Donald trump says voters cannot trust joe biden to navigate the coronavirus or heal racial divisions. Some like it hot. Treasury yields jump as jay powell says the fed will move to a more relaxed approach on nation. Global stocks had for a fifth week of gains. The s p closes at an alltime high. With emergencyt clearance in the united states. The Trump Administration is said to be buying 50 million worth. Good morning from the city of london. Tokets waking up in asia what powell did yesterday. This average of inflation, although economists are skeptical on how they will achieve it. We heard from donald trump, he has accepted the nomination and he wants to cut taxes and increased job growth. Let us look at how the price action is friday morning. 10year treasury yield taking ticking higher. We see a steepening of the curve, the widest in two months. Msci asia pacific continuing its rally. Bloomberg dollar index under crude, we of brent course have been tracking. Urricane laura crude facilities including the largest u. S. Refinery was spared. That is the price action. Now to the politics. Donald trump officially accepted the president ial nomination of the Republican National convention. He lauded the u. S. Response to the pandemic, promised to create 10 million jobs, and further tax cuts. Buildtrump we will again the greatest economy in history, quickly returning to full employment, soaring incomes, and record prosperity. More isus to discuss bloombergs reporter. Trump made the economy a key talking point, but what are the details of his plan . It sure was a focal point. It was the first thing he brought up before international affairs. Part of that will come from regulation, but a lot of that will come from onshoring jobs onto american soil and making america the superpower of the world in manufacturing. He and biden take widely different stances on energy with trump finding ways to create more jobs in the energy sector, energyamerica an exporter. We know biden is looking to clean energy. Viewersurse we have waking up in europe and the middle east this morning. What is his plan for Foreign Policy . China was a focal point for President Trump. Was veryy knew he critical about how biden handled his relationship with china, even saying biden has really of manys at the expense american jobs. Going beyond china, he did talk about American Defense spending. A little bit earlier, he talked about closing the borders. We heard him talk about his trade agreement, working bilaterally, ending nafta, which he called a nightmare. Looking back at his policy that defined the first three years of his term before the coronavirus pandemic had hit. Seehis speech comes as we protests continue in wisconsin. How did President Trump addressed the racial tensions brewing . It was really important with the backdrop of kenosha and the shootings we saw there. While he made no mention of jacob blake, we did see a lot of black speakers at the convention making sure people understood this was not a party just for white voters and this was not a party that encompassed racism. With that said, this was a law and order message we saw from very many of the rnc speakers including trump himself, defending the police force, saying he would add jobs to the police force. The economy is front and center and really on the ballot. What also struck me, this was reminiscent of his campaign speeches. He is the president and it was the white house. Different imagery, but the same rhetoric. Now for more news. Another night of unrest. Underway in kenosha and minneapolis. A number of spit of states are sending National Guard troops. After boycotting games in solidarity with protesters, the nba will resume playoffs. House Speaker Nancy Pelosi and the white house chief of staff mark meadows talk for the first time in three weeks. Talks are still at a stumbling block. There will be no relief deal until the end of september. Hurricane laura better louisiana, one of the most powerful storms to ever hit the state. In its wake it left chemical fires, and more than 15 billion of uninsured losses. Aura was downgraded to Tropical Storm. Global news 24 hours a day on air and a bloombergquint take bloomberg quicktake. This is bloomberg. Thank you. Coming up, a new approach. The fed takes a more relaxed to line on inflation. We will hear from Jerome Powell next. Next. This is number daybreak Europe Bloomberg daybreak europe. Shinzo abe plans to resign due to Health Reasons according to a local news organization. We wish him well. We should take a look at what is going on with the dollaryen this morning. You can see a drop of the dollar against the yen. It is down nearly 0. 3 . Jp morgan actually recently put out a note talking about the fact of what that risk would be if shinzo abe is leaving the Prime Minister position, and they were looking at 100 per again. They said it would be a short time reaction, but we have worse will be watching as we see it dropping more. The u. S. Dollar down 0. 4 against the yen. We will be keeping track of the story. Shinzo abe plans to resign due to Health Reasons. Treasury yields jumped at the announcement from jay powell on inflation yesterday. The yield premium demand by investors increased the most in two months. We spoke to the st. Louis fed chief after the announcement. It is a Large Committee with many opinions. I dont think you want to get into precise mathematical formulas here. But the spirit of this is that in the committees judgment it would be wise to allow inflation to be above target for some time , to make up for past misses to the low side. And then markets having expected that will then cement their expectations of 2 inflation. What has happened is we have missed our target to the low side for a while here. Almost a decade depending on how you measure it. Thehink that is because effective lower bound is pulling the inflation down. This is a way to make up for that and make sure you get that ability for your 2 inflation target. Comfortabled you be with in terms of an overshoot . To nominal gdpe targeting, which i have advocated. It is in this family of policies. Average inflation target is kind of more practical. If you want to stay on the price level path established from 1995 to 2012, you could run 2. 5 inflation for a while. You can do the calculations yourself. The idea would be, you know, we are going to try to make up for past misses, but it is going to be the judgment of the committee. Is it symmetric in terms of time . You missed onto percent for years, would that mean you run over 2 for years . Judgmentk that is a they will have to make. Thing about price level targeting for those viewers that does dependt is it when you start doing the targeting. When you start measuring from many years ago, you will get different answers for how to stay on the price level path. We are starting on this endeavor now. We are doing a softer version of this. I think this will provide a better commitment to the idea that we want to make up for past losses as best we can using in the judgment of the Committee Going forward. Why isnt this a return to higherfed policymaking inflation for lower unemployment , that did not end particularly well. One of the things the new framework acknowledges is that the committee is going to try to make up for four shortfalls for maximum employment as opposed to deviations. The deviations language is technical jargon that we we would like unemployment to be as low as possible. Possible, because that is helping the most people in society. We are already keeping track on inflation on that side of the mandate. The inflation side, making sure inflation does not get out of control. I would say it is quite a bit different from anything going on in the 1960s. Later today we will speak to the former new york fed president william dudley. Robert kaplan, the dallas fed president joins us. We want to recap breaking news out of tokyo. This is according to nhk. They say Prime Minister shinzo abe plans to resign due to Health Reasons. We will be tracking health concerns. We will take a look at whats going on on the dollaryen. We see the dollar weaker against the japanese yen. Down 0. 3 . From j. P. Morgan saying this could mean 100 per yen. Annmarie 17 minutes past 6 00 in the city of london. Shinzo abe has decided to resign due to Health Reasons. This is breaking news coming out of nhk. Without attribution. Lets get more. What has been the reaction to the report shinzo abe plans to resign . If you look at dollaryen, we see that gaining strength this morning. Higher,en was tracking certainly strengthening further. A massive reaction has been coming through in the japanese equity market. Losses on the topics by 1. 6 . We had been seeing gains as much as 1. 3 . This news coming from the nhk is a little different to what we thought would have at the would occur at the press conference. We heard from the chief cabinet he thought theg Prime Minister would actually continue to serve out the remainder of his term, which is due to expire around a years time. We are watching what will happen in the yen because there has been a lot of speculation in terms of if we did see a resignation from Prime Minister abe, what that would mean for dollar yen jp morgan coming through saying you can see it test 100 if you see President Trump kicked out of the white house. Terms of implied volatility shows we have been seeing a lot of traders taking this in stride expecting we would not get any reaction from the move when you look further out in terms of three months, there is more implied volatility. That plays into that thought of what happens come november with the u. S. Election. Certainly quite a bit of a sell down in japanese stock indexes this afternoon. We are seeing huge falls in electronics players. Ismarie what is interesting who is going to succeed him . That is what the market is asking. One could possibly be defense minister, someone from his cabinet. What could we see in terms of policy changes, ties to china, Monetary Policy . Do you think there could be drastic changes to japan domestically and internationally . This is the big thing with abenomics, which has been steering the economy, will and also hit by the pandemic. You would think there would be a steady hand over, someone who is going to continue what we have seen. A couple people have been mentioned. One of his defense ministers is a fluent english speaker, graduate of georgetown university, and he urged the bank of japan in 2017 to lay out the strategy for exiting the easing of Monetary Policy we have seen japan enjoy. Changeoing to be a huge for japan. As we know, the creator of abenomics helping japan get through the pandemic, you would hope there would be some kind of seamless handover. We are trying to learn more here. You make a good point. Abenomics could outlast abe. There is still more that is going to last even if we have this resignation from shinzo abe. Thank you so much for that insight and context about what is going on in tokyo. Now lets get the first word news. Erat could be the end of an for japan. Nhk is reporting shinzo abe plans to resign for Health Reasons. A hospital visit fueled speculation the nations longestserving Prime Minister might step down. He is scheduled to give a News Conference. Letfederal reserve plans to inflation run higher to keep Interest Rates low. Jerome powell says it will target inflation that averages 2 over time. Afterill let overshoot periods of weakness. Government is buying almost all of the rapid covid tests produce this year. Aboutd 750 million for 150 million kids. Kits. Officials believe it could help ease delays in testing area in testing. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Lets get a quick check on the financial markets. What isbreaking news on going on in tokyo. Onmorgan recently said yen 100. The nikkei lower, down nearly 0. 8 on this news. We have been talking about the dollaryen. Up, a little bit of strength there and the won, a little bit of dollar weakness. We are seeing dollar weakness broadly regardless across the fx markets this morning. We are going to head over to Juliette Saly for more reaction about shinzo abe waiting to resign. Planning to resign. What are you hearing . We are still trying to get details fleshed out. Indexe seen the nikkei coming off earlier losses. Certainly a lot of Market Reaction in dollaryen. That call for 100 ways on other factors such as do we see a change in the white house, too. This comes after we had heard perhaps shinzo abe would remain in office and continue to hold out his term. Certainly trying to get further clarification from the nhk report. It has been an interesting session in asia. We are still reacting to what happened with the fed. Implications, you can see dollar won and what has been having in the kospi. Further social restrictions come into place in south korea. They will go to the next level as they try to stem the flareup in virus cases. When it comes to shinzo abe, this is going to be huge for japan. You would hope it would be some kind of smooth, seamless handover. We are trying to work out what the implications would be implications would be. We have been watching the bond market and a lot of that implied from what you heard from jay powell overnight as well, big move in yields globally. Im just seeing now across the wires shinzo abe will explain his resignation at a News Conference 5 00 p. M. Local. It just brings to the forefront another risk in this year we have been dealing with the pandemic, the u. S. Election, and now a change of hands in tokyo area thank you very much. President donald trump is officially accepted the president ial nomination at the rnc. He vows to heal the nation, attacking biden. Pres. Trump he has pledged a 4 trillion tax hike on almost all American Families. Which will totally collapse are rapidly improving economy and once again record stockmarkets we have right now. Will also collapse. That means your 401 k , that means all the stocks you have. On the other hand, just as i did in my first term, i will cut taxes even further for hard working moms and dads. I will not raise taxes. I will cut them and vary substantially. And we will provide tax credits to bring jobs out of china back to america and we will impose tariffs on any company that leaves america to produce jobs overseas. [applause] pres. Trump we will make sure our companies and jobs stay in our country as i have been doing for quite some time, maybe you have noticed. Joe bidens agenda is made in china. My agenda is made in the usa. Annmarie donald trump accepting the nomination, really a formality, to be the republican president ial candidate. That ends the rnc. Msci asiapacific relatively flat, hang seng up 0. 9 percent. Csi 300, chinese equities, up more than 1 this morning. We are keenly focused on what is going on in japan this morning. Resignabe has decided to due to Health Reasons according to nhk. There thee dollaryen, shinzo abe will explain his reasons for resignation at a News Conference federal for 5 00 p. M. Local time. Stay with us. This is bloomberg. Loomberg. Hike coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions. Touchdown only mahomes. Expect anything different . The big events are back and xfinity is your home for the return of live sports. Morning from bloombergs european headquarters. I am Annmarie Hordern 30 these are todays top stories. Eliminateen land will americas borders in the middle of a global pandemic. He is even talking about taking the wall down, how about that . Trump saysonald voters cant trust joe biden to navigate the coronavirus or heal the racial divisions. Running at hot, treasury yields jump as jay powell says the fed will move to a more relaxed approach on inflation. A fifth week of gains, the s p closing at another alltime high. Japanese Prime Minister shinzo abe has decided to resign because of health medias. Local media and nhk report. 30 minutesg, gone past 6 00 in the city of london. 11 dealing with these breaking news out of tokyo. Prime minister shinzo abe does plan to resign because of Health Reasons. We will be tracking those. He is set to give a News Conference this evening in tokyo time. Lets look at what is going on in the markets given this new development out of japan. The 10 year treasury yield is ticking higher. A lot of that has to do with what jay powell did yesterday, a private pivot in inflation. The Bloomberg Index is software. The yen is much softer, there is movement. J. P. Morgan said it could hit 100 if abe and President Donald Trump loses the election. 35. 16. We have been tracking this because of the u. S. Gulf coast. The biggest u. S. Refinery was spared damage, but we are keeping track on that as it affects residents there. President donald trump has officially accepted the president ial nomination. He vowed to heal the nation, checking his rival. Trillion pledged a 4 tax hike on almost all American Families which will collapse our rapidly improving economy and once again record stock markets that we have right now will also collapse. That means your 401 k s, all of the stocks that you have. On the other hand, as i did in my first term, i will cut taxes even further for hardworking moms and dads. I will not raise taxes. I will cut them substantially. [applause] we will also provide tax credits to bring jobs out of china back to america and we will impose tariffs on any company that leaves america to produce jobs overseas. [applause] sure our companies and jobs stay in our country as i have already been doing for quite some time. Joe bidens agenda is made in china. My agenda is made in the usa. [applause] trump in president front of the white house accepting the nomination. Joining us now, thank you for my joining us. One thing that struck me was a lot of the rhetoric in his speech was similar to what we saw in 2016 on the campaign trail. The samee he is using strategy to get reelected even though he is the man in the white house. That is right. What we saw trump doing is playing again on this notion of fear, safety at the borders, internationally and of our communities. Strategy whereis in light of the pandemic, he cant really play up the economy as much as he would have liked to. Prepandemic it would have been certain he would have really promoted the economic results of the country. That is not going quite as well as he would have liked to. Now we are seeing the strategy of 2016 which is safety, safety. Annmarie the pandemic is the forefront of american mines. You think he did enough to persuade americans another four years of him could be well managed . Convention avoided the actual strategy. Trump touted some of his successes, talked about how he was going to be the first to get the vaccine, that his statistics were not as bad as they seemed but he mostly avoided the topic of what his Clear Strategy was going to be and moved on to a number of other issues including law and safety. Annmarie we have the polls number up now. Biden is leading, but it is narrowing. Do you expect that to be narrowing even more following the rnc . I think biden has a lead which would make him win comfortably, but we cant trust the results. There is so much unknown especially in this election where people will be voting by mail. There will be a lot of voter disenfranchisement. The chaos going on in wisconsin, trump thrives on chaos. So much has been about law and order. That could boost him in the polls because he presents himself as a president who can really bring home safety to everyone. Annmarie some analysts are worried about the uncertainty following the election. Is a contested election something investors need to start pricing in in terms of risk . Absolutely. A lot of our investors, this is something they have been talking to me about. We have seen trump, not someone who has respect for traditional institutions, seen him pull out u. N. , w. H. O. , poo poo the go against china, and what will stop him . Specially how he has held out the entire convention, possible risk of violating the hatch act. There is the idea it is not certain trump would even accept the results if he were to lose. We have seen this before. There was bush versus gore in 2000, there was a contempt stood a contested election. It was a safer environment. Annmarie things are brewing in terms of tensions, the discourse between the two parties. I noticed that trump did attack china. He did not go directly in on xi jinping. Why do you think that is . The ideas about china is this is for a domestic audience. ,e have seen him laming china china is some sort of abstract concept. Blames china for not giving us jobs, for the virus. This was a speech about convincing the local American People that there is some external enemy. It is not really the time to go in in detail about xi jinping. Annmarie the editor in chief went through the numbers, biden was mentioned 41 times. Pandemic three, socialist one, coronavirus zero. I read these numbers out because i want to know from you, what is the response from the Joe Biden Campaign . Is going to say there is no strategy to deal with this pandemic, and that he is laying precovid, that are there is no concrete strategy how we will deal with the recession, how are we going to create jobs and this will be biden, what is giving him the edge in this election. Annmarie think for joining us. Some analysis on the rnc and the political election coming up. Lets get to the first word news. Is a bitter end to an era in japan. Prime minister shinzo abe plans to resign for Health Reasons. Fueledpital visits speculation the longestserving Prime Minister might step down. He is scheduled to speak at a conference 9 00 a. M. London time. Another night of unrest after the Police Shooting of jacob blake. Demonstrations were held in various cities. A number of states are sending National Guard troops to help local officials in kenosha. Nba players have voted to resume the playoffs. Yesterday hurricane laura battered louisiana. It left chemical fires and wrecked buildings, flooded roads in what could he more than it was downgraded to a Tropical Storm having lost half of its power. Global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Annmarie coming up, President Trump delivers law and order message at the rnc as curfews are placed on several u. S. Cities after protests. This is bloomberg. Allow mob rule. We can never allow mob rule. [applause] and the strongest possible terms, the Republican Party condemns the rioting, looting, arson and violence we have seen in democrat run cities all like kenosha, minneapolis, portland, chicago, and new york. Annmarie President Trumps law and order message on the final night of the Republican National convention. Curfews are underway in kenosha, indianapolis and st. Paul after the raciallling out injustice. What is the latest from wisconsin . It is really kind of crazy to think that almost three months after the unprecedented protests in the wake of George Floyds killing, we are at another Inflection Point in this country. The protests began earlier this week after jacob blake was shot seven times by a white police officer. On tuesday ,two black lives matter protesters were killed by a white vigilante in kenosha. Executors ended up charging a teenager in that shooting. Following these events, several cities have imposed strict curfews, kenosha being one of them, minneapolis, where george floyd was killed, and hundreds of National Guard troops are from othersent states into kenosha in the next few days. There are more protests and actions planned. Look at the last few days. The sports world coalesced racialthe issue of injustice in a way we havent seen in a long time. This was a reflection of a few things but in general it is absolute frustration over in of racialthe part injustice, especially during a summer where people had been optimistic about progress. I want to mention, today happens to be the anniversary of the march on washington. We will be watching closely because there will be several civil rights and justice leaders descending on washington in person and virtually and they will try to make their message to voters and mobilize people around these issues ahead of the november election. There is a lot to look out for as you know. Annmarie thank you for that context. We wrapped up the rnc last night. You are focused on this, how do the messaging behind the rnc differ from the dnc . Not have been more stark. We saw the democrats really unify around this message of restoring american democracy and that the country cant go through another four years of trump. This week we saw the republicans double down on this message of law and order. For many people that felt contradictory and confusing under the backdrop of reignited protests here in the state. Leadership is needed now more than ever but instead we heard several republicans including mike pence and President Trump on their defense of who they say is people threatening law and order on the streets of this country, going so far as to say americans would not be safe under a biden presidency. It is important to remember how this convention started. We heard a speech that from a couple that waved guns at Peaceful Protesters earlier this summer. Americans felt this convention was not a literal reality they are living today given the pandemic at the situation we are in. There were efforts to soften the orsidents rough edges vulnerabilities as it pertains to women and black people. The events of the past few weeks and months underscores this throughline between both conventions, which is that this election is going to be one of the most critical of our history and time. We will be watching it closely. Annmarie i look forward to your show. Our quicktake reporter staying up late in new york. Have been talking about what is coming out of tokyo. The Prime Minister plans to announce his resignation at 3 00 15al time, 7 00 london time, minutes from now. He is resigning because of health concerns. He was told he might need to seek treatment over the next year. This is a very big story. We will be looking at the impact on the financial markets. He was the longest serving, is the longestserving Prime Minister in japan from 2006, 2007 until the present. This is bloomberg. His is bloomberg. Annmarie good morning, welcome to daybreak europe. I am Annmarie Hordern. Japanesereaking news, Prime Minister shinzo abe has decided to resign for Health Reasons. This according to local media reports. We are expected to hear from him. We have been tracking the Market Reaction to this. Japans topix is down, the nikkei as well. We saw any media drop of the dollar versus the yen. For more on this we are joined by david ingles, the china open anchor and asia markets expert. Give us the latest. You have been parsing through his path and what it means for abenomics and what does it mean for the future of the Prime Ministership . David a little bit of background, a couple of days back, this press conference we are having today was called. It is not completely out of the blue. There was a lot of speculation what he might announce for today. We understand given what you have just mentioned in a couple of minutes, which in nine minutes that is when the announcement is expected to come. That is out of the kyoto news. That is the same time the supposed to close. We are down 17 points. We have to wait and see what he says. Whoave a couple of names may be able to replace him. I will go through it quickly. The former foreign minister, a couple of names here. The chief cabinet secretary, the finance minister. Andformer defense minister, a defense minister. We are bringing these names on, and the reason i brought up a couple of earlier we had a story about two days back, in the event we found ourselves in the situation we are in right now, these are the names. As far as market calls are concerned, you see reflationary effect he has had on the stock market, Business Sentiment and weakening the japanese currency. We have had calls out of j. P. Morgan initially. If he goes, does abenomics go . J. P. Morgan thinks the initial reaction might be yen strength, which is what we are seeing, not to the extent they called a couple of days back. I think it will go to 100. We have to wait and see. We will keep on top of the story. We dont have a lot of details. Think partly as we are not even close to the 100 yet. The note did say including donald trump losing the presidency as well. We are kickstarting the u. S. Election campaign. What does this mean for abenomics if we have a new p. M. . David three arrows. That is what it was supposed to be about. For the first couple of years it was always spending, the easy thing to do and the boj coming anomics. Kurod here is the balance sheet. Easilyse things retractable . The name and the brand itself is a patch to him, but mizuho was out with a note. What they are saying is given how institutionalized some of these practices have been, and it has been seven or eight years, it is hard to see how this goes away. It will depend on the continuity of policy. I will bring in the pandemic. It is not as if the boj can do anything else but support the economy even the other problems. The markets dont seem to be perturbed, given the extreme scenario people were thinking a couple of days back. Annmarie thank you for that context. Also with us is Stephen Engle from hong kong. You have covered asia for years especially the geopolitical ramifications of this. What is your take . Stephen it is a sudden departure for shinzo abe. He is the longest serving japanese Prime Minister. As is his second stint. He had to quit in 2007 for health concerns. It is believed it is because of this colitis he has been suffering from since he was in high school. He has been in the job the second time since 2012, the longest serving japanese Prime Minister. Looks as if Health Issues might bring his downfall. Nows at an interesting time with the coronavirus outbreak, pandemic, donald trump also up for another election, what happens to the coalition between donald trump and shinzo abe . It will be an interesting scenario to playoff to the next Prime Minister of japan. Annmarie right, abe has worked hard to build that bond with President Trump. Is that the same trajectory we will see under a new Prime Minister . Stephen two of the top people are in the defense ministry. You have the 63yearold former defense minister and also another, the current defense minister. If both of them perhaps seen as hawkish towards china and supporters of the five is alliance,telligence and Monetary Policy, those two individuals as well [speaking simultaneously] going to havere to leave it there for now. Stay with us because at the top of the next hour, this is when we will hear from shinzo abe according to local reports as he resigns because of health concerns. This is bloomberg. Loomberg. Anna good morning. Marketsto bloomberg the european open. The markets say watch politics and policy. Japanese stocks tumble after reports of big changes at top of government. Treasury yields jump as the fed changes its approach