Bloomberg surveillance. This is what the market is looking at if you look at equities. Is what the focus happened with china. Most european stocks are rising following the rally in asia. The offshore yuan falling after meantinese central bank to restrain the rally. Lets get straight to the bloomberg first word news. There is renewed sparring over stimulus in washington. President trump and House Speaker nancy pelosi hit at each other over the lack of progress on a new rescue package. Kudlow said he expects the two sides to continue negotiations with that a new deal isnt essential for the u. S. Recovery. President trump is no longer considered a coronavirus transmission risk. The white house physician says he has met criteria to end his isolation. He said the president s symptoms have improved but didnt say the president tested negative. The president has a rally planned in florida later tonight. The world bank is still in oil fields despite pledging to fight climate change. Thats binder that is in a report. They spent billions on oilfield after the paris climate accord. Lebron james has led the l. A. Lakers to its first nba title in a decade. The team beat miami in game six for a record equaling 17th title. James was m. V. P. For a fourth time with this 11th final tripledouble. That is where they get double digit in three different categories. Nba title withhe miami, cleveland and the lakers. Global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im leighann gerrans, this is bloomberg. The u. K. Prime minister set to announce new coronavirus alert levels today. Boris johnson will undergo plans with areas of medium, high and very high alert. The u. K. Central bank has said it isnt currently plan to cut rates below zero, but is doing the groundwork on the issue. Is head of research at Blackrock Investment institute. Thank you for joining us on this monday morning. When you look at the number of restrictions, of a of infected in europe, does it make you more likely to question the initial vshaped recovery we are waiting for . Because thel vshaped recovery was always something that was slightly clouding the real issue which is not about the progress is with the vshaped is about. But it really about the level of activity and given the highly unusual downturn we were experiencing, we need to keep looking at the level of activity which has been rebounding as we came out of lockdown and is still running ahead of original expectations and thats why we revise theirimf forecast. What do you worry about. The rebound happened quicker than expected. How do you look at this second wave or extension of the first wave with one of the numbers looking pretty ugly. Worrying atrs look face value, but i think we need to account for the fact we have massively ramped up testing capabilities. ,nd if you look at things statistics such as fatality rates, they paint a much more moderate picture than the overall count of new infections. Comparable nowhere to what we had in the spring even in those places where the numbers at face value are now higher than they were in the spring. We nown secondly, understand much better have the virus is transmitted and that can work with some targeted measures from that blanket shut down. I think that will make a big difference. I want to talk about negative rates in just a second, but overall where is the evidence of permanent damage. Damageevidence permanent i think would really be , which would destroy some intangible capital that typically sort of devalues Human Capital for training and so on. Thankfully we havent seen much evidence of scarring yet, but that is because we had very major policy support and that is why it is a bit disconcerting that we dont make a lot of progress on this in the united states. And a think the chances of getting an agreement in the runup to the president ial election are getting slimmer by the day. The path is very narrow. If we dont get something before the election day then we might actually have to wait until the new congress is seated and that is sort of that would basically take us into early 2021. In europe, and generally we have more visibility about the stimulus. We see the Recovery Fund being negotiated, making progress towards implementation and that is in favor of European Assets at the moment. I also want to ask about the u. K. Loomingit deadline is and we still dont have market seem to be testing with the bank of england will go into negative territory. What is your take . I have a relatively open mind about negative Interest Rates. I think they have worked effectively in the euro area. So a lot of concerns before the ecb rent into negative territory have not been materialized. Mix can as part of a policy be effective. But then the u. K. Banking system is someone has a slightly different structure than the european one. Which is why it is important the bank of england take a look at what kind of specific education it could have in the u. K. Thisnk in the euro area has been an effective tool. That is potentially why the bank of england is reassessing its first verdict in the financial crisis, that that is something that would not be advisable for the u. K. Francine thank you so much. We talk about the u. S. Next. The stimulus saga continues. Pelosi blaming each other for lack of progress. We are just over three weeks away from the election. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. Stimulus talks remain deadlocked in washington. President trump and House Speaker nancy pelosi blaming each other over the lack of progress. The president has sent shifting signals on the amount of stimulus he wants. While pelosi calls their first offer grossly inadequate. She thinks she can influence the election and i think they are hurting themselves by not doing it. Traders may come around to the idea alert the election one ended fireworks. In fireworks. Some weve heard around the election is the biggest risk is that the election is uncontested. Lead in widening his the u. S. Polls prayed the volatility sector has started to come down. This is the volatility curve on the vix. This is just from one trading day ago. The entirety of the curve this measures options further out and this is been brought down with volatility starting at price cheaper. This is the election right here, you can see this peak in the curve of volatility expectations. It is lower than it was a week ago. The biggest area weve seen this decline is in emerging markets. Im looking at stock volatility versus the vix. Usually em is higher. People want more protection. Over the past couple of days, it has fallen relative to the vix. The idea being perhaps after the election we get stimulus that emergingmarket assets. Really a lot of that disappearance and the election reflecting itself here. One place that does not have thanks is tech. This is tech volatility versus the vix and detroit soft and it drops off. If the other volatility pictures im showing you were due to this expectation of a blue wave that we dont have a contested election, democrats have made it clear they were looking at more regulation against big tech. A blue wave is yet to be priced in. The volatility of tech stocks and ever else we are seeing volatility. Francine thank you very much. , we were just talking before, thank you for sticking around. Talking about the difference between u. S. Assets and European Assets. Person,vestor in market how should people look at the bulls. Both hedging against eventualities or should we trust the polls . The picture from the polls becomes clearer, i think maybe trump by the market increases. But of course its important to look beyond the National Polls and look at the specific polls in the battle states and also on in thehats going key senate races. Who goes toion of the white house and whether the determine theill policy in the united states. Is the one thing you think markets are mispricing . Is it something to do with dollar, the impact the election will have on emerging markets . Concerns that we have is around the uncertainty that the election and may be the aftermarket creates. Leadinteresting to see the for the democratic candidate widen, markets seem to conclude that makes it less likely for the image to be contested. Which is what the volatility seems to imply. Also a big concern around specific sectors. Some sectors have a very high concentration. Account and they also account for a large part of the stock market. Concerns some of the we have going into the election are in u. S. How we equities at the moment. Francine is there Something Else you quite like. I dont know if it is havens. Or whether able to get brunt of the volatility in the coming weeks. You are essentially asking about the u. S. Dollar. Chatters been some about regime change, but regime change in the currency markets dont happen very often. We think we can still very well explain what happened to the u. S. Dollar but we saw in the early summer with our models. So we dont see any signs of dollarand we view the being driven by Interest Rate different rajesh differentials. Which is what explains much of the dust remains safeollar haven assets. If uncertainty increases even if it might be some of it might be originating in the united states. Investors still head towards the u. S. Dollar. How much more you expecting fiscal stimulus. Does it all now depend on an extra stimulus. Currentink that in the environment as a reflection of this very unique situation with the pandemic caused recession that policy support, especially from the fiscal side, is important. To bridge over those disrupted cash roads and incomes. Thats not something Monetary Policy can do. Was the working together was a slightlyry different issue. Basicallying is to put money into peoples pockets, going direct and that is clearly supposed to form a fiscal policy issue. Francine when you look at fiscal policy, is there a region that may fall behind. How does europe compared to some emerging markets . Emerging markets obviously have also ramped up their fiscal stimulus. For the first time we have seen quantitative easing and some of the emerging markets. Going into the imf meetings, there will be a new focus on em debt sustainability. ,ut i would say for the moment with very supportive financial condition, the outlook is still the reasonably constructive one. But a longerterm, like many em it will be settled with higher debt levels. Some of them might struggle more to carry them given the institutional setups and market other is is for not as solid as other countries. Much,ne thank you so head of Macro Research at Blackrock Investment. Coming up, a Food Distribution and retailing during a pandemic. Coming uped that shortly. This is bloomberg. Francine you are watching bloomberg surveillance. Lets get to the Bloomberg Business flash. Failed tomes has force apple to put fortnite into its back into its app store. Apple removed the game in office of a august after epic set pay system that circumvented apples system. The case is headed to a trial next year. The worlds biggest maker of rubber gloves is considering a hong kong listing to raise more than 1 billion. They are working with advisors on the potential share sales and its already traded in kuala lumpur and singapore. It would be the biggest ever listing by a Malaysian Company over in hong kong. The biggest banking takeover this year, Saudi Arabias National Commercial Bank has. Greed to buy a rival the new firm would have total assets of 220 billion, a cretin the gulf regions thirdlargest bank. Its market cap would nearly match that of Qatars National bank, the middle easts biggest lender. That is your Bloomberg Business flash. Francine these are the events you should be looking at for this week. The imf and world bank will hold their meetings virtually. It starts today. At midday london time we will hear from Christine Lagarde. Week, wall street banks also begin to report earnings. Comment onutives to u. S. Elections during earnings calls. Tomorrow, apple is expected to unveil its 5g iphones. On thursday, we have another brexit deadline. European Union Leaders will meet in theory to approve a postbrexit trade deal. Coming, Food Distribution retailing during the trent pandemic. Up next. Oming this is bloomberg. 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. Francine economics, finance, politics. This is bloomberg surveillance. Lets get straight to first word news with leighann gerrans. Renewed sparring over stimulus in washington. Pelosint trump a nancy hit eddie judd or over the lack of progress. Says he expects them to continue negotiations that a new deal isnt essential for u. S. Recovery. The u. S. Economic recovery has flattened out and is now in vital need of more fiscal support according to minneapolis fed president face the nation that the country could see a slow recovery with thousands of businesses at risk and that more action from washington is vital. The world bank is still investing in fossil fuels despite pledging to fight climate change. Thats according to a report by a german environmental lobby group that says the bank has been to more than just spend more than 12 billion on fossil fuels after the paris agreement. The World Bank Says it was helping resource dependent nations. Global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im leighann gerrans, this is bloomberg. European leaders are stepping up efforts to contain the spread of the virus. Permits are Boris Johnson is expected to announce the new tier system of alert levels. The government working on tighter restrictions of social gatherings. Lets get more. Thank you so much for coming on. The u. K. Governments new roach will win i think we are seeing a change of approach from the government in response to quite a lot of opposition. Particularly from leaders in the north of the country who are very resentful that they were not consulted as much as they thought they should have been earlier in the process. They feel the governments messaging has been confusing, that the evidentiary basis for the governments decision has not been made clear and that simply the public dont really understand the criteria of government is using for making decisions. We are seeing the government respond to that, stepping up consultations. We are seeing the introduction of new clear systems for developing windows lockouts will be put in place. Finding more engagement i think with parliament because both conservative mps and labor mps have been claiming there is not enough scrutiny. The government is changing its approach both with local lockdowns and how it feels the messaging on the consultation side. Public opinion is quite supportive of local lockdowns and you wouldnt really know that from reading the press every day or hearing the complaints. Most people do see it as a stopgap measure and the hope of preventing the national lockdown. Prove effective, we will see opposition really increasing quite substantially into winter. See much difference between the you just the way the u. K. Is handling the way the u. K. Is handling compared to europe. The restrictions are so different, even if the number of cases lacking one or two months, are similar. France thatn with had this traffic light system. They are now in the fourth iteration. Skepticism andf even fatigue and the French Public with that system. That maybe doesnt bode so well for johnsons system. All of the governments are having to resort to some type of local measures to try and keep the virus contained. It is very much guided in each case by the capacity of the hospitals and the icu beds. In the u. K. Case they are concerned the hospitals, the nhs will be overwhelmed if they dont get a handle on the increase in infection rates. What is your take on brexit . We understand now Boris Johnson is getting involved to try and broker an agreement with the eu. Week. S was an interesting johnson accepted the deadline, but was it deadline . Probably not. Neither side want to be seen as a one to break the talks often be responsible for no deal. Both sides could be fairly certain want a deal. Really we dont see the kind of level of fear of it no deal situation we saw last year. There is an element of acceptance that if this were to result in no deal, thats where the danger is. They could come to an agreement. The french president is very set on getting something on fisheries, germany is very worried and other countries, about the u. K. Having a free hand. All of these are resolvable but we are not see any concrete progress and i dont think we will. Francine thank you so much. We will see what happens. Thank you. Bloomberg opinion, columnist. My next guest is the founder of the major italian Food Distribution. The business started off importing products for domestic markets but specializes with partnerships including kroger the u. S. Joining us now is natasha, of founder and chief executive. Thanks for coming on bloomberg surveillance. Trying to understand some of your worries. Not only with the pandemic, but because of brexit. Everything in place to still import italian food to the u. K. And export them in case of a no deal brexit . That is something all of us would love to see a World Without tariffs. Things therefore made only in italy can only be purchased in italy. If the u. K. Wants to carry on our products, which im sure they will, unfortunately they will have to deal with an increased of goods. The world ofg in uncertainty at the moment. Francine i guess there are two concerns. How do you get products. Thered be a shortage of the products, or they will just come in a higher cost because there will be tariffs on them. I would say we are an unfortunate situation. Combination. We see it all over the place and so demands for products are spiking everywhere. The covid spikes are caused by people fearing new lockdowns and therefore stockpiling, shopping and getting all they can. Is a more highlevel corporate governmental situation were regulatory issues are involved. The combination of these two. Time in whicha the stores are acquiring more goods and on top of this, it is winter. The u. K. Is an island. Realityto deal with the of ports, or usually even in times where there arent money troubles, one has to make sure its able within the country so that when they face bottlenecks of the ports. It is a combination of all these aspects which makes it rather challenging. Francine what is your biggest challenge now . Brexit or covid . Both. , but i havehallenge a fantastic team here who have proved to do a magnificent job during the first wave. Problems like the to get goods across europe. That was very challenging. Producers who were not at all prepared, who did not have packaging or raw materials. I think we are more prepared now than we were during the first wave but brexit, if the uncertainty of it. We see talks are going on. We still dont know when there will be freetrade deal or not. Getting the Company Ready for that is a big challenge. Ready and get our ip and the actual flow of goods. Helping and been trying to understand what he no deal brexit could look like. Tremendously. Weve had the Committee Going on for the last two years. When we think we are involved in food and trying to get delicious products on the table of people and having to dedicate so much manageinto trying to problems which are not connected to the actual quality of food, but connected to bureaucracy and documents and two ways of working which has to change. That is tremendous support from our partner in the u. K. And we toked together very closely try and feed the nation. Disclaimer, if i , thats a piece of my household. The typical seasonal products are already in the u. K. The big challenge will be towards the end of the year getting all the chilled products. Bottlenecks and thats our main fear the moment i would say. The breakinglly newss shop now and chop often. Natasha, founder and chief executive. We also spoke with scott who says the feds main Street Lending program has been an disaster. This is bloomberg. Francine this is bloomberg surveillance. Lets get to the Bloomberg Business flash. Againc games has failed to force apple to put fortnite back in its app store after the federal judge rejected the request. They removed the game after epics set up a direct pay option that circumvented apple system. Epic alleges the tech giant runs any legal monopoly, only allowing downloads and payment through its app store. The you ks financial regulator has posted for fines this year. Thats down from 17 in the same time last year. It says the decrease is likely down to difficulties with the witnesses ordering the lockdown. To fda says its continuing pursue cases and the biggest rise and fall naturally. The British Airways boss is being replaced with the head of air lingo. Shawn doyle replaced him as chairman of the u. K. Airline after transition. He is leaving after being passed who was the group chief initially seen as a likely successor. Overbeen criticized service changes. Thats your Bloomberg Business flash. Scott says the main Street Lending program has been a disaster. He told bloomberg the u. S. Has done permanent damage. What is therns on definition of stating the economy. If they can put this package thats proposed, that is probably enough to buy us another three to six months. It wont come in time to make a difference for november. The impact may be starting to be like christmas. The cares act for instance the existing program has done very little to lift structural growth for the long term. Monetary policy has would save the market in a lot of ways. A lot of these bigger businesses have been able to keep financing. How would you compare that to the access to credit for smaller businesses, having seen so many shut down already . I think with the policymakers are doing here is leaving themselves open to another round of criticism just like they got at the end of the financial crisis. The Government Program for designed to bailout the big boys. The main Street Lending program has been a disaster. Ppp, which is a Great Program as an emergency stop gap is gone. All the 80 airlines has been used up. We are going to start seeing layoffs here and structurally, more than half of americans are employed by small to medium businesses. A lot of those are never coming back. Damage permanently done which somemarket other industry is going to have is the fed ultimately able to meet the needs of main street . I dont think the questions with the fed as much as it is in combination with the u. S. Treasury. When you look at how the main Street Lending program was designed, the banks are sitting in the first loss position. They have to absorb a lot of losses if something goes wrong. At the same time megan hughes, nor are they going to be capable of the underwriting standards that are necessary to make good loans. The banksrstand why arent having a lot of success with this program. They are guarding their castles. The other side of it is the banks did get a big windfall here, especially those that underwrite securities. We see fixed income and most of the major banks has been record profitability. I think theres been a sort of feeling in washington that there is a quid pro quo here. We did this program that made you a lot of money, you ought to be taking some losses on these main street loans and i think they are at a standoff. Lets talk about the banks for a second. Some banks have said consumers outlook has gotten better for them. Do you think thats a bias . The bank wouldve chosen better customers anyway and they have a large part of the economy not seen by the banking system. There is certainly a large part not being seen by the banking system. An issue for chairman powell and other members of the federal reserve. Capital into or innercity communities, minority businesses is nowhere similar to the levels to other sectors of the economy. Issuehink that structural that is basically in the system is going to lead to a lot of low view of on the socialism and other programs which basically directly protect certain groups of our society. Coming up, joe biden widens his lead over President Trump with just over three weeks to go till election day. The latest on the campaign trail next. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Just over three weeks until the u. S. Election and joe biden is maintaining his doubledigit lead in the polls. A new survey has the democratic candidate leading President Trump 54 to 42 nationally. Polls from cbs shows biden ahead by six points in nevada and michigan. Joining us now is her Senior International editor. Why is joe bidens lead expanding . It is thought to be widening. Both nationally and in some key battleground states. A lot of this has to do with the coronavirus. These voters, particularly in the cbs poll, they asked this question of voters in michigan, nevada and iowa considered battleground states feel President Trump set a bad example during his own coronavirus with that they thought he handled things irresponsible. In an irresponsible way. Theres been a lot of criticism of the u. S. Having almost 215,000 deaths of the coronavirus, more than anywhere else in the world. This is something President Trump had tried to shift attention away from to issues of law and order and issues about the democrats, but with his own testing positive for the virus, its turned back to this. Having said that, battleground states, joe bidens margins are generally narrower than the National Figures show. In some states they are considered toss ups. So there is still three weeks until election day and a lot can happen. That lead is widening for the former vice president. The latest on is Amy Coney Barretts nomination to the u. S. Supreme court. We will see hearings this week, they are set for her nomination to the board. Court. Barring a major bombshell and some questioning, her confirmation by the Republicanled Senate is pretty much secured. Democrats, who dont have a lot of options here, they havent been able to shake that support for barrett for the hasty replacement of the late justice ginsburg. Theres only two republicans who said they will not vote for her. But they will try to use the democrats will try to use various delaying tactics, would really also focus on issues that could hurt some of these republicans when they when the voters go to the polls next month. Francine thank you so much. Coming up, plenty more bloomberg surveillance. We will talk elections. Francine Boris Johnson set to tighten u. K. Restrictions after a spike in coronavirus cases. Writtens other hat britains other headache. A crucial summit takes place used tuesday. President trump Speaker Pelosi blame each other for lack of progress with 22 days to go until the election. Trump trails biden in a national poll. Welcome to bloomberg surveillance. Im Francine Lacqua in london, tom keene in new york. Theres a lot going on. We have Christine Lagarde speaking later. We have the brexit deadline. Were Something Like 22 days away from that november election. Im being told three days after halloween. Tom you buried the lead, Francine Lacqua with an exceptional panel