There is quite a lot going on. If you look at btps, this is the one thing we need to look at. Stocks, climbing, treasuries, slipping. Retreating. Carmakers leading the gains. Contracts also advancing after the s p 500 index close lower. Lower. Ed towe we speak to the German Economy minister and get his take on the slowing economy. Dont miss that interview at 3 p. M. London time. We are also getting some details from norways Sovereign Wealth Fund about the secondquarter performance. Dani burger has details. Not as bright as we saw last quarter. Fundss sovereign wealth 8 , they hadpoint a gain of about 3 . Comparing that to last quarters return of 9. 1 . I have been digging through some of this report and see exactly what the layout looks like. In terms of how different investments did, Equity Investments returned nearly 70 . Equity, 2. 7 , mirroring what we saw last year. The issue was the global uncertainty we saw. Keep in mind, this was the Second Quarter. This was not even before we got to the bond terminal. In terms of the stocks, there is a 3 return. Last quarter, 12 return for stocks. So the 69 number was the holdings not changing that much, but really, the turmoil is hitting Stock Performance hard. Francine thank you so much. Dani burger with the latest on the breaking news. Overhaul. An an volcker 2. 0 is here, looking more like a tweak. Regulators have rolled out the limits banks must follow. It is a win for big wall street letters lenders but hardly considers the transformational changes needed to spark a revival. The u. S. Economy is not headed for they recession according to mary daly. Wrote that domestic momentum is pointing to continued expansion. The comments echo those from the white house or downplaying fears of a recession. I think the word recession is inappropriate because it is just people int certain the media are trying to build up because they would love to see a recession and we are very far from a recession in fact, if the fed would do its job, we would have a tremendous spurt of growth. An employee of the u. K. Consulate in hong kong has been held in china. Confirmation comes after early reports he went missing after an august 8 meeting. Earlier, police said they have launched a missing person investigation. Donald trump is canceling his meeting with denmark because they do not want to talk about selling agreement. He tweeted that copenhagen save a lot of effort by being direct. He described it as a large real estate deal. Denmarks Prime Minister ruled out the sale, saying she hopes he is not serious. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine thanks so much. Quit as Prime Minister, blaming his deputy sell beanie. Deputy salvini. Handed in the job, accusing salvini of rebellion. Talks has been scheduled with the biggest Political Parties. Is the us for the hour Portfolio Manager at pimco and fixed. Trategist at thank you both for joining us. And country gunter. Let me kick off with you. When you look at concerns, if we havent snap elections, what will people be asking for . Do they have beef with the European Union or is it just immigration . That is a good question. So far, we dont know if we are headed for a new election or if there will be a government passing budget laws and only then going for an election. But if there is an election, i think voters will be quite confused. Populistsvoted for and have been in office. After one year in office, they have not delivered that much on the promises they initially made, the big spending plans. One thing would have done a lot of action is migration. Playing on what he considers big achievements. Overall, some of the skeptic voices will really be quite a big theme in the election. That would be devastating. Francine when you look at some of the spreads between the 10 , is btp and bund yields this artificially low . You dont exactly know what the ecb will, possibly looking for that to be higher. Its interesting to see that the market is relaxed about the prospect of a snap election. The main reason is that this government has not done much and anything else would be positive. There will probably be a centerright coalition that will be seen as more marketfriendly. So i expect the reaction makes sense. I dont think the development is necessarily bad. We have not seen any good news in the last 14 months. Anything else from this government is probably seen as positive. That is why the market seems to be pretty relaxed. Francine the concern is that it ist comes to liga, unclear what their plan is. Luca. Gree with with the election, we might have something that is ideologically stable. Cuts, butet more tax less spending if they win the election. In the back of everyones mind is the qe is likely to come from the ecb that will bring relief to italian bonds. View iny much share the the fact that the market is relatively benign. Riskine we have seen the of the italian president overstretching what he could say and could do. If you does not call a snap election and we find the solution with the fivestar movement, will the people of italy feel cheated . Italy, so iive in dont know what they will feel. Of italians think went to the polls because they were unhappy a year ago and disenchanted with the political class. They voted for an experiment with new people. They knew that fivestar had zero experience in government and they still vote for them because they were so fed up with the old medical system. After one and a half years, they have to vote again, there will be a lot of questioning why again and why isnt this new set of working. So this coalition will be one option. The think a lot of people, especially those who have voted for five stars will feel really angry. Francine when you look at some of the concerns, but the investors are worried about, is your . Eruope . Europe how attached are they to the project . I personally dont think there is a lot of opposition to europe. If you look at the polls, it is 60 or 70 support. So it is not even an issue that is debated in italy. There is immigration and the recession, but of course, politicians can use this argument. But even the league up the l iga, they have stopped talking about it. This is not a big thing. Francine s what we saw 12 months ago, talk about a possible parallel currency, you think it wont be part of the conversation . I dont think so. It would be infrastructure plans, tax cuts, these will be much bigger issues than the euro membership which is not actually an issue at all for most italians. Francine thank you for a good conversation. All stay with us. And stay with surveillance, plenty coming up. Boris johnson meets Angela Merkel, we focus on the prospects for a brexit compromise. And a pisa bond market history of germany holds the worlds first option with 30 year bonds and a negative yield. Who will buy it . We discuss that next. This is bloomberg. I think the word recession is inappropriate. It is just a word that certain , certain will be kind people in the media are trying to build up. Im going to do this whether it is good or bad for your statement about falling into a recession. Fact is, some he had to take china on. But i like doing it because i had to do it. We really need a fed cut right. If you look at what is going on with the European Union as an example, take a look at germany and what they are doing, they are actually doing something nobody has ever seen before. We have to keep up to an extent. Francine that was President Trump talking recession fears. Now lets get back to brexit. The eu has poured cold water on Boris Johnsons attempt to renegotiate the brexit deal. It says the irish backstop is a vital part of the agreement. The two sides deadlocked, the premise or heads to berlin and to meet Emmanuel Macron tomorrow. Still with us are our guests. , letsgo back to you start with the political stuff and go to the market. What do you think will be able to be renegotiated, if anything . What is the word from brussels . I read the letter carefully and it is an explanation for the problem. Does not offer any solution. It talks of the creative solution for ireland. While this discussion has been ongoing for several years and the only thing the negotiating partners could come up with was the backstop. So in the end, if he says he does not impose border patrols, the eu will have to do it. Otherwise, integrity of the will be violated in that sense, unless you have the backstop or another solution , she does not always say what it would be, there will be basically a hard border and it is therefore dishonest in that sense that we dont want a border but dont have a solution for the problem. Francine do you know if brussels, its not an alternative to the backstop. It could be something Boris Johnson could sign up to. Brussels has weighed all the options, but i do not think there is a lot of willingness to consider many other options. I think there has been an attempt to do this. At this stage, the machinery is locked and everyone has more or less agreed on this. The moment where we might see reconsideration is basically in the European Council when it is the time to blank for both sides. As a market participant, you have to make a bold call. You either bet that there is a and on the words from mr. Johnson or you ignore it, saying there will be a repricing of assets. That is what we are doing. When we look at the pound and those yields, there is little to be said. There is one place where we feel the premium is to elevated too elevated. The capital buffer of these banks is relatively large, even in the case of a bad outcome. Francine is the market positioned for no deal . Andf you look at the pound the cell value, you would probably conclude we are pretty much there. The consensus is that it will be no deal at some kind of agreement to avoid economic disruption. That is probably the consensus. Theres also a possible snap election in november. But i feel that the no deal is probably the best base case scenario. Francine when we look at what ,appens through a european lens what are the questions we need to ask ourselves . Is it whether we trust the government whether we will suffer more than the u. K. . It is clear that a no deal would be a very bad outcome. I think that history will certainly say no deal is also to be blamed on the eu, primarily on the u. K. , but also the eu. People look at this quite carefully at what is also clear is that, for the eu, it is impossible to just give it to the new Prime Minister who is very much remembered in brussels as a person who has been gaming and unreliable in his reporting. And so i think there is not a lot of sympathy for this government at this stage. In the end, there might be an agreement among the 27 leaders to push it to the brink. I quite like the idea of perhaps deal fora technical avoiding finding a deal for avoiding catastrophe. The European Council in the middle of october will be crucial. Francine thank you. Coming up, as World Leaders start to pack their bags, we will stay with the geopolitics and what to expect from this weekend. We seehe first time President Trump and Boris Johnson headtohead. This is bloomberg. Francine this is bloomberg surveillance. Lets stay with geopolitics and discuss the g7. Had of this twoday gathering in france, President Trump says he is open to considering remitting russia. Meanwhile, the u. S. Trade war and tensions with iran subjects likely to be focused on. Still with us are our guests. Tryingf all, if you are to protect yourself or hedge yourself against some of these concerns and the numerous wells of worry, where do you go . s treasury still the right haven . Is treasury still the right haven . Yes, it remains our favorite. These are yields that can still go lower, where some are already in negative territory. Generally, it is just quality. Quality has to be the overarching theme of a portfolio. Temptation for junk. Course, people are in the search and hunt for yields. Sometimes needing to make bets that are relatively debatable. Francine if you look at the g7, is there a pairing of World Leaders to look at . Is it Boris Johnson and trump or Boris Johnson and Angela Merkel . The dynamics of such a summit are difficult to predict. Notabley, what is quite is that the socalled anglosaxon world, Boris Johnson and donald trump, in a sense, are quite apart from the other five in terms of what they think is right. Francine thank you so much. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you preorder a new samsung note. Click, call or visit a store today. Calls it quits, its up to the president to decide whether new elections need to be called. Investors are hoping jay powell will signal a deep cuts when he speaks at jackson hole, but could he suffered a messaging misstep . Suffer a messaging misstep . Donald trump meet with Angela MerkelBoris Johnson meets with Angela Merkel, can he make any progress . Lets check in on todays biggest stock movers. Annmarie we have some auto news. Renault and fiat are both higher. Report from a a local italian newspaper saying that talks between the two Companies Never stopped. Theyre still in contact, a reporter citing people wellinformed with the minor the matter. Telworld isld hos down, saying the 2019 outcome will be well below 2018, citing a competitive market. Francine thanks so much. Lets get the latest on hong kong. For all the tumbled since the protests got underway, the countdown to a crucial anniversary makes the next six weeks particularly sensitive. The 70th anniversary of the peoples republic of china will feature a military parade by beijing. That has raised fears that xi jinping will try to get hong kong under control to avoid protests stealing the headlines. For more on that, lets get straight to our government editor in hong kong. China has confirmed they have detained a staff member. What do we know about the incident . This has been transfixing the city for the last couple of days. This consulate worker traveled to the mainland, something people do all the time. He was messaging his girlfriend on the train and on the way back. And then he was never heard from again. His family filed a missing persons replaced complaint. Now, the Foreign Ministry has confirmed he has been detained. Obviously, this brings back memories of the mysteriously detained canadians. People are still trying to figure out the details. Whether this could be some sort of political message to the u. K. , which has spoken out quite strongly on the hong kong. Rotest and Police Tactics at the moment, we know he is detained. We only know it was an administrative detention and that he has been detained for about 15 days. Give some about five days left. Gives him about five days left. Francine whats next in hong kong . There are a few more protests over the weekend. It is unclear how big it will be , especially compared to sunday, which was 7 Million People. So does unclear if there is anything of that scale. Anything overdramatic. Francine thank you very much, ian marlowe. Lets get straight to bloomberg first word news. Italys president must decide the future of the Prime Minister. Conte could return as premier, but it is clear from his testimony that the alliance with details of the name is dead with Matteo Salvini is dead. The eu is pouring cold water on Boris Johnsons attempt to renegotiate the brexit deal. It says the socalled backstop to prevent a hard border is a vital part of the agreement. It means that with just over two months until britain crashes out, the two sides are completely deadlocked. The u. K. May delay naming the next bank of england governor until after brexit. They also postponed the budget until 2020 if the government is forced into a general election. At the end of january, mark carney is scheduled to step down. He has twice extended his tenure to provide continuity during the split from the eu. Norways 1 trillion wealth fund rose in the Second Quarter, gaining 28 billion amidst market turmoil. It drove equities lower. The fund holds a. 4 of global holds 67 billion of negative yielding bonds. Bonds. Spidermans place in the marvel universe is facing a bigger threat than thanos. According to the deadline website, disney wants a 50 share of profits going for the forward. Sony wants to keep the current arrangement. Disney gets 5 of box office revenue. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine . Francine from wall street to the white house, hopes are high that jay powell kickoff the jackson hole symposium with a speech that signals he is revving up a series of rate cuts. There are also fears he is wildly out of tune with expectations. President trump is deflecting criticism that it is his trade war that is up to the risk of recession. I am doing this whether it is good or bad for your statement about a recession. Fact is, some of the had to take china on. I like doing it because i have to. Francine still with