Transcripts For BLOOMBERG Bloomberg Surveillance 20240713

It is not only a big conservative majority giving a lift to u. K. Stocks, the pound is gaining, but this phase one, or at least something that feels like a phase one [indiscernible] we will not see extra tariffs on sunday. It is going to be a risk on mood to markets overall. I am delighted to be joined by a conservative party spokesman. What a win for Boris Johnson. What are the markets looking at . What will you deliver, as the tory party, that the market likes so much . What we will deliver is a degree of certainty. Weve got a working majority, and that means we can deliver a withdrawal from the European Union on the timescale that we set out, and we can get on with thrashing out a trade deal with the eu and investing in an infrastructure that will help continue the growth in the u. K. Economy. Francine if a Withdrawal Agreement goes through, do you have any idea when that could be . We will certainly start the process before christmas, and we will do so in a way that we can get through the parliamentary stages in time for the 31st. Francine what kind of deal does Boris Johnson what with the eu . Go intoately, i cant details, obviously, because that would be part of the negotiation process, but we know that the eu marketslly important and trade partner for the u. K. , so we ought to protect that, but we also want to give ourselves the freedom to strike other trade deals with the u. S. And some of the other fastgrowing economies around the world. There will be a balancing act, he could demonstrated do self negotiations and do them quickly, thats what we will look to do with the eu with the eu. What kind of deal will be on the table with the nhs . That was nonsense put out by the labour party during the general election, and the british people were not buying it. The nhs is not for sale, will never be for sale. It will remain publicowned, publicfunded, and free to use. It is so fundamental to our psyche as a british people, that will never change. What about with the norway agreement . Do you know what the Prime Minister is thinking . Although short hands were unique when they were first no doubt at all that the relationship in the u. K. E. U. Strike will be unique and different, but it will be to the benefit of both the u. K. And the eu. It will also give us the flexibility to strike trade deals with other countries as well. Francine how changed is your conservative party, a conservative party that has promised to end austerity, to do more public spending . We heard a lot from johnson about uniting the country. James one of the lessons we learn from brexit is, while london has remained very buoyant and generated a lot of Economic Growth and opportunity, not every part of the u. K. Was feeling that. One of the things the Prime Minister is passionate about is making sure we level off, and that means in terms of infrastructure spending, job opportunities, education, and that kind of stuff. So we will see the conservative party talk more about the other parts of the u. K. I think that is a good thing, because we are here to serve the british people, and that will be the core of the johnson premiership. Francine but how does the johnson premiership keep the union together . The ecb will not go quite big and they want a second referendum. James this is always something the s p shout about. They like to talk about an independence referendum because people are not talking about the things that are under their current control. For example, the nhs in scotland and education in scotland. Those were slipping backwards under an s p government. Snp government. I would say focus on the powers youve already got, discharge those properly before another referendum. Francine but if there was another referendum on independence, would they vote for independence . That must be a concern. James parliament has made it very clear, we are not going to be distracted in 2020 by more referendum. He has made it clear that we have a duty, and we have a duty eu, and weut of the also have a duty to refocus all the power of government on delivering for the people of the u. K. The nhs, more police officers, money for schools, transport infrastructure. Thats what hes going to focus on. Francine you need funding for that. Tot is your main message investors today, people who were shy about putting money into this country . James we have a Prime Minister that understands the relationship between the successful commercial wealth in the u. K. And top quality public services. We know they both have to work. Boris, as mayor of london, was always a business from the mayor. He will be a business friendly Prime Minister. Francine do you know if the Prime Minister has a name of who he wants as england governor next . James i have not discussed that. I have been all about the election over the last weeks. I am pleased with the effort the Prime Minister has put on. Our activism seems to have paid off. I am pleased about that. Francine we will have plenty more from westminster throughout the day, but now lets go straight to the bloomberg first word news in new york city. Today the u. S. House Judiciary Committee is set to vote on articles of impeachment against resident donald trump. That is despite rejections from republican members of the panel. After the vote in the republicancontrolled senate, it is not likely to vote to remove the president. Ecb president Christine Lagarde striking a positive note. She says the euro area economy slowdown is showing signs of bottoming out. Policymakers wanted lagarde to mention the risk of subzero rates, but the governing council decided investors could over interpret that message. Euthe middle of the century, leaders play edging to eliminate net Carbon Emissions. Pledging to eliminate net Carbon Emissions. 26 nations giving an unqualified endorsement of the goal. And the top u. S. Aviation regulator criticizing boeings chief executive. The u. S. Federal Aviation Administration is concerned there is pressure on the agency regarding the 737 max. The plane was grounded after two deadly crashes. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine to fiona, thank you. Wins a decisive majority, but what kind of future relationship does he want the u. K. To have with the eu . We will discuss that next. This is bloomberg surveillance. I am covering the u. K. Elections with a landslide from the conservative party. They secured a large majority in an historic general election. Boris johnson conservatives have won over 360 seats with labour just above 200, the worst result for labour since 1935. Its taken look at the highlights. With this mandate and majority, we will at last be able to do what . So polarized and divided debate within this country, it has overridden so much of a normal political debate. This election means that getting exit done is now the brexit done is now the irrefutable, you resistible, unarguable you resistible, on resistible, unarguable position of the rich people. It will not go away just because brexit is dealt in the way with Boris Johnson plans to do with that at the moment. Few the people of this country voted to be Carbon Neutral in this election. You voted to be Carbon Neutral by 2020. You also voted to be corbynneutral by christmas. I will not lead the party in any future general election campaign. These results will bring dread and dismay, and people are looking for hope. We are waiting for the next steps. We will see if it is possible for the British Parliament to access the regional agreement to take a decision. Lets get brexit done, but first, my friends, lets get brexit done. Francine we have full coverage of the Election Results and market reaction. Joining us is carson and lucy. We also have jen hardy, coming up shortly. Lucy, the markets are on a tear. Is this because of the risk of nationalization with Jeremy Corbyn going way, or is it because they think the tory government will get something done . We got good news of a relaxation of trade tensions in the u. S. At the same time we got this result. The two concerns investors head towards the u. K. Market in the last couple of years have one, been the risk of an extreme u. K. Government, and the second has been the risk of a heart exit. Hard brexit. You have seen all of the asset focus, whether that was sterling or midcaps. And this gives the certainty that markets have been hoping for. Francine carson, what do we know about what kind of brexit Prime Minister johnson intends to deliver . Carson nothing. We know they will pass Withdrawal Agreements, and that does not mean getting brexit done. I think it is unrealistic to go for a more comprehensive trade deal before the 31st of december, 2020, so we have no clarity. Conversationrst with british voters in five years in which we have not had a real conversation that we need to talk about. Francine does johnson get control back from the erg . Can he ask for an extension without getting too much lack at home . Carsten i think he has greater leeway, no doubt, but at the same time, the composition of the electorate of all parties is in the process of massive lyrical realignment political realignment. Every mp elected on the basis of the tory manifesto has promised not to extend. We are no longer in a situation where you can limit this to 15 or 20 erg politicians. Effectively we dont know where the dividing lines will be. Francine looking at some of the stocks, rbs gaining 10 , central gaining 18 , so is there going to be a reality check when we dont know what kind of future relationship we will have with eu, or is it just because labour and Jeremy Corbyn, who said he wanted to nationalize some of these companies, is out of the picture. Clearly the big discounts they were trading under was because of the risk of an extreme leftwing government, so those will disappear. Thethen we will have uncertainty that remains about the brexit negotiation Going Forward on trade. However, as we said, the majority that has been going means that some of those extreme elements are going to be less able to shift the debate. So it will give more clarity than we have had for years. Francine how much have you invested in u. K. Stocks right now . Lucy we have a decent investment. These tail risks have been diminishing over the last two months. What happened overnight is not a complete surprise. One about with norway . We tried to quiz the head of the conservative party on that. Carsten if you look at where the tories have made progress in northern workingclass constituencies, people have said we need to invest majorly in public services, where Something Like freedom of movement is seen as a strain on public services, yet at the same time you are not really able to spin massively on because theces other half of the party is very skeptical of higher education. I think francine from brussels side, they have been frustrated that they were negotiating with a government that then put something to parliament and got locked down. Will they be happy with the result . At least they have a clear person they can negotiate with. Carsten totally, but with a caveat. Until the 31st of january, until the morning after that, we might be at a situation where we are back to square one, because nobody has had the conversation we should have had over the last couple of aunts couple of months. Francine it seems like a significant point. We will go back to that. Carsten nichols and lucy macdonald. Isaac we are getting live pictures at the you Leaders Summit in brussels, where the irish Prime Minister, they are going around the table. You can see the European Commission president together with Christine Lagarde of the European Central bank in her first News Conference yesterday, so we will see if we have any reactions. That is the irish Prime Minister, probably one of the most important voices in this. He is speaking to reporters. I dont know if we can listen in or not, but we will bring you all the comments shortly. This is bloomberg. I thick the prospect is there to develop a new partnership, and one that is good for all of us. Does it clear the way for a general election at all . I want to also make it clear that i will not lead the party in any future general election campaign. Toill discuss with our party ensure there is a process now of reflection on this result, and on the policies that the party will take Going Forward. That was Jeremy Corbyn saying he will stay as u. K. Labour party leader to reflect on the Election Results, but he will not leave the party in future elections. To discuss the elections overnight, to talk about the future of the labour party, we are delighted to be joined on the phone with the chairman of the u. K. Labour party. Why did labour do so badly . Because quite simple, ae election quite simply was rerun of the 2016 eu referendum. People put that first and foremost. People believed that the labour party tried to frustrate the Brexit Process in parliament. Believed we did not adhere to our process in the 2017 manifesto, where it would seem we certainly respect the result of the 2016 manifesto. And people feel as if they are being disenfranchised, as if their vote does not count anymore, and the fear is that the labour party should have done better than that. Think thedo you labour party would have done better than it with a different head of party and the same policies . ,an our policies are brilliant and they are Jeremy Corbyns policies. Has been a manifesto in 2019, an amazing manifesto, very similar to 2017, but a little more radical. We should not look at the 2017 , we saw the corbyn biggest swing towards labour since 1945. In 2017,rence is Jeremy Corbyn was a leader of the party. But we see it that we respect the view of the referendum. Weve got Jeremy Corbyn as a , we rotatehe policy magnificent manifesto, but we change our stance on brexit. But we see it is what we see it as, we would negotiate a deal and put it back to the british people. From the east, to the midlands, to the north, people feel that we have not listened to them. Francine do you think a more labourst labor leader kavb leader would do better in the next elections . Me last nightld he would not leave the labour party into the next election. Organizationcratic. A new process for a leader of the party that is under anyone theye party who feels that could do the job, whos got that fire and desire, and we put that into operation pretty swiftly after jeremy decided to stand down. Weve got lots of good time within the party, so we will see what happens. Francine thank you so much. 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. Ran cold francine the pound the surge . Boris johnson hails a defeat to deliver brexit after returning to the biggest conservative majority since the 1980s. That is not the only thing. Sident trump agreed canceling a fresh round of tariffs. Good morning. This is bloomberg surveillance. Official. The conservative party has secured a majority. We will go into all of the results announced. Boris johnsons conservatives have already won. Happenedlatest on what and what that means for the Prime Minister. What that means for brexit and what that means force Boris Johnson for Boris Johnson. Away. Take it nejra great to see you. In about two hours, we will have Boris Johnson come back here after he headed off to meet Queen Elizabeth the second. She will ask him to form a cabinet. When he comes back, he is likely to give another speech. The one he gave this morning he joked about the campaign slogan. Brexit before we get done, lets get breakfast done. The Withdrawal Agreement, that is expected to be done by the end of january 31. 11 months be enough time for the u. K. To negotiate . Well that what will that look like. Will the u. K. Want out of the eu . Will it be more a low impact, low regulatory, singapore type nation. In terms of whether there will be an extension to come to a transition agreement, july 1 is the agreement. What kind of deal will Boris Johnson get . Results course, the means Boris Johnson might have to face the prospect of a vote on Scottish Independence and Northern Ireland a bit of a thorn in Boris Johnson side. Theistoric victory for majority conservative party. The conservatives managed to get votes in many areas that had never voted tory before. Francine. Francine nejra, thank you so much. Lets get back to more market reaction. We will be joined by mairead mcginnis. Let me kick it off with you. When you look at exactly what it means for negotiations for the u. K. And eu, are we going to have clarity on what the future relationship is in coming months . Do we have to wait for january 31 . I think we are going to have to wait to predict the future because the person that has to be given the size of the happen by, ifwill not on, january 31. The parliament has to ratify the agreement and then we have to move to the next phase. Barnier is lined up to start the next phase. There is no obstacle from the side. What we will need clarification on is how much of the british Prime Minister wants to deviate from european standards. That will make it difficult unless and less difficult if he decides to stay close. Were will come a time where will need to know exactly what sort of relationship the u. K. Wants with the European Union. We want and need a Good Relationship with the United Kingdom and there will be efforts made to try and get the i cannot see it happening within that space of time. It is too short, too many complications. I hope there is a realization that if we dont manage it within the timeframe, there will be stocked to extend the transition period. We are not there yet. A lot of the conversations have been private but has he given anyone in brussels an indication of what the future relationship for him to the u. K. Would look like . Mairead we have a paper about the future. Certainly, if you like my thoughts on this, the british Prime Minister wants a less close relationship. He wants to move away from european rules and regulations, but we are very clear that a level Playing Field will be required. There has to be a time where the negotiators sit down work on first principles. That may take some time to decide on what the principles are here that we can work with, how can we be flexible and what our designs on both sides again. At the moment, in the face of this victory, it is too early to say what exactly Boris Johnson will want. Ive heard some connotation saying he may not go for a very soft brexit. Others might suggest because he had such a large victory that he might be minded to be much tougher in the negotiations. Ast is why from our sides the negotiators have been clear, we want to have a Good Relationship with the United Kingdom but we dont want to sacrifice our single market, our customs union. Theres a lot of issues to be resolved. Today, when i look at the clouds of lifted in brussels. Will leavekingdom the European Union, the divorce will happen. Im afraid the relationships will end. Part of us francine Vice President , let me bring in carsten. If you look at how the vice the Prime Minister brought the United Kingdom together, is there real worry the stocks will break out and have referendum . That is the next thing we need to look at critically with the view to the scottish elections and in 2021. This morning, you can make the claim that we have won the landslide. If some performance like that can be repeated in 2021, i think theres going to be a provocation that will be very serious. Francine we have a new commission in place. There is a Carbon Neutral goal for the economy. How long will brexit still be a distraction for brussels . I hope once we get the Withdrawal Agreement over the line, there will be less of a distraction, but more of a deal to be dealt with. It will be on the list of many. The Climate Change agenda. We have migration challenges. Spective,leaders per they will go to christmas dinner with certainty that they know the United Kingdom will leave and we will start on the next phase of the negotiations. It will be a very large issue. We forget this point, that when a deal is done, when we get to its stage when we agree, will have to be ratified, not only in the European Parliament but in the parliament of all the member states. There will be a lot of work internally to maintain the unity. This second phase will be the most challenging one because each member state will have different issues. It is therefore very positive that Michel Barnier who led the negotiations will stick with us. View, european point of uncertainty is over. That is the most Important Message from the election. Mights what Boris Johnson be minded to do on the trade side. We might have to wait for him. That might come next week. There could be a vote on the Withdrawal Agreement on the 20th of december. These things could have a momentum of their own. We will never know what will happen on the trade side. Francine we also understand that donald trump has signed a phase one deal with china. What does that mean for the european economy . I think trade is an issue locally and there has been a steer about protectionism coming back. The wto is not as strong as you would needed to be. Europe was a very Strong Player and we would want to do trade agreements that are fair. The china issue will come into all of the future trade agreements. b tweeted about a relationship with the United Kingdom trump tweeted about a relationship with the United Kingdom. Linksave strong trading with European Union. I hope it is not one against the other. Carefulwe have to be that as we move into a new year, we should work toward avoiding trade barriers and trade wars, because they dont do any good for communities and for countries. I think this commission, as well as many other issues on its agenda, will be looking at having strong trading legs trading links with other global players. Francine thank you so much for joining us. Maireadguinness mcguinness. Coming up, we will get banks. We are delighted to be joined by the chairman of rbs, sir Howard Davies. Rbs stocks were gaining some 10 . This is bloomberg. Francine this is bloomberg surveillance. I am francine lacqua. We are looking at the u. K. Elections and what happens. Lets go to john hardy. We had quite a move in pound what comes next . Up as weis shaping expected. We thought there would be a boost. We got the conservative majority. We have seen the gap up. The ceiling might already be here, plus or minus a percent. There is a lot of uncertainty around the shape of whatever the trade deal is approached. We do have some room for fiscal stimulus that is currency positive. There doesnt seem to be a fiscal impulse. Trump, the tax cuts on the table. It is much more modest. Accounta large deficit all is shaping up. So much is already in the price. What does itn, mean for bank of england . As you look at some of the charts, the probability of a rate cut . John makes sense. They are looking for the numbers to research. Numbers two resurge. There staying pat. Pat. Ey are staying we dont see the bounce we are expecting, some further accommodation could be in the cards. We could see a rate cut into early next year. Francine does it make a difference who becomes the next england governor . Boris johnson will be better prepared to have a candidate in hand. When we get that announcement, does pound move depending on who it is . John you are always looking at the profile of any central bank governor, but our general feeling is the era of the massive brokers on Central Banks has come to a close. We are looking toward the fiscal side. So many countries that are close to a zero balance. There is a profile that the governors important but it is less important. Less important than how things shape up on the fiscal side as we look at programs like mmt. We look at the failure of zero negative rates to move economies forward and what they have cost us in terms of productivity. That will be my observation. Francine john, thank you so much. Now with all of your stock movers, lets check in with dani burger. The floodgates have opened for u. K. Stock, even with that search, the highest since 2017 in the pound, we are seeing u. K. Stocks take off. In terms of movers, points added to the stoxx 600. Lloyds is the biggest lifter in the main index, up 7. 5 . The threat of further regulation seems to have diminished with the conservative majority. We are seeing some analysts saying that u. K. Think stocks could rally as much as 10 . We are not there yet. No longer looking like they are going to get nationalized threat, Jeremy Corbyn had made. Those shares are rallying more than 7 . Health care is the weaker sector in the u. K. Stock indexes. Finally it is not just the u. K. , we have other global macro movers. We have the trade save one deal that is helping out autos today, francine. Francine thank you so much, dani burger. There is a to trade deal between the u. S. And china. How much of an impact will that have . How much of a Lasting Impact will that have on stocks . It is not completely because it has been rumored. Even so, it is certainly what we have wanted to see. There was a deadline today that needed to be rich otherwise the currency is going on monday. So it will be the areas which will likely to be affected most are autos, as a result. This is not the end of that. Francine is this the beginning of something bigger . Start, but there is a lot more. State subsidy,t property, all of these things are not going to disappear overnight. It is a very good start. Francine when you look at 2020, is Central Bank Policy the one thing you worry about . What is the biggest concern . There is uncertainty about Central Bank Policy, partly because the fed and ecb are working on the tools Going Forward. On hold for the moment. Not a huge amount of uncertainty. There is more uncertainty about trade. Yes, weve got a good start but it is only a start. How that develops is very important and whether the stabilization of growth in pmi does begin to support more growth next year. Francine do you worry about liquidity in the markets . The repo is a concern in the background. That. D are all over they will increase liquidity by cash, by qe4 if required. Francine do you have an outlier call for next year . A part of the market that is unloved. Lucy the u. K. Has been that part. It is still despite the fact we have had no big rally, it is on the ella to on the relative side. Francine anything in europe . The flip of brexit negotiations have been europe. If you look at the smaller exporting Companies Like germany, they renovate from the brexit deal. Why hat is francine do you like any of the big stocks . Lucy industrials, good quality industrials. Also from the but stabilization to change the nature of their business. That scenario going into next policy. Owth in francine what is your dollar call . But we dont do too much on the balance it could be a little bit weaker and that is a help. Francine lucy, thank you so much. Lucy mcdonald. Coming up we will have plenty more on the u. K. Elections. Well have a full round up of your markets. I have to say a lot going on. Weouple of guests saying will stand to have some planks because the market can focus on the specter of nationalization. That is sending u. K. Stocks up and a deal between the u. S. And china. Holding 2 . C this is bloomberg. This is bloomberg surveillance, i am matt miller and berlin with a quick look at what is going on after the conservatives won a crushing victory in the u. K. Ting over threat to 60 getting over 360, posting the biggest election loss since the 1930s. Absolutely destroyed. Take a look at u. K. Assets. In a town absolutely soared with u. K. Stocks as well as bonds dropped. A very interesting look here. Typically the pound and u. K. Stocks go in different directions. They have an inverse relationship but now you see the pound up to 134. 19. It has gone up to 135 and beyond. The ftse still gaining. The ftse 250, a broader u. K. Benchmark, a lot more local stocks listed there is 4. 4 , the strongest gain in almost 10 years. The 42 50 up the most since 2010. Up most since0 2010. Now, elsewhere in europe we have big gains. News of the partial trade deal between the u. S. And china reverberated across Global Markets and through the continent. The dax, the cac and ibex in madrid are all up more than 1 . The ftse in milan is the smallest of the gains across european equities. You see u. S. Futures up. If you are prepping for the u. S. Open, looks like it is going to be a risk on day with gains across futures and yields on. 9 on treasuries. Yields 1. 9 on treasuries. This is bloomberg. Francine riskon. This friday the 13th markets rally on a conservative landslide. The u. K. Focus surges more than 4 . Boris johnson hails and historic mandate to deliver brexit after returning the biggest majority since the 1980s. A phase when trade deal is done. A bloomberg scoop from President Trump agrees a pact with china could sink a fresh round of tariffs. Good morning, everyone. Everyone in the u. K. Has been awake. This is bloomberg surveillance. Tom francine at westminster. Tom, i spoke to a couple of market participants. A lot of them are saying, santa came twice. It is not only the specter of nationalization tom as well but a little bit of what is next. How do we get into december . How do we get into 2020 four a very different time and . Very different Prime Minister . Francine what kind of relationship . Tom the United States as well. A victory for mr. Trump yesterday. Lets do a data check right now. We could do a two hour data check. We are going to keep it real short. Massive riskon, not only off of the trade deal but off of that moment at 5 p. M. New york time, when we saw the first calculation of this historic election. Futures are up now. Clearly breaking through all sorts of record highs in the United States. Your oaktree calibrates. Euro we calibrates. Francine we have a great headline on our stories that on thesets are unleashed back of the tory landslide sweeps. I dont know what else is unleashed if you look at the majority in the british general election, it means traders see the end of political gridlock. We dont know what the future relationship with eu will look like. Boris johnson will be drawn the political map of britain. Will be drawing the political map of britain. At 202. With labor the worst results cant 1935. Have to start with you because your share prices on tariffs is 11 higher. Was there a labor nationalization that has been taken off . Howard they didnt in their nationalizing election manifesto. I dont think we were very high on their agendas. Of theless, a shadow other policies related to taking 10 of the shareholding which affected all of u. K. Stocks and particularly must ask stocks. We have seen a bounce particularly domestic stocks. We have seen a bounce. The dog can get to the end but eventually it pulls back because the rope has gone out. There will be a limit to this because until we have some certainty about what our future trading arrangements will be, i think there will be a bit of a pullback. Francine that is the point that we dont know what the intent of the Prime Minister is in renegotiating after he gets the agreement through parliament. David which way is he going to run . We dont know it we know what is Withdrawal Agreement looks like. Hint in thee got a future relationship part of the deal. But that is up for grabs. That is not legally binding. He is no longer beholding to the more extreme parts of his party. He can go back on some of his ideology. He can change his mind about the deadline. Most experts tell us that is not a realistic timetable anyway. That can now be extended. He can now take him far softer position in order to get the best economic deal he can. We have to wait and see. Finally, he is going to be pushing very hard to get a vote before christmas. Tom david, how soon does he have to send signals to new conservatives in Northern England . Is it today . Is it postbrexit . David the message he sold to them was get exit done. He is going to be pounding that message home that i am going to deliver this by the end of january. There is not a lot of common ground. The seats havent had a tory mp for centuries. How is he going to connect with them. Kind of similar to what has been happening in the United States. The value of the labour party no lager matched a lot of the seats in europe. Mr. Johnson saying he is going to deliver. Francine what is this new tory party . Spending a lot more, and yet quite conservative on trade. The phasing of this is interesting what i expect is the initial work will be on the and that has to get through parliament because parliamentary passage was extended was suspended. I expect that around the end of february, probably. Looks like it. Signs of will look for what all this means in terms of the orientation of public spending. Is he going to increase spending and some form of taxation . What is going to happen to hs two. Iconic projects that are ready to go. The question is which way he jumps. We really dont know that. I think and on the lord, what does the new left look like after this disaster . Thenit up to 20 blair and hold onto what in the next five years . Howard it will be the green left. The left is organizing around llama change which is an issue around Climate Change which is an issue. When i was running, that is where the left were, they were in groupings like the green left or groupings around the palestine issue which remains a very important one. I think that is what you will see because in the short run, reconfiguring the labour party is difficult. Francine why did labor do so badly . We spoke to the chair and he said because of the referendum. The fact that they put a second referendum on the table. Do people want a more centrist labour party . Argument is clearly part of the process of trying to win the battle for the soul of the labour party. I find it difficult to understand the logic of that argument. The problem was on the european issue that the position was taken by both Jeremy Corbyn were very difficult to defend. Heres was to have another referendum but i wont tell you what i think his was to have another referendum but i wont tell you what i think. But it also does seem that the policies on the very large increase in pub expanding were not ones which people were prepared to go for. What . Ters said, can this really be true . Nobody is going to pay anymore except a tiny sliver. That didnt sell. I dont think it is sensible for them, if they do believe this is all to do with the referendum, then that i think they will lose the next time. Fascinating. It david, i have a questions for you. You people study every day what is a policy that will show fiscal stimulus on the part of the super majority government . David we will have to wait for this budget. They indicated that austerity was over. Spending tom 35,000 nurses done by march 1. David 20,000 extra police, spending on education. There is these big infrastructure projects. Hs two, 100 million pounds. Isnt that going to happen . Heathrow. Mr. Johnson has called that into question. Is he going to rain back from his infrastructure . Clueless aboute what the u. K. U. S. Relationship will look like . Thed is a quick out of mr. Trumpt his was quick out of the blocks to tweet his congratulations. It is all about access to the National Health service. Mr. Johnson said it is not on the table. He has the path to change his mind on that. We will have to find out. Francine thank you both. David merrick and sir Howard Davies. We talk a lot more about the u. S. China trade deal. Trump signed off on a trade deal h china dodging this 50 this 15 levy in the process. 0. 7 , less than i wouldve thought. We discussed that next and this is bloomberg. We discuss that next and this is bloomberg. Francine this is bloomberg surveillance. Tom and francine looking at the general election 2019 of the u. K. Lets get to bloomberg first word news. Viviana tom, we begin with the bloomberg scoop. Donald trump improving a trade deal with china. The agreement would over on chinese products. Bloomberg has learned the deal was a promise from beijing to buy more American Farm goods. Later today, the u. S. House expected to be one step closer to impeaching President Trump. This morning the house Judiciary Committee votes on two articles of impeachment. That would set the stage next week for debate and vote on the house floor. Democrats turned back republican attempts to European Union leaders vowing to eliminate net Carbon Emissions is an historic pledge. It will require a radical overhaul. Didnt commit to meeting it. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am viviana hurtado. This is bloomberg. Much. Hank you so we are here. We talk politics but we are focusing on the financial capitals of the world. One of them is the city that is part of london. With us, sir howard john davies. We have been thrilled he has been more than candid as a chairman. He has been circumspect over the months and years as he speaks his mind. The city is going to die and move to europe. Happen that is not to but the city has what the message is going to be for the government is you really have to give some priority in the future, future negotiations between the relationship between the city and the European Union, because at the moment very little has been given to that. More airtime has been given to the fish than the whole of the city. Nothing against fishermen but it is an important part of the british economy. The next part of the negotiation must include an attempt to negotiate some proper, mutually compatible regulatory agreement between the city and the rest of europe to allow people to carry on trading. Francine what does that mean for regulations . In the european directives, and some of them, there are provisions for what is called equivalence. The u. S. Has equivalence. Willsay, your regulations be equivalent to ours so we will allow this. That is a minimum requirement for us, in the European Market for financial cements directive. We must build on that. There are a lot of parts of european infrastructure that are based in london. For that, we need collaborative Supervision Arrangements between the ecb and the bank of england, so that we can have confidence over the oversight is appropriate. Persist does the city in the old minister johnson and the new minister johnson . The fancy people the city, they will benefit that put his majority in place. Howard there are two things going on that will help him. The companies are working very hard on defining their purpose. We are doing that at rbs trying to articulate the social value of what you do. As a bank, it may seem difficult but wed support people through their lives. We provide mortgages. We provide capital for companies. Tom jamie dimon is moving a huge operation to texas and providing huge social services for jp morgan employees. Can you commit to further headcount up north . Howard we are well distributed in that way. We are the largest private employer in scotland. In our case, we are fairly well distributed. For an uptick because it is logical. It is cheaper to employ people in london. It is more about how businesses articulate the social value of what they do. You are going to see a lot more of that in the next year or two. Francine if you look at european banking, first the Banking Union encouraged consolidation across the board. Much pressure first negative rates, how do you find Business Values . Howard there will be some more consolidation within the euro zone. It is hard to see a lot of consolidation in the u. K. Market which is already fairly well consolidated. Clearly leaving the eu doesnt promote crossborder consolidation. I dont expect that. I dont think they will be a big consolidation story in the u. K. , but in europe there is still a tale of poorly performing banks, and they have got to be swept up in places like italy. That is a problem, but that is not a problem primarily for us. Tom this is wonderful. So Howard Davies of sir Howard Davies, royal bank of scotland. Stay with us. Other news around the world including President Trumps action on trade, moving to a trade piece. Have we heard from beijing . We will have more discussion on trade. We will do that next. Please stay with us through the day. This is bloomberg. Francine this is bloomberg surveillance. We are covering the u. K. Election and the trade between the u. S. And china. Tom and francine from westminster. President trump signing off on the deal with china. This avoids the introduction of a 150 billion in tariffs which was due on sunday. Davieset back to howard of rbs. Is this a deal that will last . Or is this a truce that could be reneged on in 2020 . Howard the history of this theres a deal and then suddenly someone gets crossed and then there is another deal but this does seem fairly seem a fairly solid basis. Tom we have this wonderful tory multilateral debt. Howard the Current Situation is not a good one at all and it is unfavorable from this point of view because there are people saying, we might find ourselves operating with wto rules in eu. If the wto rules are being enforced i dont think that is a great option. It is not a good period. I hope they underlying logic the underlying logic will reassess itself. Tom there seems to be a stunning naivete about a trade war between the United Kingdom and america. I donterstand think they understand the history of the relationship how much argument will they be on a trade discussion between United Kingdom and United States . Howard quite a lot. Complicated because there is a difficulty in moving everything america would like to have. It makes the eu deal look complicated. Theres a big choice on which one you will prioritize. Francine is Boris Johnson really now in charge because of the big majority . Howard yes, he is. Sono longer beholden he can decide but he is going to have to decide whether to part whetherrican deal to prioritize an american deal. That does constrain some of what he is going to have to do. Mostly we would like to remain aligned on europe because that is the way the citys businesses are oriented. We have the regulatory relationships with the u. S. Which will continue. That is where we will elect to go. Other indices industries might take another view. Tom we are thrilled sir Howard Davies is with us. Look to europe and that means look across the channel. We will find time for that. In the next hour, we will bring you megan desai. One of the phrases he uses is the social astronomy of the new United Kingdom. This is bloomberg. Francine bloomberg surveillance, live at westminster with a helicopter or two. The Prime Minister may be on the move. We are looking at live pictures of 10 downing street. Prime minister johnson with a huge landslide victory going into number 10 downing street with his partners. Nejra cehic is outside. On whatve any insight the Prime Minister will do today . Nejra there is a car that has pulled up outside number 10, waiting to take Prime Minister Boris Johnson to meet Queen Elizabeth the second, having won the landslide. The best result since margaret will be in 1987, he invited by the queen to form a government. Cabinet announced mints are not likely to happen announcements are not likely to happen today. , after boris, he will come back to address Boris Johnson meets the queen, he will come back to address the media. ,e talked about one nation conservatives, pointing to the fact of uniting the country. The landslide victory they got, there was a lot of places in the u. K. , particularly Northern Britain and wales that voted conservative for the first time. What will brexit look like . What kind of deal will be negotiated and can it get done in 11 months . Cehic, thank you so much. A busy day for a new and different Prime Minister. This is a joy, with us sir Howard Davies from the London School of economics and we are thrilled to bring you a professor emeritus, always working far beyond emeritus. He joins us and he is truly an authority thinking about the migration of left to right and right to left within british history. You have been writing about it for years. How big a loss was this last night for traditional labour labour . Corbyn the labour party will go back to its moderate roots. It left because of a peculiar thing. Allowed people [indiscernible] i think it will go back to a moderate socialist program. We do not win any other way. Labour has to recharge themselves around social theory. Stars . In the labor can resthe theory they onto . Maghnad all of the theory has been badly beaten up and you are left with fiscal activism. Without fiscal irresponsibility. Anymore programs and consolidate the wealth while you can. If you can do that and run the likely john, more left, he was more to the then tony blair. Labour transforms to it depends on Boris Johnsons success. How can he do that while keeping investors in the game with brexit moving . Howard i suspect if you ask me whether that will affect the labour party, i suspect not. There will be a battle for the labour party within the labour party which will go on more or less regardless of what is going on in the outside world. In the mediumterm, whether johnson can consolidate the support he has won in the north of england, that is a big question. My hunch is that is somewhat of a natural position for those constituencies and with any kind of reasonable labour leader, they probably come back. Adoubt if that will force complete realignment of british politics but it is difficult to say. What does the labour party become . They lost so big. They will regroup and figure out what the next strategy is . Moghnad it has been a peculiar question for british politics because it has gone across the standard political divide. ,nce the brexit thing is over maybe half of the losses will come back and the other half we will have to fight for. That is my rough calculation, because you know something is drastically wrong. They will come back. Tom this is critical. In the mining communities of a Labour Community years ago the 30yearolds were on the same page as the 60yearolds. How do you get to david lloyd , ande out to tony blair how do you get on to the next labour with the generational divide . Moghnad the younger members of would know they future is no longer in the old party cycle. Tom they think you are to the right of Howard Davies. Moghnad it is not a bad place to be. [laughter] moghnad i have met these people and those centrists are of my left. Inpatient with what Jeremy Corbyn was doing. He was not meant to be a leader. He was not a brexiteer. He did not want to get into the Common Market to begin with, but he had to pretend to be statesmanlike, which failed. Rancine thank you so much Boris Johnson could be going to. He is leaving 10 downing street to go to the palace because the queen is a pivotal figure. He will go to her and say, i have this majority and i can form a government and she will likely acquiesce and say yes. Tom a lot of history. Winston churchill, get it done, the urgency of it. The new Boris Johnson will be very different with this historic majority. We will continue with more. Sterling surging, among other things on the market, a real shift over the last 15, 16 hours. Sterling was at 1. 35, now down at 1. 34, nevertheless a stronger sterling. This is bloomberg. This is bloomberg surveillance, tom and francine live at westminster. It is not only about the u. K. Election, it is about trade and the bank of russia. They say they will lower the rate to 6. 25 . That was widely priced in, but the ruble trading a little higher at 62. 38. The other thing i want to watch out for as they have not given a clear indication what they will do in 2020. Inflation is falling faster than expected and they point to substantial risks to the Global Economy persisting. Lets get straight to the bloomberg first word news in new york city. Viviana we begin with the bloomberg scoop. Chinaerim trade deal with , President Trump signed off on avoid aith beijing to of tariffs on chinese goods, and china has promised to buy more u. S. Farm goods. It still has to be finalized. The house Judiciary Committee setting a final vote on articles of impeachment this morning. Pass, nexte articles week the house would take up impeachment. In washington, d. C. , negotiators coming up with a deal to overt a government shutdown. The 1. 3 trillion dollar deal would fully fund the government by the next by the rest of the year. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Francine thank you so much. Lets focus on the rest of europe. We have the u. K. General election, clear conservative majority. The pension reform system of Emmanuel Macron will come into force in 2025. With a deep understanding iss are Howard Davies. Strikes andk at the you wonder if france is reform reformable and John Claude Trichet says people are taking to the streets because reforms are being put into place. What will it look like in 2025 . Howard there is almost no political opposition to macron. He is almost certain to win the next president ial election because he only has to come second to le pen. The unions on social reforms think the street is the environment in which they have to fight because they have a huge majority. You have a proxy for a political fight taking place only in the street because that is the only place it can happen. It clearly is a big issue for him, because previous tried to reform the public sectors and failed. It is a touchdown, and it is touch and go, because paris is in a significant mess. I teach there, and my exam has been threatened next week. This is serious. Happen, thatnnot is pretty serious stuff. The police appear to have come around yesterday because the police were going on strike, and that was a serious problem, but they appear to have been modified by the Prime Ministers statement yesterday. At least he has the forces of order with him so that may help. It is difficult to see the outcome of this. Bitter better battle battle. Tom there will be no open book exam remote. Howard there probably will be. [laughter] tom the parallels are striking. Is gone. Of chirac how does the centerleft regroup if the capitalist macron has no competition . Howard it is serious. It may be part of the answer, the same answer i gave you on the climate issues because one of the problems in france as you have ecologists with the green list which has taken support from the socialist party. There has to be an alliance between the green and this may be a solution in germany but the green and the social democrats have to come together to form a political force. I suspect that is the only way forward in germany, france, and in a slightly different way, here. Tom coming up, we will drive forward the conversation on this historical action. Looking forward to the conversation. In westminster, a historic day for the United Kingdom. This is bloomberg. Francine Boris Johnson leaving number 10 downing street moments ago in his traditional jaguar. He is on the way to Buckingham Palace to tell her majesty the queen that he can form a government, and we expect him to come to downing street in about 10, 20, 30 minutes. It is a private briefing between her majesty and the incumbent Prime Minister. Joining us on how the e. U. Will look at this and deal with Boris Johnson is maria tadeo who joins us from brussels. Finally the brussels folks has someone who has a Strong Majority in parliament. What will the relationship between the u. K. And e. U. Look like . About thes is not europeans now liking Boris Johnson all of a sudden, this is just about clarity. The europeans wanted to get a sense of direction from the u. K. And they got that yesterday, but the conversation in brussels as shifting to the trade relationship. For the europeans, it is a longterm strategic goal to get that right. Europeans do not want to be undercut by a u. K. That no longer plays by european rules, and the timeline, they believed to get this kind of trade deal, which will touch and affect every industry in europe, you will need time. They are skeptical they can get this done in a year and are warning the more he moves away from european rules, that will make it more difficult from an e. U. Perspective. Francine maria tadeo in brussels. We aree on westminster, just getting the German Government and German Economy spokesperson saying they hope the u. K. Election result will economicction clarity. Well it . It depends on the future relationship which is yet to be negotiated. The coming year could bring another cliffhanger. Bit ofe removed one problems of the source of an clarity, the Parliament Getting in the way of what the Prime Minister wanted to do. Tom i thought of you this morning. At thehunderstruck nationalism of the unionism. Where will we be in 12 months . Bronwen that is a good question. We will be talking about whether scotland and Northern Ireland stay in the union. It is possible the version of brexit they have set themselves on precipitates the breakup of the u. K. Party has doneal very well in the election and it will take that as a mandate. Snp . Is it a burden for the how do they extricate themselves when they could call a referendum . Maria they do not bronwen they do not have the right to call ended referendum on their own so if johnson says no, you have a standoff. Mandate for the new referendum and johnson says, i do not give you one, there will be a classic battle. There is the United Nations recognition, that is not the same thing as the country to breakup. Francine we are looking at pictures of boris arriving at Buckingham Palace in a jaguar. What kind of advice with the queen give the new Prime Minister . Maria as we have heard it bronwen as we have heard it, whyhe first turned up would anyone want the job . She might not repeat that one. She might not say very much, because one of the bits is broken if people start quoting the queen more than they used to, so i expected to be short. Tom Bronwen Maddox with us. Surely a historic election, this is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone wifi up there . Uhh. 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 local xfinity store today. Tom this morning, a single president ial treat. Markets celebrate. The u. S. Will commit trade peace. No word from beijing. Victory,hatcher like boris will be Prime Minister. Look for the mayor of london boris. Tony blair in 1997, we consider our with martin sarao sorrell. Keenene lacqua with tom on the green. They delivered truly a historic election. Francine Boris Johnson is the most powerful conservative Prime Minister since margaret thatcher. He is meeting the queen. We saw the jaguar arrived at Buckingham Palace and we are expecting him to come out and about 20, 30 minutes to form a new government. Tom you wonder to they immediately move more centrist to signal to the labour people who voted conservative this time . Francine it is interesting listening to his speech at 7 30 this morning. He is trying to unify the country and what will be significant is when the markets try to understand his intent on brexit post Withdrawal Agreement. Tom jon ferro and i will join you for two hours after this our. Right now a data check. A left in every asset class. Lift in every asset class. Futures up 16. The euro 1. 1181 and sterling with a pop. Francine equities are marching upwards from beijing to paris on the back of the u. S. China trade deal and on the back of u. K. s theks on a tear because specter the markets where , Jeremy Corbyn talking about nationalism being on the scene, has been taken away. It is a risk on move. The conservative party has secured the largest majority in a conservative general election. Boris johnson conservatives have labour 202 seats, their worst result since 1935. Joining us from downing street is nejra cehic. What are we expecting from Boris Johnson when he comes back to downing street . Will we have a new cabinet . Will he work on brexit straightaway . Nejra in terms of the new cabinet, we understand we might not have announcements on that until monday, but when he returns from Buckingham Palace, he is likely to address reporters outside downing street. You have heard from him this morning, the Prime Minister giving a speech around 7 00 a. M. London time where he reiterated his message to get brexit done and made a joke that he has gone on and on about that. He said before we get brexit done, lets get breakfast on, his customary joking manner. He made reference to the fact about having one nation conservative, talk about uniting the country, and made reference to areas of the u. K. That were contributed were what contributed to the landslide. There were areas in Northern England and wales, typically labour strongholds, conservative for the first time, and Boris Johnson said they had to work hard to meet the expectations of those voters in particular. Tom thank you so much. This is a joy as we look at economics, finance, and investment and convey to our american audience the shock of this nation last night at 10 00 p. M. , and all of the analysis waking up to a new United Kingdom. Ubs us is geoffrey yu of with his wonderful work synthesizing together Asset Classes and looking at pound rosalindand, and matheson. Synthesis of our team at Queen Victoria street . Been a regional map of the u. K. You so Boris Johnson coming to years. Hat labour had for they wanted brexit and they switched sides. Whether they can stay with him is another question entirely. Tom the idea of staying as well, we will discuss this with sir Martin Sorrell. U. S. We saw a farleft. Suggest the jeff debates will affect the in the United States, that they learn something . Rosalind brexit is an unusual beast that is peculiar to the u. K. We saw joe biden commenting overnight, saying people in the u. S. Will paint this as the show for the farleft and what happens if you try to push too far to the left. There are questions about how farleft the democrats are going in the states. Is that the way to get voters back from the right . Francine when our markets on a tear like this . We dont know the future relationship between the u. K. And e. U. Thefrey if you look at u. K. Specific basis, they are outperforming. Are probably more to a sign of the chinau. S. , and bearing in mind that matters to the u. K. As well. The u. K. Is important leverage to Global Growth. Francine do they need to choose between having a Good Relationship with the e. U. Or u. S. . Geoffrey Boris Johnson has stated he wants both. This is where we move towards pricing out uncertainty and pricing in some uncertainty certainty. Tom buy the rumor, sell the news. It today the news or the rumor of a better United Kingdom to come, better gdp, animal spirit, investment . Geoffrey it will be the latter and the Prime Minister will have to prove whether he can deliver. He will have to hit the ground running, deliver a budget as what that he can, and framework is like. Replace Governor Carney . Thefrey if you put in that size of the majority is so large , Boris Johnson needs to appoint a boe governor who is gung ho about brexit. Others are saying, Monetary Policy globally is irrelevant so that is important, but it will all be fiscal. Francine when will we find out what the new tory party is . We are looking at Boris Johnson with a new slogan behind, trying to unify the country. How difficult will that be to have the funding they promised . Rosalind they are saying you get out of the e. U. And all the money that went there will come back. Basic services that people in the u. K. Feel have been deteriorating for years. The brexit has been a pointless years, has been divisive and brought out the worst in people arguing over there dinner tables over everything from migration to jobs. Happen overnight because Boris Johnson has a decent majority. It gives him a chance to get stuff through, but healing that divide is another question. Francine can he ignore the erg now . Rosalind possibly. He will get his brexit deal through parliament, but the key thing is negotiations after that. Have 11 months of important negotiations with the e. U. And that will be the test of how far he can push it in terms of what concessions he will give. Mathieson,osalind and joining us as well geoffrey yu of ubs. We talk a lot more about the business side and what this election means. We will be speaking to Carolyn Fairbairn next. She is next. Bloomberg surveillance, from the green in westminster. Not just another election, absolutely extraordinary, with parallels to 1945, to the thatcher election, and this extraordinary statement by the people of the United Kingdom. Viviana we begin with the bloomberg scoop, donald trump approving an interim trade deal with china that would avert sundays introduction of tariffs on chinese products. The deal includes a promise from beijing to buy more American Farm goods. Negotiators have to hammer out the legal text. Later this morning, the house is expected to be one step closer to impeaching President Trump, the house voting on the articles of impeachment. That sets the stage for a debate and vote on the house floor, democrats turning back republicans attempt to amend the articles. European leaders vowing to eliminate that Carbon Emissions. It will require a radical aerhaul of the economy and straddle global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Francine thank you so much. We are looking at the reaction this morning to the landslide win of the tory party in the ,. K. To the landslide win the tory party in the u. K. , and the royal bank of scotland. We are joined by Carolyn Fairbairn and still with us is geoffrey yu. Great to have you. What do businesses want more clarity on . Carolyn they have got some clarity, a huge day for business because the layers they are beginning to peel back. We think we know the brexit timetable and think we have transition until december, but we urge for clarity on there will not be another no deal brexit next year, and the direction of travel. Francine do we have any insight into what Boris Johnson intends to do with brexit, what kind of deal he wants, and whether he will extend the transition . Carolyn that is a big unknown and the clues are not there to be read. With the mandate, the opportunity could be there to do something powerful on brexit to bring the country together on something that is business friendly, leave ideology in 2019, and get back to pragmatic business apology. maybe it is manchester my map is not that good of the United Kingdom you can do fiscal stimulus through the g function. You are in charge of the eye function. Johnson Prime Minister to direct investment that helps kensington . Carolyn five out of six of the last have declined business investment. Builds confidence, you can do that in three ways. Take the no deal risk off the table. Also, do the things that Business Needs to grow. Innovation across the country, not just in the south, a skills plan that gets apprenticeships flowing. Tom what about investment tax treatment for people who gave him his majority . Carolyn you could start looking at fiscal stimulus, but we have to have an economy that has the basics to inflate. ,nfrastructure will be critical connecting the cities of the northern u. K. That have felt left behind. Francine what about the city of london . Financial services were not on the priority in terms of renegotiation. Will they be now . Carolyn they have been an absent voice and they have to come back centerstage. Services and the city is vital. Boris johnson could be clear about the value he places on the city. After the financial crash, he was one of the voices who spoke up for the city. Tom give us a briefing for fiscal space. Ubs is acclaimed on topics like this. Does the United Kingdom have fiscal space . Geoffrey it certainly does. All governments do. I. Mentioned g and net exports will start to drag. The u. K. Is an open economy so you put money in peoples pockets and net at ports will imports will go up. Tom algebra at westminster, this is too much. If she gets her business investments, does it make investment pop . Geoffrey consumption pops, but for whom . Does it help the u. K. . It is not like the u. S. Where the consumption will stay in the u. S. Target areas where the multiplier is high in the u. K. Tom geoffrey yu and Carolyn Fairbairn on this most historic moment for the United Kingdom. Let me look at some data. The tradeoff announcement yesterday by the president , there has been mystery of how beijing will respond, but all in all that move continues today. Dow futures. I am on the doubt 29,000 watch. Maybe not. Sterling higher. This is bloomberg. Good morning, everyone, bloomberg surveillance. A historic election in the United Kingdom, and the story of trade. My morning must read from singapore, bloomberg opinion, tough language for the president. Of hopee on the brink for a trade deal with the u. S. And china. It was not worth it. Nation relief when a stops punching itself in the face. Better if it had not started. There is nothing in the tentative deal that wouldnt have existed in the absence of the past two years of wrangling. We synthesize it with geoffrey yu and folding in the greater economy as well. That is tough language. Is there a phase two . Nextrey phase two in the 10, 20 years, Something Like that. Decoupling is mentioned so often and that is fundamental. We can have a phase one deal on the trade side and china is realizing selfreliance. See numerous examples. The model for chinas growth for how the state is involved, that will not change. Mohamed elerian on game game theory is the for the chinese now . Geoffrey from chinas view, not just the u. S. Point of view, but how the west views china, how the economic relationship will evolve, just probably play a different game. That is their way of looking at it, change the rules when you think you cannot win under the existing rules. Tom or play with another player. Geoffrey find new players. Remake worldime to institutions. Francine are you telling us markets are on a tear but if we dont get anything after a phase one deal we will have volatility in 2020 . Geoffrey volatility will be in place and i dont think it is an outright cost. It is the opportunity cost. Globalization, the ongoing intertwining of supply chains, where will Global Growth be . There will be diversions. Francine what does that mean for the fed . Geoffrey the uncertainty has been pushed away so the pressure for the fed is to cut rates further. Will we get a massive investment boostn the u. S. Or get in the u. S. Or get gdp growth . Tom the dollar call is different from that at the fx desk. What is your dollar call for those deploying assets . Geoffrey we think the dollar has peaked for the next decade. Now is the time to start shorting dollars, the start of a bear cycle. We are starting to look for opportunities moving away. Tom where is the pear that make sense . Geoffrey take dollar out of the equation altogether. Australian dollar has become a funding currency, much lower yielding than the u. S. Dollar. Francine where do you see value worldwide . Can anything be done in japan . Geoffrey japan has had a rough time and we are looking for investors to own japan unhedged. You dont worry about the yen and equities correlation. What we are seeing is demographics could be at the forefront of innovation, so the massive view rather than the the cyclical view. Has been extraordinary, geoffrey yu continues with us. We saw earlier Prime Minister johnson off for attendance with the queen. We tried to give you good conversation this morning from a crosssection of United Kingdom society. Oning up, sir Martin Sorrell the midlands and the new conservatives. 1. 3334 andgher at equity futures much higher. [ electrical buzzing ] [ dramatic music ] ahhhh ahhhh elliott. You came back with this mandate and majority, we will at last be able to do what . Get brexit done. Andrexit has so polarized divided debate within this country, it has overridden so much of a normal political debate. This election means getting brexit done is now the irreversible, and arguable decision of the british people. Justicessues of social and needs of people will not go away just because brexit is dealt with in the way which Boris Johnson presumably plans to deal with it. You the people of this country, you voted to be Carbon Neutral by 2050 and we will do it. Byn neutral. Becor i will not lead the party and a general election campaign. Dread andesults bring dismay and people are looking for hope. We are looking for the next steps. We will see if it is possible for the British Parliament to accept the Withdrawal Agreement to take a decision. Butets get brexit done, first, lets get breakfast done. Tom extraordinary images from an extraordinary election. We certainly heard from our guests today, conversations that have a direct impact on the politics forward to november 2020 in the United States. A special edition of bloomberg surveillance on television and radio. Trevor greece on will be with us us. Reetham will be with also philippe lamberts. A busy 10 downing street earlier. Lets listen to nejra cehic. Nejra breakfast as done is done and we are heading toward lunch. We are expecting Boris Johnson to return to number 10, having visited Buckingham Palace and the queen. We are waiting with baited breath, not necessarily expecting cabinet announcements. They will likely come on monday, but after the landslide victory for the conservatives, the first big question is how is boris going to drive brexit forward . Yes, the Withdrawal Agreement will be tied up by january 31, but will he be able to find a trade deal with the e. U. In 11 months or will they need to extend . How close will the relationship between the u. K. And e. U. Be . For borisf challenges johnson are the Scottish National party throwing up questions about another possible referendum on Scottish Independence. Another question is what will happen with the spending plans. They were vague and the tory manifesto. Will we see any kind of unleashing to lift growth . What does this mean for the bank of england governor . They said if the tories won the election they would looking does they would look for a replacement for mark carney they would look for a replacement for mark carney quickly. Francine Boris Johnson just leaving Buckingham Palace after having a couple of minutes with the queen. Lets go to brussels and maria tadeo. From the e. U. Perspective, they have a Prime Minister who is more legitimate because you would think he would have parliament behind him. Do they have any idea of his intention with brexit after the Withdrawal Agreement has passed . Maria good morning. Now they are operating on the basis that that was a clear yes to getting brexit done, and the Withdrawal Agreement will be put through quickly. E. U. K. Will leave the january 2020 with the deal, always the best case for the e. U. Moving to the trade relationship, europeans will tell you this is central for them. They want to get this quickly done in a way that is fair and balanced for everyone. Two things are emerging, the e. U. Does not want to be undercut by the u. K. They do not want to be undercut when it comes to attracting business, capital, taxes. They have questions on the timing Going Forward, because the Prime Minister will have to make a decision to ask for more time to negotiated trade deal, or get it done in 11 months. Bigeuropeans feel it is so that this is optimistic and are not sure it will be done in a year. Francine thank you both for joining us. For perspective on business, what it means for investment coming into the u. K. , joining us is sir Martin Sorrell. Still with us on the green is geoffrey yu. Investments, at what do businesses like yours want to hear from the Prime Minister . Sir martin that was a second referendum and it is clear that getting brexit done, that was a two second commercial and it is very effective in todays digital environment. The other thing was a rejection sm and what the labour party stood for. What i am looking for and businesses are looking for is a britain that will be open for business. I describe it as a singapore on steroids, a low regulation, low , andurisdiction, a rock will not just be focused on a welcoming environment for the internet companies. It should be a welcoming environment for them, but a focus on education, mobility, transformation, and infrastructure. Francine what kind of brexit are we getting done . , to remove on brexit the uncertainty around the decision around brexit, the uncertainty remains on the trade deal. You posed the question whether this could be done within a year. It is unlikely and possibly there will be an extension. There is always a risk of no deal, but it will take a long time. This transition in the u. K. The americasfrom and africa and the middle east, that transition will take a long time. The country has spoken. The electorate have said what they want to happen and now we need to get on with it. Er, passionate, but the democracy has spoken. We are a company that started a year ago from zero and we have a billion dollar plus market cap. This is a big opportunity. Thehe government backs digital economy, which the Prime Minister did say in his opening speech, it will be a positive environment for us. Tom right. We need to interrupt sir Martin Sorrell, a very important financial headline. It is that time of year when we start learning about the consideration of bonuses on wall street, Deutsche Bank announcing a serious cut in their bonus structure, 20 under consideration. With mr. Sewing, it has been a challenge. We continue with sir Martin Sorrell. I want to talk about your childhood, before you were fancy. It is about people that voted for Prime Minister johnson who arent used to it. What does a Prime Minister need to do to make permanent conservatives out of disaffected labourites . Sir martin he has managed to unite the nation to a far greater degree than the tory party did before. I dont think you can talk about one nation, because scotland voted in a different way, and we are seeing in parts of southern england around london a different point of view. Overall, the electorate were clear about what needs to happen, and traditional labour voters under tony blair, that was a majority of 25000 and last night was 5000, a quite amazing turnaround. We have been here before. Rejects an country extreme left position, and the labour party that is to be successful in the future has to shift to the center again. It is a rerun and my mind of tony blair and patterson, and they need to move it to the center. That may happen. ,he early signs are not good given what Jeremy Corbyn said about staying on. We will see whether that happens and whether momentum retains its momentum. Successful,rally they have to shift to the center. What do the candidates in the United States learn from this election . What do the left learn from the collapse of mr. Corbin corbyn . Sir martin it is dangerous to apply those principles cross borders sometimes, but it is a clear message to President Trump and probably increases the likelihood that he will get reelected, or draw election to the attention to the greater possibility of that. It is a single warning to the left of the democratic already that you can push it too far. In thetake business United States, democratic businessman, will they vote for Elizabeth Warren with her program . There are similarities to Jeremy Corbyns program, and the answer is a resounding no, so rather than vote for Elizabeth Warren or bernie sanders, they will vote for the incumbent president , whether you like it or not. President trump been good for business. Tom thank you so much. We greatly appreciate it. We will see you very soon. Sir Martin Thanks very much. Tom thank you. We should point out as we speak of american politics, Michael Bloomberg is a candidate for the democratic nomination, the founder of bloomberg lp and Bloomberg Television and bloomberg radio. Francine up next, tim bale. We will have plenty more on the u. K. General election 2019 and we will talk about brexit and Prime Minister johnson. This is bloomberg. Yes is bloomberg thislance tom taman surveillance, tom and francine from westminster. Boris johnson just getting back to number 10 from speaking with the queen. Still with us is geoffrey yu. The do we know about intention of Boris Johnson in dealing with the e. U. After the Withdrawal Agreement . Tim we know Boris Johnson has given himself an impossibly tight deadline. He basically has to decide by the first of july whether that is complete, which seems unlikely, or whether to west for an extension. His other option is to go for a barebones deal fleshed out over the coming years. Switched to nationalism and i dont know where the customs borders will be. Will it change did it change last night . Tim i do not think it will be. The border is drawn down the iris see. See sea. H tom do they rename it . Tim it is whether there will be customs checks procedures and whether those will damage trade through parts of the u. K. Francine when you look at the next bank of england governor, as soon as we have Election Results, the probability of a rate cut by the bank of england was half. Any insight into who it will be . Geoffrey that is more uncertainty. We are seeing many names. Does the u. K. Need a Monetary Policy specialist or a regulator . These debates are moving forward. Francine does the u. K. Stay together . Tim good question. There will be a huge demand in scotland for a second independence referendum. Win insnp goes on to 2021 and can show there is opinion poll evidence that scottish people want a second referendum, it will be difficult for Boris Johnson to deny them that chance. He does not want to get into a Spain Catalonia decision. Up this morning, for those in america, profoundly important results in Northern Ireland as well. It is a different Northern Ireland. Have a gooddkar night and is there a way forward to a unified ireland . Tim it has got close but not that close. There are many politicians in the republic who might Pay Lip Service to the idea of a united ireland. Whether they want one in the short to mediumterm is a good question. Francine does that, i dont know if free cow the market is right freak out the market is the right word, but does it discombobulated the market . Cross thate will bridge when we get there. Northern ireland is a share in economy and is probably less significant. We have resolved a few questions, many more on the way. Scotlandou think about , scotland breaking away from the u. K. Has defends implications defense and security implications. Francine well we see a different Prime Minister johnson . Tim that will be interesting, because he created a cabinet that was designed to impress people who voted for Nigel Farages brexit party. If you bring back some more centrist tories, that will establish the fact that he wants to take the party into a more pragmatic direction. This moment,ory of what lessons can the left in the United States learn from the collapse of the left ear . It has come up a few times left here . It has come up a few times. Tim they have to pick a credibilityo has with floating voters and not just the democrats biggest fans. They need to offer a platform that is focused rather than give a general manifesto. Tom Michael Bloomberg is a candidate for the democratic nomination, founder of bloomberg lp and this television and radio station, as we consider the lessons for those. Francine to continue driving the conversation on the future of the United Kingdom, our election coverage continues. Greetham will be joining tom keene and jonathan ferro. This is bloomberg surveillance. , looking at the landslide victory for Boris Johnson. Assets up across the board, the pound gaining the most since 2017, and british stocks gaining. Normally you would not see this as they have a traditionally inverse correlation, but the pound is up 1. 3 . 4 , the biggest gain since 2010. Globally, we have trade developments and specifically the bloomberg story overnight that donald trump has signed onto to a phase one agreement, boosting equity indexes all around europe. We see gains in terms of u. S. Futures as well. It will be a risk on day. Barrelhing through 60 a , nymex, wti. It has pushed through 60 a barrel on optimism for a phase one trade agreement. All risk assets are rising. Investors feel comfortable not to sell off bonds or safe haven assets. Surveillance continues on the radio with tom keene and jonathan ferro. 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. Jonathan from westminster, good afternoon. After a landslide victory Boris Johnsons conservative party, risks received worldwide. Weve got to talk about a trade story and a big election here in the United Kingdom. Good morning to you all in new york and worldwide. Im jonathan ferro, alongside tom keene. What a night. Jonathan what a night tom what a night, what a morning. This is a historic moment. We welcome all of you worldwide. What have we seen in the last hour . We saw the trade minister go to see the queen. Youve done that many times, right . Like in the john adams movie, he backs out when hes done. We may see a changed cabinet. Jonathan we might see some subtle shifts. Then its basically full speed ahead