Transcripts For BLOOMBERG Bloomberg Daybreak Americas 20240713

To work out what the future relationship looks like between the United Kingdom and European Union. Tom we welcome all of you. Good morning on Bloomberg Radio in boston, new york, and washington. Very Early Morning in san francisco. I would suggest to our sirius xm audience, as well as all worldwide tv, what is important in this changed United Kingdom, it can actually drift over to the 2020 election. Jonathan i think you are wondering, imagine a republican president winning massachusetts, a republican president winning california. That is what happened basically, with the conservatives taking out. The red wall, so to speak. They made some big wins. Tom much to speak up today, but right now on television and radio, we need to go to 10 downing street and our nejra cehic. We just saw that door on 10 downing street open as Boris Johnson came back from his meeting with the queen. He entered 10 downing street, he was greeted with cheers from his staff inside. It was a landslide victory for him and the conservative party last night, the biggest majority since Margaret Thatcher in 1987. Contrast that to the worst result for labour since world war ii. So what does Boris Johnson do now . Monday is when we are likely to get some cabinet announcements. They may only be small ones. Then the big question becomes what happens to the trading relationship between the u. K. And the eu. Agreementawal will be by january 31, but will they be able to find a trade agreement within the next 12 months . Jonathan trade will be front and center. Lets reflect just for a moment, the Prime Minister has made a big win in england. The conservatives have had big wins in england. This is a divided kingdom. What does that mean for the coming 12 months, the coming five years . Nejra you point to another challenge for Boris Johnson as he celebrates today the victory from last night. Indeed, big wins for the Scottish National party, that is likely to bring to the forefront the possibility of another referendum on scottish independence. That is something Boris Johnson is going to have to contend with at some point in the next 12 months, even if you want to push it aside today. Of course, you and tom were also pointing to the other thorn in his side, which could be Northern Ireland, where the results might bring another question around a referendum on unity there. Those are two big questions. In terms of unity elsewhere, you pointed to the crumbling of the red wall in Northern England, an area that was traditionally a labour heartland. Some areas they voted for conservatives for the first time ever, but it wasnt just in Northern England where we saw that shift. It was also in wales. Northern england and wales really gave that lift and fed into the conservative victory we saw last night. Stay close. We will catch up with you throughout the day as we get more news here in westminster, and much more from the Prime Minister a little later as well. Here in westminster, the heart of politics in the United Kingdom, Trevor Greetham, Royal London Asset management head of mathesonet, and roslyn of bloomberg alongside tom and i. What is the religion should between the u. K. And the eu . Reporter Boris Johnson will get his brexit deal through parliament, and probably pretty quickly. Then he has 11 months to negotiate a trade deal. Beingacticalities of outside the eu. Hes got to the end of 2022 do that. That is when we get into the really painful part, to be on it. To be honest. Parts of his party may not want to give so much stuff up. He has to navigate that because if he gets to the end of the year, hes other got a crash out and we are back to no deal, or hes got to negotiate deal except a will to brussels and his own party. Tom he has to write a check to the European Union, right . When do they write the check to leave . Is that still part of the mix . Obviously, the eu was saying if you want to leave, you owe us an awful lot of money. But that is really on the back burner, to be honest. They bring that out every now and then lay it on the table. Either way, this is going to hurt at some point. They really want to get brexit sorted, the trade deal sorted, so once the uncertainty to end. They just wanted to stop. Tom did it end yesterday . What do you do now . Do you reallocate . Trevor we didnt change very much, actually. You had a big jump up in the share prices of utilities, so the midcap sector in the u. K. Jumped 5 overnight, but the large cap sector is only up a bit more than 1 , really following a strong finish on wall street last night because of the china deal news. Sterling went up 2 . Gilt yields have gone up five basis points. Hardly a change. Tom theres an etf being developed for a january rollout. Jonathan will you reallocate that . People talk about that a little later. Risk seems torbyn be the story. Pricing out 2020, lets talk about that. We need to work out the u. K. And the eu and what these negotiations look like next year. We have until the middle of the year for the Prime Minister to make a decision whether to kick the can down the road, and how long to begin negotiations within the European Union. It is in his manifesto not to that not to do that. Will he do that . Trevor he might. Lot fromto diverge a the rulebook. It is hard to negotiate that puts a. Could end up with something that is so stripped down, it is essentially no deal, and that would damage the economy. Second option is you go back to the center. End up saying, actually, we are not going to diverge as much from the european rulebook so we can get things done in december 2020, or you delay. But he has such a big majority, he doesnt have to follow the hardliners in his party anymore. He can take his time, and the markets can react as things develop. Jonathan i just wonder, yes, he has breathing room, but we dont know what hes going to do with that breathing room. We dont know if that means the Prime Minister is going to go for a harder brexit because he can or a softer brexit because he can. When you look at the coverage in the United Kingdom, putting much everyone gets asked the same question. What kind of brexit does the premise to want . I dont know. Do you know . All guessingare because Boris Johnson is a man of many personalities. Boris the campaigner, boris the mayor, boris the Prime Minister. The question is, does he come back to the center . Morninghis words this that he sees the need for unity, to repair the trust. It knowledges weve been arguing for the sake of arguing for too long. He does need to show those labour votes he brought over that he means that. What he says on any given day is anybodys guess. Here is of the reaches a labour party that, by every report ive seen, has been destroyed. You can go back to david lloyd george, and forget about the history of it. What is the monday story for labour . How do they regroup . Rosalind thats a good question. Jerry miracle written can stay on until matt Jeremy Corbyn can stay on until may of next year. Tom impossible. Rosalind he could take some time to reflect. They will have a protracted leadership process. You can expect that to be painful. Jonathan in addition, there might be an assumption out there that the left wing politics of Jeremy Corbyn dont work, so labour will change. I wonder if that is a fact. We sat here thinking that left wing politics didnt work, we need something more central. We didnt get it. We went further to the left. How convinced are you that you end up going back towards the center in the labour party . Inalind what he presented 2017 was not as left wing as it was this time around, and that resonated. He got pretty close to theresa may. Thinking he went too far to the left this time. There is a feeling that they are echoing concerns of british people the health care, education, crime, you name it, theres a real concerns. Theres concern about the nhs. It does resonate still. Jonathan before we let you go, your guide on the day ahead. What you looking for today . Rosalind we are expect and Jeremy Corbyn to talk pretty soon. Nicholas turgeon is also about to Nicola Sturgeon is also about to speak. We are expecting parliament, of course, to come back early next week. Tom this will be fascinating. Gradually appreciate it greatly appreciate it. This is fun. On television and radio here, we knew it would be news, but it really rebounds over to the United States. With the immediately president s response. We can reflect on what it means for u. S. Politics as well, but we began the week of staring down the barrel at risk event on top of risk event. As far as the u. K. Is concerned, that is one risk event down. And it looks like the u. S. China risk is diminishing. We havent heard a word from the chinese, and i think that is the story throughout the day. For markets worldwide come the story is pretty clear. Equities, alltime highs, for Global Equities in the bond market, it would your bond market. Coming up on this special edition of bloomberg surveillance, a whole lot more fromdon, england westminster, england. Viviana you are watching a special edition of bloomberg surveillance. We begin with a bloomberg scoop. President donald trump approving an interim trade deal with china. The agreement would avert sundays introduction of tariffs on chinese products. The deal into his a promise from beijing to buy more American Farm goods. Negotiators still have to hammer out the legal text of this agreement. Later today, the u. S. House expected to be one step closer to impeaching President Trump. This morning, the House Judiciary Committee votes on the two articles of impeachment. That would set the stage next week for a debate and vote on the house floor. Democrats turning back republican attempts to amend the articles. By the middle of the century, European Union leaders vowing to eliminate net carbon emissions. It would require a radical overhaul in the economy. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. It was an extraordinary evening last night, first with a shock of the announcement at 10 00 p. M. , and then on the results and the voices of many politicians. Lets listen. With this mandate pm johnson with this mandate and this majority, we will be able to do what . Get brexit done. Much ofs overridden so a normal political debate. Pm johnson this election means that getting brexit done is now the irrefutable, irresistible, unarguable decision of the british people. Mr. Corbyn the needs of people will not go away just because brexit is dealt with in the way that Boris Johnson presumably planes to deal with it at the moment. Pm johnson you voted to be Carbon Neutral in this election. You voted to be Carbon Neutral by 2050, and we will do it. You also voted to be corbyn december. People are looking for hope. We are waiting for the next steps. We will see if it is possible for the British Parliament to accept the Withdrawal Agreement and to take a decision. Pm johnson lets get brexit done come about first, lets get brexit done, but first, lets get breakfast done. Jonathan welcome, from westminster england, alongside tom keene. Im Jonathan Ferro. A landslide for the Prime Minister, a result weve not seen for the conservative party since the late 1980s. Tom not only a landslide for the Prime Minister, but for labour, this goes back to 1935 and a crushing depression defeat for stanley baldwin. It was a grim day for labour. Weve got much to talk about. There are many themes to speak of. You could go on and on about the domestic politics, but theres an international reach, and certainly that moves across the english channel. Is with lamberts belgium, and he joins us now. Thank you so much. It is wonderful for you to be with us today. What does russells do in the coming days . Do they listen to the Prime Minister, do they reach out, or do they wait to see what the plan is . Rosalind now that we have philippe now that we have clarity from the British Government, it is not that we are happy about the u. K. Leaving, but at least we will have an orderly withdrawal. There will be a majority in the European Parliament to ratify, so indeed, brexit will happen on january 31. The question is what comes next. It is the British Government that has to make up its mind. Government once a very deep and profound access to the single market, and that will of britishnment legislation with the eus, or they want to systematically undercut eu legislation, and then Market Access will not be there. But that is a contradiction that the buddhist government must resolve that the British Government must resolve. We are not out of the woods yet, but the first hurdle has been cleared. Tom one of the claritys in the selection immediately last night was the resounding victory of the Scottish National party. What will be the new relationship of brussels with scotland . Happy aboutll, i am their victory because these people are part of my group in the European Parliament. The question now is whether they an independence referendum i scotland. But if they do, i would guess that they would reapply to the European Union, but at the moment, the interlocutor is the British Government led by Boris Johnson, so Boris Johnson is the person we need to engage with. Jonathan at the moment, it is not clear. In fact, it doesnt look like it at all that this Prime Minister would offer them a referendum anytime soon. The concerned part has beens going into next year is to get our heads around the deadline, the process to come to an agreement between the eu and the u. K. In the middle of next year, that is when the United Kingdom would have to a form you and others in the eu that they would like an extension. How hard is that deadline, philippe . Hardppe it is absolutely because it is written in the Withdrawal Agreement that is going to be ratified, so it is legally binding. It is not like you can circumvent it in any way. Is written in the treaty for the end of the transition period unless theyer, so ask for an extension, that is what is going to happen. Investors can take a cue from previous statements by Boris Johnson. He said he would rather diane a ditch than requesting an extension to the brexit deadline would rather die in a ditch than requesting an extension to the brexit deadline. I would imagine a Prime Minister would do what needs to be done to secure his position, so i think the pressure will come avoidwo sides in order to a cliffs edge brexit at the end of 2020. The first side will be the Business Community which wants to preserve access to the European Union. Theres notorious from the fort or labourheld constituencies that would want to undercut social legislation, environmental legislation, and the rest of it. The pressure on Boris Johnson to ask for an extension in order to secure access to the eu market will be very strong indeed. Thank you so, much. Philippe lamberts with us from brussels today. Trevor keith from Trevor Greetham is with us from broil london asset management. Did the city from Royal London Asset management. Did the city change last night . There was a huge lift of uncertainty, but can there be a new round of spirits for the Financial System and the city . Trevor there are two elements to the uncertainty. One is the element of nationalization. That has been removed because the labour party lost so crushingly. The fear of things like financial transaction taxes has also been lifted. There are lots of things which would have been Labour Party Policy if they were heading a coalition or minority government, which is not going to happen. On the other hand, brexit uncertainty is still very much with us, and we dont know whether we are going to have something akin to no deal at the end of 2020 or something much softer. Jonathan you can hear some of toms friends have just arrived. [laughter] tom i didnt pick up the bill last night. How does trade fold into this . Issue . N emerging 2020 trevor i think the key question is how close a relationship does johnson want with the European Union and the single market, or the u. S. Tom or frankly, the rest of the world. Trevor the impact of new trade deals for the rest of the world is estimated less than 0. 5 gdp when theresa mays treasury published their reports. Leaving the eu without a deal would amount to 8 . Jonathan you heard what the mep said. We have a hard deadline in the middle of next year. If you want to extend, thats when you got to ask for it. We heard in the Prime Ministers manifesto that they wont be doing that. Six months. Trevor that is why people have not unleashed investment. We are not getting the Labour Government we might have got, but we still dont know if it is going to be a strippeddown trade agreement or something more like theresa mays agreement. Johnson to decide what he wants to do because hes got the luxury of a large majority. He will want to be something that brings the country together. It is a resounding victory in a landslide in a first past the 64. 5 ofem, but only people voted to get by accident in the selection. Time now for your Bloomberg Business flash. Deutsche bank is considering steep cuts to bonuses. Bloomberg has learned discretionary compensation could be cut as much as 20 . In a radical restructuring, deutsche ceo christian sewing is trying to eliminate billions of dollars of costs. In the battle for qantas long range business, airbus wins, boeing is the loser. The airline picking airbus to provide services that stretch halfway around the world. Qantas selected the airbus over the boeing 777 max. Sydney andly between new york and london. That is your Bloomberg Business flash. This is bloomberg. Tom good morning, everyone. This is bloomberg surveillance on radio, on television worldwide. Im tom keene at westminster. With me, jon ferro. It is just extraordinary how the story is advancing within 15 hours. Jonathan already trying to understand what the Prime Minister does with new breathing room. No consensus going into next year, tom. Tom we will see. Please stay with us through the morning as we see much more from the United Kingdom. The Prime Minister has met with the queen. This is bloomberg. Good morning. 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 good morning, everyone. This is a special edition of bloomberg surveillance. We knew it would be news of the election, but it is truly history. Nx ordinary outcome, not only the victory for Prime Minister johnson, but also the crushing forfor mr. Corbym mr. Corbyn. Jonathan you have to thick about a total rejection of Jeremy Corbyn in the labour party. Tom i thought the results from Northern Ireland were extraordinary. One of the highlights was last night, jon ferro with ian bremmer, and dr. Bremmer really speaking about the american ramifications and lessons from what weve seen with the collapse of mr. Corbyn in the United Kingdom. No collapse today at 10 downing street. Smiles and enthusiasm as mr. Johnson went to visit the queen. Heres our nejra cehic. Nejra when Boris Johnson returned, he was greeted by cheers as he entered 10 downing street. He will be stepping out to address reporters here later this afternoon. Hes already given a victory speech earlier this morning after that historic victory, the best results for the conservatives since 1987 and Margaret Thatcher. In that speech, he reiterated his message a little tongueincheek about getting brexit done come but also talked about a one Nation Conservative Party, talked about uniting the country, and made a nod to the constituents and the people in the u. K. That really delivered this victory for johnson from the heartland for labour in Northern England, but also in wales. As you were saying, it was a stunning defeat for Jeremy Corbyn, the labour party having its worst defeat since world war ii. For Boris Johnson, even though he might be celebrating today, still a lot of questions ahead, the big one being what kind of brexit is he going to deliver, and will he be able, after the Withdrawal Agreement gets passed january 31, to get a trade agreement with the eu in the 11 , or willft in 2020 they ask for an extension on july 1 . They said in their manifesto they wouldnt come up but it is still a question. Theres also the victory for the Scottish National party and the question that raises about disunity in the United Kingdom and a potential referendum on scottish independence. Jonathan two things we need clarity on in the coming months. One thing we do have clarity on, the efforts to restrain the referendum from 2016 have failed. How has brussels reacted to the election . Maria the word here is really relief. The europeans, it is not that they are really liking Boris Johnson or feel that he is great now. It is just the fact that he has a big majority and is going ahead with that vote. They now believe the u. K. Will leave with a deal, and that is always what they said they wanted. They did not want chaos. They wanted that break the deal to go through. But this morning, the conversation has already shifted to the trade deal. We are going to your from Angela Merkel and Emmanuel Macron shortly. Theres two things the europeans are Crystal Clear about. They want this relationship to be fair. They do not want to be undercut by a u. K. That leaves the European Union and plays by different rules. They do not want to be undercut by trade and taxes, and they think that is perhaps the way Boris Johnson is going to go. Secondly, the timeline Going Forward, this is a massive trade deal. The idea that we could get this done in a year, the europeans feel that is not entirely optimistic, and they do feel there is a question as to whether or not they will need a extension for this. Jonathan maria tadeo out of brussels and at downing street, special thanks to nejra cehic as well. Joining us is ellen wager from from. K. Is alan wager the u. K. In a changing europe, alongside Trevor Greetham. We need to try to get a little the u. K. Arity on what wants. Alan hugegot a manifesto, but a amount of Political Capital now. People in this party are saying he could just forget about the manifest of commitment nasty manifesto commitment when it gets to june, say get about the manifesto commitment when it gets to june. That would give him a lot of scope to maneuver. Boris johnson is a very flexible and adaptable politician. That is the key to his strength. Europe,is a changing isnt it . Alan i think he would probably like to flit back to the one nation, center ground. Tom but it is not one nation. He got crushed in scotland. Northern ireland shockingly unique this morning. It is not one nation, is it . Strategy is focusing on the United Kingdom because the only thing that could really derail Boris Johnson in the next five years is another independence referendum in scotland, and losing that, his position then would be untenable. Thats the only thing that would stop five years of strong Boris Johnson government. Jonathan sterling bid, the pound stronger, utilities really written higher in the United Kingdom. We talked about the midcaps and banks as well. The perception over the last three years is that there is this wall of capital waiting to come back into the u. K. Once we resolve some of these issues. Have we resolved those issues to the extent that capital starts to come back into the u. K. . Trevor youve seen the pound move up about 2 on the exit poll. Its given a path of gains already. It is not a very big move. The markets were expecting a johnson majority, if not this big. I think there will be money coming back in, but i think the degree of that investment pickup is going to be limited. Tom this is critical. This is the heart of the matter. Trevor, youve been doing this for years, not only applying it to Money Management and Asset Allocation come about thinking about how money flows. Thedo you flow money to labour areas of the nation that does voted for Boris Johnson . Trevor fiscal policy. If we do go out with a barebones trade deal at they lived next year, johnson wants to get that behind them so he can move to other things. What is the fiscal policy that helps . Trevor youve got to have increased Government Spending. Maybe some targeted tax cuts. I think we learned that all of the parties were splurging the cash in their manifestoes, and gilt market didnt blink. Theres much more capacity for borrowing and spending. Jonathan the conservative party has a new constituency they didnt have for much of the last 30 years. We are talking about that, for much of the past 30 years, the conservative party were not in. Tom im a foreigner here. Hawks in no deficit washington. Is that what we are going to see here . Jonathan well, the gilt market is not there. Should it be . End, the gilt market will respond more to rate expectations and inflation expectations. You cant get a good inflation going at the moment. Government can load up on debt. If china comes firing back, Commodity Prices rising, inflation goes up, then there is a reckoning. Alan the question is whether or not Boris Johnson tries to square the circle. Hes got this coalition now. Whether he tries to double down on the social populism hes won this election with. Tom lets come back. Want to come back in advance that point. Alan wager for us, researcher at u. K. In a changing europe. Trevor greetham with us of Royal London Asset management. Weve got much more on this special edition of bloomberg surveillance. Benchie with us ritchie will be with us, everything asset management, and Maria Demertzis of bruegel. This is bloomberg come on television and radio. This is bloomberg, on television and radio. Jonathan viviana this is a special edition of bloomberg surveillance. Weve learned President Donald Trump signed off on an agreement with beijing that averts sundays introduction of a new wave of tariffs on chinese goods. The agreement also includes chinas promise to buy more u. S. Farm products, but it is not a completely done deal. The legal text still has to be finalized. The u. S. House Judiciary Committee sending a final vote of impeachment this morning. Democrats rejecting republican attempts to water down the accusations against President Trump. Assuming the articles pass, next week the house would the full house would take on impeachment. The spending bill must be passed by both houses congress by next friday. The president must also sign them. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. Jonathan from westminster, england, this is bloomberg surveillance. Alongside tom keene, im Jonathan Ferro. Special coverage on the british election, and we will get you up to speed on the trade story in the United States as well. For Prime Minister Boris Johnson, a heavy result for him. This is a happy result for him. This is what the europeans had to say. I would like to congratulate Prime Minister Boris Johnson for his victory. Possible as soon as vote by the British Parliament on the Withdrawal Agreement. It is important to us that clarity is soonest possible. An agreement guarantees no hard border between north and south, guarantees protection of the, trouble area, and the fact that british and irish Citizen Rights will be protected. I am keen to work very hard with Prime Minister johnson on getting the executive assembly up and running again in Northern Ireland. Boris won the election, the know it is time for delivery. Jonathan this is a special edition of bloomberg surveillance on television and on radio from westminster, for our audience worldwide. Alongside tom keene, im Jonathan Ferro. What a day already in the United Kingdom. Tom the Prime Minister going to meet with the queen, coming back. What is interesting is you have to think it is going to be a bit of a quiet weekend. Theres got to be some real discussion about the new conservatives, the new tory, and the new Boris Johnson. Jonathan we go from westminster to our headquarters, where in our studio, Therese Rafael is standing by, bloomberg colonist bloomberg columnist. Therese i dont think it is controversial to say that jeremy historically unpopular candidate. He ran a campaign that just did not resonate with voters. It didnt resonate on a few levels. On the economic policy, he just threw too much at it. It was such a radical economic agenda that most voters didnt find it credible. The antisemitism row also heard him. His foreign policy, may be his personality. In that sense, johnson got lucky. I also think it was the central issue of this election, and many voters just i also think brexit was the central issue of this election, and many voters just want it over with so they can move on with their lives. Where he gets a lot of credit is for a campaign that was disciplined, and where he was able to portray himself as the change candidate. That wasw a chart beautiful and showed the london liberals, the london labour, and the rest of labour as well. How far apart this morning is the fancy london labour from the rest of the nation labour . Therese we are seeing a seachange, a complete remaking of both parties. The labour youngis now metropolitan,. The conservatives going up 11 points among workingclass voters is a very different conservative party to the one Margaret Thatcher dominated for so long. But for the labour party, they really have a big decision to make. Do they try to expand that base, and will they ever reclaim the labour heartland if they cant find a way to appeal to those voters . Tom thank you so much. Therese rafael of Bloomberg Opinion writing today on this historic election. We welcome all of you on Bloomberg Television and Bloomberg Radio. Trevor greetham with us of Royal London Asset. I want to talk about the nations economic might. The stereotype is it is all centered in london. Thats where the future is. Thats where they send their kids from other geographies in the United Kingdom. Is there a way to change that, or is there a permanence there that has been there for centuries . Trevor about 25 of the economy, it is a large part of the tax revenue. A few years ago, for the first time ever, we started to see fiscal balances reach regions of the country. You found that the southeast of london particularly pays a lot more tax than it receives in Government Spending. Other parts of the country have got really tremendous deficits. For example, Northern Ireland, the deficit is about 10 of ireland gdp. It is about the same in scotland. A lot of revenue goes from london to the rest of the country. Challenge will be, if we had a more distant relationship with europe Going Forward, whether the manufacturing heartlands of the u. K. Get worse rather than better. Jonathan that is going to be the big challenge for Prime Minister Boris Johnson. He has a new constituency in the northeast of the country. It is the old labour heartland. We are talking about old mining towns were decimated by recession in the 1980s. Thats who hes accountable to now in a. Much bigger way what can he do now in a much bigger way. What can he do . Trevor he can direct more Government Spending to those areas. Im not sure exec lay what he has in mind. Up thean try and firm social policy aspects that cut those voters on board. Tom you bring up a really good point. I am going to bring up my english football knowledge here. He goes to Newcastle United. Is this a Prime Minister that has to get out of london . Does he have to, within his tenure, go up to Newcastle United . What does he do politically to begin to show affection and genuine future belief in those people . Trevor trevor theres a definite need to bring the country together. Hes got this very strong majority, but at the same time, if this were a proportional representation system, you would have a government in place now that would be calling for second referendum. The country is still quite divided, even though it sounds like it is not. Thats how it works here. So hes got to bring people together, and that probably means tacking back towards the center. Jonathan weve been fortunate enough to have you for much of the last hour. Lets look into next year before you run away. There is a belief this morning in new york, worldwide in financial markets, that risk coming into 2020 has just diminished in a big way in the last 48 hours. Am not talking about what is going on in the United Kingdom. I am talking about between the United States and china. We have barely heard anything from the chinese yet. How much of a mistake is it to think that things are in a much better place . Trevor weve been positive all year, but we did pull back a little bit about a week ago for the reasons you mentioned. There was the tariff risk, the general election risk, the risk of a fed meeting with a tweet asking for negative Interest Rates, Government Shutdown, the impeachment. It does feel like those things are resolving in a positive way. We are on pace to get some dry powder, but there will be bumps. In allis keeps coming up my conversation, the measurement of bubbles. Can you measure an equity bubble . Trevor i would go back to bob measuring way of priceearnings ratios. They are a bit above average. Theres been an earnings bubble. Weve got some strength in the earnings trends. Tom do you own the darlings into 2020 . Trevor i think Technology Still looks good, for example. I think the World Economy feels like it is beginning to pick up again. Manufacturing has started to pick up again. Tom tim cook could become best pals with President Trump. Trevor dont underestimate the amount of lobbying done to make these tariffs go away. Trevor, great to see you. Really appreciate your time. Trevor greetham of Royal London Asset management. I think we are going to talk a lot about the trade story, not just here in the u. K. , but between the u. S. And china as well. I think theres a real risk that we defined the current stance, the current relationship between the United States and china, purely by what is happening with the trade negotiation. Something much bigger is going on. Tensions are getting worse, not better, overall. Tom fascinating insight overnight in an essay that is outstanding on this from Bloomberg Opinion. Do they really need our Agricultural Products . Their protein industry is so broken. Jonathan can they deliver ag purchases of up to 50 billion . How is that achievable . How can they agree to it . All of those things are still outstanding. Tom do we know any details on International Copyright yet, ip protection . Jonathan weve got very Little Details whatsoever. One thing we can tell you is that equity markets are higher. Record highs for Global Equity markets, not just in the United States, but all around the world. In the bond market through the week, we are seeing high yields. In the United Kingdom, we are seeing a stronger pound. From london, this is bloomberg surveillance. 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. Tom good morning, everyone. It is an election compared to 1945 and the three thatcher elections of another time and place. Truly an historic election for the United Kingdom, with ramifications for the u. S. Election november. Good morning, everyone. And tom keene, simulcast on Bloomberg Television and Bloomberg Radio. We welcome you across the coast and around the world to a truly interesting and nuanced day. You are in the crucible of it last night. I loved what you did with ian bremmer. What was the shock at 10 00, where you, and i, and guy looked at those results . Jonathan there was always going to be a focus on the labour heartland come up but it was starting to come through overnight. You started to see seats that have not been conservative for 100 years being turned, and that is when you knew this was going to be a lot bigger. , cnbc reporting that china still has concerns regarding hard agricultural purchases. This is the issue. It has been the issue since october 11, when the president said we had a deal. Tom there were some other , and it is a lot more tangible right now. Jonathan october 11, the president of the United States was in the oval office with the chinese vice premier liu he, and said we have a phase i agreement. We are going to have big ag purchases up to 50 billion. The big issue is the chinese putting that on paper. At the moment, as far as we can see, very little from the chinese side of things. Reporting your at bloombergs the president had signed off on an offer with the chinese. We havent heard as to whether they will commit to that 50 billion. Politics and the summation globally of the effect of this United Kingdom election. That starts at 10 downing street. Jonathan tom keenes friends have arrived just behind us. Nejra cehic, bloomberg anchor, whatope were looking for in the next couple of hours . What are we hearing from the Prime Minister . Nejra we are expecting Boris Johnson to step out of number 10 again. He went in there just about an hour ago, having met with the queen. He gave his victory speech this morning after that historic landslide victory for the conservatives, the best result since 1987 Margaret Thatcher. First of all, we look ahead to monday, when we might get the cabinet appointments. The main thing is Boris Johnson does now have a mandate to get his brexit done, to get the brexit that he wants. The question is, what brexit does he want . Will he be able to negotiate the trade deal with the eu by the end of 2020, or do we face yet another cliff edge scenario . The second issue is how much of a challenge is it going to become for Boris Johnson, even though you might want to put it aside now, if we get renewed calls for a referendum on scottish independence, given the results for the s p and scott scotland . P in we would get any boost to fiscal spending . Finally, what does this mean for the successor to mark carney at the bank of england . Tom wonderful report. Thank you so much, outside 10 downing street. As nejra cehic talks about spending, maybe that is one of the themes to start with with rosalind matheson with us. Ben ritchie of aberdeen standards stops by this morning as well. The fiscal stimulus to me is key. Is it urgent . Does it wait six weeks for the state of the Union Address when he says this is the budget . When does the budget get clarity . Rosalind i think we will see that the early part of next year. The first thing is to get brexit through parliament, and then he starts king at numbers for his own budget. What isntingent on happening with brexit and the eu. A lot of money has to fund that,. Including on the health services. It wasnt just labour saying we need that money. It was the government as well. Jonathan what does the cabinet look like in the coming weeks . How does it change . The government of the bank of the governor of the bank of england leaves, too. Rosalind he had most of his diehard supporters in there. When he removed theresa may, he essentially fired a bunch of tories who he thought were against him. Brexiteers the hard from the far right of the party. You may not expect to see cabinet move or shift that much this early in the game. Jonathan when we caught up with people in the fx market, talking about what comes next in 2020, the rate cut call came up ready quickly. The bank of england has 75 basis points to play with. Do they follow through on a cut anytime soon . Ben i dont think so. Think after yesterday, we got a lot more stability. If anything, i suspect we are talking about rates going up rather than going down from here. Jonathan the bank of england tom the bank of england plays a part, but it comes down to that fiscal space. Rosalind and our team have written a piece about this. Frame the physical space of the United Kingdom right now the fiscal space of the United Kingdom right now. I think expectations have changed. The ability to run a deficit of 1 , 2 , which weve been shooting for in recent years, has probably widened. I think the expectation to take that has expanded, and we expect to see that as a responsible reaction. I think that has shifted, and gives government more flex ability from here. Jonathan is that the privilege of the United States, or can the u. K. Follow suit . Ben i think one of the remark bull things throughout the whole brexit saga has been that u. K. Bond yields one of the remarkable things throughout the whole brexit saga has been that remained yields have stable. We are still a wellregarded issuer. Expect the government to take advantage of that. I think borrowing is going to be the way forward. Is it an existential crisis for the United Kingdom that they now theyvehis far, got to go forward and forget austerity . It is something you hear a lot psychologically is it something they are locked into psychologically . Theresa may acknowledged austerity was something maybe voters thought had been taken too far. See questions around jobs, crime, education as a whole. Theres a feeling that yes, perhaps they have to be a bit careful, particularly through this long and protracted uncertain period when brexit was being debated within the u. K. But if we get to the point that brexit is happening, perhaps there is more of a discussion around spending on some of these key areas. Certainly, the labour voters behind Boris Johnson last night will be expecting it. Jonathan just getting some reporting around the bank of england, according to officials, that the new governor will not be named this coming friday, as in today. Ive been up on night. Two government officials discussing the timing of that. We wont find out today. Tom will he be a Different Bank of inland official with the size of bank of england with the size of the selection . You you wonder jonathan wonder if we will have a bank of england governor that believes in brexit in perhaps a way that mark carney does not. That is something to think about as well. Taking a step back for a moment, equities rolling over. The deal between china and United States in doubt. Weve heard from the u. S. Side briefly the report that the president signed off on a proposal with the chinese. At the moment, very little. Tom we welcome all of you on Bloomberg Television and radio. Matheson with us of bloomberg news. Ben ritchie with us also of aberdeen. Are you changing anything . Ben i think it is a combination of trade and the election that removed two of the bigger issues that have hung over european equities for the last several years. If we have a phase i deal, whatever that actually means, we reduce hostilities and take away brexit as a potential cliff edge issue, and we also start to see more governments across europe move into fiscal expansion, that is creating an environment that is positive, at least for Investor Sentiment, toward european equities, which has been dreadful for the past few years. Jonathan we are just hearing from the global times that china will hold a press briefing today on trade talks. We dont know where things are at all. For many people, the last one he four hours was eerily simmered eerily similar to october 11s. We are told we have an agreement. We dont have details around it. Weve got nothing on paper whatsoever. Ben i think we want to see the deal agreed. Think the concept of the deal is less relevant than that there is a deal for market sentiment. It is less agricultural purchases, what the extent to come of the protections about technology. It is not so important that a deal is reached so important as that a deal is reached. Jonathan over the last two weeks alone, one of the few things that is agreed upon in d. C. Right now between democrats and republicans is a hard stance on china. You can see right now for the chinese in the past week alone, decoupling supply chains is something not only happening, they are actively encouraging in china and the United States. I dont think we can say that we have a truce. Do we really have a truce just because we agree on buying a little more agricultural goods . Ben i think thats absolutely right. It is just one small part of a larger frame. I think it speaks to the disruption in corporate competence and disruption we have seen. This is an important step in trying to ameliorate that to some degree. Jonathan ben ritchie see of aberdeen will be sticking with us. A special edition of bloomberg surveillance today from westminster, england, keeping up to speed on the Election Results in the United Kingdom and getting you updated on the trade story in the u. S. And china. Coming up, Maria Demertzis, proulx deputy Maria Demertzis, bruegel Deputy Director. That is coming up shortly. This is bloomberg. Viviana you are watching a special edition of bloomberg surveillance. We begin with breaking news on the u. S. China trade. China will hold a press conference on trade, according to the global times, after reports the nation may have concern about hard ag buy targets. All of this following a bloomberg scoop that President Trump approved an interim trade deal with china that would avert a sunday imposition of new tariffs. Negotiators still have to hammer out the legal text of the agreement. This morning, the u. S. House judiciary on two articles of impeachment against President Trump. That would set the stage next week for a debate and vote on the house floor. Democrats turning back republican attempts to amend the articles. By the middle of the century, European Union leaders vowing to eliminate net carbon emissions, a historic pledge that requires radical overhaul of the economy. Poland endorsed the objective, but 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 more than 120 countries. Im viviana hurtado. This is bloomberg. Jonathan this is bloomberg surveillance for our audience worldwide on Bloomberg Television and on Bloomberg Radio. Alongside tom, im Jonathan Ferro, keeping you up to speed on the latest on the election in the United Kingdom. According to global times reporters, chinese officials will be holding a News Conference later this evening beijing time. Tom so do the math. Soon. [laughter] jonathan we will find out one way or another, i think, where they stand on the proposal for the u. S. Side. Tom ive done enough travel in asia that this is hugely cultural. The way that a government messages, the way a society messages, is radically different. It is a general statement in asia, and particularly in china, versus the way the u. S. And the way donald trump does it. Jonathan think about how this started. October 11 in the oval office, we have a phase i agreement. We were told again and again. And as weeks progressed, the less we heard. We realize, maybe we dont. I think still the issue at the moment comes down to what we thought was the easy task, the agreement on agricultural purchases. Tom i strongly agree. It flipped. Jonathan it is not the case at all. Porkon the chart, you see going straight up. This has to do with the protein in china and how much agricultural goods they can take in,hat has reptile take which has abruptly changed. Timesn the global editorinchief saying that trade talks has moved a step forward. That is hardly conclusive, is it . Tom it is sort of what we expected when we talked earlier. Jonathan from london, england, we will continue the conversation. This is bloomberg surveillance. Jonathan this is a special edition of bloomberg surveillance on Bloomberg Television and Bloomberg Radio. Good afternoon. Alongside tom keene, im Jonathan Ferro. We will go to brussels and catch up with maria tadeo after boris majority ining a the u. K. We with us later. Here now, Maria Demertzis, bruegel Deputy Director. Your thoughts on how brussels will respond in the coming months with a british Prime Minister with a much bigger majority here in the u. K. Maria it was an expected result. This is going to probably mean that the Withdrawal Agreement will pass. It will be voted in the parliament, which means we can start discussing the future trade deal. That is good news because it will provide certainty that the market will need. This will be a solid result in terms of being able to start to think about the longterm relationship. Jonathan it took canada seven years to come up with an agreement between the canadians and the eu. Theres a belief, and i think it is wellplaced, that the eu can do it quicker. Your thoughts on a timeline here . How doable is all of this . Maria a typical trade deal, if two randomy countries, it takes more than one year. Sewed wanting to do everything in one year is rather ambitious. On the other hand, we know what to expect. It, weget your minds to could do it in less than that. If it were to be blocked, it would be a little more than that. But i dont know why you would need seven or eight years to strike a deal between the two. Unspoken things is a changing of the guard within european trade leadership, really top to bottom , strasburg back to brussels. Does it matter that there are new individuals doing these discussions . I dont think so. There is pure continuity here. It will be important to just know what the next step is. First things first, lets pass a Withdrawal Agreement with the majority of that Prime Minister johnson got yesterday. As soon as this happens, i think the continuity will be insured. The negotiations will still happen by the same people. It doesnt really matter. Jonathan thank you so much for your tom thank you so much for your time this afternoon. Maria at the mattress Maria Demertzis is the Deputy Director over at bruegel. Jonathan what we are finding out, and i think we knew it already, making trade deals is really difficult. Months a timeline of 12 to come up with a comprehensive trade agreement, if that is what the primus are wants the Prime Minister wants. Talk about the epicenter of things at the moment, china and the United States. A lot of people think risk is diminished going into next year. Do you feel the same way . Ben yes, but i think we need to see this deal agreed in some form. The details are less relevant than the deal itself. And we see that perhaps by the end of the year, at the start of next year . Hopefully we can. That puts us in a reasonable place Going Forward. Jonathan we started this year worried about the effect of Monetary Policy. We havent seen a real pickup in the Economic Data worldwide, in europe or in asia. I think we are defining the effectiveness of Monetary Policy by what markets do. But i wonder when the Global Economy is going to start picking up, and what kind of recovery we have alternately. Lshaped . What are you looking for in the front of data . Lshaped . What are you looking for in the fundamental data . Ben i think we are starting to see it. Weve seen some stabilization in rates. The u. S. Economy has continued to grow and develop in a similar way which it has done for much of the last five or six years. Maybe a little slower around the margins, but we had the job sprint last week. It is in the band of things doing ok. I think domestic consumption continues to be weak. We havent seen significant pickup. But some stabilization around the trade war gives the capacity for european many factoring to pick up. Tom in q4, we have seen lower for longer established in fixed income. We are waiting on international to come in, including an em that really didnt happen in the fourth quarter. What links together lower for longer with em coming up . What is the sign i want to see out to know that has clicked in . Ben i think it is really looking to china. That is the key. Tom gross gdp of china . Ben looking at the pmi and manufacturing data there. That is the key that drives a lot of the other Global Markets, the ones that have been struggling over the last 12, 18 months as a result primarily of trade. That, to my mind, is the key driver for europeans. Jonathan what do you make of the debate into next year, the rest of the world versus the United States . Weve got consensus forming in the 2020 outlooks that it is the rest of the world in 2020, that that is the story to get behind. Is it . Ben that has been the story generally for the last 10 years, and it has been wrong. I think theres reason to be more enthused about european equities particularly going into 2020. We had a tough times in terms of the manufacturing side of things. Weve seen an incredibly negative Investor Sentiment for that market. Tom can you buy the european banks . Banks aty european 0. 23 and 0. 25 . Ben you can. I think theres enough attractive business within the european context. I think is about the earnings performance. If we are in a better earnings environment, that can deliver much better returns perhaps then we see from the u. S. That is what i think we are interested in next year. Jonathan pleased to speak with ben ritchie of Aberdeen Asset management, sticking with us. Coming up, more on the u. K. Election and beyond, the epicenter of Global Markets once more. Here in london, the conversation very much on a conservative win. Andseats to labours 203, just one seat still outstanding. A crushing majority for Boris Johnson. Viviana time now for your Bloomberg Business flash. Deutsche bank is considering deep cuts to bonuses. Bloomberg has learned discretionary compensation could be cut as much as much is 20 . In a radical restructuring, deutsche ceo christian sewing is trying to eliminate billions of dollars in cuts. In the battle for qantas long rangel business, airbus boeing loses. The flights will be used from sydney to new york and london. This is bloomberg. Jonathan live from westminster, england, for our audience worldwide, alongside tom keene, im Jonathan Ferro. Weve got to be talking about what is happening between the United States and china. Clearly, we have been told for the second time in a couple of months, i think eight weeks ago to the day, that we had a phase i agreement. Do we . Big, thisp yesterday morning up more, and we have given up a huge amount of this move. Jonathan equity futures coming off alltime highs in the United States. The conversation very much on Global Equity markets, with trade at the epicenter of that. In the u. K. , a stronger pound sterling. Good morning across america on Bloomberg Radio and Bloomberg Television worldwide. A special edition of bloomberg surveillance. I am tom keene with Jonathan Ferro in westminster. Lots going on including trade. Littletill about every 2 leave having value of sub u. S. Gdp. Jonathan waiting for the retail sales to come through on my phone so i can bring them to you. 0. 2 month on month. A little bit of a gain. Jobless claims under the radar yesterday. A little bit of a pop. Tom no attention whatsoever. Jonathan given the base in the , it is there. A little bit of a lift. Tom it is a mystery where the statistic will land into next year. Jonathan the data for you comes. 3 , 0. 1 , the estimate up a slight downside surprise on u. S. Retail sales. We continue the conversation about the u. S. Economy and the relationship between United States and china. In london, and the heart of westminster politics, we had to downing street, where we catch up with limburg day breaks anchor waiting to hear it with Boris Johnson after his visit from the queen. When do we hear from him . Jra we expect to hear from him in the next hour outside downing street. We already heard from the Prime Minister this morning around 7 00 when he talked about delivering on brexit, getting brexit done, which is his campaign message. He also talked about a one Nation Conservative Party uniting the country and acknowledged the voters that voted for conservatives for the first time ever. I am talking about those seats that went to the tories in the traditional labor heartland of Northern England, but also some of them in wales. That was the message Boris Johnson delivered in the course of his historic victory which has given him the mandate to deliver the brexit he wants. The big question is what kind of brexit does he want and will he be able to negotiate the trade deal with the eu by the end of 2020 and avoid a potential cliff edge . Tom thank you so much. In brussels is maria tadeo. How will Prime Minister johnson, how will his new government be greeted by brussels in the coming weeks . I have to say the sense here is relief. He finally has the majority. He promised he was going to deliver and the europeans are expecting he will deliver. This is not about Boris Johnson and the europeans now magically liking Boris Johnson, thinking he is a great Prime Minister. This is purely pragmatic reasons. They feel that with him they will get the orderly brexit and avoid chaos. We are getting reaction from Emmanuel Macron who is saying we want to close relationship with the u. K. But we do not want them to be a disloyal competitor to the eu. That is where the conversation is shifting this morning. The trade relationship and what that relationship is going to look like. The europeans do not want to be undercut by a u. K. That does not play by brussels rules. Jonathan just to jump in, getting news around the china story. That News Conference we are expecting in china soon, we have time for the Chinese Commerce ministry, 10 30 p. M. Local time. That is one hour from now. Set your clocks. One hour from now we are sitting here from chinese officials on the trade relationship and that deal the president reportedly signed off on. Tom thank you for that reporting. It shows the complexity. Of thesident is guilty simplicity of a single dialogue, the art of the deal on trade. There are a lot of moving parts on trade into next year. Jonathan we keep going back to this, but it is worth repeating. The mistake made nine weeks ago in the oval office when we were told we had a phase one agreement with the chinese. We were told the difficulty would be getting it in writing. It would take three or four weeks. Nine weeks later, we are struggling. Tom in writing is the key phrase. Ben ritchie is with us. He has been more than patient with an interesting news flow over the last hour. On trade, clearly important. I saw great charts from Bloomberg Opinion on the decline in world trade. ,hat does that do to investment not financial investment, but the corporate spirit . It has to bring it to a screeching halt. Is that what you see . Ben that is exactly what we are seeing. It has postponed Corporate Investment and is devastating for corporate confidence. Within the european sphere companies are looking at their Global Supply chain and the willingness to invest in support. It has not been there. The concern is not that the deal itself will manifest, but that Going Forward there will still be the ongoing if we do invest, are the rules going to change. That should be difficult to put back in a box. The megaphone behind us is. Ur executive editor jonathan lets talk about this News Conference in beijing. I do not want to prejudge a particular News Conference. I want to explore with you different outcomes that could materialize. Lets assume the chinese back away from what we have heard from the United States and the last 24 hours. What does that mean for you . If the chinese say yes, this is an important step forward, but we are not there yet, what does that mean . Ben that would be a setback for market expectations. I do not think it is terminal. Both sides would like to get agreement. Both sides need to show they have pushed a good deal. That part of it is going on. Tom how do you get double digit growth, the success of 2019 in the equity market given what youve just said . Is it all central bank driven . Ben next year you have an interesting dynamic. We will not have Interest Rate cuts, but we have had the ecb and also the fed saying we are not going to do anything. That is a reasonable place to be , if we can take away some of the political risks. Hopefully we have taken away brexit risk of last 24 hours. I think we will get a reasonably constructive call. Jonathan we have thrown a lot of this economy. A lot of rate cuts. Qe out of europe. You take confidence in the fact that the weakness in manufacturing has not late or pleaded into the rest has not leaked or bleeded into the rest of the economy. Are you more comfortable with risk around the trade story given the experience of the last 18 months . Ben i think that is a rolling cycle. You have seen it at the margins but it has not been significant. That allows investors to feel more confident. We are excited to see a conversation started in europe. I would not be overly optimistic this would be a game changer, but we have seen the loosening of the pursestrings. Jonathan ben ritchie, great to catch up with you. You will be sticking with us. We will be counting our audience down to the News Conference in beijing in the next 60 minutes. Tom an important News Conference, and then theres a from the white house. Whatever the news flow is out of china, how does washington save face into the weekend to drive forward the enthusiasm from yesterday . It does not matter what beijing says, than there has to be a response from the white house. Jonathan at the moment this is dependent on what we hear in the next 60 minutes. We understand the United States and the president has signed off on a proposal to scale back tariffs and delay the sunday tariff increase. On the table, at the epicenter of the debate is what happens with agricultural purchase and whether the chinese will agree to a dollar amount. From london, this is bloomberg. Viviana this is a special edition of bloomberg surveillance. Lets begin the bloomberg first were news. In less than an hour china is expected to address trade at a News Conference after news President Donald Trump may formally present an interim trade deal with china as soon as today. Bloomberg has learned it would avert new tariffs on sunday. Already questions, including a cnbc report that china still has concerns about agreeing to hard targets to buying American Farm products. Critics pointing out the deal includes nothing on bigger structural issues such as subsidies. The u. S. House Judiciary Committee setting a final vote on articles of impeachment for this morning assuming the articles past, next week the entire house would take up impeachment and stay on capitol hill. Congress came up with a deal that would avert a Government Shutdown but must be passed by both houses and by next friday the president must also sign. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Tom thank you so much. Greatly appreciated this morning. We welcome all of you to a changing market. A huge boom. Risk on with the president s announcement and then a little bit of a dent across all assets. Even sterling gave way from the 135 level we saw. From the the silence chinese has been deafening over the last nine weeks. We just confirmed, 9 30 eastern time. We are expected to get a News Conference from the chinese to find out there start on trade talks with United States. We have an idea of where the u. S. Is. We have little clarity on where china is. Tom steepening the yield curve. It is fractional, but an odd risk on feeling. Forget about this historic election. This is about trade. No question. Jonathan we thought we had the green light for risk assets. Im sure many of you felt that way. We are about to find out in 45 minutes whether the green light is still on. We will find out shortly. Full coverage continues right here on bloomberg surveillance. Jonathan this is a special edition of numbered surveillance bloomberg surveillance on Bloomberg Television and radio. The conservatives with 360 four seats, a gain of 47 to labors 203, a loss of 59. One seat outstanding. A crushing majority. Unexpected for many. Tom huge change from conservative and labor and real changes in Northern Ireland and the huge dominance of the snp in scotland. Because of the news flow, we must turn to trade and i want to do that with our senior economics,ditor for stephanie flynn. Writing out of asia this morning, a scathing note on President Trump and trade. I want to bring that to you. Brinky finally be on the of the first part of the hopedfor trade deal between the. S. And china it was not worth it. Naturally it is a relief when a nation decides to start punching itself in the face. How much better if it had not started, though. There is nothing in this tentative deal which would not have existed in the absence of the past two years of wrangling. Now Brendan Murray in our london studio. What will your team listen for in the press conference here in less than one hour . Be listeningill for whether the chinese have signed up with what the officials in washington are telling us they have signed up for. Things like largescale purchases of a of american commodities and will be listening to see whether the u. S. Is going to not only cancel the tariffs that take effect on sunday but also start to roll back the tariffs that are in place. We hear a lot from washington yesterday. Not much from beijing today. It will be interesting to hear with the Chinese Government says. Right to the heart of it, which is a cultural difference. Stephanie flanders, do we have any understanding of how china conveys their decisions . We have a history to fall back on of how the Chinese Government communicates . Stephanie we have had a range of communication. Obviously they communicate with the help of leaks from our reporters around the world. Knowhallenge is always to whether it is coming from the right part of the leadership and what the chinese expectations are relative to the u. S. The consistent issue throughout this year has been the lack of trust between the two sides. Thinking there will be a few slips on the way between this announcement from the white house and whatever we see out of the chinese. Jonathan lets build on that. Brendan, you and i have talked about this many times. Agricultural purchases was meant to be the easy stuff. It has turned out to be difficult. The reluctance of the chinese to put a dollar amount on agricultural purchases and get it into writing. How has this become the issue in the last three months . Brendan for the chinese, it ultimately boils down to an issue of sovereignty. If they lock themselves into a dollar figure that is unrelated to supply and demand, they are in a difficult spot. For the trump administration, they are facing a Reelection Campaign where they want to make farmers in the midwest happy. This has been one of the demands President Trump has had all along. Of the easier issues, or it should be, but it is coming down to the big Sticking Point that will make or break this deal. We have an understanding that president stephanie it is a very small focus, a small piece of what the president has been talking about throughout. When he takes on the big challenge of changing chinas approach to the Global Trading system, changing the imbalance in trade between the u. S. And china, this is a small piece of that and arguably the easiest thing. The easiest thing for the chinese to do relative to the much grander aspirations the president has. We should focus on the details of this deal and asked whether it amounts to anything. The president will have to answer the question of what comes next. This does not measure up to the kind of grant top he had at the start of this process the grand talk he had at the start of the process. Jonathan great to catch up with you. Stephanie flanders alongside Brendan Murray. For final thoughts, ben ritchie, aberdeen standard investment head of European Investment is still with us. 40 minutes away from chinese officials talking to the press about trade. What are you looking for in the language in 40 minutes . Ben it will be fascinating what happens going into sunday from here. If the chinese do not agree they will put the ball back in the president s court and then he will have to concede to some degree. It will be fascinating to see whether he is willing to do that. Uspect there will be some perhaps a test to see what happens. Tom the heart of this is a goes on the naivete that trade deals are simple, whether it is the u. K. In brussels or the president in china, there is no history of these being simple transactions, correct . Interesting thing is the only measurable component of the deal, is a big number, that is great. The things you want to get out of a trade deal around ip protection and changing the weight china subsidizes state industry, those things are so impossible to assess that will not be there when we come to november. Jonathan there is an inherent contradiction. Ive been supportive of the effort to get the chinese to lower the barrier to entry and to do things around ip theft and technology transfer. These are worthy efforts. Then we have become bogged down in an issue like getting the chinese to agree on big purchases. I thought this was about getting the chinese to liberalize the trade regime, to contribute to what is going on. How has this shifted to Something Like this . Ben you box yourself into a corner because the political thing you want is the agricultural purchases. The economy longerterm is about the other stuff. That is something to be easy to be measured against, and that is how we end up where we are. The chinese have worked that out. Jonathan ben ritchie, great to catch up. I know that doesnt it for your coverage with us. You will run over to london heathrow in the next couple of hours to try to get a flight. I am going to sit here and run you through the market open in new york city and get you up to speed on what happens with the trade situations. 9 30 eastern, looking at the News Conference from the chinese to find out where they stand on the offer from the United States in the last 24 hours. That drove Global Equities to alltime highs. That is the number one story. The second story, and the number one story in london is the general election. Tom how close are we to harrods . Jonathan you could get on the tube. Kenne,ndon alongside tom i am jonathan farrow. This was a special edition of bloomberg surveillance. Up next, i will guide you through the opening bell in new york city. From london for audience worldwide, this is bloomberg. Jonathan from westminster, england, for audience worldwide, im Jonathan Ferro. The countdown to the open starts right now. Jonathan live from the city of london, 30 minutes away from the opening bell. Global markets on edge. 30 minutes away from a News Conference in beijing. Trade front and center. Look out for equities going into the opening bell. That risk that News Conference is the risk event. In the United Kingdom, prussian majority. And thetting his United Kingdom, a crushing majority. A fantastic lineup of guests alongside me. Tos turn to Michael Mckee get you set up with the next 30 minutes into the open. That trade conversation getting just a little bit more interesting as the day grows older. Are just beginning to figure out some of the things that go into the trade