Down without demand. Ryanair says the risks are skewed to the downside as the ceo called the new lockdown political mismanagement on a grand scale. Welcome to the program this monday morning. Just under one hour to go until the start of the cash Equities Trading session and futures look like this. It will be moving to the downside. The u. S. Session on friday, particular tech stocks taking a hit. You might expect negativity coming through. Lets have a look at u. S. Futures, a slightly different trend for us this morning. No trend, in fact. Fairly flat. Theaw a definitive move to downside on friday. There are a number of themes in play as we go into this, not least of which the u. S. Election and the fed. The chinese data we had out overnight, interesting of course for markets but really from a european perspective, we are focused on what is going on with the left story across europe and we will be thinking a lot about that and talking to our guests a lot about that as we go through the program this morning. We have quite a lot of positivity on asian equity markets which might seem a little out of step that we are seeing in europe as we are gearing up for a tough runup to christmas and the holidays we are seeing strength coming through in asia as we gear up for other big events. Under a little bit of pressure. Lockdown smattering more than any progress around brexit. Boris johnson is hoping to save christmas. The yucaipa ordered a second lockdown in england, including pubs, restaurants, and nonessential shops for 28 days from thursday. The minister signaled the measures may be extended if they failed to contain the spread of the virus. Joining us now is bloombergs guest with analysis. Really good to have you with us. He has a picture of how restrictive these measures are. Not quite as restrictive as march and april, and therefore, raises questions about what kind of progress can be made in a month. Absolutely. It would be a mistake to call it a second lockdown in any shape. Critically, schools will be open. Boris johnson has done is essentially what germany, france, and every other sort of country in europe has done. Leaders were dragged kicking and screaming into this. Is big question of course people are very set up and have been could up for months. They have been popping up in different parts of europe. People are not really doing what they are told in there is incredibly lots of pressure from retailers and airlines, etc. , because the economy is in the toilet and businesses are really offering so its just a different equation this time around with no air and tease it will actually work. Anna politically, talk us through the latest developments. It seems as if the Opposition Labor Party will back these measures. They have been calling for a shorter but similar lockdown over recent weeks. It seems as a boris johnson, despite protests within his party, will be able to get his way here. Through. L go he has an opportunity to say i told you so. The big issue of course for boris is that his party is deeply divided. Veryajority is looking shaky. He has gone on record saying hes not happy. It will squeak by but theres a lot that this can turn in the rank and file about just how the government has handled it. The whole management of it has come across as shambolic and chaotic. Anna thanks very much. The latest on what is going on here in the u. K. Specifically in england. Lets move to the global perspective. Asian stocks climb and u. S. Futures point lower in a volatile stance to a crucial week spanning the u. S. Election Federal Reserve policy meeting. The dollar edges higher while the pound retreats as new coronavirus restrictions in england overshadow signs of progress on brexit. Cudmore,rt with mark our managing editor in singapore. Coming back to the u. K. Story, i know you have been thinking about this, the way that brexit of course will matter of various points. But right now, the magnitude, the scale of lockdown measures in whatever form seems to dominate. We are seeing weakness in the pound. Absolutely. There is a theme that the virus will dominate politics and this will apply across the atlantic as well be on the initial headlines. Brexit has been a multiyear negotiation and we have reached close to compromise on fishing, a contentious issue, and therefore, there is a lot of optimism. But the pound is not trading because the more immediate shock is much worse for financial assets. Once we move beyond the election, its we will go, now that we have this outoftheway, lets trade the underlying fundamentals. And they are deteriorating rapidly at the moment. We have just seen the worst week for global fatalities, coronavirus fatalities, since april, and thats likely to be the worst week, even worse than april, by the end of this week yet we are seeing hospitals overrun. We are seeing a hospitalization rate across the world pick up rapidly so its a very negative backdrop. Thats much than brexit for the election even though they have been a longrunning story. Anna for many parts of europe, the talk is of hospitals threatening to be overrun in the weeks ahead or various timescales and that is something we are focused on. Taking a broader view, looking at whats going on in markets and gearing up for the election, a lot of people putting the latest polling front and center in looking at what is happening in oil prices, some specifics around supply. We see real weakness overnight to the asian session. What is happening . Its remarkable how much Oil Prices Weakened in the open. I think that reflects the backdrop. Traders dont want to fight shortterm moves. We had that weekend news that libyan supply was up to 800,000 Barrels Per Day from an average of 100,000 Barrels Per Day. That is a massive supply boost. We talked about these stories are a number of weeks. We expected only a soft impact but instead, we have this real sharp slump and thats after the weakness of the last couple of weeks and that shows traders might go, this move is rational but i will not stand in the way. They dont know how far things can go, kind of how much things can overshoot in this backdrop when theres a lack of liquidity and massive event risk. I think we will see more of these irrational outsized moves across many assets in the next couple of days. Anna anna we are getting lines crossing the bloomberg. The ceo giving thoughts on Global Oil Demand and how far that will demand good in terms of Barrels Per Day. You have been asking what should investors fear the most this week . Reflections do you have on this topic . A variety of different answers. Some people are focusing on the complacent position. The tech sector might be where there is more of that to come. From my point of view, i think going back to that, i think what investors should fear is they are getting distracted by election which is obviously drawing all about attention for the next 22 hours at least. What they should really be paying attention to is what is happening on the virus side. I think we will get through this election and focus on the backup and then go the Growth Outlook is much worse than we thought. Some of the growth forecasts will need to be revised significantly and that is really going to change the equation for investing across Global Stock Markets no matter which policies we have from the new administration, whatever that composition is. Anna thank you for your time. Mark cudmore. Day. The question of the what should investors fear the most this week . Themarkets live team would love to hear from you. Coming up on the program, germany imposes a new process shutdown from today as italy stands to be next in line to add stricter virus measures. We will get the latest from across europe, coming up next, plus also ahead, Michael Oleary tells bloomberg he expects. Market share gains after a Covid Vaccine is found that he warns investors that theres worse to come for ryanair in the near term. The highs and lows of that interview with Michael Oleary of ryanair. We will bring you that later on in the program. This is bloomberg. Anna welcome back to the European Market open. 45 or so minutes to go. European equity futures look fairly mixed. Ftse futures looked to be on a different trajectory. Volatility around various themes around the pound. In terms of u. S. Futures, we have a fairly flat picture so we will look to that as we head closer to the start of u. S. Trade. Lets get an update with laura wright. Laura with one day to go until the u. S. President ial election, joe biden is leading donald trump in a series of polls. He remained ahead nationally as well as in key battleground states. Some of the races remain extremely close. A number of polls put biden ahead in pennsylvania. Brexit negotiators are close to breaking an impasse over one of the biggest obstacles to a deal, fishing. Its a sign an agreement may be ready by the deadline. Sources tell bloomberg the two sides are nearing a compromise. As protests in poland are continuing after the tightening of the nation stripped abortion laws. People in many cities took to the streets, ignoring virus will standing gatherings. Many in the region are calling on the e. U. To do more about the restrictions. We can negotiate about a lot of things in the European Union. We need to find compromise. There needs to be foundational values and principles like rule of fundamental rights, they are nonnegotiable. If they are undermined, we need to see action from the european commission. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna. Anna thanks very much. Laura wright in london with your update. Germany enters a partial lockdown as new virus cases surge in the biggest economy but its just one of many countries in the region taking drastic action as the pandemic spirals famously out of control. Our western europe managing editor joins us now with the latest. Lets start in germany. Paint the picture of how tough the measures are perhaps compared to earlier on in the year. Chat the real difference in germany, the lockdown starting here today, is that they are trying to thread the needle by closing down those places where people gather and hopefully in doing so, they are able to get the virus under control so they are closing down restaurants, bars, cultural venues, gymnasiums where people would go for sports, but the things that are still staying open, and this is the difference we see from earlier in the year, is that schools are still staying open. Universities are open, and a lot of stores will stay open so people will be able to go shopping. Of course, they will have to wear a mask and social distance, but they are trying to do essentially a lockdown in germany. We will have to see how that plays out. Angela merkels meeting with her corona cabinet this morning and we will be hearing from her little bit later this afternoon, as to whether they will be talking about new measures at any time in the coming weeks. Anna in various parts of europe, we see this phase of the lockdown, this iteration of lockdown, looking different from what we saw in the spring. What about elsewhere in europe . I know italy has some tough decisions to make and perhaps that will move forward today. We have the italian Prime Minister meeting with his cabinet as well and we may hear more about regional restrictions across italy. The restrictions in france went into effect last friday. Belgium announced new restrictions over the weekend as did portugal and austria so we are starting to see all of Continental Europe entering into this second phase of lockdown, what people are referring to as ite, while they try and bring the virus under control without doing as much damage to the economy as we saw on the first lockdown phase. In france, they have been saying that even the lockdown they are doing their could mean a 15 hit to gdp in that country so you can see how enormous these measures are in terms of the impact to the economy. To thread are trying the needle, trying to do similar things to masks without being as damaging to the economy. Are there any parts of europe that seem to have gotten the test and trace and isolate side of this right . For many months, we were looking at germany, but may be they have not done well relative to asia. Are there any parts of europe that are still fighting this . , when you look across europe it seems as though everyone has basically lost control and thats why we are in the position we are in in terms of the measures now being incremented. You are right in the germany. People held that up as an example of a country that had been able to do it right. Last week, the chancellor said the reason why they were and lamenting these measures is they could not track 75 of new cases, where they came from. When you are at that point, you have basically lost control and this is why they are implementing the measures they are now in germany. Is happening here for one month. The chancellor made it clear that she will meet again with state leaders in two weeks time and reassess where they are at so if things do not improve within the next few weeks, we can expect an extension of measures or perhaps more strict measures coming to germany in the coming weeks. Anna thank you for the update. Our managing editor with an update on the fight in europe. We are asking our question of the day on the markets live blog. You can join in on the debate and get in touch with the markets live team. Ib tv is the function on your bloomberg. What do you think investors should fear most this week . There is the virus fight and the u. S. Election to navigate if not fear. A fight and win tomorrow could have a sweeping impact on m a, we understand. Up next, how the democratic candidate proposal could keep dealmaking. This is bloomberg. Anna welcome back to the European Market open. Just under 40 minutes to go. Here in europe, perhaps in contrast to the gloomy headlines around lockdowns across europe, the cac and dax futures point to the upside. Ftse futures look sluggish. Lets set our attention to u. S. Politics. A joe Biden Victory would have a sweeping impact on mergers and acquisitions, if we were to see such an outcome. Deal Hungry Company is polled by bloomberg say they are concerned about the Democratic Candidates plans for a higher Corporate Tax rate and other measures. Lets talk about the future for m a. Cohead ofthe alternative capital at ubs and joins us now. Good to speak to you. Is it just about taxes . We saw a list the other concerns that others might have about m a trends if we see joe biden victorious. How do things shape up under biden in terms of m a for you . The outcome of the u. S. Election would positively impact m a. They have been on hold until relative stability, a clear winner emerging. What to worry about his attacks increase taxuld rates. Higher Corporate Tax rates would have cash flow. View, corporates will need to support valuations. They have standard mna. In the shortterm, we could see a pickup. What will this mean for private equity . We saw the concerns listed on the graphic. What could this due to private equities . They continue to have a lot of drive power. Away, i thinkmove they will play a big role in the recovery across the globe. It can provide solutions to corporates for capital. They provide direct lending. I think they will play a crucial role in the recovery. Anna have we seen flows reflecting that . Debt isd about how available through alternative capital sources. You say lots of investment money went into some of these debt funds in anticipation of that. So what role can we expect the alternative Capital World to play in the recovery . You look at alternative capital, they can be truly liquidity. [indiscernible] liquidity needs. The banks are facing challenges. And a lot of this year. Anna how much of that can help to fix some of the broken Balance Sheets around europe . How big is the scale of that problem . Simona in the u. S. , the amount of liquidity that has been raised has been in the trillions. In europe, we dont see a lot. Characterization that is a bit more accomplished. It has been very active. We will definitely see more. Anna thank you very much. Atead of alternative capital ubs, thank you very much for joining us. Lets have a quick look at where we are on futures. This is the picture for European Equity market futures. They have been pointing to the upside increasingly. Not by much. Can charons and dax futures 40 and dax futures. The pound against the dollar is down by. 3 . See the euro fairly flat. Of the pound, we have conflicting headlines. Lockdown marked to and brexit progress possibly, tentative signs around that, thats where the market is fixated right now. Coming up on the program, more on the u. S. Election. We are one day away at a number of polls that put joe biden ahead of President Trump. But do the National Polls tell us anything meaningful at this point . Some of the key battleground states and some of the early voting trends and what they can us. This is bloomberg. I think it is terrible when we cant know the results of an election the night of the election in a modernday age of computers. I think it is a terrible thing and i happen to think it was a terrible decision for our country made by the supreme court. I think it was a terrible decision for our country and i think it is a very dangerous decision. Allies today have been talking about maybe declaring victory on tuesday night, even if the votes arent final . What is your response . My response is the president is not going to steal this election. Lets give the extra three days and take all the time you want. Bad things happen in places like pennsylvania and nevada we love nevada, but you have a governor there, bad things can happen. Lets take plenty of time. No, thats a terrible ruling for our country. I dont care. Its a terrible ruling. The good news is on tuesday, you can choose change. You can elect joe biden. Youcan elect Kamala Harris, can choose a better america, and you dont have to wait until tuesday to cast your ballot, michigan. Anna one day from the u. S. President ial election. According to a series of polls, joe biden is in the lead nationally. Some races remain extremely close. More than 93 million have already voted. For more, our Senior Editor joins us. The earlyg to look at voting trends. How important has this weeks end of campaigning been given the high rate of early voting . More than 90 million. How important can the last Campaign Event be . The last couple of events actually are really important in driving the last little bit of turnout. Consider miami, florida. The place where i was born, the place where i was raised. The most critical spot in the state of florida, and you saw donald trump down in miami trying to rally voters because if she can do a little better among cuban voters, venezuelan voters in florida, may be dried a little more of that turnout, it could make all the difference in that state. At the same time, you see joe biden trying to lock down pennsylvania, that critical swing state with he and Kamala Harris planning events in philadelphia and pittsburgh and nearby ohio. These last strategic things are designed to try and get that turnout right where you need it, right at the end in these critical margins, in these states that our winner take all. Interesting to watch the makeup of those who have voted early and the makeup of those who will vote later. Does President Trump still have a path to victory . What could that be, given the numbers we are seeing in the polls. We need to be mindful, the polls have been wrong in the past, they have underestimated President Trumps support in the past. We are mindful of that but if we take the polls at face value, does he have a path to victory . Derek i think he definitely has a path to victory and it is not an outlandish one, even if he loses the popular vote by quite a lot. Why . Part of that popular vote is going to get sucked in places like california and new york where joe biden was going to win anyway. If he wins california and new york by 10 or 15 more points than last time, honestly, it doesnt matter because the results in the Electoral College dont change at all. You are looking at swing states being not as wide as the national margin. Thats a critical thing. Your basico win, rule of thumb is he has to carry pretty much all of the tossup states and then take at least one state where biden is assessed to be a lean democrat state toward biden. You can simplify the math down that way and as i say, it is not impossible. The tricky thing for trump here is biden has banked so many votes, because so much of this early vote is skewing toward biden that trump in these last days is trying to rally his entire base to turn out, whereas biden is allowed to focus a little bit on those more persuadable voters because they know who has gone to the polls. Anna we started the conversation hearing from President Trump and joe biden about how things might go on Election Night. We are used to talking about Election Night, but maybe this time, given the amount of postal voting and ahead of time, we have to give the count a little longer. How likely are we to know who has one on Election Night won on Election Night . Im preparing for scenarios everywhere from landslide to multiple weeks. Dont necessarily think either of those is necessarily going to happen, but it is certainly possible here. One of the things is the explosion in mailin voting we are talking about. It takes time to process that and im looking at pennsylvania as a great example. They are not even allowed to start processing those votes until the morning of election day, and the state is telling us right now before they have counted a single vote, they are saying we may not have all of this done until friday, so you can walk in and understand, there will be some states that count very quickly, where we will no one Election Night and there will be swing states we can read a lot into, but there will be critical states where they are telling us the election officials, they are telling us right now, this is going to take a while so i think it is important as people go through this to understand that the vote counting, taking some time, is a function of volume and not a function of fraud. It is really, really, really important for that to be understood. Just prepare yourself for a while. Kino markets do not want to sit here on uncertainty for multiple days between two very diametrically opposed situations, but that is a situation i know a lot of people in every trading country around the world have been preparing for and are prepared for at this point in time. Anna my mind goes back to florida in 2000. This could be an even bigger unknown still. Derek wallbank. After Global Equity markets rounded out the worst week since march, investors are gearing up for another volatile stretch. Between the election and tighter restrictions in europe, macro risks are dominating. Joining us to discuss is dani burger. How are investors preparing . We were talking over the politics. How are investors preparing for tomorrow . Dani keeping that in mind, a lot of sources say desks simply arent putting money into the machine. In terms of preparation, they are cutting and running. They find it much more comfortable and indeed, much less expensive to do that. You can see that dominated by how the market has been reacting. Havens havent had much of a bid and part of that is hedges are expensive at this moment. Gold has actually been falling over the past week. Investors for the most part, just on the sidelines, waiting to see what happens through the rest of the week, if it is a contested election. The only action we are really sellg is the idea to equities and just sit tight. ,nna some of the havens looking strange, gold being one of them. For those in the markets and not sitting on the sidelines, what are they doing and buying . More it tends to be the shortterm cta fast money and Retail Investors. Going to betself is noisy salida is hard to derive meaning from individual asset movements we have seen, but one thing ive noticed the past few trading days is the momentum factor is what is leading this market lower. You see it in the u. S. , asia today. Momentum is getting beaten up and from that, we can derive this idea that a lot of Retail Investors that have piled into these highfliers perhaps are pulling back at this moment. Also says his models show him the trends follow fast money, they are following Market Action and they are selling u. S. , s p 500 futures and nasdaq 100 futures. Perhaps some of that drag, moving it down. He mentions macro hedge funds have cut all of their longs in u. S. And europe. That has more to do with the economic concern. Not necessarily the u. S. Election, so it is tense positioning right now for those that are left in dipping into this market. Anna bloombergs dani burger with a look at how markets are playing the u. S. Election. Lets just check ftse futures, nasdaq futures, and other assets. 20 minutes or so until the start of this trading week. The cash equity session, and in terms of euro stoxx 50 futures, pretty unchanged. The overall picture may be unchanged. Ftse futures to the downside, cac and dax futures, modestly to the upside. In contrast with selling in tech names during fridays session stateside. Onh oil, down as much as 6 the oil price in the asian session, where we sometimes volumes resulting in dramatic moves. A summation of supply data out of libya, but the latest on the lockdown story from europe front and center for oil markets. In the election, that is another risk factor. The pound, we see ftse futures moving a different direction to other futures markets in europe and the pound is often the reason. Pound, 1. 2903. Lets get the Bloomberg Business flash. Laura a new report says takei companies are on average borrowing five times more than usual this year. Are on average borrowing five times more than usual this year. Are unlikely to start reducing the debt until 2022. Profit aftering the lender was hit with a record fine for breaching antimunching antimoneylaundering laws. The firm says 2020 was a particularly challenging year. The result is disappointing. Sixthpic is buying the largest you can broadband provider. The company says over a million customers for 8. 1 billion, including debt. The deal values astound at 8,000 per subscriber. Internet providers have done well during the pandemic as more people stay at home. That is your Bloomberg Business flash. Anna speaking of Corporate News flow, coming up, ryanair breaks its deepening losses, prompt a return of restrictions. Some positive and negative from the conversation with the ceo. We will bring you some of that next. This is bloomberg. This is political mismanagement on a grand scale and what is missing is the effective testing, where you can test 10 or 20 of the population each week. Thats the way to get rid of these lockdowns. Anna that was Michael Oleary, ceo of ryanair. Airline says losses are set to worsen this winter. Airlines across europe have been tearing back schedules as a resurgence prompts a return of restrictions in europe. For more, bloombergs reporter for europe. Great to speak with you. What are the Biggest Challenges for ryanair because if you were to pick a month during which they lockdown might do less damage than others, it is relative and i know im grasping at straws, but november might be the month you pick. What are the big challenges the aviation sector or this business faces . Good morning. The biggest challenge for the Airline Sector at the moment is how long these restrictions will last on travel and how fast demand returns, because as you mentioned, the quarter we are enough the moment as well as the next quarter, usually weak quarters for airlines with few people traveling, summer is the busiest time of the year for airlines and summer was a washout for airlines. Anna Michael Oleary, just like other leaders in airlines will be hoping europes politicians might be able to save christmas because that is a key part, withing Family Associated the holiday season. That is a key part of the outlook, which looks uncertain. Outlook isoment, uncertain and no one is sure when capacity will return. Down to 40 capacity of their usual capacity and that could fall further and the Company Expects numbers for the full year to football below forecast levels and it will be weakive to a week month the month and nobody anna knows the outlook going forward. Outspoken,ryanair is Michael Oleary critical of Government Action around the virus, but about the bailout for some rival airlines in the sector. What is the news flow surrounding that . A ryanair has challenged number of bailouts carriers across europe have received and their contention is airlines should be forced to go it alone and giving bailouts gives them an unfair advantage, especially with the outlook so uncertain and ryanair said the cost base, which is lower than other carriers, will allow them to better compete so the challenge, the bailouts of lufthansa and others in court for the European Union. Anna thanks for bringing us the story. Transport reporter for europe siddharth philip. Lets get a first word news update with laura wright. Day to go until the president ial election, democratic nominee joe biden is leading incumbent donald trump in polls. He remains ahead nationally and in battleground states. Some regions remain close. And number of polls put biden ahead in the key swing state of pennsylvania. Bridget negotiators are close to breaking one of the obstacles to a deal, fishing, a sign an agreement and they maybe remember be ready by november. Mass protests in poland are continuing after the tightening of the nation possible loss. People in cities took to the streets, ignoring virus rules, banning gatherings of more than five people. Many in the region are calling on the European Union to do more about the restrictions. We need to find compromise, but there needs to be foundational principles like rule of law, fundamental rights. These are nonnegotiable and if they are undermined, we me need to see action from the european commission. Laura global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Anna thanks very much, laura. Lets check the markets, 10 minutes to go until the start of cash Equities Trading for another session. Slightly to the downside but recovering a little bit of the losses we saw earlier on. Elsewhere, european futures point to the upside modestly but it is positive, germany up. 4 on dax futures. With u. S. 10 year yields, they are up. 85 . If you think we are going to get fiscal stimulus, how high do you think the 10 year yield will go . Oil prices, thinking about what happens with an election outcome this week, assuming we get an outcome this week. Oil prices, down as much as 6 the session. The euro against the pound, given the suggestion we might see progress with fishing. 0. 9 against the pound. Minutes from the open, we will get your stocks to watch next, including acardo, raising forecast. This is bloomberg. Anna welcome back to the open. Seven minutes until the start of trading and futures, looking positive as u. S. Futures point to the upside. Minutes from the start of equity trading for the week. Lets look at stocks we are watching. Letsnames or sectors, come to you on this. Investors have the task today of pricing in the new restrictions hitting the u. K. Month in england, bars, restaurants, retail, shops being closed. Pubs going to take a hit. Jb weatherspoon has been pretty vocal about the damage these restrictions in the u. K. Have caused. They are launching a deal for 99 , trying to clear out stock before the lockdown. For retail, this is where a lot of the pain is going to be concentrated. For those who dont have a big online presence. Johnormer deputy chairman lewis points out 80 of profits for nonfood retailers come in the november and december. Then, when people are going out for Christmas Shopping and if they cant do it in person, they will turn to online so a lot of these high street retailers very well may lose market share. Foods predicted a 307 5 million 375 million hit. The ceo last week said the biggest threat for them was another lockdown. This could also help boost market share when it comes to the online grocers. If you want stocks that may react positively to the new shutdown measures, look for acado, like boosting fullyear profit target, looking at 60 Million Pounds of fullyear, up from 40 Million Pounds but when you take a step back and look at the overall market, interesting that sentiment seems to more or less suggesty so this does the weekend lockdown announcements were not a surprise to the global investing base. To aslots to look ahead we wait for European Equity markets to open up in five minutes. We will keep an eye on the sectors mentioned, whether retail or grocery distribution or some of the online names we know have done well during the lockdown. Also, airlines. We have the numbers from ryanair but perhaps the numbers themselves will fall into the background when it comes to the Bigger Picture story, all around the november lockdown story in the u. K. And the other measures being introduced in europe. Tough measures in many parts of europe, not just in the u k, so we will talk about that. Will get an investor perspective on how you navigate what will be a busy week when it comes to the lockdown stories in europe and u. S. Politics. The open is next. This is bloomberg. Anna a minute to go until the start of cash equity trading. England prepares for a monthlong lockdown to combat coronavirus and a partial shutdown begins in germany and italy maybe next. Stricter lockdown measures impacting oil demand. Ryanair says the risk is to the downside. Lockdownalls the new political mismanagement on a grand scale. Theeconds or so to go until start of the cash equity trading session. Futurists have been recovering some of their poise in the last hour. U. S. Futures slowly and modestly moving to the upside. Also pointing to the upside. We did want to play a bit of catchup tech stocks under pressure over a slightly underwhelming earnings season. Lockdown story is gathering momentum across europe. The European Equity markets might be excused for being a little more gloomy this morning. The ftse is open up 0. 1 . Ibex is up 0. 3 . We are potentially looking for some big moves in some sectors reflecting the lockdown measures. Particularly in the leisure sector. The Aviation Business of course impacted. Retailger talked about dani burger talked about retail. We do see a number of those sectors flagged under pressure as a result of the lockdown. Onoss europe, we see those the move this morning. European equity markets opening just to the upside. Zero point 3 . As germany enters a partial lockdown. It is just one country in the region taking measures. Let us start with germany. How do these measures compared to what we saw on the spring . Morning. What we are seeing in germany people areat referring to as lockdown light. Germany is shutting down bars, cultural venues and places where people would gather such as gymnasiums. They are trying to keep open areas of the economy such as retail outlets and schools as well at this point are also open. Will be watching is what chancellor merkel has to say later this afternoon. She has called a press conference to speak to the public after she meets with what she is calling her kuroda cabinet. Corona she has already said they will reassess the measures they have in place in two weeks time. And if numbers have not come down, they may have to consider additional restrictions. Staff said if they loweredave the numbers from where they are currently, they will have to put in more restrictions. About theme ask you broader western european story in terms of more restrictions. We understand that in italy we may see that story progresses well. Italian Prime Minister addressing Parliament Today and also meeting with his cap and it to consider additional measures. Some of the things being talked about include shutting down shopping malls on the weekends. Lockdowns inized certain cities. It is already under a curfew starting at 11 00 p. M. In the evening and they have shut down a lot of entertainment venues. What they are talking about is an expansion of measures already in place. And the Prime Minister says it may be difficult for italy to keep open schools. They are still open. Whatll be watching closely the Prime Minister has to say when he addresses parliament and when he meets with his cabinet later this evening. Anna thank you very much for joining us. Let us reflect on some of the sectors on the move this morning. This weekend we learned a lot about the english lockdown story. There are other developments. These are some stocks a very, we also have u. K. Focused retail business. Ryanair numbers from reflecting on the lockdown. Ryanair down 1 . Down overtherspoon 6 . Let us talk more with paul markham from Newton Investment management. Good to speak to you. No surprise that we see leisure stocks selling off in the short term. As a result of the latest measures being introduced in england. And more expensive lay there in england. What is the trajectory you went hesitate as an investor . Its seem different does seem difficult to view this as a shortterm lockdown. How will you be viewing the winter into the spring . Paul good morning. That is a key question. One of the biggest issues around this whole period is which industries could be permanently impaired . Which could find themselves structurally adrift and effectively uninvestable . There will be companies within those sectors that will be impacted and the longer this goes on, the more the balancing act between the economic and medical impact is impacting the way that the various governments are enacting their policies and that is likely to feel like death by a thousand cuts. Berry specifically on the industries you mentioned a lot of pressure on retail is where the smaller players, the mom and pop style shops and they will find it difficult in many cases to survive. Within the Airline Industry as well, we do feel there is a particular dynamic developing. The National Carriers are likely to find a way to survive. For aquite ignominious nation not to have a carrier. They will find ways to support them. The budget players pricing will have to rise in some cases. The guys in the middle will be the airlines that will struggle to survive the most. We continue to see development on these issues go through. Anna it is interesting to think about the structural changes that the virus might ring about or have sped up. In retail, many are getting used to Online Shopping and may not inly revert back to shopping other ways after the virus has passed. What about in aviation . Do you think we are seeing something structural there . Aftert be just smaller the virus has passed . Does that overstate the threat to that sector . Paul i think we may be seeing the era of low cost travel lessening. And the environment is also a big part of that. The Younger Generation will be more aware of the opportunity to operate in a cleaner way. The airlines may be under pressure when demand returns to try to do that in a way that is less environmentally damaging. There is quite a lot of wealth in the developed economies sitting with a certain part of the population. There is no doubt that wealthy will be unlikely to spend time on cruise ships or to travel as much. Business travel will also be impacted. There will still be a great value placed on personal interaction between individuals to the era of traveling conduct business may be over for a period of time. Anna we may be making fewer business trips. The other big event this week is the u. S. Election taking place tomorrow. Reaching theons same levels as on the diva of any other election. It is worth remembering how relatively expensive stocks look at this point or is that not on your mind . Paul you make a strong point. Inre is a big bifurcation the equity market particularly in the u. S. We have beenhat seeing as they structural winners. Segment, you mentioned the trends towards Online Shopping and takeaways and those kinds of sectors. Some see a result which is which is in some way it islusive, counterintuitive that the result which would be fundamentally seen as a least positive for equity markets which is a blue sweep or a democratic win in the house, senate, and presidency, would also represent the biggest andrtunity for certainty transparency for markets. And the idea that there are no shenanigans around the results. Those issues could lead to a of volatility. A decisive u. S. Election victory could lead to stimulus and a brexit trade deal in the next few weeks as well as a virus exiting those things together could be very powerful for markets but it is the uncertainty that is proving the biggest obstacle to markets moving forward. Anna paul markham from new Investment Management will spain with us. We turn our attention to the earnings season. Ryanair ceo rails against the new lockdown measures and the u. K. As he warns that the second half will be worse than the first. On the spoken are ready Aviation Industry but we will bring more from our interview with Michael Oleary, next. Anna welcome back to the European Market open. 13 minutes into the trading session. Fairly flat for European Equity markets. The ftse 100 under pressure. Is also under pressure. How much is this linked to Risk Appetite . Set to says lockdown is worsen the company. Michael oleary spoke to manus cranny. We have reduced our schedule to just 14 . We think we may have to work that number back slightly. A slower schedule. We are not sure the lockdowns we are not sure the lockdowns will have that much effect. Thatho itself has said lockdowns are a failure and should be avoided wherever possible. To get youry used testing system in place to avoid a second lockdown. And here we are getting locked down again. If we were to have a lockdown, november would be the best month. 15 minute rapid tests. Is that not where we should be . Our government should spend more time and money so that we can move around . Absolutely. Theset sure i believe in 15 minute tests. There is no doubt the government should use this lock down to massively boost its testing. Testing ahould be tenth of the population each week. That is the way you chased down the virus. That is the way you get on top of it. Not moving from a lockdown into the next lockdown. This is political mismanagement on a grand scale. Testcale testing where you 10 or 20 of the population each week. That is the way to get rid of these lockdowns. Manus you strike me this morning with slightly more positive rhetoric. What is the double down trade what is the opportunity in this crisis if there is one at all . Michael the opportunity is to orders on pricing and competition. Enormous been an opportunity. Find [indiscernible] as we recover, we will have lower employment cost. All of thoseon savings to our customers in the form of lower airport. Airfare. I have no idea that the first thing customers will want to do is travel across europe. That was the ryan ryanair ceo. Us. Markham is still with the earnings story is a little backwards as we try to assess what is happening with the u. S. Election. In terms of sectors, where are you moving . Jp morgan is cutting tech to neutral and lifting banks to overweight. What are you expecting to see in that trade of growth and value . Trade which been a has been waiting to happen for a long are you of time and there for been several attempts market rotations out of the growth sectors into the value ones. They have always stalled because of the news flow and some of the backwards looking numbers have tended to put the market off a little bit. I think there is probably a geographical trade to start to move more gently into emerging markets. In china seems to be an area where the covid story is trying is starting to recede a little bit. Demand to going straight online which allows investors to straddle the emerging market and the tech story. The shift into banks would work if we solve those good pieces of news come together at the same time around a conclusive outcome to the u. S. Election, a brexit deal and a vaccine. I think those things would see an expectation of a consumer working better and that should optimism and the valuations are very low. I think we will probably start to see those things work that scenario. But it is too early. Anna paul, thank you for joining us and for your thoughts. Will continue his conversation with us on Bloomberg Radio at 9 00 a. M. U. K. Time. Lowslides to a fivemonth as new lockdown measures in europe raise demand fears. There is also a supply story coming out of libya as well. We will get to that next. This is bloomberg. Anna welcome back to the European Market open. 22 minutes into a trading session that is flat in london and a little more positive in frankfurt. The chancellor saying it was regrettably clear the measures that needed to be taken. He said there is no single indicator the government is looking at for lockdown which is interesting when you think about the criteria listed. To talk about the extension to the grants for the selfemployed. Any furtherlook for details on what selfemployed individuals might get from the government through this latest lockdown period. Assets on the move oil is down more than 3 this morning in european trade as the tightened lockdown in europe throw doubts on demand. The strictest measures coming into place on england. And in italy, the Prime Minister will update the cabinet. Joining us now for a look at the oil story is our european oil editor. How bad is the demand picture right now . We are seeing reflected in the much weaker price . The consensus seems to be looking at what has been happening since this summer. It is not looking like it will be as near as bad as the drop we saw in the first wave of the corona virus pandemic. The oil market was already week. Of one of the biggest independent oil traders spoke this morning and he said it could be as much as a few Million Barrels of oil loss. The few factors imply lockdown story in europe and also what is going on in libya regarding supply and there are some suggestions at that the u. S. Election is having an impact or keeping Energy Traders on their toes over the next 48 hours or so. How are all of these coming together do you think . Libya it is the worst possible timing. Is not what the oil market is needing with a supply coming back quite quickly. Then, if there is a Biden Victory, the longer effects of his promoting low Carbon Energy could affect oil demand but in the shorter term, there is also the possibility that he could try to revive the Iranian Nuclear deal which could see sanctions being lifted on oil coming from iran. Anna thank you so much with a look on what is impacting the oil prices this morning. At 36. 54. Urrently we are one day from the u. S. Election and a number of polls put joe biden ahead of the president. Some close call states remain too close to call. We will also look at what role early voting is playing who is voting early and who is not . And also how long it might take to get an outcome in this 2020 u. S. President ial election. More details on that when we return. The European Equity markets are currently trading flat to negative. The ftse 100 down 0. 2 . This is bloomberg. I think it is terrible that we cannot know the results of an election the night of the election. I think it is a terrible thing. And i think it was a terrible decision for our country made by the supreme court. The president s allies have been talking quite a bit about declaring the three on tuesday declaring victory on tuesday night. What is your response . My response is that the president will not steal this election. You know bad things happen in places like pennsylvania and nevada. You have a governor there bad things can happen that is a terrible rolling for our country. I dont care. It is a terrible ruling. The good news is on tuesday, you can choose change. You can elect joe biden, you can , you canala harris choose a better america and you do not have to wait until tuesday. Anna one day away from the u. S. President ial election. According to a series of polls, joe biden is in the lead nationally and in some battleground states although some races remain extremely close. More than 93 Million People have already voted. Joining us now is Kathleen Hunter. Which are the states we are watching most closely as we head into tomorrow and into the overnight count and the days ahead . Pennsylvania is shaping up, we heard that in some of the sound that we heard, is shaping up to be the big prize tomorrow with 20 electoral votes. It is a state that Hillary Clinton lost. We are already seeing some contentious voting issues in places like philadelphia, the largest city in pennsylvania that has been embroiled in protests over police brutality. Pennsylvania is going to be closely watched. The hind that would be michigan, hind that thbe ld be michigan, florida they will be hot battlegrounds in the closing days of the campaign. Was the lastortant weekend of campaigning given the historically high levels of early voting . That is close to 70 of the total vote count in 2016. That means that we are going to see a far higher turnout in this election than we saw four years we are already seeing a record high level of early voting which means people have already made their decision. That means that what has happened over the last few days will not influence voters that of already placed their ballots. That said, several battleground states that could prove decisive are close. What is happening on the campaign trail these last few votersy be helping decide whether to stay home or come to the polls on election day. That could prove to be influential. That will be a question that people will be looking at after the election. Really interesting. A lot of interesting reporting about who is and who is not voting early and how that may shape things up. Election night we anticipate knowing on Election Night who has won. Times look different this around. How likely are we to have to wait some days or potentially weeks to get an outcome . It is one of these expectations raised each election. Ago in the bushgore race, we did not know the outcome. That was a big surprise 20 years ago. The expectation is that we probably will not know wednesday morning who was the winner and we may not know for a few days. The process could he come protracted if donald trump starts to challenge the state laws regarding the counting of ballots. In pennsylvania, the ballots have been sitting there and will not be counted until tomorrow. Did legalee a very battle over whether or not those ballots are counted. Much,thank you very Kathleen Hunter with the latest on the runup to the u. S. Election. The Global Equity markets rounded out there worst week since march so investors are tearing up for another volatile stretch. Macro risks are dominating. Joining us to discuss this is dani burger. Market actions we are not seeing any dipcations of panic or buying. With so many different scenarios, we dont really see people going towards a certain biden ordicted if donald trump wins. Nobody wants to put money into the machine right now. What they want to do instead is cut and run. They want to take risk off the table which is what we saw a lot of towards the end of last week. Heading into the next couple of days, even hedges are not as appealing because they are expensive at the moment. You get the idea that hedges and havens are not popular. Look at 10 year yields they are stuck and have been for quite some time. Old has fallen, down 1 . The yen not doing much either. Is dominating in terms of flows. With thement volatility expected, investors are betting that it is more comfortable and less expensive to not do anything right now. Anna for those that are playing, what are they playing in . Bei a lot of this tends to retail dominated. And the fast money left dominating the market which could means it could be very noisy. Momentum has been doing poorly in the u. S. And asia. It is doing somewhat fine in europe. We see momentum going lower. The high flyer concentration risks being sold off ahead of this risk event. At the same time, global hedge funds have reduced their longs. That is the economic story and not just the u. S. Election story. What is left is a trend followers that will chase the market but the bias is to be somewhat flat. Anna dani burger with a look at ahead at how investors are preparing or the events of the next 48 hours. It is have a look on where we are in terms of European Equity markets. Dax is is down and the flirting with the flat line. Ibex are downhe a half of a percent. U. S. Futures point modestly to the upside. And the stoxx 600 and the stoxx 50 we are not getting any prices on those. According to a spokesperson, the data issues,having there is no movement. They are both still showing the close prices on friday. Oil prices, we talked about the concerns around locked down measures and the issue with libya. And pound weakness today as it seems as though the lockdown measures overriding concerns over the brexit fishing issue. 128. 65. You can see it on the move against the euro. Let us get a bloomberg first word news update. Laura brexit negotiators are close to breaking the impasse of one of the biggest obstacles to the deal, fishing. It is a sign that the deal could be ready by the midnovember deadline. There has been compromised. Poland after an continued tightening of the nations strict abortions law. Many in the region are calling on the European Union to do more about the restrictions. We can negotiated about a lot of things with the European Union. There needs to be a foundational value and principal including fundamental rights that are not negotiable. Undermined, we need to see action from the european commission. The worlds strongest storm this year has killed at least 10 people in the philippines. Search and rescue operations are under way after the storm hit yesterday. Madeegion where the store landfall is unreachable. As many as 390,000 have been forced to flee their homes. 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. Anna . London. Ura wright in up next on the program, the nightmare before christmas as the u. K. Government orders nonessential Stores Across england to shop for four weeks. Retailers could suffer in the lead up to the busiest shopping season of the year. We talk about retail travails next. This is bloomberg. Monetary policy cannot and should not be the only game in town. We are not here to close spreads. This is not the function of the mission of the ecb. And allll use any flexibility that we have to make sure that our policy is properly administered. Certainly, under current circumstances, it is very likely that the full envelope will be used. This recovery is still today uneven. We will be looking at everything. Now, in the meantime, we are not going to just stand still. Yesterday was the First Anniversary of Christine Lagardes presidency of the ecb and that has been dominated by a topic that no one couldve predicted. At the end of february with coronavirus spreading fast, the ecb did not think action was necessary but less than a week later, it made its move. In march, she said it was not the ecbs job to close spreads. It was seen as a sign that the central bank would not support nations in trouble. Less than a month to go from no need to know limit with lagarde announcing an emergency program. And then the ecb lifted the cap it wouldbt of how much purchase from each nation. It expanded its emergency bond purchases by another 600 million euros. As the pandemic has rolled on, it willhas signaled almost certainly have to provide more support in december. A look back at the first year with Christine Lagarde at the helm of the ecb. Some of the highs and lows and unanticipated challenges she has had to face. Let us look at fighting the virus but from a different angle the u. K. Government ordered nonessential Stores Across england to shop for four weeks. These new measures, at the busiest shopping season of the year. Damaging are these measures . We see some of the u. K. Retailers under pressure. How damaging are these measures compared to what we saw in the springtime . It is difficult to overstate how bad this will be for the retailers. This is what is known as the golden quarter when everyone does their Christmas Shopping. It is a really busy time of the year, much busier than march. The fact that stores will be shut is really damaging. I have notple started to do any shopping but im sure there are far better organized people than me. Figures a while ago and retail said people had started to shop early. I think people had feared that this may happen so they did start doing some Christmas Shopping early which had boosted sales. But that is not going to be able to offset the sales that will be lost over the coming weeks. Anna for those that want to play catchup such as myself, will online be able to cope . You were telling me earlier that this is an area that could be a big difference between one retailer and another as well as what retailers can do this time around versus march. Help with delivery. It wont make any difference if you do not have a website. Wouldmpany warned they lose sales because they dont have a website. , you canve a website take orders through that and fulfill them from stores. Saw some retailers do this some that were allowed to continue to trade. They were able to do no touch click and collect. Some stores will be able to do that to take pressure away from the last mile. Have expanded online but you do not expect all of your sales from stores to go to online so that will stretch and that will really stretch capacity. You would hope that many of these retailers have their warehouse operations operating in a covid compliant fashion. That could be a difference maker. Thank you so much. Not all of the retailers moving to the downside. If you are an online retailer coming you may mushing higher including ocado. May be moving higher including ocado. Regaining positive momentum. U. S. Futures also pointing modestly to the upside. Nasdaq futures pointing up perhaps making lost ground from fridays session. What should investors fear most this week . What should they prepare for if they are not afraid . We put that question to Kristine Aquino next. This is bloomberg. Anna welcome back to the European Market open. 50 three minutes into a trading session that looks increasingly positive as we move through the start of the trading week. That is get into a crustacean about where we are heading. Later today, we get the pmi data from the u. S. And tomorrow is the election results. On wednesday, the u. S. With oz from the paris treaty. Day is aly come at the big day for central banks. The bank of england is expected to increase bond purchases. The fed is likely to hold steady. And a jobs report for the end of the week. As if things were not big busy enough. Kristine aquino is with us. It is worth pointing out that as we see European Equity markets point to the upside and the National Markets appear to be open, we do not have any trade on the stoxx 600 or the stoxx 50. Those indexes are not showing movement. What is the significance of that . Kristine not a great start to the week for investors. With it being a week where jitters are already high. We heard from the deutsche bursa people that it is an input problem but it is not something that is reassuring to investors just as they are getting ready to be trading in a busy week. As you pointed out. The market live question of the day, what should investors fear the most this week . And if they are not afraid, what should they be prepared for . Kristine absolutely. Whether it is regarding the election or other things going on in the market, it is the wildcard, the unexpected scenarios that investors should be watching out for. It is difficult. They are unexpected by nature. Eventsis these kinds of whether it is regarding the election, joe Biden Victory but without a blue wave considering the implications of that. Victoryrsely, a trump but with a blue wave. All of these scenarios that are not part of the base case at a time when positions are locked in and risk sentiment is really heightened and jittery. Anything unexpected really risks wrong footing by investors during a week like this. Anna Kristine Aquino leads our market live team here in europe. Pmi hasgermany october been reported. We got the manufacturing numbers earlier from france. And the italy manufacturing pmi number has risen to 58. 3. That are relatively realtime. Downng ahead to lock measures coming back into force at least partially in germany and the suggestion that we could see something similar happening in italy and certainly here in england, we are bracing for change on thursday. A lot to look forward to with the latest pmi numbers coming in , all of us 50. Surveillance is up next. This is bloomberg. Francine election day is tomorrow. President trump and joe biden chase swing states as early voting hit a record. England prepares for a monthlong lockdown as a partial shutdown begins in germany today. Gately may be next to reimpose restrictions. Ryanair says risks are skewed to the downside as the chief executive calls the lockdown political mismanagement on a grand scale. Welcome to bloomberg surveillance. Im Francine Lacqua in london