Hold onto a recent rebound and global stocks head for a second week of losses. The European Union is giving Boris Johnson until the end of the month to back down on his controversial brexit bill. Cable holds at 1. 28. And citigroup names jane fraser ceo, making her the first woman to run a major wall street bank. She faces the challenge that alluded her predecessors, boosting the banks profitability in line with its rivals. Just under an hour away from the start of cash trading in europe. Lets take a look at where futures are pointing here on the dax, ftse, and euro stoxx 50. Futures all pointing down, although slightly lowered right now, with ftse futures off by about 0. 3 . Take a look at u. S. Futures quickly after the drops we saw yesterday, almost 2 drops. We have a bouncing futures bounce in futures. Anna lets have a look at some data out of the u. K. We are getting monthly gdp data. The u. K. Economy growing by 6. 6 in july. It is almost in line with the estimate of 6. 7 . No surprise we see such a highgrowth number by historic standards even the lows we slumped to. The hospitality sector reopened in july, providing some upside. A big concern, even looking at the strength in these numbers, the rebound that we are seeing, a big concern about where it goes next when the furlough scheme comes to an end at the end of october. How might unemployment go . How will we go through managing coronavirus through the winter . July butmy surging in still clouds gathering, in the words of my colleagues at bloomberg news. Asian equity markets fairly resilient, up by 0. 3 , increasingly resilient as we have gone through the session, so managing to recover from earlier lows, despite the extensive selling late in the day on wall street. U. S. Futures point to the upside. Lots to talk about. We have got idiosyncratic stories, so indonesia, that market suffered a lot because of restrictions reintroduced earlier on this week. Now, we see a bit of a rebound there. Taiwan dollar seems to be fairly volatile. Asia fairly resilient through what was or the aftermath of what was a turbulent session. More, eddieow for vanderbilt. What do you make of the wall street action yesterday . We sawtek names leading to the upside tech names leading to the upside in the first part of the session, then leading to the downside at the end of the session. What is the story for you . I think that is a little bit of that. We just had such a good runup since march, particularly in the tech stocks. The problem is that a bearish narrative is not hard to construct from here. If we see another couple of days, if we drop below the 50 Day Moving Average on the nasdaq 100 and so on, if we drop below those, it is very easy for the fundamental analysts to get on board with that and say look, the economy is still struggling. We have still got the virus, we still have not got a vaccine. Its very easy to construct a bearish narrative from here. Matt so in that case, do we see commodities start to come down . Do we see copper start to come down from the highs it has hit . For me, there is a big split at the moment. Copper come on the one hand, saying that copper, on the one hand, saying that things are great, things are recovering. Copper sitting at highs that we saw before the trade war started. Oil, on the other hand, is still in the pits. They had cut more than 7 Million Barrels per day and still, you know, oil is not able to recover and get to that 50 per barrel level. I think i believe oil because it is a faster cycle. I think that is the big risk at the moment. Anna really interesting lines coming through from philip lane at the ecb, saying inflation to remain negative for the rest of the year. Downys the euros rise since the inflation outlook, inflation has been significantly muted by your against. I am not euro gains. Christine lagarde was picking her words ever so carefully, wasnt she . Weg explicitly many times, do not target the currency. What did you take away from the ecb . Verythink lagarde walked a fine tight rope. A stronger dollar would be negative for a lot of people. We have seen the dollar and stocks are inversely correlated over the last few months. If we see the dollar researching, that could could , that there is really nothing they could do at this stage but sit back and watch. I think some of the markets were surprised that she did not offer stronger verbal intervention. I think there were real risks from starting to talk down the euro at this point. Matt so do we see the euro than 31, but do we 1. 18 or thegetting to 1. 20, possibility of 1. 30. If we do get to those 1. 30 . Stage,e do get to that the ecb will start to talk it down. If it goes much further, they will start really addressing the problem. Axe interesting double emerging between Christine Lagarde and philip lane. Philip lane is certainly giving us something to read and digest this morning. Thank you very much. Just a quick line on another red headline breaking across the bluebird. Tesla plans to start shipping china built cars to europe and asia. Its nice to talk about the actual nuts and bolts, if that is even the right word these days, the nuts and bolts of actually making cars, matt. Matt absolutely. That is something that we will be focusing on. As new york prepares to mark the anniversary of the worst terrorist attack on american soil, we will speak to tom kbwaud, chairman and ceo of. Quarter ofre than a their employees in the World Trade Center attack in 2001. We had to the break on the morning of september 11, we will show you live pictures of manhattan as the city wakes up and bring you full coverage of 9 11 memorial events throughout the day. This is bloomberg. Welcome back to Bloomberg Markets european open. It is 10 minutes past 7 00 so 50 minutes to go until the start of the European Equity trading day. European equity market futures suggesting a little bit of downside. Lets get a bloomberg first word news update with laura wright. Europe has overtaken the u. S. In terms of new coronavirus infections. The eu, norway, iceland and liechtenstein reported more than 27,000 cases on wednesday, compared to just over 26,000 in the u. S. The region has reemerged as a global hotspot after bringing the pandemic under control earlier in the year, with resurgent infections in countries including spain and france. The odds of another round of u. S. Fiscal stimulus have dropped. Senators blocked a republican proposal for slimmeddown support in the region of 500 billion to 700 billion. Democrats are looking for 2. 2 trillion. Minority leader Chuck Schumer told reporters he hopes the result will prompt gop lawmakers to come back to the negotiating table. President trump says he will not extend his deadline for byte dance to sell tiktoks u. S. Operations. Separately, sources say byteda nce is looking to make singapore beachheadhead its for asia. Global news 24 hours a day, onair and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Matt thanks very much. Laura wright there in london with your first word news. The selloff resumed on thursday, with stocks headed for a second week of losses in the u. S. It has come, of course, around the world as a renewed rout in mega cap tech stocks. It highlights lingering concerns about valuations in certain parts of the market. European and u. S. Futures diverging today, with your pointing to some slight losses europe pointing to some slight losses. U. S. Futures are actually rising a little bit. We are joined by Florence Barjou , deputy cio at Lyxor Asset Management. Thanks for joining us this morning. Happy friday. Let me ask you, what has happened in the u. S. . I think there were at least two occasions this week where we thought, ok, that was just a blip, now we are going to resume the rally. We have been we down yet again weighed down yet again. Florence if you look at what happened during the summer, we saw a major trend on the u. S. Equity markets, especially on tech. If we try to understand why this is coming from, you have fundamental reasons linked to markets pricing in a robust recovery, liquidity slowing. And then obviously, you have everything linked to speculation. Massives been these discussions about softbank intervening in terms of an option on the tech stocks in the u. S. Market. What we see now is may be a reversal of those kinds of trades, with markets may be questioning a little bit the strength of the recovery. We had some data out of the u. S. Labor market yesterday which was a bit disappointing. We are questioning fundamentals. We are questioning also everything linked to the covid situation, with, you know, wait s for vaccines. And then, you have everything which is linked to technical. When you have such a big player as a softbank coming into the , obviously, it is bringing liquidity on the upside. They only provide liquidity during the upside. When you have technical effects from big players pulling out, well, that can morph into something a bit more violent. To be honest, for the moment, we are not worried. Upward trends in markets have been very strong. Like, it still looks profittaking. The fundamental story is still there. Anna florence, pause your thoughts for a second. I want to get to a headline across the bloomberg. To cut up to 9500 jobs worldwide. Germany based, of course. I think it has around 40,000 employees, so about a quarter of the workforce would be fairly substantial. That takes me to my next question. Itime to buy cyclicals time to bicycles is it time to buy cyclicals . How do you see the cyclicals space in the face of the volatility that we have seen in tech . Florence to be honest, i think its a bit early. We hit a low point in march. What has been driving stocks . I would say it linked first to radical change in the way we see the economy. For has been supportive tech stocks, thats clear. And then, the recovery which we have been witnessing since the economies reopened, for the moment, it has been very strong. It snapped back from a dramatic situation. Now, what we are looking at is, is this recovery is going to remain sustainable . Is it going to remain on such a strong linear trend . What we see is that probably, this is not going to be the case. Expansion, butn if we look at late macro indicators, what they tend to show is that the strength of the recovery is starting to slow a little bit. You know, i like the example of the kshaped recovery where you have strong corporates which continue to grow, and where you have whole sectors of the economy which are suffering from an environment which is still quite uncertain. So going into the end of the year, probably we are going now to be in a phase where the economic recovery is going to be a bit less strong. I am not sure that this is the right time to buy cyclicals. Matt so its not the right time to buy cyclicals. I want to ask one more question on your take about tech stocks. Because a lot of people are comparing now possibly, potentially to the. Com crash the dot com crash. On the other hand, the valuations are not that out of control. There is the occasional tesla, but for the most part, if we have a correction and adjust that, i mean, you dont see a tech stock crash here, do you . Florence there are two ways to answer your question. Just taking into account the impact of interest rates, you know, we are talking about valuations being expensive, thats right. But it really depends on how you discount them. If you discount longerterm valuations with a longterm growth rate of the u. S. Economy, it looks as though stocks are overvalued by over 40 . If you use current interest rates, which are really low, in fact, in terms of overvaluation, you are just back to 4 . That is to give you a macro picture on the fact that valuations today with rates being so low, it does not mean much. If we moved to the tech question, you are right, there are some outliers which look very rich. Picture,ke a broader in fact, you do have those trends to watch digitalization, which i think will remain with us, so thats a positive. Earnings growth is quite supportive. Att of all, when you look corporate Balance Sheet structures compared to other segments of the market, these are corporates which have a very sound, very robust Balance Sheet structure with a lot of cash sitting on it. That does make a difference in an environment where debt ratios across the corporate world are rising and i think, going into winter and autumn, we are going to see default rates rise. Anna thank you very much. Stay with us. Florence barjou from Lyxor Asset Management stays with us on the program. 40 minutes to go until the start of the European Equity trading day. We have already heard of these lines from philip lane at the ecb today. Coming up, we will get the latest from Christine Lagarde. She says the ecb is keeping an eye on the euro, but she does not sound the alarm. We will analyze the latest ecb meeting next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Away from the start of cash trading. , deputy cio at Lyxor Asset Management, is still with us. We have some alliance from philip lane saying headline inflation is going to remain negative for the rest of the year. He says it is abundantly clear that there is no room for complacency on the ecb has made only partial progress, or maybe he is saying that europe has only made partial progress on combating the crisis. We have forecast going out four or five years from huge Market Participants saying that inflation could be 5 10 . What is your take on inflation . Florence i think we have a really different scenario when we look at what is happening in europe and the u. S. In the u. S. , we have positive inflation, which is still low, but slightly below historical averages. The situation is quite reassuring. If you look at europe, i think it is very contracted. Latest inflation data was quite a disappointment. We had inflation declining, so deflation in europe the last month, a contraction in price data. We have a situation where structural and potential growth is much lower in europe. So actually, i was quite lagardesby christine lack of interest in the euros strong recent strong appreciation. She says this is not a matter of concern. I agree with philip lane, i think it is. The appreciation has been very fast. It is an issue for countries in Southern Europe come suffer from a competitiveness problem. With inflation remaining low, the euro is a problem. What do you what does it say to you that we have the press conference yesterday and then we get this philip lane blog post that perhaps gives us a different take . What does that tell us about how on the same page everybody is at the ecb . I mean, maybe they dont need to be. Florence it suggests two things. May be there is a lack of communication within the ecb. I hope its not that. The second thing which it could suggest is that markets were expecting some kind of dovishness coming from the ecb, especially given that the fed has been quite ahead of the curve. That was viewed by markets as being quite dovish. We expected the ecb to step in and at least have some verbal intervention concerning the currency. If you look at all the themes that the market was looking at yesterday during the press conference, the assessment of the current Economic Situation was very balanced. They suggested no need for additional easing, no intervention, no verbal intervention on the euro currency. That was a disappointment. The strategic Monetary Policy framework review, Christine Lagarde said nothing. This was ane maybe opportunity for philip lane to change this. Matt absolutely. Florence, pleasure having you this morning. Florence barjou as the deputy chief Investment Officer at Lyxor Asset Management. This is bloomberg. Welcome back to the European Market open. Cash equity trading, european futures suggest we will see downside. Lets get to the morning calls this morning. Juliette saly has been pouring over the research in singapore. What have you got . Reporter this one is from an Australian Research firm. It has returned outperformed its peers and returned 24 for investors so far in 2020. They say the top tech bets are still fair play even though you very hefty price tags on both companies. The cio saying both Companies Trading below his valuation targets. He said the top tech bets continue to deliver and his view hasnt changed, despite to the selloff. Interesting to note loftus peak did sellout of tesla, fighting wariness and governance issues. Tiktok is making the city state of singapore its new headquarters. The bloomberg scoop, u. S. President trump putting pressure on tiktok to sell out of its u. S. Operations and not increasing the deadline of september 15. The owner bytedance has applied for one of five Digital Banking licenses in singapore and they will invest heavily, they have advertised for 200 jobs in both lion city and want to establish as well. Nter Bloomberg Intelligence saying singapore is highly attractive to tech firms, the workforce is educated and multilingual. The mliv strategist saying this could be a huge investor boon for singapore with billions of dollars to be paid by bytedance. I could seem that could see more investor appetite. It has been underperforming down 22. 5 . Thank you very much. A little closer to her friday in singapore, friday evening. Thank you for joining us. Lets get to Bloomberg Business news, the big news we are tracking. Reporter thank you. Jpmorgan is requiring most of its senior sales and trading employees to the office by to return to the office by september 21. Managing directors to oversee subordinates but those with childcare or Health Issues are exempt. It is the strongest move yet by a u. S. Bank to restaff its workplaces. Nissan has raised 8 billion in the first noncombustible dollar sale in at least two decades. Carmaker told a security it may debut a public euro note as soon as friday which follows its biggest loss in 20 years. Englands Football Team take to the field for the start of the premier league. This match will be on saturday but it is unclear when spectators will be allowed back. The ceo hopes there will be a small number by october, but without fans, he sees the richest competition taking a hit of 700 million pounds. That is your put your Bloomberg Business flash. Ceo is rio tinto stepping down after an explosion to open a mining area destroyed a 46,000yearold aboriginal sites. That comes amid mounting giantres for the mining to step up its response. Joining us to discuss this is commodities reporter david stringer. It is only a few weeks since rio backed its ceo to stay. What has changed . A few weeks ago the board had its own internal review and that handed down some penalties but mainly crimped bonuses for the ceo and other executives. The german and others have had talks with dozens and dozens of investors. 75 investors in the past couple of weeks. Also immunity leaders in australia, indigenous landowners where this happens. The message received from the people was the response was not satisfactory and investors want to see individuals held to account for the failures that led to these incidents. The ceo and other Senior Executives will leave the company. There is a lot of work needed to repair the reputation of the business and review it in some way. Do we know what kind of person the board is looking for to replace the ceo and others . We do. The chairman, we spoke to him earlier. He did explain the thinking behind that process, they will review internal and external candidates. One thing, one of the key criteria is whoever replaces the ceo will have to take on responsibilities for what could be a month long or years long process of restoring confidence in the ability of rio tinto to work with communities. Earner. Is a top the operations are based in Western Australia and Community Relations are quite key for that unit. So that is a key there. I wonder what is the response for investors and the Community Impact by the destruction of that 46,000yearold site. It is quite amazing. David we have heard on the on whichal landowners, those sites, the shelters that were evidence found by archaeologists used by humans 46,000 years ago. They said they wont speak specifically to the changes but they are focused to work with rio tinto and the industry to make sure there is no repeat of these kind of incidents. Positive butroadly they have also said they will continue to scrutinize what rio does from here. They are holding rio to account, how it fixes the problems, and they want to see someone coming in who is capable of sorting out cultural problems inside the company. Thank you very much, david stringer with the latest on the really incredible news at the top of rio tinto. Thank you for bringing us that story. Not the end of that story. I know you have got news out of germany. I want to get to news out of france, involving a telecom business. They have made an offer at four for the a takeover story. They say the total consideration is 2. 5 billion euros. We have also got some further detail on the timing. They expect to complete in the First Quarter of 2021 m a in the telecom space. Germany the news out of that you mentioned specifically out of berlin, we are having an informal Euro Group Meeting today here in berlin at the intercontinental hotel. I will take off this tie and go over there. Olaf schulz has spoken, discussing the state of play and oecd of digital taxes. Also saying it is necessary to decide how to pay debt back. This is going to be one of the overriding issues for almost all countries, companies and consumers over the next year or longer. We will have a chance to speak to finance ministers from netherlands, portugal as well as many others. Stick to bloomberg for more of that coverage of the informal Euro Group Meeting. Coming up next, three weeks, that is how long the e. U. Is giving Boris Johnson to scrap plans to with draw or risk facing legal action. We will get those details next. This is bloomberg. Matt welcome back to the european open. We are 20 minutes away from the start of cash equity trading. We see red arrows, not huge drops but futures pointing lower. Next week will be a big one for Central Banks again. Lets take a look at what is coming up wednesday, the fed holds its last meeting before the president ial election. Fomc will keep policy flexible. We will get brazils Rate Decision on that day and thursday we will hear from the bank of japan and the bank of england. Also thursday we see a rate cut in south africa after gdp shrank an annualized 51 . Taiwan announcing decisions. Friday we get details from the bank of russia which published a draft guide until 2023. They say policy or main loose like most others for a long time. U. K. And the European Union are heading for a chaotic split without a new trade deal. The e. U. Has threatened to take legal action in a proposed bill which claims to walk down the Brexit Agreement if it is scrapped by the end of this month. Rejected the request and said it wont back down. Committedvernment is to the implementation of this protocol. The Vice President requested the u. K. Withdraw its market legislation. I explained to the Vice President we could not and would not do that. I stressed the vital portions of reaching agreement through the committee on these important questions. Anna for more we are joined by bloombergs maria survey of. We heard the finance history speaking, talking about brexit, saying it is clear we have to speak to what is agreed and my choices to negotiate until the last moment. I wonder where the negotiations will go if this ends up in the court by the end of this month. Two dates were is should keep an eye on. One is the reference you made to september 30, the deadline of the European Union, now seeing this bill needs to be removed and changed because we already believe and talked about this legal document there is a case to be made, this is in breach of an agreement. We are trying to change a deal we both negotiated as different sides. The other date some say will happen september 24, when Angela Merkel and the rest of the european leaders are going to come here to brussels. That is not about brexit. It is not in the agenda, but you could get a sense of where the negotiations are heading if european leaders to change that political mandate, or they find some room to inject momentum into this, or they say we will stick with the Technical Advice we get from Michel Barnier. Credibleoint it is a threat to say by the end of the month the talks could break down. What is interesting is after the aggressive language we heard in the morning, by the afternoon both sides were saying we are preparing for no deal, but we want to get the deal. We are working to get that deal. All of this is work we are doing in case we dont it the deal but we are working to get it. There was a change of language yesterday from morning to afternoon that i thought was remarkable. Matt are you hearing from anybody that this is part of the negotiating tactic from both sides . Isnt it the best for Boris Johnson if the e. U. Thinks he is willing to walk away . They give him more than they otherwise would. I have heard that yes, this could be a crisis of the u. K. Has reciprocated to get attention from european leaders. I have said for weeks Michel Barnier is not the one they want to negotiate with. They want to take it to merkel, macron and other leaders. The e. U. Is very serious about this legislation. They do care about what gets put into the language. Binding, it is a problem. This deadline and ultimatum is serious. Maria there in brussels talking to us about the breaking down brexit talks. The e. U. Is not working for a hard brexit, says one man. They told bloomberg it is up to the British Government to reestablish trust between the two sides. Bill was very betweeny Damaging Trust u. K. And the e. U. And so what we are stressing now is that it is up to the British Government to work to reestablish this trust. And time is running because our assessment is that either we reach this agreement within one month from now you know the formal deadline is the end of the year. To have an agreement, we need to have decision taken at the beginning of next month, beginning of october. So the establishing of trust which means the changes in this bill that was introduced in , it isdays is of essence very urgent. If the u. K. Does not back down, will there be a hard brexit . As we always said, this is proposal. Ropean this is not the european will. This is not the solution that we need two, but you parts to have a deal. Anyf there is not seriousness and respecting the on the basis of negotiation that is now going on, i think things will get very difficult among the e. U. And u. K. We are not working for this, not at all. We are not working for hard brexit, but we need to have a trustful partner to have a deal. Commissioner, we heard from the ecb they revised upwards their 2020 forecast but see the stabilization of any rebounds next year. What is your assessment right now . What letter of recovery are we in . Well, we are in general the one of the ecb, our evaluation, we will have our winter forecast beginning of november. Have aluation is that we rather fast recovery especially in june and july, but perhaps according to highfrequency data and new groundwork data, the speed of the recovery is slow down in recent weeks, in august. So i think we still have in aroundf us uncertainty the strength and speed of recovery. Our task is to reinforce confidence in the markets, in the citizens and in the business community. This is what, with our recovery plans, we will try to do in the next weeks. Because uncertainty is still there and we are not sure of the speed of recovery. Anna that was the e. U. Commissioner for finance, speaking to bloomberg. Minutes away from the market open. We will get your thoughts to watch including one person cutting a quarter of its workforce, this is bloomberg. This is bloomberg. Matt welcome back to Bloomberg Markets. We are a few minutes to go until the start of trading. Dani burger joins us with stocks to watch. It appears the founder and the owner Patrick Draghi is through hisg this company next private. The offer price is four euros . 11 per share. That is a 24 premium on the current price. We can expect to see a sizable rally for this company which has lost 42 area that is why the owners decided to take it private because of the volatility in the share price. Anna what about the manufacturer of vehicles . We have seen a lot of job losses from companies that supply and then we get some from them. Reporter it is coming throughout the industry. It is a Truck Division cutting a quarter of its workforce, 9500 jobs. The cuts will come globally, from across the organizations. No part will be spared. They will relocate this is all in the mind of becoming thin, efficient and lean. The plan is to improve operating results by 1. 8 billion euros. You would have to imagine shareholders would react well to a plan to bring in that operating profit. What is the story with the swiss breaker the swiss bigger, cookies, pizzas and appetizers as well as sweet baked goods . And bonds for mcdonalds as well. Mcdonalds they are based in switzerland and they have seen shares plunge through the year. Paul singer, his firm Elliott Management has entered advanced. Alks to take over the company they may jump in with public tender for the outstanding shares, but they have drawn some other interest from firms. It is one of many possible takeover potentials. Anna dani burger there very it all of that talk of breakfast makes me feel hungry. We are looking at live pictures, informal Euro Group Meeting taking place in berlin. Speaking about brexit, we will track everything said there. We are on the ground at that event. This is bloomberg. A minute to go until the last cash equity trading session of the week. Heavyweights in the u. S. Cant hold on to the recent reebonz. Global stocks head for a second recovery losses. Heading for fair optics lips cometh the European Union is giving birth johnson until the month to back down on his heading for your chaotic split, the European Union is giving Boris Johnson an ultimatum to back down on his brexit deal. Matt lets take a look at european futures. They have been pointing down, not substantial drops that two or 3 10 of 1 on euro stoxx 50 futures as well as u. S. Futures pointed the other way. We will see what happens in a few hours trading. In any case, the life trade in europe starts now. Lets look at the bloomberg macro movers screen. You have a plume of risk assets. On the far left column, equity indexes as they open up they will populate the screen. The ftses first out of the gate and totally unchanged right now. See a lot of these gray boxes across equity indexes at the start of trading. They will not turn green or red until they moved substantially away from the zero line. That cac is down 2 10 of 1 . The ibex imagery is down to tenths of 1 . The dax is open early this morning and down 1 10 of 1 . European markets are not moving a lot. The moment we do see is to the downside. Global stocks are headed for a second record losses after the selloff in the u. S. Yesterday highlighting lingering concerns about evaluations in certain pockets of the market. Joining us now to discuss is curt custard, chief Investment Officer at Newton Investment management. I wonder what you think of this downturn. It is starting to look like a row with legs. Do you think it will continue . Curt we will probably see continued volatility throughout the quarter. We have an election, trade tensions and also high valuations. All those things sort of lend themselves to increased corrections and increased movement in the markets. That said, i think it is probably a healthy one. Valuations and tech shares were getting a little stretched. Everybody was piggybacking on the same kind of names. Last time this happened was 1999 and he didnt and so well and end so well can a selloff in tech be in a riskon signal, maybe we have to divide tech into a few different baskets some text will do badly when the vaccine is discovered. So maybe the tech is not the whole sentiment story at the moment, is it . Curt you are absolutely right. There are two ways to think about tech. One is on a strategic or thematic perspective, and the other is reacting to the circumstances due to the virus. Clearly, the world is going to rebound after a vaccine is developed. You will start to see some return in normalization. That said, there is a lot of underlying trends now that will either accelerate the best were either accelerated or created because of the virus that will persist. I think online schooling, for example, will become a mode schooling for an increasing number of young people. It will continue. Tell a medicine will continue. All these things will likely telemedicine will likely continue. Those trends will continue for some years to come. Matt i want to pivot away from the ecb five second. We are getting a lot of headlines from the informal meeting here in berlin where we see the finance minister from the netherlands talking about nominating Frank Anderson to the board. Probably more interesting is comment we are hearing from the governing council member, vil leroy who was saying that if the ecb doesnt target, the Exchange Rate that is clear, that is what Central Banks say, but he says the Exchange Rate does matter for inflation and Monetary Policy. So shouldnt they be targeting the Exchange Rate more . Curt i dont think they will come out and say they are targeting an Exchange Rate as part of Monetary Policy because there are too many things that move an Exchange Rate for them to be effective in doing it. However, the Exchange Rate clearly does impact inflation. It clearly does impact the ability for countries to be a way to export their goods. It is an important part of the overall Monetary Policy condition. I just dont think they would say, hey, we will target a weak euro or a strong euro exquisitely. The only country that has tried to do that was back in the day, japan. That had some very mixed results because the marketplace got pretty used to when they would intervene. Part of what the ecbs having to deal with is what the fed has artie done, perhaps moving ahead of the in terms of setting out future strategy. Certainly, that has been part of what has led to the dollar weakness and euro strength. Looking ahead to the fed, then, this will be the last meeting before the election. What are we expecting to see from the fed . Anything substantial, any detail to what they talk about in jackson hole . Curt probably not, not ahead of an election, especially one as artisan is a current election is partisan as as the current election is likely to be. They want to pump a lot of liquidity into the marketplace. Right now the market is not concerned with inflationary nearterm. The challenge they have is that a, they are starting from a point where the ecb is considerably below their target. It raises the question about why they made the announcement in place. St secondly, when you say you will allow inflation to be above target for length of time, that is very ambiguous. Certainty. S want if they said 5 , that would be exceptional. And for how long . I think the marketplace, especially fixed income, will have some volatility coming to it next year if inflation starts to develop. What safe haven plays the uc working out well . Iffy recently, running up against ceilings, so to speak. Do you think people are going to start pushing gold over 2000 . Is bitcoin going to come back . Is the yen going to get stronger as the dollar weakens . Curt it is sort of in order there. The gold argument is something that may team has gotten completely right and i still remain perplexed by it, i can never split out what is a momentum trade and what is an inflation hedge in gold. Similarly, i dont have a strong view on bitcoin. I think it is a bit of a side bet. Until it becomes a really functioning way of exchanging value for joe public, it is not really a real alternative to currency. I think the yen is likely to strengthen, and i think the excess liquidity the fed is bumping into the system is material, and it should weaken the dollar versus most of the majors in this environment. As for how do you find protection, that is a great question. I think it is a function of what the fed is going to do. If we start to see inflation and the fed does not react by raising shortterm interest rates, you will see a very, very different marketplace environment than if it does react. Matt stay with us, curt custard, Newton Investment management chief Investment Officer, sticking with us on a bit longer. Coming up, the e. U. Gives the u. K. An ultimatum on the brexit failed. That is next. This is bloomberg. Matt welcome back to Bloomberg Markets, go this is the european open. I dont know what he is wearing a tie. In any case, bruno le maire, the french feminists minister, talking about the impetus needed post french finance minister talking about of the impetus postcrisis. He was talking about the Banking Union and the Capital Union and the budget needs. I will head of weather in just about two hours time and interview the portuguese finance minister. Suffice it to say, a lot of news coming out of this Euro Group Meeting especially surrounding not only the crisis, but brexit, as talks seem to have fallen into turmoil. Lets get the Bloomberg Business flash, the top corporate story from the terminal with laura wright in london. Says hera President Trump will not extend its deadline for bytedance to sell tiktok. He said the cap would be banned if a deal is not agreed by september 15. Separately, sources say writedowns is looking to make singapore bytedance is looking to make singapore its next headquarters. Rio tintos ceo is stepping down amide concerns over the destruction of australian Aboriginal Heritage sites. Pressurender investor to step up response to explosions that opened up the mining area at a 46,000yearold site, which archaeologists say are among the most significant of their type in the country. He will remain in his role until march of next year if no successor is appointed before then. Jp morgan is requiring most of its senior sales employees to return to the office. The order applies to managing directors and executive directors who oversee subordinates. But those with child care or Health Issues are exempt. Volkswagens truck maker plans to cut as many as 9500 jobs, almost a quarter of its workforce. The company could also close three factories, in a bid to improve earnings. Increasing Profit Margins is key to finance new technologies like electric trucks. That is your Bloomberg Business flash, matt, anna. Anna thanks very much, laura wright in london. The uk and the European Union are headed for a chaotic split without a trade deal. The e. U. Has threatened to take legal action if a proposed lead to water down the president movement is not scrapped by Boris Johnson. Us. Custard is still with we are interested to get your investor perspective on market assumptions here, or the base case here. Increasingly, we talked to guest who suggest they are increasingly deciding that no deal is the most likely outcome here. What percentages do you attach to the various possible outcomes . Curt certainty that no deal percentage has gone up substantially. The brinkmanship is getting pretty extreme as you rolling to the deadline. I amimportantly than that, not sure the marketplace has effectively discounted a nodeal in terms of what will impact both cable and the ftse. Covid has garnered all the airspace, all the headlines around the world. So brexit, which dominated things in london for a long period of time has split off the radar screen. I do wonder how much people are paying attention to it. That said, if the government is not prepared for a nodeal outcome, they should be tossed out. Matt how bad will it Nodeal Brexit for the addition is nice and for the british economy will it be for the British Business or the british economy . Curt the economy could get hit severely over the shortterm. That will garner the headlines against the backdrop of economic weakness associated with the virus. That said, in the longterm, i dont think this is material. Britain remains of a very innovative economy, more innovative than the continental european economies. But that is the longterm. Politics rarely is the longterm, it is typically the shortterm, so i would suggest the shortterm shock against the backdrop of weakness do to covid could be significant in some sectors. Anna what do you make of the moves that have weakened the pound . One guest who was here earlier on the daybreak program, was talking about how we could go to that is quite a substantial weakening. How do you anticipate the pound moves as we go through the end of the year . Curt that is a tough one. You are caught between the prospect of a Nodeal Brexit, which is clearly bad for the pound, but also, as we talked about earlier, the liquidity going on with the u. S. Fed. In terms of cable, i have less of a strong call there will be a kneejerk reaction to the pound weakening dramatically. But in terms of where will be six months from now, that is a tougher call. In perspective of a nodeal the pound should we can versus the euro and i expect that to persist. Matt do you see parity there . Is the euro worth the pound . Curt [laughs] maybe on a shortterm basis. Probably not longterm. I think there are greater prospects for Economic Growth out of the u. K. Over the longterm probably than the rest of continental europe. So i expect a recovery. Anna one of the big concerns for the u. K. Also is around the virus. What are you anticipating for europe and the resurgence of the virus we have seen in the u. K. And continental europe, and what that does to these economies through the winter . What are you bracing for . Curt that is the 95 billion question. [laughs] to the extent to which the virus reasserts its self in cold and flu season, and how governments respond to that will be critical going forward. You have seen Different Countries taking various approaches, some of which were successful early on. Whether the economies can withstand another extreme lockdown is a real genuine question mark. Will havenday, we further restrictions placed here in the u. K. Because they are seeing a surge in cases. That will continue to dampen, modestly, to dampen Economic Activity across the u. K. And any further restrictions as we roll into january, and february of next year when you have cold and flu season at its peak, that is the real . So that is the real question mark. I think everyone is watching the vaccine trials very closely, because the longer it gets a delayed, the more economic damages done. Matt curt, thank you so much for your time this morning. Curt thank you. Matt your insight on these volatile markets. Curt custard is the chief Investment Officer at Newton Investment management. He will continue the conversation with us on Bloomberg Radio as well at 9 00 a. M. U. K. Time. Switch on the tv and turn on london dab digital radio, or o on theo matt welcome back to Bloomberg Markets, this is the european open. We are 21 minutes into the session. The market has turned slightly higher, the ftse up 0. 25 even as the pound gains over the dollar. Individual movers, lets go to dani burger. Dani the biggest mover on the stoxx 600 to the upside is this company. The funders company is called next private. The offer price is four euros and . 11, but it is trading just above that with a 26 gain. It is the biggest share increase on a daily basis in the year for the company. Next we have this company gaining 16 , not a great story if you are feeling hungry this morning, a lot of frozen and baked goods, cookies, things like that. They had a pretty tough year, down 40 . Because of that, a lot of takeover interest from funds and other companies. The latest we have heard from is paul sanders area to management, in advanced talks with the company. Finally, we have this company, its biggest daily decline on record after a new Share Offering from germanys third richest person, offloading about 10 million shares of the company. He will use that 1. 2 billion euros in proceeds to help fund some of his other investments. Matt, anna. Anna thanks very much, dani burger with the latest moves on the market. Citigroup has named a new ceo. Jane fraser will become the first female to lead a major wall street that, succeeding michael corbat, who is retiring after eight years on the job. For more, lets bring in Bloomberg Finance reporter. Tom, what does the appointment say about how far wall street has come on gender issues . Tom it is certainly a historic moment for the finance sector. She is the first woman ever to run one of the giant u. S. Ranks. In some ways, there that u. S. In someme ways ways, it is a breaking of the glass ceiling. But it also tells its own story. When you look at the wider finance sector, it remains very maledominated. Hard toersity is ca come by. Only a quarter of the industry is female or minority groups. Well this is definitely a moment , it is really just the first step, i suppose. Matt she was not chosen we dont want to make it sound like she because she is a woman, has a ton of experience from Goldman Sachs to mckinsey. Tell us about her bio. Tom it is an impressive resume. She has been to every top firm. , born in scotland she started in m a that Goldman Sachs, moved over to mckinsey and became a partner, then joined citigroup in 2004. Shes been there ever since, 15 years, helping it get through the financial crisis where it was hit very hard. I think internally, everyone saw her as the probable replacement. So, fully deserved. But yes, definitely taking on a big challenge. Anna yes, there will be some challenges ahead. I think we have a chart that shows how the share price has performed. Michael corbat is in the white, Vikram Pandit in the yellow. We will try to get that up for viewers. What are the challenges she will face coming after all these other ceos. Tom obviously, like any big financial bank, it is very difficult times. For one, she will take over at a time when people still trying to work out what is going on with the pandemic, what that means for loan losses. Specifically citigroup, compared to the other banks, it is undervalued. Its book value is about 0. 6. Compare that to the top performer, morgan stanley, which 1. Over so investors are hoping she will be able to boost profitability and also avoid some of the dogged, nott have least recently, where they accidentally sent 900 million to a hedge fund. Is not a basket case, her predecessor did a good job of boosting it from a pretty low point, but there is plenty of room for improvement. Metcalf thanks very much. Bloomberg finance reporter. Next, we talk about the changes in the csuite at rio tinto. Anna welcome back to the European Market open. 30 minutes into fridays trading session. Things looking more positive than it was suggested they would be. U. S. Futures to the upside through much of the asian session. Europe flipping lower and then catching up. Nasdaq futures up 1. 3 . Mind you, they were strong in the early part of the day yesterday and then slipped in the later part of the u. S. Trading day. Lets get a bloomberg first word update. Thanks. Europe has overtaken in u. S. In terms of coronavirus infections. More than 27,000 cases were reported on wednesday compared to 26,000 in the u. S. Ae region has reemerged as global hot spot. Infections in countries including spain and france. The odds of another round of u. S. Stimulus has dropped. Democrats are looking for 2. 2 trillion. Chuck schumer said he hoped to come back to the negotiating table. The u. K. Economy surged in july. G. D. P. Rose 6. in june. A triple threat of mounting b losses and the risk of a nasty brexit make it difficult. Englands Football Team taking to the field this weekend for the start of the premier league. It is unclear when spectators will be allowed back. The c. E. O. Said he hopes it will be by october but without fans, he sees it taking a hit of about 700 million pounds. Global news 24 hours a day, on air and poured by more than 2700 journal estes and analysts in more than 120 countries. This is bloomberg. Anna, matt . Anna thanks very much. 30 minutes past 8 00 in the u. K. Brexit trade deal talks are to resume next week. The e. U. Has threat tight end u. K. Government with legal action if it does not resolve its internal market bill. It is designed to prevent a hard border returning to the island of ireland. Orthern Ireland Retail Consortium director general, good to have you on the program. They are increasingly preparing for a no deal on trade outcome at the start of january. Is that what businesses in Northern Ireland have to be prepared for now . It is something that is a lot more likely than it was at the start of week. Less of a certainty. It is simply not good enough. We need the u. K. And the e. U. As we need an agreement comprehensive as possible. Matt i wonder if there is really a possibility of one side or the other putting up a hard border. Wouldnt wouldnt neither side want to provoke with such a move . It seems like the dumbest thing you can do if you want to avoid violence. I think that is where there has been a lot of trouble. A question about the constitution. It has been a question about the agreement. What were really concerned about, it doesnt matter if youre in Northern Ireland or outhern ireland. Specifically in Northern Ireland, households, our families here have half of the Discretionary Income of british households. That means they cannot afford any of these cost rises. It is not perfect. More importantly, the cost rises would be hugely detrimental to the most Vulnerable People economically on our island. Anna the u. K. Government suggests one of the reasons it needs to disrupt the protocol is to delivered what it describes as unfettered access. Your assessment is they did offer unfettered access . No, there is a lot of roblems with protocol. We have tried to work with the u. K. Government. We have been talking about a supermarket solution. That means that we can prove that good are going only to stores in Northern Ireland. They will not be at risk of going into the e. U. There they should not have hings like customs checks. It will help us keep costs down and continue to give consumers affordability. For us, there is still so much to do and very, very little time. Matt how much time do you actually need . Clearly in a negotiation, everything comes to the wire. Down to the very last minute. You need obviously lead time in order to get the rule book, read it, implement what you need to. What kind of lead time do you think you need . You put that very well. I suppose one of the problems a lot of people dont understand, there is a lot of things that need to happen at ne time. Usually if we were making changes, they would be signed off in august. They would be ready that line deadline has passed. The more we have to speed things up, the more it costs. The potential we have now, for whatever the regime looks to remember we are still dealing with, especially in the Retail Industry and the effects of he covid pandemic. Nna what if it ends up on w. T. O. Terms . What would that do, the trade between the northern republic . How it would be facilitated. Couldnt actually be able to move. It is not just about buying and selling. It is about processing as ell. For processing and then comes back. Some will cross the border at five times before it becomes its border, north, south, east and west. 40 damental unnetting yearsor being part of the e. U. Nd thats really hard to do. Anna thank you very much. Aidan conley. Northern irelands court sort yum inspector general. Up next, stepping down after the destruction of an ancient aboriginal site. More details next. This is bloomberg. Matt welcome back to the european open. We are 41 minutes into the trading day. Looking at a mixed picture here with the ftse rising just as the dax falls about. 25 . Rio tintos c. E. O. Jeansebastien bach is stepping down after a motion to open a mining site destroyed a aboriginal site. Rios Corporate Culture needs an overhaul. That will give the company room to now do what is the most important cause that they should take and that is to find the right person to rebuild the internal culture of the company so that the company does not continue to destroy important aboriginal sites and treat traditional owners and australians in general with the content that jeansebastien have. Matt lets bring in bloomberg ay break anchor ann marie. J. S. J. Just had two weeks ago support from the board to stay. Thats right. Clearly the investor pressure was mounting and they didnt like the way the board had originally dealt with the matter. It is not just the c. E. O. That is going. It is head of the Iron Ore Department as well and the head of the corporation. It is a really big shakeup that stems from what happened earlier in year, a blast near the australian aboriginal site in australia. Investors criticized how they originally dealt with that situation. This is the backlash of that destruction. Rock structures were used by aboriginals as many as 4,000 years ago. This is just not nice to have any more as part of corporations. Investors really care about it and you can see given the amount of pressure they placed on rio tinto. Anna thanks very much for the update. Lets get a business flash. Thanks, anna. President trump says he will deadline tend the to sell tiktok operations. Spending billions of dollars and creating hundreds of jobs in the state. Most of its ng employees return to the office by september 21. Those with child care or ealth issues are exempt. A truck maker plans to cut as many as 9,000 jobs. Almost a quarter of its workforce. That is your Bloomberg Business flash. Matt, anna . Matt thanks very much. Up next, were going to be talking about what happens when youre caught between stimulus and the virus pain. European stocks have been trapped in a tight range since june. Is there anything that can break the impasse between the bulls and the bears . This is bloomberg. At the moment, we hope the virus is not spreading too heavily again and that we can reach a little bit better situation than what was projected in the spring. 6. 8 for the whole year 2020 i hope it will be a sharp rise in g. D. P. Next year. The virus affects the deficit it definitely affects the deficit. Without the coronavirus and debt would have dropped to 6. 5 of g. D. P. This 8. 5 . Oming from now it is going to increase to something between 80 and 19 in the next two years. In the longterm perspective, we are convinced that we can lower that ratio again. Dealing with the budget, if you are planning reform for companies, we heard about ange the chance for the so ing the in Companies Shareholders or business foundations. Is that going on . First of all, the priority was to save human lives. This is the reason why we did the lockdown. Of course this had severe effects on the economy. We implemented subsidies for he austrian businesses and a very large extent, altogether, 50 billion euros which amounts , 13. 5 of austrian g. D. P. And now we have to make sure this money also reaches the companies and at the moment, there are some conflicts with the European Commission because we dont agree on what we tried to do to help the companies. It is not within the framework of competitiveness but from my point of view. We have a crisis. Taxpayers spend a lot of money, invest a lot of money. We show solidarity with italy, spain and france and vice versa, we would like to be able to support our own businesss with our own taxpayers money. How Many Companies would have liquidity problems . The austrian Tourism Branch is severely hit. Tourism accounts for a large amount of austrias g. D. P. It is mainly run by small businesses, familyowned businesses. At the moment there are no bankrupt sis because we give the opportunity for bankruptcies. It is more necessary that we subsidize those companies because those companies that have no problems before the coronavirus werks have to save them until after the crisis. How are you dealing with that and how do you want that to not repeat again . Corruption all, case. The crime obviously, smaller regional bank. We try to do now, evaluate together with the officials what we could do on a National Level to prevent such a case to happen again. This investigation is ongoing. Anna that was the austrian finance minister speaking exclusively to bloomberg at the informal Euro Group Meeting earlier on this morning. That is taking place in berlin. European stocks have been trapped in a tight range since june. Is there a way to break the impasse from the bulls and the bears . Heather, really interesting to look at a chart simply at what european stocks have done or not done during this whole period of summer where we have been caught up talking about u. S. Tech so much and through all of that, europe stays range bound. Is there any way to break that narrow range . Good morning. Right now we have stimulus and euro area fiscal unity as a tail wind going up against an increase in infection numbers and the sputtering of Economic Growth. European stocks have been held back because they have not had that tech momentum that the u. S. Has. Right now the biggest thing would be to see a rebound in Economic Growth, vaccine hopes, another global stock rebound would maybe be some of the biggest things that would help european stocks break out of that range. Matt i agree. Seeing this chart, heather was fantastic in your piece. It felt to me like stocks were going up, up, up and over the last two weeks having coming down, down. The range has been so tight. It made a big difference to see that. How much what pushes this around, you know . Is it the infection numbers . Does that make a difference to traders . Is it the stimulus . What are the big what are the key, you know, movers on a benchmark that doesnt have these huge tech high flyers . If you look by country, the german stocks have outperformed. A move toward some outperformances, cyclicals, unprecedented german stimulus has helped them. If you look at the other end of the range, spanish, u. K. Stocks have underperformed. Spain has been hit by travel quarantines. Its economics have lagged over euro areas and they have been hit by rising virus cases more than some other countries. You have different plays and in some cases it is a countryspecific thing. When all of these factors come together, you really have european stocks in this tight range and while it is less than while they have not risen as much as the u. S. , they have not they have not been as volatile either. Anna heather, thanks so much. Thank you very much for joining us. Matt, im going to say that European Equity markets have slipped back to the flat line. U. S. And mass knack futures point higher. Maybe i should care less about that given what we discussed with heather. Matt european stocks closed with a small drop. Small is the key word. This is bloomberg. Surveillance is up next. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. More voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music francine heading for a chaotic split in the European Union, giving Boris Johnson ntil the end of the month to break down the brexit deal. The first woman to run a major wall street bank. Pressure over the destruction of australian aboriginal sites. Good morning, everyone. Welcome to bloomberg surveillance. Im Francine Lacqua in london. Happy friday, everyone. It