we can deliver our targets this year end next year. I think we are well positioned. We continue to benefit from global trade. We are in very good shape. I think you can see that in numbers. Manus frank, good morning to you. Frank, do you, get a sense from your customers that a progressive trade deal would unleash a resurgence of business and perhaps shift your guidance . Are you dependent on a structural move in those tree negotiations to change your guidance. First of all, uncertainty is not always good for business around the world. Duties have Significant Impact the less uncertainty we have, the better for business overall. Based nce is not brexit is still not unknown even though it looks more likely that we dont get a hard brexit. We have basted on strong market positions and of course the benefit from ecommerce. The lift in the last , can you give us a sense of the situation in germany changeow and if will anything if germany is in a technical recession . Business isale usually not very volatile against gdp growth anyway. People still sent out letters. The business has continued to grow as well. We have gained market shares as well as increasing prices. We are optimistic that even if the economy in europe slows down , we dont expect to that, but if it happens we should see a development of our own business in germany. Manus we are covering the 48tests in hong kong, about hours. Your freight business, dhl, anything to do with hong kong, anything of significance for us . Uncertainties are always not good for business. We have not seen any major impact on our global operations. Many Different Things which are happening. That is our job, to manage the Logistics Supply chain for our customers. We have done that around the world, despite that we have seen some challenges around the world in the last month. I ask about street scooter. We are reporting that street scooter is in talks with potential partners in germany but also overseas. We could surmise that investors might not want to much spending to happen on the unit expansion, and there were questions over you actually selling street scooter. I think those have been put aside. What is the outlook here . How much spending will be involved in trying to find potential partners . Frank we have a very good product. We have now deployed more than 10,000. We have sold more than 2000 or 3000 internally. We want to continue to build and grow further. That is the reason we are looking at the moment for partners. But we are inw good discussions with potential partners. Manus in terms of the guidance for next year and pushing through price rises, we talk about inflationdeflation stories in a macro sense, but do you think you will be able to throughprice increases despite the backdrop you are seeing globally . We are a premium provider. We provide great quality and i think great quality deserves a decent price as well. That is why we will continue in our business to increase prices wherever possible. We have been successful this year. If you want to buy quality, you have to expect as well that you have to pay a certain price for it. That is our strategy and we will continue to do that. Nejra thank you so much for joining us. We appreciate your time as always. Lets get back to our guest in london, martin sorrell, executive chairman of s4 capital. The Biggest Issue we all face is the question of u. S. China relations. The trade deal is the tip of the iceberg. We may well see in the election in the u. S. Next year the president want to secure a deal with president xi. Is fundamental problem u. S. China relations, the willingness of the u. S. To coexist with china in a g2 world. China is not going to go away. Depending on who is in the white house i guess is the critical factor. If Elizabeth Warren were to get in the white house, may be bided would be different maybe biden would be different, certainly Bernie Sanders would be. If Michael Bloomberg were in the white house, we might see a rapprochement. Brexit is not a sideshow but it is very much a subsidiary issue in the context of the Global Economy in terms of what will happen to u. S. China relationship, whether we will see more isolation, more inequality, the technological threat that we see technology that is a destroyer of jobs, not a creator of jobs, that creates within the middle class great concerns about it, in addition to the fact of low Interest Rates. And labor as a proportion of gmp is that of gnp is that an alltime low. Nejra on one side, we see a lot of companies redistributing supply chains and finding new ways of working with the backdrop knowing that we could have u. S. Chain u. S. China trade tensions for years to come. Some people in the Advertising Industry i think our little bit befuddled by this. You have to divide the business into analog, legacy, and digital. We are focused at s4 totally on digital. The ad market this year, in the u. S. , traditional is down 3 . The Digital Business is up 20 . 40 ,al is probably around 45 of the global ad market so about 225 billion is in digital. I would argue, i think there is validity in it, that in that situation, when they are faced with Digital Transformation or digital disruption, they want to accelerate Digital Transformation and delay it when things are going reasonably well, there is not pressure. Certainly, things are going well, lets leave it as it is. Maybe the psychology is, we have to get it done, we have to make major structural changes, lets get it done faster. The digital ad market will probably accelerate. I would have to say that i am subjective about it am a biased about it. Nejra digital ad market accelerating into a recession. Can i ask you about political advertising, the announcement that twitter made that twitter made it will band political ads, facebook doubling down. Who is taking the right approach . Martin very difficult issue. Mark zuckerberg is taking the devotees canebook define what is true and what is false. My position has always been, the tech platforms, including bloomberg, is responsible for the content. I think facebook, google, validity inre is no my view. They are media companies. There is this issue. They are accepting it. Facebook is higher at 30,000 people, to monitor advertising content. You can see the impact on their margins. They have been effected by this margin of editorial control. I think increasingly the original the regulators will force them. To give them credit, they have responded. Havenk they actually responded quite significantly. The pressure in europe and some of the californian states, the reverse effect of actually reinforcing the position of the boys and girls, rather than knocking it down. A number of the mediumsized players in the u. S. Declined to come over to europe because they thought it would be too expensive and complicated to implement. There is the law of unintended consequences. Be very, very careful. , executivein sorrell chairman of s4 capital. Thank you so much. Joining my colleague manus by indiasis joined minister for petroleum and natural gas. Yes, i am. The minister for energy, inroleum and natural gas india. Factory orders the lowest in eight years. Is it that bad . Any issue. See looking into india, the longterm plan, what we have done the last three, four years. There are some problems. , demand on all the commodities, energy. Willconfident that india go on a growth map. Manus do you think we are in trough of growth at the moment . Im sorry . Manus do you think, in the demand for energy, are we in a trough at the moment . In any economic model, ups and downs. It is not indiaspecific. Andgy is such a commodity you cant plan on its own. Changing geopolitics today. Isias domestic demand increasing on all aspects. Globalyou talk about the geopolitics. To what extent are you concerned about the lack of agreement between the United States and america on a trade deal so far . We have to live with the reality. We have taken some steps and every country has its own aspirations. Every country has its own roadmap. What lets talk about china and india could be doing together. You could be forming a pretty powerful buying bloc. Are you talking to the chinese . Its own energy area. Oil and gas. Japan,india, china, certainly we have to look into the similarity. Owns could you create your asia opec equivalent on the demand side . Feel, in a free networking kind of in order to block something is not good. It should be free market. What it is today. Yes, certain expectations. Whatever network we have to do. To a ok, so you are open bit of networking but nothing on a formal basis. The iran waivers, has there been any progress on that . Have you spoken with the americans on the waivers . Everybody has their own strategy on a specific issue. Will you push the americans for are you pushing the americans for waivers at the moment . Lets put it this way. There are certain things, we have to have bold negotiations. That is for that and what the balance of things. Manus mr. Modi has been on tour. Japan, the uaea, recently. He is drawing up inward investment into india and oil and gas. Modi spelledster out his strategy of energy infrastructure. India is spending 100 billion worth of investment in energy infrastructure. New facilities. Expect more investment from outside countries, prime , energy captains of the world. Please come to india. India is a growth market. We are confident, all the measures coming to india, investment in the energy market. Manus i am trying to find Anyone Around here who wants to take a stake in saudi aramco. Are you tempted . Recently, we have taken a stake in manus that is the uae. I want to know about aramco. All the data has come out. Let us see. Gets what does it take to a sovereign to take a stake . Energy security. Manus what do they need to do to convince you that i have Security Control . Old partner of our country. Never a drop of oil. Our supply chain. They are also going to invest in a big way and our Domestic Energy market, refineries, marketing areas. We want to invest in their area. They want to invest in our area. Manus would the government be agreeable then to aramco having a stake in a joint venture at the same time as having a reliance . Yes. They can do it both ways. The public and private company. India is an open market. They can deal with anybody. Manus in terms of the diversification, it is good to have relationships with the uae and saudi, but how is that progressing in terms of who you are buying your oil from . Supply chains, our consumer pricesensitive country. We have to have Affordable Energy to all of our citizens to fulfill that. We have an open mind. Differentent from a part of the world. From crude oil to energy, however gives us the competitive price. Manus we are getting ready to go to opec. Someone said to expect more cuts if oil goes below 60. Would you agree with that . Friend, i mademy , the oil minister for saudi manus you said no more cuts . The have to look into different sorts of energy. One aspect. Priority. R manus thank you very much. We wish you a good rest of the day here in abu dhabi. That is dharmendra pradhan, the minister for energy and gas from india, joining us here this morning. Nejra great coverage. We will continue that through the morning. We will also continue our coverage of developments in hong kong. Paralyzing the district today after demonstrators disrupted the commute for the second straight day, disrupting subway lines and clashing with police. Linkedthe first fatality to the protest. To arrestsshes led and left people injured, including two critically. One man was shot by a Police Officer during the morning commute. Another was set on fire by protesters. We will bring you the latest, next, as well as all the market action. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Nejra good morning from bloomberg yes. Headquarters. This is bloomberg daybreak europe. Addressing the unrest. Condemns protesters for continuing disruption and says she hopes the escalation will happen. Bloomberg learns the Trump Administration could delay a decision on tariffs. Delivering a beat. Bank beating on the top and bottom line. The ceo gave us his take on the trade war. Uncertainty is not good for business. Even the duties china and the u. S. Have put up have not Significant Impact, created uncertainty. Nejra today, we are really waiting for any kind of direction either way where we go. For the development in hong kong gathering steam yet again. We heard from carrie lam last night. The severity of the escalation is quite stunning. You had a conversation with martin sorrell. , saying there should be no more cuts. That was investors tuesday. I think it is fascinating when you get this insight into the conversations ministers are having here at the diversification of energy supply. I will tell you what. Im glad you are not here. It is a bit cold. Know you are not used to the cold. Unfortunately staying in london during autumn, i am more used to it now. A conversation you had with the indian oil minister, perhaps down. We are going to get cuts from opec plus. As you pointed out, there is that risk of oil below 60. Dax and cac 40 futures on the front foot. We saw a flat session in europe yesterday. The s p 500 in the u. S. Dropped for the first time in four sessions. Perhaps we should not read too much into it. Was it to be in the futures market as we saw a global bonds selloff yesterday as well. The 10 year treasury yields steady on 195 handle. To get to hong kong where we did see significant Market Reaction yesterday, carrie lam condemned protesters for disrupting traffic. The comments come after one of the worst days of violence up since the unrest began. Clashes left two men in critical condition. Lam added she hopes elections will be held as scheduled. We still hope we can hold the election and try our best to do so. It is an important election with the rights of 4 million voters to respect and safeguard. There has been the issue of safety in order. We have to work hard to satisfy these requirements. Joining us to discuss is Sophie Kamaruddin. We saw big reaction yesterday, the biggest drop since august for the hang seng and the Msci Hong Kong index area stabilization today, in the green on the hang seng. What is the status of the disruption today . The financial district has been paralyzed by protesters. Disruptions continue into a second day. Navigatetill trying to the gridlock happening 400 meters down the way. Protesters have been gathering to try to create gridlock. Earlier, we saw there might have been a protest a clash between police and protesters. That was not the case. Police are holding back. Protesters are testing out a new strategy to protest during the weekdays during instead of during the weekends. Briefingm held a press this morning, the second in a week, fielding questions around independent inquiries released. She asked about the District Council elections. For her, the main priority has order, but sheg did not cite details about how she expects to do so. That not resonating with protesters, who have still come out on the street. We have seen remarks from chinese authorities who say they have security that needs to be strengthened and that crimes committed by protesters need to be punished. A 21yearold protester who was shot on monday has been arrested for unlawful assembly. Check on theget a markets in asia. We are seeing some stabilization in the hang seng, but also seeing a fair amount of green elsewhere in asia. Whats driving that . Its not like we have good news today. Absolutely not. We started to see a turnaround in late trade. A little bit of money going out of the end. The nikkei rebounding from yesterdays losses about 0. 8 on the close. Tencent a front runner in hong kong. Tencent is going to come through with earnings tomorrow and in late trade we have the hang seng index up by 0. 5 . A lot calmer after that drop yesterday, the biggest slump in three months. Chinas market slightly higher, up by 0. 2 . We have seen weakness in the kiwi today ahead of the rbs rate decision. We had Inflation Forecasts dropping to a three year low in new zealand, adding pressure or fuel to the fire that the rbnz data will be tomorrow. In singapore, this is a bellwether of what is happening in terms of the overall u. S. China trade dispute. Have seen retail sales year on year decline for an eight month in a row in september, down 2. 2 year on year. This is mainly due to a lapse in bigticket item sales. Car sales down 12 on the month after a drop in august. You can see caution in terms of buying bigticket items amidst the Global Economic slowdown. When you strip out car sales, youre on your retail sales are down by about 0. 3 in september. Nejra thank you so much. Lets turn to the u. S. And the boston fed president saying he does favor negative rates in a recession. He spoke in oslo monday evening. We will be watching for other fed speakers this week including jerome powell. Joining us now is the head of Investment Grade credit europe at wells fargo asset management. Welcome. The fed on pause, and we have inn a pass on yields optimism on trade talks. It is something to watch. We have seen quite a move in the last few weeks. There is a reason for that. We have seen some positive news on the geopolitical side. It started in the summer when we had a resolution in terms of what happened to the italian government. Less uncertainty there. Then the u. K. Did not drop out of the eu on the 31st of october. Good news in terms of trade talks as well between the u. S. And china. It has been building gradually. A pause at this point from the fed makes sense. A bit of a steepening of the curve as well. We will see if it goes on. We need a bit more clarity on these issues. Good morning. How steep can she go . What are the consequences of the premium . There is still room for the term premium to increase. It is still low. Youve got an more normal shape in terms of the curve. We had the inversion over the summer. I think the market is seeing the fed has adjusted its policy and is no longer behind the curve. At this point, the short end is quite pleasant. They are waiting to see whats going to happen. For me, there has been a degree of kicking the can down the road, not a resolution of the issues we are facing. See hower and, we will the markets react to that. Thats going to put pressure on the long end. Nejra how much risk do you want to take in credit . Perhaps more optimistic news out there, people even talking about a bottoming in global manufacturing. Think a better environment from an Economic Perspective is good for credit spreads. We will have to see what impact it has on the rate markets in terms of Investment Grade. A better economic environment would be better for Investment Grade, your loans, your high yields. Are stillissues that being worked through over the course of this year, if you look at european for instance, you have had a fair amount of aversion. Some risks linked to the auto sector, still going through a difficult transition. In the case of the u. S. It has been more on the loan space. You had a bit more volatility driven primarily by sector exposures on the energy side in the u. S. Be helped by ald better economic environment. Manus we have aggregate financing from china this morning. I look at your notes and you talk about the degree of unleashgness to meaningful stimulus in china. They are battling high debt levels. What do you want to see from china . What i would like to see out of china and the u. S. Is more progress in terms of a trade deal. China is doing the right thing in terms of trying to keep a lid on credit. Levels are high. They dont want to create a debt stimulated growth that we have seen in the past few years. That is the right policy. Even if they have got flexibility for infrastructure and so on, they dont want to unleash that at the moment. What will be really helpful in terms of sentiment is more of a resolution on the trade side rather than pushing stimulus into the economy from the chinese side. Nejra it sounds like youre hopeful there might be improvement on the horizon, but we are not out of the woods when it comes to Global Economy and the trade situation. What sectors are you preferring to invest in the the moment. I touched on that last time. We still like financials on the credit side. Throughout the capital structure, depending on the name you look at, that is an area from a fixed income perspective which has got interesting trade still. Its one of the areas the ecb is relying on, which is helpful. That gives you more spread to choose from in terms of structures and issues for an active manager. For us, that is a fertile place to generate performance going forwards. We are still cautious on the cyclical side. We are underweight on the auto side. There is a lot going on there. Hopefully we get good news in the next week or so, a delay in terms of the auto tariffs in europe from the u. S. In that case i hope it goes away, that its not just pause or delayed. Manus lets hope your glass is halffull in terms of european trade. Get the first word news. Angela merkel signals european banking union. The german chancellors approval of the finance ministers plan suggests willingness to export the policy. Insurance was a key pillar of europes strategy to end the debt crisis. Debate has failed to produce results. Eu Foreign Ministers have voiced concern over irans uranium enrichment. The countrys capacity to enrich violating the landmark nuclear deal. It continues to cooperate with the International Atomic energy agency. The threat of wildfires in australia is intensifying as a strong fan the flames. Authorities have issued multiple emergency warnings for blazes 300 kilometers north of sydney. It may be too close for residents to leave safely. Global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than one hundred 20 countries. This is bloomberg. You so much. We continue to monitor developments in hong kong as protesters have paralyzed the financial district after one of the most violent days in five months of protests that led to 260 arrests. Left nearly 100 people injured, including two critically. The shooting of a protester causing outrage. Today, demonstrators disrupted the morning commute for a second straight day, blocking subway lines and clashing with police. We also heard from carrie lam who said the protesters will not achieve their goals through violence. We will bring you the latest. Nejra 7 19 a. M. In london, 40 minutes away from the start of cash equity trading in europe. When it comes to brent around the state of opec plus cuts is going to be the critical issue we debate along with the demand side. What does it take to get opec to act . We have the ceo of total. Take a listen. Market, it can derive very quickly. We see an impact on the demand. Even if Financial Markets are pushed up by the low Interest Rates. Wars your demand level this year . It is going to. The increase of demand is up month after month. Plus 1. 4 million barrels. I think we will end at one million barrels. The demand is on that side. Manus you are not inclined to give me a price on the upside. This lobi for prices . Slow be for prices . Want a priceries of about 60 a barrel. They have been very disciplined. Russia joins the group. Opec will react. 60 per barrel. Making the call, sub 60, they will act with further cuts. Kong get across to hong for your business flash. Of Jaguar Land Rover has made new attempts to brand. Yers for the it is hoping in alliance would and share theosts burden of investing in electric vehicles. No talks have been held. Steve wozniak says the company he helped start is not guilty of gender bias. He told bloomberg the algorithm was not at fault. I dont believe looking into the algorithm is the solution. I dont believe changing the algorithm is the solution. It is being able to get individual attention in cases where the algorithm misses. Wework looking for a new ceo. Candidates include the head of tmobile. They stress the company intends to consider a large pool of potential candidates. That is your Bloomberg Business flash. Nejra thank you so much. Boris johnson looking to capitalize on Nigel Farages announcement he will not contest in 2019. The news sent the pound higher. Goinginking seems to be that Boris Johnson, conservatives have quite a good chance winning that majority. The uncertainty goes away. Should we be making an assumption that if that path comes to pass, the uncertainty will go away and that could be positive for sterling for domestic equities in for credit . U. K. Has moment the seen the Growth Numbers are not great. Rate andow its run what would be expected in the type of economy the u. K. Is. Yes, we have had the good news. What the u. K. Needs at the moment is a move onto the next step. We need to get past the bill and onto trade negotiations. Thats not going to be a walk in the park. The uncertainty is not going away. At least there is progress. To do that, you need a majority and a working majority on the 12 of december. I dont think that is a slam dunk the moment. There is a lot going on. The news we had yesterday of nigel farage pulling out one last time is positive. A could do more to facilitate majority in december. From my perspective, what we need is to move onto the trade negotiations. Get a little less uncertainty in the market. Is it going to have a huge jump in terms of Growth Prospects in the u. K. . Maybe not . It is interesting to note on the labor side or the tory side, there is spending. Something moodys picked up on friday. That is going to be interesting to watch. On thecan i pick up growth factor you mentioned . Than expected,ss but we have avoided a recession. Even if theinty tories have a victory, we going to trade negotiations. Are you confident we avoid a recession in the u. K. 2020 . It is still a hard one to call. Negotiations are going to drag on. I dont think they are going to be quick. Look at the history of the eu and their trade deals globally. It takes years. I think were going to have another run of deadlines that are going to cause uncertainty on the economic side. I think if there is a bit of theding in terms of what governments intentions are, that may help keep the u. K. Out of recession. Nejra great to have you with us. Thanks so much for joining us on the show. Another day of protests in hong kong. Plenty more coverage to come. We have seen protesters paralyzed the financial district, bringing it to a standstill demonstrators interrupted the morning commute for a second straight day, blocking subway lines, also clashing with police. Yesterday one of the most violent days yet in five months of protests. 260 arrests, nearly 100 people injured, including two critically. One man was shot by a Police Officer during the morning commute while another was set on fire by protesters. Carrie lam spoke last night saying the protesters would not achieve their goals through violence. In terms of Market Reaction, hong kong shares yesterday, stabilization today. European futures on the front foot. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Anna welcome to Bloomberg Markets the european open. Gonets say, has growth missing . German Investor Confidence may have improved as we look ahead to the survey, but economic backdrop is bleak. European futures point higher. Cash trade is less than 30 minutes away. Anna