The single currency crosses the key level for the first time in two years. Philip lane says it matters for monetary policy. Andy Swift Financial regulators and the swiss financial of creditart suisse over spying on former employees. Let us get some breaking news for you. Front, u. K. Housing august house prices rising by 3. 7 year on year. This is according to nationwide. 2 on the increase of month. The month on month figure is 2 . The year on year figure is 3. 7 . Very strong numbers follow other measures of stress. We have a right move for july. Know the reason behind all of this. There was pentup demand because of a lockdown. There was a tax incentive put in place. And perhaps a little bit of incentive to move to quiet, rural locations. All of that lifting housing demand. Solid numbers nationwide this morning. Lets get to the broader picture around markets, have a look at futures. For European Equity markets, fairly flat. If you excuse exclude the ftse. The futures picture giving us something more positive. We are around 0. 7 . Futures, we u. S. 0. 4 pside there between and 0. 6 . We continue to grind higher. Having a look at whats going on through the asian session, this gives you a picture of how mixed we are. In terms of the overall move, asian equity markets have a bias to the upside. Australian equities you can see doing very nicely. Real moves in us trillion markets. We have the australian currency on the back foot. 0. 1 , the first recession since 1991 in australia. Something that will be talked about later in the program. Expectations as we grind higher globally in market around stimulus, ongoing support for Central Banks, all of those being still very much to the four along with the fight against coronavirus and the latest on the vaccine. We will get more through the program. Lets get the bloomberg first word news. Protestersfter two were fatally shot in kenosha, wisconsin, President Trump has visited the city. His trip came despite the objections of the city mayor and the state governor. The president did not meet the family of jacob blake, the man shot in the back by police. Pres. Trump you could take the people of kenosha that are not here and that you will not see and that are not protesting, but they want change also. They want law order. They want a great police force. They want people that are going to keep them safe where their houses are not broken into, where they are not raped and murdered. That is what they want. Australias economy contracted the most on record last quarter, confirming the nations first recession in almost 30 years. Gdp plunged 7 . A percentage point more than expected. Ongoing lockdown in melbourne, the nations second largest city. Shinzo abes righthand man is the leading candidate to replace him. It is a sign the nation will stick to his economic strategy. Suga is not ahead in opinion polls, but has support of key factions in the party. Willest will behol be held on september 14. 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. Thanks very much for that. U. S. And european futures are climbing as investors take stock of gains. Global shares with yet another record. The euro is faltering after breaking above the 120 level yesterday. With bring in these themes laura cooper. Im not going to ask you how high numbers are going to go. There is much more nuance. An interesting question about where you find havens these days. The markets live team has been asking this question. Is there a better haven than the nasdaq . Explain to me how the nasdaq has come to be seen as a haven during these times. One of the reasons we have seen the nasdaq taking on this narrative that it is a haven is just because it has outperformed the rest of the market during this period of uncertainty. Are companies that are outperforming, they are turning profits, they are cash rich. They are benefiting from this overall period of Global Health climate. This we canental in attribute to acronyms. Fear of missing out. There is no other alternative. You really have to participate in these secular growers given the backdrop. Some exposure to cyclicals at this stage. Just the fact that when we look at traditional havens like bonds that are negative yielding distorted by central bank intervention, clearly at this stage it is no wonder we are seeing these tech stocks continue to have this relentless rally. If we thought things looked uncertain now, it seems markets are factoring a great deal of uncertainty and volatility towards november. Effective campaigning going on already. When we look at what it is factoring in for september, october, november, that time horizon, we see interesting patterns on the amount of volatility anticipated. Absolutely. Something quite interesting is that we are seeing this water relentless rally in stocks despite looming risks being priced into future volatility. It is interesting that the most expensive event risk on record is feeding into the contract when we look to october. That is quite interesting. We have not really seen this type of event risk command this type of premium before. It is clearly telling us markets expect some degree of fireworks. My colleague wrote on the blog yesterday that if we start to actually see premiums higher, that could be assigned markets are worried about the year 2000style uncertainty. That is when we had the bush gore decision go to the supreme court. The degree of uncertainty about that. Markets are anticipating that going forward. But those risks are not feeding into this broader equity rally at this stage. I suppose there are many lawyers of risk. Layers of risk. Remember 2016 at how the market changed assessment in terms of the what would be positive and what would not. We have seen the euro pushing point2 1. 2. Ne seen as a warning sign i supposed to investors. Is it that that moved the euro . What was your assessment . A combination of both. We did see that leading indicator of new orders reaching the highest since 2004, which is quite exceptional. We also saw this relentless rally in the euro most likely due to the pause. Terday we had the european euro area core inflation print at a record low. That shows how this currency strength is actually feeding into disinflationary pressure. That is clearly on the radar of the ecb. 10 to 20 basis points out that core inflation print. I think that is why we are seeing signs of caution coming from the ecb. It actually acts as a headwind to the recovery. At this stage, the fact Economic Data is beginning to roll over, the fact we are seeing Economic Activity as gauged by a highfrequency indicator begin tailwindsa lot of the that propelled the euro to the 7 rally year to date are starting to fade. We could potentially see this range bound trading before we see a catalyst notably higher. Anna thanks so much. Great to hear from you this morning. 10 minutes past 7 00 in london. Billing, september starts with serious corporate debt issuance in europe. Our next guest says the total is likely to fall short of previous years. We will speak with colin party. This is bloomberg. Mberg. Anna welcome back to the European Market open. 45 minutes or so to go until the start of the European Market equity session. The asian equity session has been moderately positive. European futures point to the upside. Here is laura wright. The switzerland financial regulator has open proceedings against Credit Suisse following the scandal that has damaged the banks reputation and led to the ousting of the former chief executive. Latest news marks the escalation of its involvement in the matter. Tesla is planning a share sale to sell as 5 billion in stock to help solidify its position as the Global Leader in electric cars as the worlds most valuable automaker is seeing surging demand from retail investors. Tesla is expanding new factories in germany and austin texas. Donald trump has again insisted any tiktok deal must pay compensation to the u. S. Federal government. He says the sale must be agreed by september 15 or the service will be shut down. It remains unclear how the u. S. Will collect compensation from any potential deal. That is your Bloomberg Business flash. Anna september has begun, true to its billing, as one of the busiest months of the year in credit markets with a batch of new deals coming forward. By the end of today, issuance will reach 6 billion euros market wide according to data compiled by bloomberg. Amidst the flurry of selling, the yield gap between investor grade and junk rated debt has narrowed to the lowest since early march. Investors are buying riskier assets in the hunt for yields. With the amount of supply you are seeing coming to market. Typically you tell us, other investors tell us september is a strong month. Some investors tactically have to raise money earlier on this year, i suppose. Have we seen the supply you might normally see in september cannibalized during the summer . I think we have. Good morning. Indeed, if you look at the u. S. Highyield market, august traditionally is very quiet. We normally have about 12 billion of u. S. Highyield in the month of august. In the month, we have 52 billion, a record for that month compared to any other year. The secondbiggest supply month we have had in u. S. Highyield after june of this year. We have a lot of supply coming into the market not just with highyield, but investmentgrade as well. A lot of that came through in the earlier parts of the year. Even against the backdrop of volatility, i think certain companies, a lot of companies were encouraged by the debt. They had access to the market. What they really wanted to build was a cash buffer to see to the economic concerns we are seeing now. All of those things came together. Q2had a phenomenal q1 and from a supply perspective. And indeed, august as well. New they hadanies to pile of cash buffers. Investors Screening Companies for the strength of their Balance Sheet and the amount of cash they were holding. Does that mean what is the strategy for this . Is it to go along on credit in general . I assume you have to be more granular even though you have Central Banks stepping in to keep rates low across the spectrum credit. I think that is right. We have an overweight bias to fixed income, primarily expressed through you mentioned the fundamentals. We look at Balance Sheets. We look at cash flow. Is the macro backdrop might be recovered. We dont know the pace of that. We do know it is going to be a fairly weak year overall. Growth will be around 3 for the year. It is not a market where you want to buy debt broadly. You do have areas of value. You have areas, we like investmentgrade, where given the week macro, you want to be up the quality curve. Youve also got direct buying by Central Banks. If there is weakness, that is capped. Even within investmentgrade, there are areas that we think make more sense, looking at more noncyclical names of tech, health care, we like banks as well. We like these names where we think weve got a good degree of visibility on cash flows and earnings. For the same reason, you know, we are still relatively cautious in those most more cyclical areas, retail, lodging, leisure, to give examples. Anna so those are the sector picks. Thinking broadly about how the recovery in the Global Economy fits the credit cycle, normally we have been talking about recovery from perhaps a more sustained downturn. This has been a quick, sharp downturn. We have conversations about recovery. Play into credit markets . We might still have peaks in unemployment ahead or trouble for consumers ahead. Wayare you working your through conflicting macro signals . It is difficult. We feel we have to have visibility before we are willing to take risk in the name. That involves the fundamentals of the name. At a very high level, with ,entral banks, the fed, the ecb that does give us some confidence. Is a slightly different picture. You have sensitivity to that. Where should we be taking risk now . Where are we still relatively cautious . We are looking at default increasing. Controlledeen fairly in the retelling energy space, within the highyield space. Pick up to they will an 8 rate. It is important toy into five where you think these risks are. Is trying to overlay the macro picture with the sector and individual fundamentals goingfied which names are to be ok, which names are going to come through this period. Downturn,s a further who has the cash flow strength . Who has the liquidity to see market volatility . Anna we will see if we get some sort of reckoning. Thank you very much. Stay with us. Colin purdie stays with us. Coming up, twin peaks. Bond watchers calling for steeper curves on both sides of the atlantic. Anna welcome back to the European Market open. Futures point modestly to the upside. Bond watchers calling for steeper curves on both sides of the atlantic. Toasury yields have risen levels last seen in early june. In europe, five banks have lined up recommendation for higher long dated rates. Is still with us. Would you go along with this trade . The idea you should position for steepeners, expecting to see a steeper curve, a higher longer dated rate . I would agree with that, exactly what you say in terms of the theoretical aspects. The fed particularly last week mentioned the fact i think the question that has to be answered around this trade is timing. When are we going to see inflation coming through . E saw the recent eurozone what has become fairly apparent is the nearterm impacts of this virus. U. S. , alook at the large point of inflation would be the job market, would be wage growth, seen as widely reported. The job market has come off quite significantly. We get is actually on the inflation side. Where is that going to come through . In the longer term, there is a lot of talk about fiscal programs. The size and scope of any fiscal problems, europe or the u. S. , are yet to be determined. It is more wait and see on that one based on what we have heard from Central Banks and others, that the trade does not make sense. Anna how do you factor in expectations around a vaccine and what that does to yields . There,o see progress comments from Anthony Fauci and others, if we see progress, do we still managed to keep this low Interest Rate environment . For the time being, the answer would be yes. There has been clear damage done to economies. I dont think anyone is going to move and route anytime soon. Central banks have been fairly explicit. The way we think about it is in terms of portfolios. We are fairly comfortable with investmentgrade credit. If you see a vaccine come through you are going to get positive momentum. You are going to get positivity through the market. In that environment, high yield will have a bigger part to play. Portfolios in that point in time. It would be very beneficial to a lot of companies. Thanks very much for joining us. In london. Coming up, trump in kenosha. The latest on the president s visit next. Give you my world how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Anna welcome back to the European Market open. Expect equity markets to be stronger at the start of trading. Lets take a look at the key events to focus on. Will be back facing off against the Opposition Leader keir starmer in parliament for the First Time Since july at 12 00 p. M. U. K. Time. Staying in the u. K. , ad 2 30, bank of england governor sorry, policymakers including the governor will testify before lawmakers. They will discuss monetary tools needed to fight the economic slump. The London Stock Exchange will announce the results of the latest quarterly review. The Media Company plunged this year. More on that story and the stickup of the stoxx 50 shakeup of the stoxx 50. Publish the latest beige book highlighting Economic Conditions in the u. S. Lets get a roundup of the latest news. The u. S. Economy urgently needs new stimulus to rebound from the Coronavirus Crisis according to Steven Mnuchin speaking to a house committee. Sources tell us he started a conversation with nancy pelosi amid stalled negotiations. He stopped short of offering a fresh proposal to break the deadlock. The pentagon is warning of chinas increasing nuclear capabilities. Its rapid nuclear bill that means the country is going to join russia and the u. S. In the ability to Deploy Nuclear weapons. According to an annual defense report, chinas progress upgrading its bombs should achieve this triad of delivery systems. Chinas Charm Offensive in europe may have backfired. The visit of the Chinese Foreign minister culminated in a Tense Exchange in berlin. He was confronted by his germany counterpart for saying the check Senate President would pay a heavy price for moving to taiwan. 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. Thanks so much. Let us talk about what we are seeing in the morning calls from various banks. The euro is faltering after breaking through that 1. 20 to the dollar mark, the highest since 2018. It came after philip lane said the eurodollar rate does matter to the central bank. Some analysts see the single currency breaking lower. Others remain fairly bullish. Lets get into todays morning call with the dani burger. What are we hearing on the euro . We are definitely hearing both sides of the argument, which is maybe why we are seeing so much waffling on the euro itself. In the more bearish camp we have someone like scotia bank and analyst sean osborne point to fills comments and say we are finally getting philip lanes comments saying we are finally getting pushed back saying the euro depreciation matters for policy. Because of that, his call is the euro is likely to go as low as 1. 175. Just trading about 1. 19 or under their. We have people saying you cannot discount for the rally in the euro against the dollar. Particularly, that we are going to see you have to respect the momentum. Hutchinson saying you cannot discount the positive narrative in the market at the moment. For that reason we could see the euro move higher from here. We will keep an eye on the single currency. You have also been looking at details coming through on esg research. Inhave been talking a lot recent months about the way esg has performed through the crisis. What is the latest research . Collects the latest research actually is really against a lot of the things we have been discussing. This comes from university of waterloo and Nyu Stern School of business. Research saying esg stocks in the u. S. The first half of the year did not outperform during the pandemic fueled selloff. This is contrary to people like bank of america researchers who said esg did help you. These researchers found in the first quarter, esg did not have any smaller losses. When the market rebounded, they did not lead the way. Instead, things like liquidity and leverage were more important. You and i were discussing this. This is just a sixmonth time horizon the study took place. If youre investing horizon is a decade, this may end up being statistically insignificant. It is interesting esg did not perform as well as we expected in this crisis. It is unclear whether that is enough to completely throw out the notion esg can give you alpha over the longterm. Anna really interesting which question you pose. Thanks so much for bringing us the latest on those morning calls, the latest research update. Back to u. S. Politics. A week after two protesters were fatally shot in wisconsin, President Trump visited kenosha to applaud police and the National Guard despite objections to his trip from the citys democratic mayor. Ourning us on the phone Senior International editor jodi schneider. What is the message donald trump wants voters to take away from his visit . Jodi a law order message. That is his key messaging. He went to kenosha not to meet with the family of jacob blake, the black man police shot multiple times during an arrest a week ago more than a week ago. But to talk about demonstrations and to thank the police for quelling demonstrations. Last week a business condemning what he is calling dangerous antipolice rhetoric. Trying to paint a joe biden, his democratic rival, as somebody against thatgo violence, even though joe biden has come out against violent protests. Is for peaceful protests, but against the violence. Trump ispresident getting out the law order message. How is joe biden responding . Jodi he has sent a more complicated message. He wants to blame donald trump as aowing violence, spokesperson said today, President Trump cannot bring himself to condemn the violence he is stoking, but also not supporting violent acts. He supports peaceful protests and he supports black lives matter but does not want to see violence or looting. It is a more complicated message to get across. President trump is doing what he paint joe biden as soft on this. Joe biden according to the New York Times is going to be coming out with ads in which he comes out against the violence himself , trying to get out ahead of this issue. Anna thanks very much. Jodi schneider joining us with the latest on u. S. Politics. Coming up, a group led by apollo has drawn one of the biggest property deals ever in the middle east. An exclusive interview with us at bloomberg. The welcome back to European Market open. Apollo Global Management is leading a consortium of investors in the real estate of abba ws oil company in one of the largest property deals in the middle east. The president about risk in the current market environment. We are in a low rate world. While we have parts of our business trying to get doubledigit plus, a midsingle digit yield on a great longduration asset, that works very well for us. Perspective, it is getting more challenging. You have to navigate a tricky environment right now. When youre trying to make 5, 6, 7 , you can find places to do that. Pimco is prepared to go overweight the trouble suspect travel sector. Some would say that is a big risk play. Is that the kind of risk you are prepared to take . Travel, energy, hotels . When you run a 400 billion plus portfolio, it has been well noted we have been participating in the really unique opportunities in the Airline Space or the trouble space. It has been noted we were active around the Airline Space. We have been active in a couple of the restructurings. There have been dips in latin america. I think it is a little too early to call the end or the bottom of this pandemic. You need to really think about structure and where you are. We are not afraid of investing in challenging industries. It really gets down to structure, security, and making bringing skills we have honed over the last 30 plus years to the table. You can track back to precovid. Do you think they continue to compress given what you heard from jackson hole . The fed is going to continue to be a very active player on high quality assets. There is going to be distortion dispersion between lowquality and highquality assets. It is hard to get longduration. The trend is positive in terms of spreads, notwithstanding any kind of dislocation from a global event. We havehave been reinvested a lot in march and april. We need to have a focus on that area in our business. May be big opportunities pass you by . You have to be patient. This pandemic came out of the blue. Behavior, on consumer on consumer activity, especially in the u. S. Where consumers are 70 of the market, there continue to be known unknowns. I think we are fortunate we have a broad platform between private equity credit. We have our fingers in a lot of opportunities. , onenk at these levels needs to be measured and thoughtful. When we think about asia broadly speaking and japan in particular , we think there are opportunities that are consistent with how we invest. I would say the same thing about opportunities right now. We are tryingia, to pick our spots in that region and how we invest our value and structure. Versus p. M. ,f e. M. M. , do you have a sense . People say what the fed did was an ignition torch. Myms of that lien apologies. Certainly the concerns about e. M. Versus d. M. In march and april have subsided. There is a nice compression. How much it has tightened is an open question. If you look at our portfolios we are probably a majority of d. M. Around the globe and we have some e. M. Overlay we are excited by. , are spreads are right now more balanced approach is probably the way. That is key how we invest from a value and. Manus where is the biggest opportunity at the moment . We think around the globe right now, certainly early days on commercial real estate, early , two bigviation ecosystems that, you know, you really need to be involved from front to back. Aviation, manufacturing to airlines and everything in between. Commercial real estate, it is a slower moving train. It will have a big impact. A lot of money has been put in the ground. As the consumer, we adjust to this new world. There will no doubt be opportunities in commercial real estate. A bit slower moving because of the nature of the assets. That was the copresident of apollo. Glad we were able to bring that to you. Speaking exclusively to bloomberg. Bda aregenerale and the the latest victims of of the euro stoxx 50. They will be removed from the benchmark. The changes signal a shift to new economy companies. Lets get some analysis what is behind these moves. Clear that youve got Telecoms Companies and banks making way for the new economy. You have a value making way for growth here yes, good morning, exactly. It is stock specific in terms of individual names, but it is a broader picture. Technology and stayathome stocks coming in. The stoxx 50 index we are looking at is really not very tech related, traditional sort of banking another financial stocks. To see these tech names coming is quite significant. Some of the companies you they havelike adyen, just lost competition with wirecard leaving. Quite stock specific, but also it is a shift toward tech, something the european benchmarks are really lacking compared to the u. S. And even the asian sectors, just starting to see a trend of tech stocks. Anna i know we are going to see a reshuffle of the ftse. Are we expecting a similar trend . Itv. Are expecting that one is going to leave. That is due to their decline in advertising revenue. They reported advertising revenue down as much as 40 in the second quarter. Companies cut back on spending due to the virus. Beingkey programs postponed. Love island, the big moneymaker the past few years. Those kind of event shows have been postponed. This has hit advertising revenues. There is also been quite a bit on itv givenation the ownership by liberty global, around 10 of the stock. There has been speculation it could become a takeover. That has not happened. Has knocked the wind out of their sales. Ae company is likely to be Discount Home where company which basically says two things. People are spending more time at thosend also looking for budget, benefiting the budget part of the sector. Anna i do not think i remember a time when we were not talking about itv as a takeover target. Now, minutes away from the market open, next, we will get your stocks to watch, including Credit Suisse after switzerlands financial regulator begins proceedings against the bank. Against the bank. Anna welcome back to the European Market open. Lets get the stocks we are watching this morning. Not a great deal of earnings. Plenty of stories to trade around. Let us start with problems at Credit Suisse they hoped they had put behind them. Quick that is right. Those problems being the scandal that led to the ouster of the thenceo. The probe has been escalated by the swiss regulator. They have opened up enforcement proceedings. Earlier this year, the regulatory body had appointed an auditor to investigate. Now it says that portion is over and it is pursuing indications over violations, if there was a systematic nature to these activities, how they were documented. That could hurt Credit Suisse stock. Anna we have not had a great deal of earnings, but we have had numbers out from the drinks sector. Pernod doing better than its rivals or some of the brewers that have struggled as bars and restaurants are closed. Instead, pernod has been able to make up for those closings by having more orders at home. A smaller than expected drop in regular earnings, likely to outperform. About the u. K. Housing sector . Nationwide numbers at the top of the hour. There was high expectation i suppose. Definitely. You had tax cuts. The biggest rebound in prices in 16 years. That perhaps is helpful to the home buyers. Got earnings from barack, arratt, no longer announcing dividend for fiscal year 2021. That macy declines. Those shares are called down as much as 2 this morning. Anna thanks very much. The mix ao throw into steel company. We have talked of debt restructuring. Ryanair also putting out traffic stats. That is something to watch. Minutes to go until the start of the European Equity trading. Upures point to the upside, 0. 8 on ftse futures. The open is next. One minute to go until the start of the cash equities trading. Good morning, everyone. Here are your headlines. Trump in kenosha, the president continues the rhetoric week after a shooting. Rival joe biden accuses him of failing to meet the moment. The euro breaks 120, crossing a key level for the first time in it years. Lane. Philip and starting proceedings against Credit Suisse over spying on employees. Good morning, everyone. Lets take a look at the futures as we wake make our way to the open. Futures suggests we will be stronger at the start, euro stoxx 50 up, ftse futures up about 7 10 of 1 . Upsideo soup aided anticipated. The ftse 100 up by 2 10 of 1 , the ibex in spain up by 3 10 of 1 , and we are getting some movement to the upside anticipated, not great movement, but we are seeing general moves upwards. The cac 40 and the dax, waiting for them to open up, and some individual stocks, one is down over 7 . Onestop we were talking about with one stock we were talking about with dani is up. Have a rival in the United States that does the same thing, and one stock has changed. Overall, we are positive. And just one minute into trade, europeanf 1 , and equity markets opening higher. The euro breaking above the key 120 level yesterday. Joining us is an investment director. Toet, a very good morning you. September has started the way august finished, and that is higher u. S. Equity markets. Is there anything you can see that will stop the tech rally in its tracks . Yes, the markets have rallied strongly in the u. S. A lot of investors and clients i think the nearterm risk would be the u. S. Election,actoring in a biden presidency and there could be a shock in the short term. Other risks, the u. S. China tensions. Approval trumps rating continues to go down, then he would be more aggressive with china, because that is his flagship campaign. And with the virus, if we could see a second or third wave, there could be some localized lockdowns, so these are the risks in the near term. So there are some risks out there, are there, janet . Plenty to talk about with the u. S. Election and more. I want to get with you about the start of the u. S. Equity trading day. How are you positioned in europe . Do you favor one part of europe to another . Thedo you sit in regard to u. K. Stocks, for example . Janet we are negative on u. K. Stocks. Basically, we have been due toight for a while our outlook on the assets generally. Exposureslike the with financials and energy, and we think there are a lot of headwinds to the u. K. Economy actually. Theourse, we have got unresolved issue of brexit, and, to us, we think there are more headwinds to the economy, and we think it is lower at the moment, and we from 4 to,to rise say, 7. 5 . U. K. Assets, but on the other hand, we are adding because we look at the recovery, and the house situation we think that there is better recovery coming from that region, and we think the ,timulus there is quite strong so we are warming to some equities. Anna ok. And what about the u. K. Housing sector, janet . We had some numbers out this tt, but some barra at bloomberg saying this could and short boom, unemployment, as you suggest, could be on the rise. Janet yes, definitely. Sector,rm the housing there is policy. There is a lot of liquidity out far, therealso, so is a program that keeps people in their jobs. Havee could not actually transactions during the lockdown period, so what we see is a culmination of the factors with the short term boost in the Housing Market, but we are skeptical that will last. But there could be some benefit. It depends on their Balance Sheet. Anna and you were saying that you are not back in on u. K. Stocks, one of our colleagues writing something similar, talking about how u. K. Stocks are falling behind. Part of the reason for that is the weak dollar and, therefore, the strong pound. Does a strong euro put you off eurozone stocks, janet . How do you work out strategy for the eurozone . Janet yes, so i think to a certain extent, as the euro strengthens much higher from here, then we will be much more eurorned, and we like the with the global recovery, so a stronger euro would not favor that. If it really rallies much higher from here, that would be a bit more of a concern, but we think that so far, the weaker dollar trend has happened in a very short space of time and happened quite quickly, and we do not think the euro will strengthen a lot more faster from here, so we will keep reviewing the situation, but these levels are still manageable. Much,janet, thanks very and stay with us a little bit longer on the program. We will get more from janet. Coming up, Steven Mnuchin and supports additional Stephen Mnuchin supports additional stimulus. How should investors be positioned . More from janet in a second. This is bloomberg. Anna welcome back to the European Market open, 10 minutes into the trading session, the European Equity markets up by more than 1 in some of these markets, including the ftse market up by 1. 3 dax up. Lets get a Bloomberg Business flash. Here is laura wright. Enforcement proceedings opened against Credit Suisse amid a scandal that damaged the banks reputation and led to the ouster of ceo tidjane thiam. This marks an escalation. And planning to go public, sources tell bloomberg a company could seek a valuation of 68 billion, with the private equity firm blackstone buying a stake in bubmmble. Sales,s planning share wanting to sell as much as 5 billion in stock from time to time for the leader in electric cars. They are seeing surging demand for its shares from retail investors. Tesla is expanding factories in germany and in austin, texas. That is your Bloomberg Business flash. Anna . Couldi covid19 vaccine be available earlier than expected a covid19 vaccine could be available earlier than expected. Anthony felt she made some madents Anthony Fauci comments that push stocks higher. Treasury secretary Steven Mnuchin and was on capitol hill a tuesday, testifying before house panel about the administrations response to the pandemic. Uchin i think the economy is recovering very strongly, but let me say there are still areas of our economy that need more help to recover, and more physical response is needed. The president and i want to move forward with more physical response, and let me just say the expiration of enhanced Unemployment Insurance is something that we are concerned about, and i want to emphasize the president and i do support additional fiscal response, and we have been working hard to get a negotiated agreement on a bipartisan basis. We would like to extend enhanced unemployment and would like to send out more Economic Impact payments. Those both have been critical to the economic recovery. With us isat janet mui. Stephen mnuchin suggested on both sides of the aisle Stephen Mnuchin steven m nuchin was talking about more support for families. What expectation do you have that we get some extension to the cares act, some physical bridge to take us into next year . Janet yes. I think we expect some sort of stimulus would have to be extended. There is increasing call for that. There is a lot of pressure with protests around the u. S. , people who do not want to be evicted. There is increasing pressure from the economic and social side and the political side to get something done, and they will meet somewhere in the middle. Trumps, actually, election chances have been higher, because it has been seen that the democrats are trying to stall the stimulus through, so i expect there to be more pressure on a deal to be met. We are seeing in the data, the personal income data, in the u. S. Has started to slow again because of that extra unemployment benefit coming to an end, so it is absolutely critical for the government to stand some of the stimulus and support of the economy, which is 80 services and consumption based. Ana and, janet, do you have sense if we assume we get the results of the election in a timely fashion in november, do you have a sense of which outcome would do what to risk assets . Because it seems increasingly difficult to understand how the market is positioning around the election. Is thatst on the vix investors expect a lot of volatility running up to that event. What is your expectation . You look i think if back at history, i think a unified democratic government would be a bit more negative for the stock market than otherwise, so we think that there would potentially be a nearterm selloff if there is a unified democratic government and joe , because hesident , notses more tax rises good for corporate earnings, and all of the classic reasons why with a democratic government, but it could be different this time, because there is a lot of concern on the social side of , and i think a lot of taxation might not actually go ahead at the end because of cyclical economic circumstances, and i think that either government will do more stimulus if they got elected, so that should actually support the stock market from the monetary and fiscal side of things. It is our expectation that either government in the longerterm, we still see at assets. Ets at risk a lot of stimulus from either side. Anna yes. Really interesting to see how fighting a pandemic throws out the old rulebook about what democrats do and what republicans do. Let me ask you about supply chains, janet. Do you expect that companies in developed markets are going to start to cut out china from their supply chains, explore doing that, or would that be to overestimate the impact deglobalization will have . Think, you so i with the coronavirus manufacturers and where they should source their supplies, everything has had significant disruption to the supply chain, so there is a lot of review going on for these companies in manufacturing on should they relocate from china, but i am finding that only a very small percentage of these companies are actually going to move their operations or move their supply lotns out of china, so a more are talking about diversifying their supply chain instead, which is having china as the key supplier but exploring some other options in other regions, so overwhelmingly, the majority of companies do not have plans to have significant changes in their supply chains, so i would say there is a lot of review and but i do nots on, ssenk it will happen en ma about the moving out of china. If you look at the pandemic, china was one of the first countries to reopen and actually rebounded very strongly, and it is an economy that restarted the supply chain. If you are a manufacturer, you would be thinking, is it really a good strategy to move out of china, which has proven itself to be a reliable partner during the pandemic . Janet, as we increasingly hear more about the timescale for a vaccine and expectations around a vaccine, do you start to position yourself more for a vaccine, do you start to position yourself more for that . Janet actually, we have been adding to risk assets, so my previous appearance on bloomberg was saying we like these assets. Argument that we think we are in the recovery phase of the cycle. When we were in the early stage of the recovery, risk assets had to do well. We should actually be positioned for higherrisk asset prices, and we have been positioned for that already, so we should be incrementally adding more at this stage, and we are withantly reviewing that an overweight position in equities. Anna janet, thanks very much for your time. We appreciate it. Janet mui. Janet will be continuing the conversation with us on Bloomberg Radio at 9 00 a. M. U. K. Time. Coming up, the swiss regulator escalates a scandal with Credit Suisse. We will get the latest from zurich. This is bloomberg. Welcome back to the European Market open here on bloomberg tv, 22 minutes into the european trading session, and u. S. Futures also point to the upside, 9 10 of a percentage higher on nasdaq futures. Inma has opened enforcement proceedings against Credit Suisse over spying on former employees, damaging the banks reputation and leading to the ouster of the ceo, tidjane thiam. A Swiss Banking reporter joins us from zurich. I am sure that Credit Suisse had hoped they had put this story behind. What is the latest with the regulator . Good morning. So the news i think is clearly a shock. It just goes to show to what extent this whole drama has rocked switzerland and rocked the financial sector. The whole thing goes back to around a year ago, two last autumn, where a top banker at Credit Suisse left to join a rival, and then the bank decided to follow him, actually had private investigators to follow him through zurich, and that caused a huge scandal, which the decidedgulator, finma, to look into it. At the beginning, they hired an external law firm to look into and they have escalated it into what is known as an enforcement proceeding, and that, i think, is a sign it is getting more serious for Credit Suisse. Be limits toight what Credit Suisse can say at this point, but have there been comments from the bank . Patrick the bank has sent out a short statement, basically acknowledging what the regulators decided to do and also saying that the spying reiterating that spying is not really a part of its talk. I would not expect the bank to say to your much more, especially in the next weeks or i would not expect the bank to say too much more in the next weeks or months. One possibility is the bank could target individuals ividually or decide to go the regulator could target others. Als or go after it is not like they can slap these huge fines on banks. It is more a reputational thing. What they could do is ban executives from the industry, but we are not sure those are options. Anna ok, patrick, thank you. Maybe that is why Credit Suisse shares are up. Patrick, i reporter in zurich. Over in italy, working with the entirely Italian Government shares. Off some and the Housing Company in the t, says things are up. How long will the Housing Market positivity continue . America, one stock up by 4. 9 . Up next, german lawmakers. Could an investigation overshadow the september election . Party in germany. That is next. This is bloomberg. Welcome back to the European Market open, 30 minutes into your trading session, and European Equity markets up quite substantially, 1. 3 , the stoxx 600 right now. Around vaccines, the tech rally continuing in the United States, all of that pushing stock markets upwards. I can see all stocks on the stoxx 600 moving upward, all sectors, rather, even the ones at the bottom of the rankings, if you like. Lease,nd insurers up the but they are still up. We see media and chemicals banks and insurers up the least, but they are still up. Lets get a bloomberg first ward first word update. Laura one week after protesters shot in kenosha, President Donald Trump has visited the city. He applauded the police and the National Guard. The trip came despite the objection of the citys mayor and the state governor, both democrats. The president did not meet with the family of jacob blake, the black man shot in the back by police. President trump will you can take the people in kenosha that are not here President Trump you can take the people income are notin kenosha that here. They want people to keep them safe, where their houses are not broken into, where they are not raped and murdered. That is what they want. Laura australias economy contracted the most on record with the first recession for the nation in almost 30 years. About oned, percentage point more than expected, and there is the ongoing lockdown in melbourne, the nations secondlargest city. Abesan, shinzo righthand man is favored to replace him. He is not ahead in opinion polls, but he does have the support of key factions within the party who will decide the succession. This will goeports on on september 14. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Anna . Anna laura, thanks so much. Laura wright. Now, to the wirecard story. Key officials in the Angela Merkel government and watchdogs failed to put the issue to bed. They will start a full parliamentary probe, meaning the scandal will be kept in the public eye. A german greenis Party Representative and finance committee member, a lawmaker in germany. Thanks for joining us. I wonder if you have had some time to work out who you think is to blame for the wirecard scandal . Well, there are many. The problem is that this is a huge, huge scandal in the history of modern germany, and so this is really work to do during the small amount of time. You know we have elections in germany next year. We only have three or four big,s to look into this big scandal. Anna how high up does responsibility for this go though, lease out . Do you think that some responsibility rests with the chancellery . Lisa yes, because the chancellery, they were naive withly wirecard. You know there was also a secret Service Aspect in this scandal. The main responsibility, of course, lies in the ministry of were lotscause there of references to accounting fraud during several years, due to the good work the financial ands did, by the auditors, all of the responsible ministers. That and do you think felix should resign . Well, his chair is really how it, and we will see will go on, but the truth is that this fraud shows that the bafinisory authority of does not work, and they need a new start, and the question is if hufeld is the right man. Anna what is the secret Service Aspect hear that you referenced, lisa . Do you think the authority should have been investigating . Been they should have investigated, because one of the is now of the board searched for with international notice. A spysaid to be probably of the russian government, and the chancellery told us that they did not have any evidence of that during the last year, but now, many, many evidences show up that should have been known for several years already. Anna do you think that so when you talk about something there that goes far deeper than just accounting and finance regulation, so if proposals exist at the moment to give bafin accounting and enforcement powers, is that enough, or does this need to go much further . Lisa no, this goes much further. Also talk about auditors. We do have a big issue on this question of Money Laundering right now. Nobody wasd that responsible for supervising Money Laundering at the company, so there are several issues to look at, and the bafin, of course, the ministry of finance, but there are several other aspects in this really huge fraud. Some people are calling this germanys fraud of the century. So regulation, where should you start in terms of regulation and oversight of the finance set . How should it be reformed . Lisa well, right now, we theyadmit that in germany, say there was no knowledge and no expertise in really going authority ic , and wirecard did do fraud, one gigantic fraud machine they built up, and then if you have this authority that says they do not have any experience in forensic oversight , supervising, then this is the core issue that has to be resolved. Toa this is clearly going be a talking point in berlin. It is going to be something that has people in finance talking and in political circles, lisa. Is it going to have a real impact on how people vote in the election . Lisa we will see. Whole government is involved in several aspects. Of course, the people of germany will look at how this is dealt with, and there is a huge interest on the public in this fraud. As you know, wirecard was listed during the time, they were worth 20 billion euros, and now, it is almost zero, so many, many people lost a lot of money, so this is really a huge issue in germany. Issue. T is a huge your support of this investigation, lisa, is no doubt designed to increase your appeal in the next election. Which party do you think you will be able to win votes from by pursuing this particular policy . Lisa well, this is not our central issue. It is not to raise votes. The issue is that the population of germany wants this to be inquired, and we do our job, and back to thee European Market open. U. S. Futures also pointing higher, and no surprise that nasdaq outstrips the others. U. S. Futures up by just over 1 . Reporter a regulator has opened an investigation into Credit Suisse. This involved a former chief executive. Anythere is the idea that tiktok deal should pay compensation to the u. S. Government, with a sale agreed by september or the service would be shut down. It remains unclear how the u. S. Would collect compensation. Go bumble is planning to public. Sources tell bloomberg it could seek a valuation of 6 billion to 8 billion. Aprivate equity firm bought majority stake in bumble, valuing it at 3 billion. No official comment yet. That is your Bloomberg Business. Anna . Anna thanks very much, laura wright in london. Toesting one billion euros transition completely away from the use of fossil fueldrive micals and cleaning and fossil fuel derived chemicals and cleaning products at unilever. It will cut down their dependents by 2030 as part of their aim to become Carbon Neutral by 2039. Joining us is a unit lever president. You for joining us on the European Market open. This move you are announcing, can you give us a bit more about that, in terms of your product, the manufacturing, the process . How significant is the announcement you are making today around the use of carbon in these laundry products . Peter 16 in renewables already. R, apologies. I thought you disappeared, but you are there. If you could just start again, the significance of this with the Carbon Footprint with the laundry business . Peter it is really important that the Home Care Industry make a switch into renewable carbons. When you look at the home care 46 s for us, only 31 is in raw materials, and that is what we are changing with this initiative. And you are calling on others in the same sector or in other similar sectors perhaps. Rainbow,about the replacing them with other sources, captured carbon. Algae. You give that a blue color. This rainbow, what businesses are you calling on to take action similar to you . Industry change which we are hopefully kicking off will require all of the skill of incumbent suppliers, like dow, as well as new biotech alternative skill carbon sources to make this change happen, and we hope that with unilever serving one billion consumers every day, 100 billion washers, we hope that with our skill, we can truly clean up. Anna and what has been the impetus to making you pursue this course, peter . Specifically, have you had pressure from shareholders, who are increasingly vocal on green issues . Know leverink you has a longstanding commitment to make the total company i think unilever has had a longstanding commitment to make the total company greener. We formulated the plan on how to drive it at scale in our. Usiness the Business Case for doing this is very simple. We know that there is Consumer Preference when you have the same quality, the same price, but now sustainable. Customers love it. There are all of like thenalities, carbon taxes coming. It is better to be ahead of the curve, and last but not least, talent attraction. For a dirty work industry . Especially the young people, they want to be a part of the solution. And a business that specializes in laundry wants to be a clean one. It beingu talk about simple, but if it is that simple, why has it taken so long for your business sector to move in this direction . We moved for many years. It is not that we did nothing. We focused on low temperature washing. We focused on plantbased cleaners. Unilever is a leader. But now, it is time to move the big mainstream brands, and most consumers, especially many hurting post covid with the economy, same quality, same price, but green. Need newlock that, you science, and we believe that especially biotech is now ready to industrialp scale light for home care. How much of a feature is this kind of concern . Matters andut esg the environment. How much does it feature in shareholder conversations . When you and others meet with shareholders, peter, is this all they want to talk about, or is this an addendum to the conversation . How is this treated in conversations . Like ultimately, issues Climate Change have become part of the framework, and companies who are not willing to deal with their externalities are more risky companies. So all smart investors obviously now look at businesses Like Unilever covering all of their bases, and this is a very important one. Climate change is real. Plastic tax is real. All of these discussions. They are now here. They will not go away. And you need Companies Like ours to deal with it, and i am very proud to work with a company that is in the forefront of, you know driving this change. You seeing in are terms of response to covid19 in the Home Care Division . There is more emphasis on hygiene at this point. Has that been driving up demand in your product . Peter it has been an unbelievable roller coaster, as you can imagine. The demand for distant product disinfectant product went through the roof, and laundry a little less so, but disinfectanta has disinfectants has gone through the roof. Supply shocks, more issues we need to manage, and i am super happy, super proud, especially of our supply chain. And we were able to continue the the billion consumers that we serve while managing all of this enormous upswings, especially of disinfectant supply. It has been a wild, wild period. Er, thank you so much for talking to us. Unilever homecare president , peter ter kulve. The euro stoxx 50 gets its quarterly makeover. We have details next. This is bloomberg. Back to thee European Market open, 54 minutes into the trading session that is a very positive equity market, tech stocks still expected to rally in the space. Another blow to the making sector, Societe Generale losing their place in one of the benchmarks, one of the changes coming to the euro stoxx 50 when the shuffle takes place on september 23. Dani burger has the latest on what to expect here. Dani, give us the lowdown. Anna, we arearter, seeing one of the biggest changes in the euro stoxx 50 that has happened in decades, and that is the inclusion of more growth sort of names in favor of value. That reflects how investors have been trading since the pandemic, so we have Companies Like internet investor prosus and a dyen taking the place of bbva and soc gen, which you mentioned, and there is this. Plit, more sentiment those changes might just fuel this rush to growth because passive funds to attract these indexes and investment stocks in them. , thanks very much, dani burger with the latest on those benchmarks, and watch out for the reshuffle on the ftse, as well, coming this week. That is it for the bloomberg market open. Stay with bloomberg. Up next, it will be surveillance, and we have the market up. The dax up by 1. 5 , and up by 4 10 of 1 on the ibex, and the ftse up. Optimism around the vaccine, ongoing enthusiasm for tech stocks, and the anticipation of fiscal stimulus in the u. S. And ongoing monetary support, all of those things leading to a risk on start to september. This is bloomberg. Look here, its your very own allinone Entertainment Experience xfinity x1. Its the easiest way to watch live tv and all your favorite streaming apps. Plus, x1 also includes peacock premium at no extra cost. This baby is the total package. It streams exclusive originals, the full peacock movie library, complete collections of iconic tv shows, and more. Yup, the best really did get better. Magnificent. Xfinity x1 just got even better, with peacock premium included at no additional cost. No strings attached. Francine trump in kenosha. The president condemns antipolice rhetoric a week after two protesters were fatally shot. Rival joe biden accuses him of failing to meet the moment. Acrosso briefly breaks 1. 20. Candle scandal. Enforcement proceedings against Credit Suisse over spying on former employees