Transcripts For BLOOMBERG On The Move 20160927

Roller coaster. Oil takes a breath after productionfree speculation with saws the market. Will there be a new dawn for oil . Were live with the very latest. The beautiful dawn. A Beautiful Day in berlin, and a sunnier outlook if you are along these markets. We are seeing an uptick in the futures market after yesterdays selloff, Deutsche Bank plunging more than 7 . We are watching a rebound that seems to be pegged to the election, Hillary Clinton coming out on top. Guy we will talk about that in just a moment. Just to dwell on the gmm and talk about what is happening, you did see this massive selloff. This is what we are seeing, this side of red, caroline mentioning deutsche. The story at the moment is Commodity Currencies. Look at the aussie, up by 0. 5 . The yen, giving back some ground. The front end of the curve, showing it is reasonably well bid. That is a story to take away. It is kind of related. I am wanting to talk about what is happening with the mexican peso, the market taking its cue from the debate last night, and caroline, saying, we believe that clinton came out on top. We will show you the peso in just a moment. Listening to the coverage this morning, it was the sense that clinton seemed better prepared, that donald trump got lost in the detail, particularly towards the backend. Caroline you are talking the mexican peso. On the bloomberg, what a move, clearly seeing that loss of donald trump. The mexican peso, ramping up. It was a significant market move. You saw it in gold. You saw the risk aversion die away a little bit. Basically, same old arguments, nothing new being debated. It seems they are going back to their ageold competition and rhetoric versus each other. Watch, buth stuff to we will get out to bloomberg first word news now. Lets catch up on the rest of the world the juliette saly. The bank of englands Corporate Bond buying program gets underway today. The boe plans to purchase 10 billion pounds of sterling investmentgrade corporate debt over the next 18 months as part of its stimulus measures to help the u. K. Economy whether uncertainty. Italys Prime Minister has picked december for a referendum on constitutional changes. The move sets the clock ticking on a ballot that will determine Prime Minister renzis political fate. Push for the mother of all reforms is being closely watched by Financial Markets as it faces political instability in the eurozones thirdlargest economy. Yuan borrowing costs rose to a sevenweek high as Chinas Central Bank pulled funds from the central bank system. According to the National Interbank Funding center, policymakers want to discourage the use of borrowed money to buy assets such as bonds. Theard perry, one of biggest names in hedge funds, is calling it quits after 28 years. In a letter to investors, he said he is winding down his new yorkbased flagship fund. The move comes as the industry faces one of the most much was moments in aus decade. Over the past year, his fund, which manages 4 billion, has lost more than half of its assets. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bluebird. Guy thank you very much. Weve got a lot of ground to cover. The u. S. Election, Deutsche Bank, opec. At a Goldman Sachs conference taking place in london. Manus cranny there, and he joins a great guest to kick this off. thank you very much. We are at the u. K. Leverage finance conference. Michael marsh is with me, the head of leverage finance. Looking at some of the wonderful bloomberg stats they give me before i come out, highyield issues for september, the busiest since 1999. That has changed since the start of the year. Deutsche is one of the crossover names. They pulled an offer yesterday. Are we beginning to see a little bit of momentum fade . Youve pointed out we had a phenomenal september. We had a terrible start to the year in terms of volumes for highyield or the markets have improved since then. What you have seen is a robust Investor Base with an influx of capital. Issuers want to take it manage of windows that come and go in the space. What i would say to you is, you see some events. You mentioned an issuer who decided not to take capital to the market. What you have seen is athat hap. It is normal for markets to have some oscillation. We dont see this as an issue. Its just a point in time. The media have overblown it. Lets talk about stress. If you look at speculative european bonds, just below 4 . What happens next in the spreads market . We talked about issuance, but where do you see spreads going if there is all of this unspent capital . That is the phrase you used when we were chatting. Looking at yields, with spreads plus the risk rate, yields are at a low, and longterm low, but spreads look relatively attractive. The fact that you have the riskfree rate being negative in europe and across the world, spreads look attractive. Where do they go from here you go a lot of that will be determined by Monetary Policy. From here . A lot of that will be determined by Monetary Policy. If you see the rates being challenged, seeing monetary stimulus slowed down, that will have an impact on yields. Manus we are about to embark, i believe, on centralbank divergence, the fed tightening, whether it is a slow tightening versus the ucb. What does that do to your models in terms of potential default rates in the usa versus europe where you have a benevolent ecb but a slow fed . If you look at rates rising, that generally comes with economic growth. If Interest Rates rise but you have economic growth, default rates should stay in the controlled manner they are now, which is his store if you follow the u. S. , you would assume default rates stay flat. In europe, growth is evident. I think the ecb is more interestd in terms of rates, and that will keep the economy on good footing. We dont see issues with that. What you would be concerned by is corporate profits continuing to underperform and seeing negative growth. That may have an impact on default rates. Manus there are no gray clouds on the horizon dan . Then . Issuance closing in on the worst quarters since 2012. Why. Is it a lack of m a . What has caused that slowdown . Market has generically had a larger reliance on m a, and the world has had a weaker year from the m a perspective. Were starting to see that growth. The leverage you point to is improving. Last week, the European Market lost 10 billion in one week. See thatarting to market grow, driven by a number of factors. M a, i mentioned, but also the inflow of capital. The floating rate payment, so that is much less sensitive to Interest Rates. We are seeing interest in the product as the market starts to question where rates are moving. Manus what is your biggest risk . What is the markets biggest risk . We are constantly trying to assess where risk lies, where these grace ones lie. The biggest risk in 2017, i will give you two or three. One is the change in Monetary Policy. There is the divergence of governments, and how they interact. If we see any movement away from how the market expects, that could have an impact. If we dont see growth, if companies are not growing, we could see some questions on default rates rising, and that would give investors concern. Money would start to be shyer than it is now. Manus have a great conference. Conversationre the is. Think you very much, michael marsh, head of Leveraged Finance for emea. We are going to catch up with a few more guests later in the show. Guy great stuff, manus. Thank you very much, indeed, manus cranny joining us from the global sex conference in london. Goldman sachs conference in london. Great set of interviews. Coming up, also throughout the show, we are going to be talking about the deutsche drama. Germanys biggest bank scrapes the bottom as its future remains uncertain. Does deutsche have lower to go . Crude coasts. Oil looks to elgin for direction. Up next, the money moves to clinton. Markets favor hillary after the first president ial debate. We take you through all the moves. This is bloomberg. Caroline welcome back to on the move. Lets get you caught up and up to speed on the bloombergs is flash. Heres juliette saly. Juliette thank you. Credit derivative traders are expressing concern about Deutsche Banks weakening financial help. They have been pushing up the cost of shortdated contracts declining faster than fiveyears. Trading at aes are record low, falling 7. 5 during mondays trade. A Restructuring Plan will be announced friday. The move will include 9000 job by 2020. The plan, which needs approval from the banks nonexecutive supervisory board, will cost up to 9 billion euros. Disney is working with a Financial Advisor to evaluate a potential bid for twitter. That is according to people familiar with the matter. The company may have a splash on its hands. Salesforce. Com is preparing a good. A bid. Surged sinces have reports late last week that a possible sale was moving forward. Thank you very much, indeed. Hillary clinton and donald trump have faced off in their first debate, which ended a few hours ago. The candidates leveled sharp charges over trade, temperament, and foreign policy. Take a listen. I am going to contact taxes big league, and you are going to raise taxes big league. I have a feeling by the end of this evening im going to be blamed for everything that has ever happened. Why not . The kind of plan donald trump has put together would be triple down economics all over again. It would be the biggest tax cuts for the top percent of this country than we have ever had. I call it trumped up trickledown. You have been doing this for 30 years. Why are you just thinking about these solutions now . I think my husband did a pretty good job in the 1990s. I think about what worked he approved nafta. They balanced budgets. Income went up. Broughtbased, inclusive growth is what we need in america, not more advantages for people at the top. I will release my tax returns whenst my lawyers wishes she releases her 33,000 emails that have been deleted. To plenty of debate still come to the market, making up its mind clearly on what happened. Look at what has been happening with the dollarpeso. Gaining, thebeen dollar going down. Youve got Commodity Currencies on the front foot. Aussie is trading higher. Futures, ticking up. The dollar, gaining ground versus the yen, interestingly enough, trading at 100. 82. The market seems to be making up its mind fairly well. The global strategist from bnp paribas is with us. Lets dig into what he learned. Good morning. Guy you just came back from the states. We just watched the debate. What is your sense of markets perception of what is happening in the u. S. Political spectrum, and what is changing . I think the view i sense from the u. S. Is that this is a much closer race than men were that longng not even ago, in the summer. From that perspective, i think there is more of a need now to think about the alternate case with both candidates, what is happening, and generally, a greater focus. In addition to that, i would argue we have had a lot of innges from Central Banks the last week. The key feature is less the fed, because i think the fed did what was more or less expected. The bank of japan, what they have done is a little bit confusing, and i think there is a huge interest in what the and strategy is as far as the bank of japan is concerned. Notline we do have the boj [indiscernible] on my bloomberg, you will see its the worst performing currency. The best performer, the mexican peso. We are seeing relatively big moves on the back of this president ial debate. Is the fundamental discussion happening at a president ial level . Will it feed into the mexican peso as much as markets are reacting . Its hard to say really. With the u. S. Election, it seems to be very personal at the moment with the debate between the candidates, and the market response and with the longterm market outcome will be is going to be tricky. The point i would highlight is draw some comparisons with the in the u. K. A couple months ago. That was a very digital event. It became way too close to call. We know the result was not what the market was expecting. This is probably the situation you have in the u. S. It is difficult went to pay for an outcome based on that very tight range. A couple quick charts to go through. Lets take a look at what is happening with the yen and the euro. Month. Dollaryen, one it has come down a lot, volatility. Why . Ini think these falls dollaryen volatility have to do with disappointment in the bank of japan. If you look at the peak in july and the fall we had recently in september, bose corp. Both corresponded to a lack of easing from the boj. We would argue at bnp paribas that what the boj has done could actually be quite aggressive policy. They could be allowing the government of japan to have a huge fiscal expansion. Is guaranteeing that 10year yields a stay around zero, its an opportunity for the government to expand fiscally at zero cost as far as financing is concerned. From that perspective, we think what the boj may be doing is allowing the baton to be passed from Monetary Policy to fiscal policy to get the economy going and to raise Inflation Expectations. Guy that is being watched closely around the world. Up next, of course, minutes away from the open, and we will be looking at the potential corporate movers. Todays trade is once again focused on Deutsche Bank, hit an alltime low yesterday. Where will it go today . Be cutting 5000 jobs. Meanwhile, wolseley is cutting headcounts and branches. All of that, next. Guy it is 7 53 in london. That means it is 8 53 in berlin. We are going to hit this one every day, because it seems to be a story we should focus on. Deutsche bank, lets see how it opens, but the concern tends to be what is happening around this situation. Take a look at where the market is trying to take some of the counterparty risk and deal with it, but the stock yesterday, 7. 54 to the downside. Caroline hitting a record low, and all because you hear the state saying over here its unimaginable for us to step in and see taxpayer support for Deutsche Bank. Pain is being felt by the relative by commerzbank. Thats about 18 of the entire workforce. Pain is beingthe felt across the board in the german Banking Sector, and they are having to cut costs, having to downgrade in terms of the people they employ. Commerzbank and rise 1 , we understand. Guy the big question is, who will dance with deutsche . Lets talk about plumbing. Were actually talking about plumbing, not financial plumbing. Mostly, massive in the United States, big and the u. K. Big restructuring in the u. K. , but it is suffering in europe. If you want a read on what is happening in construction, this is as good a company to talk about as any. The stock is up 16. 5 . You may see some weakness in the stock today, caroline. Caroline i am back to financial plumbing now, from the hardcore plumbers back to the time lender, considering a debt for equity swap. We will see the way it moves. This affects the deutsche story. Coming up, the market is opening. Guy good morning. Im guy johnson. Here in the city of london alongside caroline hyde. She is in berlin. We are moments away from the start of european trading. What is the morning brief . Caroline it is the market moving on clinton. After the first president ial debate, mexican currency jump as the u. S. Futures. We breakdown implications. I can blues. Draghi says europe should consolidate as the pressure builds on deutsche. Will anyone start with deutsche . Rude roller coaster oil takes a breath after Oil Production frees speculation. A beautiful dawn. Is it new for oil . Guy . Guy we know what happened yesterday. A significant selloff for european equities. Lets show you the stories, how we are expecting to open. After a selloff like that, you hope so. This is the picture. Where unchanged. We are unchanged. You saw the selloff yesterday. We got it in the form of the u. S. President ial debate. That is what we saw in asia, as you can see the ftse is climbing a little bit higher. Certainly continue to keep an i on what is happening with the Banking Sector. That is something that we are going to work our way through. Lets show you the imap around europe as we wake the markets up. A breakdown on regional basis. Largely green around the wheel. Lets show you what is happening with the gilt market. Heres nejra cehic. Nejra it is a different day than yesterday. Risk on as opposed to risk off. The gilt market follows the rest of europe. After what has been happening in treasuries, you would expect the yield to rise the gilt to rise. Looking unchanged if anything, up just one basis point. We are having one basis point higher on the 10 year yield for the guild at the open. If we move on and take a look at what is happening on the stoxx 600 in terms of the sector health, it is green around the wheel. We are seeing every Industry Group heading higher and guess what . It is financials that are leading the game. 8 e up. 8 we are up followed by telik communication scott followed by telecommunications docs. Up. 1 . Lets take a look at the stocks we are keeping an eye on. I am starting with stocks that have numbers earlier this morning, thomas cook seen an encouraging start. The average selling prices are ahead of last year. We are waiting for that to open. Lets move on to mostly. Cost savings of 25 million to 30 Million Pounds a year. To cut 800 jobs, close 80 branches in the u. K. And the revamp is to lead significant job losses. The u. K. Part of wolseley needs to it was called the lower but it is moving even more down than predicted. Down 3. 7 . Just wanted to see how it opened. It is not moving but it is a voluntary debt for investors. Caroline keep in close eye on the banking industry. Every Industry Group is climbing higher today but every bank is in the green. All but commerzbank. Mario draghi spoke before European Parliament yesterday addressing several topics including European Bank weak profitability. One of the reasons for this will noty is capacity overgeneralize when it comes to the Banking Sector. Hundreds more banks that do a very good job serving their clients. That. t want to disrupt there are other banks that could be profitably consolidated. Guy of the banks that are not small that could be profitably consolidated. Deutsche bank setting up 1. 33 this morning absolutely after being absolutely slammed yesterday getting to a record low. Chart. The today we are down 6. 3 . Difficult days for john cryan. Of pmb bear about is still here. Bnp paribas is still here. Certainly from our perspective, we would argue that the key driver of eurodollar is policy divergence or a lack of. Really there is all eyes on the fed. This is really what is driving eurodollar. Had we gotten a rate hike from the fed last week, i would argue the dollar would be stronger. Eurodollar would be lower, really what the fed has done his kick the can down the road. The market is now focusing on december. We think they go in december but that is a way off. Markets will need convincing and will do range trading until we get there. Guy trading north of 50 at the moment. Useful but not want to present all the time. Eurodollar. O this this is a longterm chart. This is going back to 2014. Lower and lower and lower could we saw a bit of a blip yesterday. The market is pricing in nothing in terms of outsize moves. They are expecting the eurodollar to sleep peacefully through the next period. What is happening in terms of white volatility is low . It that it of why volatility is low . Steven if you look at peak from june where we where we were at 13. 5 , we have come down. A lack of policy divergence. What would get this moving would be the fed reengaging. The fed hiking. The ecb going the other way. Divergent move but both of those expectations have moderated. There is low expectations priced in for the fed hiking going forward. Listening to draghi yesterday, what he is saying is qe, the current policy seems to be working, there is no rush to jump into anything else. The market is pricing less action on the ecb side. That is why volatility is so low. Guy it is priced in. Caroline your head of fx strategy. You are head of fx strategy. Talk to me about the technicals. What consolidation the Banking Sector or Something Like Deutsche Bank would have on your market and general markets . What are you talking about at the desk . Is there a key concern within these Asset Classes . Steven the key focus that is coming in now, apart from Central Banks is the u. S. Election. We spoke about that earlier. This is increasingly going to be markets. Of fx it is going to come down to policy between those two candidates. Like once a when it looks they will be emerging, that is going to drive markets. Concerns of the Banking Sector, the big question scenario on risk off could what we learned last year during the greek crisis is problems in the eurozone scenario. What we learned last year during the greek crisis is problems in the eurozone a crisis in greece but the euro rallying. Despite this crisis coming from europe, it was positive for the euro. That speaks for the euro trades is a risk on riskoff currency. When you have good times, the euro tends to fall. In times of stress, the euro tends to rally. From our perspective, that is how we will continue to look at euro, in times of euro, you will see the euro rally. Weekweve got this can fight on his hands. He says it could be for his political future, he is now backing away. December 4, the nation has a hold a referendum on big changes it renzi has warned he will step down if the package is rejected. Something he is backing off a little bit in terms of language. Steven that is a really big risk. I come back to this chart. Why is it more being priced in in terms of the risk that your faces . Massive Political Risk coming out. Weve got the renzi story coming out. With that brexit ongoing. The French Election going election coming up. Some of his nearest and dearest decide to run separately. How are we night present listen . Steven the whole negotiation with the u. K. Next line i would agree u. K. I would agree. One of them could explode and quite and have quite an impact on markets. The key point we would argue, the market is beyond this view of euro breakup, and a sense that the euro is a litmus test for Political Risk in the eurozone. The market sees the euro continuing and is much more focused on risk on riskoff. The italian situation is interesting. It is a big event of the contagion to the rest of europe maybe limited, particularly where italy has a reputation of political change. I think from that perspective, the key here is this is a big event. It could have an impact on european politics, but as far as impacting that policy divergent between the u. S. And eurozone, it is not having much of an impact and that is what is driving the currency. As its first derivative guy plenty to come from Steven Saywell. Caroline next, we got to talk commodities. Out syria is around the corner, the kickoff from algeria is around the corner. The kickoff from opec meeting. That is a 30 london time. Carney and the corporates. We bring you analysis as the boe appears to buy 10 billion pounds of company debt. Where live in york we are live in new york. We are dragging ferro up early again. Jonathan will be joining us, a big winner. This is bloomberg. Caroline welcome back to countdown. Welcome back to on the move. The Banking Sector is your winter today after losing significantly on the back of Deutsche Bank dropping. Ftse 100 up. The cac 40, guide . Guy lets talk about what is happening. Closely is being hit pretty hard. Concern around what is happening within europe. Crisis also under pressure. We can talk tires. Were into some of the utility stuff this morning. On the upside, the two lead stocks. Airline . Caroline . Caroline we are going to talk oil, commodities and iran, saudi arabia is seeking in and to limited oil reduction. Opec members are in an opec members are in algeria. Lets get to a man on the ground, yousef gamal eldin. Gives a sense about what is happening on the floor. Iran given any signal on a deal . Iran giving any signal on a deal . Yuko we are waiting for more delegates yousef we waiting for more delegates to arrive. Remarkable,t of saudi arabia grappling with a bunch of deficit, trying to limit the extent that it is burning through its four currency reserves. Eventually issuing bonds and cover that shortfall and trying to rein in oil supplies to support prices. Then you have iran, they are kind to get back to the precinct since level of production. They are trying to get back sanction level of production. This,ical point in all of how massively the supply has changed. The latest you are looking at, libya, Russia Adding over 800,000 barrels a day in additional supply. That is a part from what we have out there. The key question is going to be whether they reach some sort of understanding that might lead to eight freeze decision here or in the year in vienna. Whether they have to cut back . The oil minister thought the supply discussion was on the table and a cut was not. Nigerians are confident it will be some sort of agreement. If you dont reach an agreement, prices could drop down to 20 a barrel. What is key is this is a critical meeting for opec. We will keep you posted throughout the day. Coverage. Thank you very much indeed. At b. N. P. Paribas with us. We talked a lot about oil. It is hard to get an idea of how things are going to end. When youre playing numbers and to figure out the dollar, what are you predicting . What are your guys tell you . What are your guys telling you . Steven we think oversupply is going to continue. We are not looking for much of an agreement. We do get a lot of headlines suggesting there may be a supply limitation going forward, but we dont think that is going to happen. If you have a bearish outlook as far as oil is concerned, the key point we would highlight, as far as inflation impact. Fx gets to some of the Commodity Currencies, norway and canada are going to suffer. But association, the other commodity dollar going forward, oil is not the key. T tends to be correlated iron ore which is australias big export. Key for is also a aussie at the moment. Australia is trading much more like a riskon riskoff currency in the current market. Caroline talk to us about the Canadian Dollar. Isnt that now more politically risk is that more politically risk exposed . Steven this is a key point. We are bearish on the outlook for the Canadian Dollar which is consistent with the oil view. The point here is it does tend to be driven by the u. S. Side. We get a fedht and rate hike in december, we dont think the canadians will follow. , ashat does get priced in we go toward the end of the year, we will see the u. S. Dollar pick up. Most likely against the Canadian Dollar. It is going to take a while in the shortterm it we just had a fed decision were nothing happened. Real Interest Rates in the u. S. Are low. Guy stephen, stay with us. Sorry caroline. Let me pick up. Terribly rude for me to jump on caroline. That is the view of washington. Who is going to be the next resident of the United States . We are going to talk about what is happening with the fed. Donald trump text aimed at the u. S. Central bank. Details next. This is bloomberg. Quick the day obama goes off and he goes out to the golf course for the rest of his life, when they raise Interest Rates, you are going to see some very bad things happen, because the fed is not doing their job. The fed is being more political than secretary clinton. Guy donald trump talking about what is happening in the was politics dragging the fed into the process. Janet yellen would disagree with what mr. Trump had to say it Steven Saywell have to say. Steven saywell, b. N. P. Paribas. Lets talk about what his happening with what is happening with the market. Treasury, people becoming nervous. Blackrock coming out and saying the u. S. Market you can see this on the flow data in terms of big Central Banks pulling money out of the Central Banks. The treasury market is so big, the flow story has to have an effect into the dollar. When the central bank is trying to hump and hall about what to do next. The dollar, view of how does it relate to treasuries . When you pull in how divided the fed is, how do we know what the fed is going to do . Steven a couple of points,. Irstly, flows into treasuries the market is making a big deal from foreign Central Banks, so reserve holders slowing and buying less treasuries. That is the case. By the same token, private investors are picking up. Is not as though there is a collapse in treasuries. The slowdown from foreign Central Banks is much more to do with their reserve acquisitions being less. Theyve got less money to invest. That is what is driving it. We dont think there is a flow story. Isfar as the curve concerned, we think it is relatively straightforward. The front end is fed is driven by fed policy. The fact that yields have come down this years a signal that inflation is under control. The fed is not falling behind the curve. Well have to aggressively higher Interest Rates. The point i would make about the dollar in your final question, what do we think . It is much more to do with headwind policy. The market a short. We think that is a skepticism about the fed. If the fed hikes in december as we think it is likely to be the case, once the becomes priced in, the dollar rebounds. That is our best case at b. N. P. Paribas. Caroline you see policy divergence upping the ante in december. The fed goes higher and the ecb goes more stimulus . Steven we think that is the case. We are calling for an extension of qe from the ecb. The other central bank is the big of japan. They did something is the bank of japan. They did something unusual last week when they try to target the level of 10 year yields in japan. That opens the taps to fiscal expansion in japan. That may be a key to get Inflation Expectations higher. You put that boj action together with a rate hike from the fed, it is a recipe for dollar yen to start moving. Both sides working together but as a traded toward the end of the year, a higher dollar yen is something we think is likely to occur. Guy the market feels quite straightforward. The politics of everything seems to be getting in the way of rational thinking. The politics of where seems to beginning in the way. Is feeling very straightforward when it comes to the politics. It is the easiest one to understand there for you base everything around that. Compare japan to the eurozone. The reason is there is a lot of structural similarities between them. They both have surpluses and very easy Monetary Policy to try and mitigate currency appreciation with the come with the surplus. This is when they start to diverge. The ecbs complicated because of the structure. Japan has it much easier. Guy stephen, thank you very much. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Guy welcome back. Youre watching on the move. Yesterday we are selling, today we are buying. 600 is up by. 2 . 6833 for the ftse 100. Selloff,terdays prices keep the market bouncing back. With stocks keep on moving these market . Lets find out. Nejra a lot of focus on financials. We are seeing green across the board with Industry Groups focusing on some of the biggest individual movers on the stoxx 600. Moseley leading the charge when it comes to the underperformers down almost 3. 5 . It is the worst performer on the stoxx 600. We have revenue coming in at in line with estimates. What also said today was it announced u. K. Repositioning strategy. This includes a closure of about 80 branches and it hundred job losses. Arestructuring charge of hundred Million Pounds it we are seeing the stock lower. Novozymes also a worst performer. As you can tell, it seems to be largely it has been rated a new cell at baron berg. Asanted to highlight nokia one of the better performers. China unicom has expanded its partnership with nokia, a highcapacity and we got the news breaking earlier. Nokia shares rise. Guy i want to take you to my bloomberg and show you what is happening with the sixmonth euro sterling risk reversal. This is askew affect tell me what the calls are and what is what it is signaling. His if the pound bounces over, we are going to get into difficult territory with what is happening surrounding brexit. Is still with us. The difficult work starts here for sterling. Steven i think so. We think there is a riskier downside. The market may be too complacent. Sterling. Sal on your what it is telling us is reversal on u. S. Sterling. What it is telling us is the market is very short. Weve got some strong u. K. Numbers. The market became nervous and start to cover some of its shores. The point we would make is we dont think we are out of the woods. Pulling up now euro sterling charts, you can see back to the 8661. Here, that is the weakest level of sterling we have seen in several months. You can see that strength that we saw in sterling in september is behind us. Guy white against the euro . Steven why against the euro . Steven i would argue if you look at a long time valuation, sterling fell to 30 year lows against the dollar. We did not see that type of weakness against the euro. That is because the euro is relatively weak. The real move on the downside for sterling has been against the dollar. What we are seeing now is sterling weakness trying to play catchup against the euro. Caroline meanwhile stephen, the boe does everything it can to support the economy. We are seeing it weighing into covert bond purchases. They have been trying to suck up some of the overall gilt market which has been harder on the longer and of the spectrum. This the boe not matter in terms of supporting the matter supporting the pound. Steven we would argue that u. K. May narrowly avoided recession but we are calling b. N. P. Paribas for three quarters of zero growth. That is consistent with the boe needing to do more. From a valuation perspective, the new norm, cable for sterling against the dollar is around 135. A lot of the bad news is priced in again against the dollar. If we do get more easing from the boe and it is probably likely given the growth outlook, we may see sterling fall even further against the dollar. We are getting pretty stretched, particularly we say the new norm is probably around 135 as for us sterling dollar. Guy talk about the move japan is making. In some way the u. K. May be making a similar pivot. See the chancellor deliver , big fiscal push in the state and you look at that and think very cheaply, they are a difficult economic environment. Taken quantitive lee . This is the way the market is trying to push so many governments . Steven this is a good analogy. Youve gotten this in japan. It is harder for the ecb to be able to deliver. A fiscalf we did see expansion from the bank of england, that would be positive for growth. Growth,ters of negative you could argue we need some growth stimulus in the u. K. At the moment. That would be a positive. It may put less pressure on the bank of england to have to deliver to support the economy. Guy thank you for sticking around and joining us here on on the move. Caroline we went around the world. Up next, anything you can do. We stick with the boe. The boe kicks off its own corporate purchase bond program. The concern. Stay with us. This is bloomberg. I think i achieved. Billy tubbs but she is going to defeat isis. Why didnt she do it Hillary Clinton talks about she is going to defeat isis. Why did she do it . 800 people are going to be deported, instead they pressed the wrong button or it was dishonesty. What happened, they became citizens. Our country needs help. Did she say anything that was false . Of course she did. I did not do my final attack which was to attack her husband on what to place with respect to him and his wife and all of the things that the place, because chelsea who i think is a wonderful young lady was in the room. I didnt think it would be appropriate to spite the fact commercials, over 200 million . If i am not leading, i am tied. We have spent a tiny fraction of the money she has spent. One more question about the media. People are talking about how she did . How you did . What do you think the proper role for the media is . I wish the media would be as fair. I want them to be fair. That includes you. Caroline that was Mark Halperin in the thick of it with all of the other journalists speaking to donald trump right after the debate ended. Lets take away from politics and move into the Bloomberg Business flash with juliette saly. Juliette caroline, thank you. Concern about Deutsche Banks weakening financial health. It is been pushing out the cost of short dated contracts with which which can be an indicator could purchase shares are trading near a record low, falling 7. 5 on monday. Commerzbank report lee announced its reception plan on friday the the move will include 9 million 9000 job cuts. It will cost up to one billion euros. Bank of america has plans to eliminate about a dozen positions at an Asian Corporate and investment taking operation. Investment banking operation. Goldman sachs is planning to cut about a quarter of its Asian Investment bank later this year. Make of America Client to comment bank of america declined to comment. Walt disney is working with an advisor to evaluate potential going to people familiar with the matter. Company may have a salesforce. Com is preparing a bid with tank of americas help. With bank of americas help. Twitter shares have surged after reports last week that a desperate you u. S. Court has ruled that American Express can stop stores from asking customers to use rival credit cards with lower transaction fees. The federal Appeals Court in new york decided amex did not violate antitrust laws. The case is a blow to u. S. Businesses trying to reduce card fees. That is your Bloomberg Business flash. Guy . Guy juliette, thank you very much. The bank of england follows in the ecb footsteps. The boe has around 270 bonds available for purchase in this game including overseas companies such as verizon and apple. Joining us to discuss all of how simon by allow comparable is this to what the ecb did and what can we apply here . Simon it has a huge compression affect on spreads, regulation of asset prices. A lot of that is baked into the sterling Corporate Bond market. There will be a positive impact within sterling Corporate Bonds. Not only within the Investment Grade perimeter, similar to the ecb. Therein lies the first similarity. We need to have more Investment Grade rating. Investors will find themselves crowded you out, possibly the credit spectrum. You are going to get a compression and eight and a flattening. The bank of england has a 10 billion limit in terms of what it can buy. In terms of the ratings and the mix similar to the ecb. When Investment Grade rating. Senior debt, the bonds that it is good to purchase will be from the issuance i material conservation to the economy. The ecb has to have the Parent Company domiciled in the euro area. It is many collation of asset process. Caroline simon, almost the ecb has been to effective. We have seen the German Company thing able to sell in negative yields. How effective is this has the ecb been in terms of pumping the economy. How much is the boe program a turning point in terms of potential recovery in the u. K. Economy . Simon you have alluded to the key point. Yes, the primary market has excelled on the back of the ecb purchase program. The transmission the funding organism for corporates was not broken. You have now had german corporates, european corporates being able to issue further and further down into yields and get more attractive funding costs. If you look at the underlying growth that it has generated, we are seeing some dynamics sign anemic signs of improvement. From that perspective, i would argue that Corporate Bond buying is manipulating prices rather than generating longterm growth which will only come when the consumer start to purchase more which will encourage corporate capex. St in in guy i cant let you go without asking what is going on with deutsche . The line is the Deutsche Bank cvs, as you can see, the cbs spiking. The market is buying protection could what are you hearing on what the market is talking about on debt . Simon the bailey and arnon balin should the need arise. Consolidation a and from there into the early two 40s. The front end of the cvs curve is still well underpinned. The one year showing shortterm risks of default. If you have any form of concern around deutsche financials, then the market is the most liquid and easiest way to buy protection. Guy is that a step too far to talk about that. People tore will be buy protection in the shortterm against that credit risk whether you believe there are people who would not step forward for support, i think it probably would. Guy simon ballard. Will be speaking to george osborne. That conversation at 2 00 p. M. U. K. Time today. This is his first tv interview since leaving number 11 downing street. You do not want to miss it, caroline. Caroline going to be fascinating. Talking more politics. Clinton and chop faced off in the first debate last night. The gloves were off. We will discuss next. We will leave you with one of the most tweeted about exchanges of the night. This is bloomberg. I have better judgment. I also have a much better temperament. Spent a much she hundreds of millions of dollars on advertising, they get madison avenue and a room here to having my shortest asset is my temperament. I have a winning temperament and i know how to win. She does not know. Thing,cio, the other behind the blue screen, i dont know the you were talking to 60 clinton, secretary clinton, but you were out of control here it i said there is a person with a temperament that has a problem. Guy welcome back. Oil a focus in algiers and let algiers. Ou over to let me hand you over to yousef gamal eldin. Yousef we were just talking about how the supply picture changed massively since earlier. Fussypick up on that with barrel with fatih birol were looking at fatih birol. Were looking at more supplied. What is your take of the situation. Fatih the situation is clear. Weak, weaker than many , 0. 8 million. Bout second, supply is coming strongly, especially from middle east countries. The stocks are huge. As a result, we have Lower Oil Prices with huge implications for the next few years. Yousef that would mean he would not be up to leave it to the market to rebalance. That means opec needs to take action . Fatih i would not say that the process should be determined by the market fundamentals. I hope the producers and consumers here in algiers would have good discussions as a result of that. Talk on a key topic, namely investments in oil sector. They are declining in a very speedy way. Decline. Have seen a 2016, we are going to see for the decline in investments. 2017, we may see a third year in a row which is never been the case in the history of oil. Need to be ofould a to support prices to bring them back to a level to allow the energy. Fatih there are many ways to mobilize the investments, but i prefer we go for the ways that are in line with the market. Yousef is it important that opec speaks to russia as it tries to rein in some of that oversupply . Producershink it is i think it is important that producers talk to producers. I think the best outcomes will come from the markets, supply and demand. Yousef the view has been the market is oversupplied. Are we headed toward another crash at 30 a barrel . Fatih i would not like to go to the projections. I can tell you that until late 2017, we dont see yet stabilizing of the markets. Which means market gain, the Oil Investments will decline maybe in a third year in a row which is the first time in the history of oil which will have strong implications for the markets. Yousef we have seen tremendous amounts of volatility in energy markets. You expect volatility to pick up . Fatih it will not take place unless the intervention in the markets unless there is a measure of economic development. We dont expect the market to stabilize before the second half of 2017. Yousef we will leave it there. Fatih birol joining us from the international agency. Guy looking forward to all of that. Gave last nights debate to six a clinton. My colleague jon ferro. What is the story . Jonathan will looking for a proxy we are looking for a proxy for who won this one, you look to the mix can peso. He wouldets, replace her. Remember the 2018, her term is going to expire. Whoever is the next president , early next year has a decision to make. Do you extend her term argue replace our nominate someone else . This is reminiscent of the Election Campaign of 2012. It came down to something very juvenile for the markets. Who would come after bernanke he. Would come after bernanke he bernanke . It is going to come to something very juvenile for the market. I would ask the question, does donald trump care if he is the riskoff tended echo i am not sure he does riskoff candidate . I am not sure he does. Market . A complacent if you think about it, whoever the next president is may face a divided government. The checks and balances. It is difficult to get policy through. Maybe the market just except whoever is going to be the next president , it doesnt matter. That is one side. If you do believe this is a complacent market, i would ask you the question, if i told you that President Trump is going to be the name after november 8, you tell me, would you go long or short the dollar . Longer short treasuries . I dont think the trade is obvious one is an obvious one. Guy francine lacqua, next on the pulse. Francine axis trade and trump. The market gives the mexican peso rallies from a liquor low. Stocks gain from a record low. Carney goes corporate. The bank of england opens a new front. We are joined by martin gilbert. Francine welcome to the pulse. Live from bloombergs European Headquarters right here in london. We have a great show lined up. We spea