That are against sanctions against iran. And leaked documents outlining 2 trillion worth of transactions and a failure by banks to catch suspicious funds. Its is one bank named and shares fall to a 25 year low. We will come back to hsbc in a moment. A very good moment. 6 00 a. M. Where you are. I am. One 9 00 a. M. Where china and the yuan and the e. M. That whole narrative plays into markets. As you look into the fx story. China will grow and it will be the only g20 country to grow. If youre waking up in the city of london today, you are questioning whether or not we will see another lock down. Radioyor talking to lbc saying he will potentially talk about fresh restrictions today and we have the u. K. Chief medical officer saying the u. K. Is at a critical point. A balancing act for the government. What do you do with restrictions while maintaining the economy . Indy. Indeed. Setting the bank of england on a different path for a status quo mission. Bifurcatione is a and i do like that word. We need to remind our viewers that japan is closed for a holiday tea. For a holiday today. Loweroomberg dollar index today and under pressure after weakening last week. Waiting for signs of a stimulus package from the u. S. Is the stimulus package now with the Supreme Court vacancy . Brent crude down 0. 2 . 43 a barrel. If you switch up the board, take a look at what is happening in the corporate sector tencent down by more than 1 . Toy say they will continue hold discussions with the u. S. Government on wechat. Down to its lowest level. Dani burger what walk us through the latest bombshell banking report. Manus tencent has 22 billion of investments in the u. S. In tech. Of deaths of the death Justice Ruth Bader ginsburg has driven the Supreme Court to the front of u. S. Elections. Driving amination heated debate. Our Senior Editor joins us now. Good to have you this morning as we kick off monday. This fight over Ruth Bader Ginsburgs seat how is it shaping up in this highly politicized environment at the moment . Seat willupreme court have a highly politicized fight but this one will possibly be worse than what you have seen before. This vacancy coming up two months before the election or a little less sets up a fight similar to 2016 where barack obama had a vacancy left by the death of Antonin Scalia a. The Supreme Court conscience of the rights. Obama wanted to replace him which would flip the court and Mitch Mcconnell said no. They came up with a reason that you will hear them talk about key point ofe which is that it is not happening this time. Senate republicans say they are planning to move forward on whoever donald trump nominates. The nomination could calm fairly soon as he has had a list of fairly conservative tourists that he isjurists looking at. You could see a nomination maybe as early as this week even. 43 days and 22 hours until the u. S. Election how big of an impact will this have on november 3 . It is already having a huge impact. If you go back to 2016, a lot of the reason why donald trump won the election was because of the vacant Supreme Court seat and he had pledged to put in a conservative. Any republicans held their nose because they wanted the court seat. That right side motivation though, this time democrats are extremely motivated on this. More than 100 million has been donated to act blue that is a vessel to how democratic candidates. More than 100 million since the death of ginsburg has come in. I watched the video from oak aussie oh cortez Ocasio Cortes saying we have to vote for biden. There is every indication that democrats are completely fired up about fighting for this even though it is not quite sure right now how they would stop an appointment like this the last thing i would mention on this real quick is republicans filling this seat is going to have a major implication on a lot of things. ,hink in terms of regulation the federal scope of regulation. That conservative fiscal groups have wanted to pull back on before. This will perhaps allow them to pull back federal scope of regulation a little bit and that is one tradable area i would look at. Thank you so much for that insight. Joining us this monday morning is andreas steno larsen, chief global strategist at nordea bank. I want to start with this note i solved overnight from Michael Purvis talking about the changes the chances of getting a fiscal package done by november 3 are even more distant now. Does this mean a weaker dollar . Does that feed into higher volatility . Andreas im not so sure it means a weaker dollar. I agree that this is an event that could jeopardize the political environment. It will make it a whole lot more tricky to get a deal done before the election. I believe the two sides will agree to some sort of stopgap spending bill to prolong the discussion. And this is obviously not something that could have a big impact on the dollar outlook. The dollar should weekend just because of political turmoil. I would rather say that this turmoil increases the odds of volatility. It also increases the odds of market turmoil across asset and that is a decent dollar story more than a weakening dollar story. Manus political machinations. The other key issue that you draw to bear as we look at turnaround inthis financial conditions. Is a homeless by stealth it is almost by stealth. What does that mean for the fed most importantly . Andreas i think it is pretty clear that what the fed is trying to obtain is easier financial conditions. They want to weaken the dollar. They want to increase equity multiples. A want to compress credit spreads because that is what is needed to bring inflation back to 2 or even above as they target now. This is the Main Objective for the fed in 2021, 2 weaker to weaken the dollar. This is a massive structural story to me. The dollar needs to weekend and otherwise the fed will not obtain its objective. You also say that the feds to show that it means business in terms of average inflation. What can it do to tell the market it means business . Andreas i would basically suggest to the fed that they start writing tips b uying tips. Futuresld also buy directly to prop up inflation by commodity prices. I would pick one of these two suggestions to make this more credible. Right now, they have not really managed to communicate is properly to the market. Manus you can buy a little bit of copper and commodities. Andreas, stay with us. Our guest host this morning. It is monday. concerns are mounting that the u. K. May need a second lockdown. Sayprime minister is set to that the nation is at a critical point and the pandemic. Local restrictions could be extended to london. Lbc is reporting that the mayor could recommend that the rules be tightened today. President trump is celebrating a tiktok deal. The owner was to have an 18 stake in the new company. And the white house wants a new u. S. Headquarters and the promise of jobs. Seeking a valuation of 60 billion as part of the deal. That pompeo is saying he says governments have privately told him that the u. S. Is right even if they wont publicly acknowledge it. The u. S. Wants to tighten restrictions on iran. A global crackdown on banks does not seem to have curbed suspicious activity. Than 2 trillion of transactions show some lenders continue to profit even after the u. S. Imposed penalties. The files released over the weekend by a consortium of investigative journalists. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Laura wright in london. Coming up, reviewing pandemic plans. The ecb will be looking into its pandemic bond to buying program. More on that story next. This is bloomberg. Annmarie good morning. 6 15 in london. This is bloomberg daybreak europe. Brian moynihan from bank of america told bloomberg in an exclusive interview that there should be another round of admiral stimulus to help the u. S. Reach a full economic recovery. We caught up with him ahead of this weeks bloomberg equality summit. Our basic belief, our Research Team has said the u. S. Will be down 4 for the year and then next year up 5 . The key is to think about it quarter by quarter. There was a deep drop last quarter. You are back up where 95 of the economy is restored and we will work out from there. 2 growthis a 1 or of the economy. It will take a while to grind through this. Including from chair powell yesterday has gotten better rather than worse. That, that, can and by consumer stimulus remain strong. It filled the whole to bring the economy back up to level and now we have to let it work out from there and they probably need more stimulus for defined places that are still in difficulty including restaurants, state and local , performing schools event venues and other Industries Including airlines. The rest of the businesses aredentists offices busier than they have ever been. Consumer spending is up year over year which is good news. It was growing at 10 . It fell. It has worked us back to even. This is good news for the economy. You said it chair powell said we are better off than we were but there is also a lot of uncertainty. How badly do we need further fiscal stimulus . We have an election coming up and we dont know about a vaccine. Crisis is a health care from beginning to end. I said it in march and i said it with you a few months ago, people cannot forget that it is a health care crisis. Are is happened is you seeing the potential for the vaccine but more importantly, you are seeing better behavior to keep the thing from spreading as fast. In the northeast, you are seeing it crest over and infection rates are much different than they were early on. Youre seeing the treatment regimens being different and because of the personal behavior of people at high risk, they ares aim more careful they more careful. That is all good news as we wait for the vaccine which is sometime out there over the next several months. Until that is in everyones arm, you will still have people dragging us back to the behavior before. What we need is pretty straightforward. More stimulus for the people. Think about the analogy we are all on one side of the river and we need to cross over. We need a bridge. We want everyone to cross over. Some are doing better than they did before the crisis. Others are doing just fine including the medical industry. They are back to where they were. Strong. Ing industry is Construction Industry is strong. Those are across the river. Help with is restaurants and things like that. The next round of stimulus ought to be focused on the areas that need the most help. There be a second bite of the apple . I think so. Manus that was brian mont brian moynihan, chairman and ceo of bank of america speaking to bloomberg exclusively i head of the equality summit. On wednesday the 23rd of september from midday u. K. Time. That is a mustsee. The ecb reportedly reviewing its pandemic bond buying. The central bank will consider how long to continue the program and if flexibility should be expanded to older programs. The dreaded capital keys come back to haunt us. Andreas steno larsen is still with us. It was sold to us and write to us and rightly so by madame lagarde as something with no limits. Many would reflect that it was a movement. Ue is there a risk . Where does that blowup . D or the u. S. . This is instrumental to the europe construction. We have seen how the Euro Construction has struggled from the outset. It still holds a lot of floss. We are moving in the right direction in europe i would say due to the new debt. Pulled the rugy from under it the Euro Construction if you questioned the flexibility. Ist is why i think cb willing to add flexibility to the that is why i think the ecb is willing to add flexibility to the ppe program. Annmarie youre not expecting resistance from hawks like Robert Holtzman . I think thosestly voices are in a clear minority in the ecb. They are also in a minority if you look at the Political Landscape across europe. Even german politicians are backing the ecb in its objectives right now. There is no clear way for the hawks in the ecb. Larsen Andreas Andreas steno larsen, please stay with us. Some of the World Biggest banks have allowed criminals to move money. Up next, we discuss those files. This is bloomberg. Annmarie good morning. This is bloomberg daybreak europe. Documents involving about 2 trillion of trans actions involving some of the worlds biggest banks have allowed criminals to move dirty money around the world. Dani burger is tracking the dirty money and the details of the socalled fincen files. This exclusive report comes from buzzfeed. They are called the fincen files they are reports of suspicious activity. They detail and until now they were kept from the eye of the public. They detail a lot of things that are related to money laundering. A have things that enable ponzi schemes. Aree sorts of issues contained in thousands of files. The concern is not just that these existed. The other part of the concern is that it is essentially toothless. Once the file is reported, they can keep collecting money and move on. It also immunizes them from criminal prosecution. Some of the details Standard Charter moving money on behalf of a dubaibased business later accused of laundering cash for the taliban. Bank of america, jp morgan come and American Express and citibank all collectively processed millions of dollars politicianhstani even after interpol issued a warrant for his arrest. The concern is not that these just exist. Buzzfeed detailed thousands of them. Not much action was taken after the banks filed this report. Manus some of those numbers are quite staggering. 1. 3 trillion of suspicious transactions over at deutsche bank. Hsbc. A red herring. Stock thatking at a is getting pummeled from reports like this but also and i think much more privacy and are the be tagged init may china as a Security Threat which has huge business implications. What do you make of the differential between the two . This report that china was considering adding hsbc to its unreliable list came a day before the buzz feed reports. This report is really important. Perhaps more market moving then the other report because of the planned expansion into mainland china. This report comes from the communist times. It seems all but certain that they will be added and once a company is added, they face restrictions on trade and visas. It is very difficult to do business as hsbc what want to. Some of the concern is the connection to huawei. Manus thank you, dani burger. 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. Good morning. Its bloomberg daybreak europe. The u. K. Plans to sound the alarm on rising infections today. The london mayor is set to recommend more restrictions. Sanctions standoff. Mike pompeo says european governments not bagging the u. S. On iran should fall in line. He calls the 2015 nuclear deal silly. And banks bruised. Ine than 2 trillion transactions show banks kept profiting from powerful and dangerous actors. Hsbc falls to a 25 year low. Manus, very good monday morning to you. 6 30 in the city of london. If you are in the United Kingdom , particularly in london, you are questioning whether or not you are going to see fresh restrictions on your social life. We are waiting to hear from mayor sadiq khan. Boris johnson is set to learn from the chief medical officer that the u. K. Is at a, quote, critical point. Good morning. Manus good morning to you. It is not just the u. K. Which has seen escalation. France and the number of other nations are seeing a rerating of covid risk. We do this group call every morning where we discussed things. Brought wasknow you all about the risk from miss ginsbergs passing. What that means for the differentials. That is a core risk you put forward on that call, isnt it . Annmarie Michael Purves was talking about this. The fact you have the Senate Debating whether they can appoint something. Days, 22 hours until the u. S. Election. This just means a relief package is further likely kicked down the road. That fiscal prevarication and the tightening of risk is pervasive across risk markets. Msci in asia along with euro stoxx 50. That tail risk in terms of the Supreme Court vacancy, closing fiscal delay, reinforcing the gridlock, is a narrative that is rising as well as the covid narrative that is rising despite the president telling the u. S. They will have a vaccine, everyone in the u. S. Will have a vaccine by april. Euro stoxx 50 down by 0. 8 . The banks will wait. Charteredtandard showing weakness. The yuan is a strong. Good news for political relations. The yuan rises. You are looking at a currency which is the strongest globally this quarter. The longest run of gains in two years, of eight weeks in a row. Aussie dollar flying higher. Only g20 country with growth. Nymex down by 0. 4 . I must compliment you. I know you dont fish for compliments. Only you could get his Royal Highness to channel his inner Alan Greenspan on the news conference. I was thinking, really . Well done. He said, the markets, he wants to make them jumpy. Lets get to our morning call. Goldman sachs says value shares are a way to vote on a vaccine. Lets get to juliette saly. Time to rotate, finally . Is it here . This is what we have been looking for. This call into rotation. Value is looking good over the month of september. The value index on track for its best months against the growth index since march 2001. Now Goldman Sachs analysts are really saying value stocks is where you want to be as we start to look towards the vaccine. They tend to have short duration cash flows that will outperform as rates rise while cyclicals have smaller durations on average. Therefore, the correlation to the prospect of a vaccine lies with value. When it comes to sectors, what is going to correlate most highly with a vaccine, food, beverage, tobacco is where you want to be looking. Tech, hardware, equipment, semiconductors, and retailers, the most negative retailers most negative players. Vaccine see news of a in terms of the november election. This could provide a tailwind. Perhaps times are valued to sign shine. Underperformeds growth. Only up 7 since the end of 2016 versus a doubling. T manus covid guidance begins to ramp above the central bank guidance. Thank you, great analysis. Juliette saly in singapore. The u. S. Announcement has snapped back multiple sanctions on iran is being met with resistance among american allies. Ministers from france, germany, and the u. K. Had washington had no right to impose sanctions since it left the nuclear deal. Mike pompeo blasted the european response. Still wedded to this silly nuclear deal. I hope they will understand if you want to be part of a Global Coalition to reduce risk in the middle east, you need to join us. Lets get to responses from the qatar financial sector. Highstakes level of rhetoric between the u. S. And its allies. Just how close to a break point are we . This casts into stark relief the divide between the u. S. And europe on the iran matter as well as generally around Foreign Policy issues around the world. The heart of this deal is whether or not the u. S. Is still party to this 2015 iran nuclear agreement. Sort of ironic to have mike pompeo call the deal silly and say european allies not wanting to be part of a Broad Coalition because the u. S. Really isolated on this. European ministers arguing the u. S. Is not part of the deal anymore, therefore it has no standing. We have seen from european leaders it desires to keep the deal alive at least until november 3. The team has signaled they would be much more willing to return to that 2015 agreement in some way. If you can keep the deal alive until then, you could get more clarity at the end of this year. How can we expect the situation to play out over the next few months . We are first going to be looking at a tuesday address by donald trump in front of the u. N. General assembly. He is expected to discuss these iran matters. The next date on our calendar is october 18. A 13yearold arms embargo on iran by the u. N. Expires. We have seen some support beyond just the United States not wanting to see iran get more weapons. The question is, what does iran do in this period of time . Head of elections for the end of the year. The country has taken a more relaxed approach. We will have to see if that changes as these sanctions ramp up. Then the question is, do they have much of an impact anyway . Annmarie thank you for your time. Back with us is andrea. Barclays updated their 2020 oil call by two dollars a barrel. Interesting to see we have bolivia coming back onto the market, iran could be a big deal next year as manus has been talking about a number of times last week. If there was a joe biden presidency. What is your outlook on oil . If joe biden wins, you should buy commodities with an arm and a leg simply due to the fact we will have less geopolitical tensions. As a base case you should buy emerging markets and commodities as much as you can. I also think the story we just discussed is a sign of that. You, can youask disclose what youre modeling, what you think we look at the deya ut inside nor nordea, how are you preparing for the twoway risk . Talk us through your thinking on the risks as we go to the selection. This election. If you talk to clients in northern europe, no one wants to bet on a trump victory. That obviously means the market is probably positioned for a Biden Victory already to a certain extent. We could see emerging markets have started to perform the recent months. Probably as a bet on a joe biden presidency. To think we look too much at this election, i would still argue the tail risk of trump reelection is pretty large. That is something you have to look at if you are a portfolio manager. The tail risk is fairly large if he pulls out another victory. Speaking of risk, euroyen has been considered fx trader, one of the clearest risk barometers. Do you think it is signaling bearishness coming into the market . Could be. I think it is more linked to the new restrictions we see on the covid19 front. It is fairly clear we are moving towards more restrictions across the european continent. It is basically no matter where you look. To me, it will lead to a flatlining consumption pattern through q4. This story of sequential improvement we have seen in europe, since the early spring, is now questioned. That is one reason the euro has lost a bit of momentum. Thank you very much. The tail risk, the large tail andrea stenolarson. Concerns are mounting the u. K. May need a second lockdown to stop the spread of the coronavirus. Boris johnson is said to be told today the nation is at a critical point in the pandemic. Re are exit mayor sadiq khan will suggest tightening restrictions today. Republican leaders in the senate are hoping to rush through a replacement for Ruth Bader Ginsburg with donald trump expected to announce his pick this week. Democrats are warning of a constitutional crisis if joe biden wins the election but trumps candidate is confirmed. Celebrating the tiktok deal despite it falling short of his key demands. The chinese owner will have an 80 stake in the new company. White house gets a u. S. For the business and the promise of new jobs. Sources have told bloomberg they are seeking 60 billion as part of the deal. 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. Bloomberg. I will pick it up. Thank you very much. Breaking news coming through on nichola. Trevor milton is stepping down as executive chairman. A new going to have chairman of the board. Is the zero emissions transport Infrastructure Solution provider. Let me get more breakdown on the news flow and we will bring that to you through the day. That is the latest breaking news headline. Trevor milton steps down. It is all about the inflation debate, isnt it . Annmarie thats right. We are going to hear from rafael bostick. He told bloomberg he is comfortable with inflation above 2 . Our conversation is next. T. Manus the fed has kept Interest Rates near zero signaling they will stay there for at least three years. Policymakers hope that will allow time for the u. S. To return to the maximum employment and its 2 inflation target or belong or beyond. Rafael bostick spoke to bloomberg about the hurdles ahead. One of the challenges we have had historically is one the Employment Level has gotten too low there has been a concern about economists and policymakers that that would trigger inflation that would not be controlled. The action typically has been that we are going to try to stop that labor market from and that can put a damper on inflation. Both have seen over the last 10 years or so is that we can get employment to a very high level. Ithout seeing that inflation we wanted to be very clear in the longer running goal statement that we are going to wait to see for evidence of that overheating before we start to take action. Aspect toe biggest come out of that statement. What is the evidence you would look for . Is there an inflation level above 2 that is your ceiling . I would say uncomfortable being above 2 . It is actually more the trajectory than the level. If we were at 2. 2 or 3. 3 and we were going to be stable, that would be fine. The last five or six years we have been out 1. 6 and 1. 7. That would be the flip side of that. Contrast, if we were at 2. 2 and the next quarter 2. 4 , that trajectory would give me some concern. Certainly the level is going to be something to Pay Attention to. For me, the trajectory is more important. Give me your levels. What do you think growth and unemployment and inflation are going to be in three years . We will have the pandemic passed us. We will have figured out what all the structurally changes had gone on mean. Our longterm estimate for our models is around 2 growth. Inflation can go at above 2 as well. I think before the crisis we were heading that direction. I was optimistic about how things are going. In terms of unemployment, we can see levels approaching the 3. 5 and 3. 75 . We have a lot of work to do right now to make sure the amount of pain and damages that happened with the economy is minimized. Staying on the local and mediumterm is something we should continue doing for a bit longer. You can talk about getting over 2 but you cannot get to 2 . Why do you think thats going to happen . Ive been talking for a long time about this. This is something i tried to say in interviews. I have talked to my colleagues about this. Many of the signals of inflation 2 . At 2 if not above i think we were actually much closer to our target just precrisis that has been really recognized in the press. That said, we are not in that place now. I have confidence once we get back into stable growth and robust recovery, we can get back to that precrisis level where all the signs are positive. I think in the last few years we have done a lot to get inflation to a place where i could be comfortable with it and it would suggest the economy is moving in a sustained way. Is your policy inflationary in and of itself . What i would say right now is the pandemic is something we have never seen before. This is an historic type of event. If you look at the inflation numbers, there is a lot of noise there. That was atlanta fed president Raphael Bostic speaking to bloomberg. He is comfortable with inflation above 2 . Coming up, we speak to the Federal Reserve bank of dallas president , robert kaplan. That is 1 00 p. M. London time. Coming up next in this program we will be looking ahead to this weeks eu leaders summit. Relations with turkey will feature prominently. Over borders in the mediterranean continues. Thearie now it is time for brussels addition. Your essential need to go need to know guide in europes political epicenter as the leaders prepare for a summit beginning thursday. Relations look increasingly strained. The relationship with turkey is at a crossroads as the bloc presses ankara to halt energy expiration in the Eastern Mediterranean. Lets get more with maria tadeo in our brussels studio. Turkey, this is going to be high on the agenda. Does turkey faces the threat of more sanctions . Yes, it is high on the european agenda. That is as european leaders prepare to come here to brussels later on this week. As you mentioned, this is all to do with that escalation we have seen over the summer between the turkish government and the greek government. This is all about energy, about the gas drilling in the Eastern Mediterranean sea. Government view is that turkey is overstepping into its waters, breaching the countrys sovereignty and breaking international law. You have emmanuel micron taking a tough line saying erdogan has been an unreliable partner to the European Union and an untrustworthy member of the nato alliance. A lot of this will depend on turkey. We have seen some deescalation over the past few weeks. Turkey has moved away from that water. Erdogan said i would be happy to meet with the greek prime minister. The europeans will tell you this will very much depend on turkey if not by the end of the week. We could get something that looks like a new blacklist for turkish authorities. We are going to be joined later european head of the cduiament, a member of the in germany. 8 30. S going to happen at tadeo with the brussels edition coming up. Lets check with u. S. Equity futures. It is about the risk of fiscal impact which comes to bear, also the fading. Nasdaq below the 50 day moving average. Apple, facebook, amazon. All exerting pressure on this market. The worst month since 2008 for u. S. Equities. A big panel. London, ftse 100 futures down. You may be questioning, or going to have another lot done . I will be discussing the impact of covid on financial markets. That panel part of c we coming up 8 40. 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. Anna welcome to bloomberg markets, the european. Oft the markets say beware continental drift. Futures start the week in the red outpacing losses for u. S. Contracts. These are your top headlines from the bloomberg terminal. Another lockdown. The u. K. Will sound the alarm