Todayreasuries are posted closed today because of labor day. If you are americans watching us, happy labor day. This is the picture for eurodollar. 1. 09. Have the german figure a short while ago that was worse than expected. The european stoxx 600 gaining but it is all about the trade war. Up, we speak to the chief economist at 10 00 a. M. London time. Lets get to first word news. It is Sebastian Salek. It forced 185 mileperhour winds and could top 23 feet. It may leave the islands devastated. Uncertain if dorian could hit makeda on my or not landfall at all. Argentina has imposed capital control. Corporations will require centralbank authorization to buy dollars in the fx market fx market. The president is trying to stem the growing economic crisis eight weeks ahead of president ial elections. Thelor Angela Merkel euro skeptic alternative to germany did not make a breakthrough in local elections. The result may save prices in berlin. Saudi arabia is putting its portfolio into two ministries. It will lose oversights of industry and mining. The news comes as oil trade comes below the breakeven level. The u. K. Parliament is ramping up for stand up standoff over brexit. Boris johnson will ask his party if they will want this want to side with Jeremy Corbyn. Italys Prime Minister says he plans to prevent a new government by wednesday. He speaks to hold together a new coalition. Five star leaders threatened early elections if his demands were not met. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. Im Sebastian Salek. This is bloomberg. Francine u. S. Has slacked tariffs on chinese imports. The 15 uptick came in yesterday and hit consumer goods. Escalation, President Trump says talks are going to still happen this month. We are going to talk to china, the meeting is to long. We will see what happens. We cannot allow china to rip us off anymore. We cannot allow china to take 500 million a year out of our country. We cant do that. Francine joining me now is michelle. Where does the latest we can in tariffs leave us . Your guess is as good as anyones. It is all up in the air after this past weekend titfortat. They went back and forth and President Trump did say the september talks are still long. We have yet to hear any confirmation. We are as uncertain as ever. The response on either side has become increasingly murky. President trump loves to be unpredictable. He met his match on the chinese side where they are trying to muddle through when and how much china response. We will see some more information on whether those talks will proceed but you saw a very interesting tact by the Chinese State media in response to the tariffs and their appeals to the u. S. Consumer. These tears hitting things like apparel and tech gadgets that are hitting a lot more closer to home. China knows and playing the long game they can target the u. S. Consumer to target trump. Francine the Trump Administration has concerns about the trade war hurting the economy could what are you looking for in terms of part of the economy where it could really hurt . Michelle globally we are watching things like the pmis. You mentioned the data out of asia not looking good. We know what is happening on the business side. We heard the Community Talk about the strategy they havent passed along the Cost Increases to the consumer. You havent seen labor market suffer. That is where some of the focus is right now especially on the u. S. Consumer. We stare down this potential downturn. We are starting to see cracks. The university of Michigan Survey was an example you so one in three consumers respond that the tariffs were becoming a negative actor in their sentiment. That was a real seachange. We saw the michigan report turned down the expert tatian for Current Conditions the expectation for Current Conditions. Policymakers have been talking about yes, it hurt business. It hasnt impacted the labor market or lead to mass firings. That could change. We will be watching the labor market developments. Francine michelle, thank you for the update. Joining us is peter dixon. Peter, i feel like we have had this conversation every two weeks. When do we know whether we can find a deal . Or if this is a projected trade war . Peter cook i dont think peter i dont think trump once a deal. This kind of rhetoric plays well with his base. 2020 he islection in making sure he can hike up the rhetoric without killing the economy. That is a dangerous game to play. Us f francine does the trump partistration is this of his campaigning for 2020 . Does he find a deal before the president ial election because hes the guy that knows how to do deals . Says heasically he continues to push down hard on the chinese. Then he will whip out the great because that is my reading of the situation. Mean . Ne what does it do you buy gold . Peter why not. I think that is going to continue for a while longer. Equities, investors are still there. They think they are getting dividend deals. Concern,e bit more little more fear in the market and you can see a bigger selloff. Francine what happens to yen . If there are no talks between the u. S. And china, for now they are so long. Our markets already pricing that in . Our markets already pricing that in . Peter it is going to take a while. A general drift. It is not something that is going to happen immediately. Marketstinue to press on a gentle basis. If you look back over the course of a couple of months, weve come in off a long way. Francine what does it mean for equities . You look at apple, tim cook went to see President Trump and cooled off because he said samsung will have it have an unfair disadvantage. Peter if you look at what has been happening to the banks over the past 12 months, they have went up and gone down. The line is flat. At the moment, we are at the stage where investors are looking at the likes of apple. They think it is terrifying, the downturn. They also look at the fundamentals of apple. That could be profitable and tech again . That is the tech. Could be bad news. Francine peter, thank you so much. He stays with us. Up next, we are live in hong kong after weekend of protests. It was the 13th straight weekend of unrest. Details are next. This is bloomberg. Francine economics, finance, politics, this is bloomberg surveillance. The Hong Kong Government will not rule out improving approving emergency law. The protests are becoming increasingly violence as it stretches into four months. Demonstrators clashing leaving 63 people arrested. Lets get out to the place where another rally is taking place. Are we getting more and more of these protests and are they trying to hit the economy . Right. We have seen after another violent weekend that more these strikes and rallies. We are staying here for the afternoon rally of students, about a couple hundred or so, to mark the first day of school. Thing. Really a we saw a right police at the School Entrance us because there were concerns there might be clashes between the student protesters and maybe even children of police officers. We are starting to see this come forward here. After what we saw was one of the most chaotic weekends we have seen now that these movements have gone on for 13 straight weekends where protesters have these running battles with riot Police Inside the stations where they were vandalized, pepper sprayed and even the airport was disrupted with several hundred flights delayed. Francine ivanka, it is also the first day for backtoschool year. Hows that likely to affect the situation . Yvonne . Yvonne they are hoping when School Starts this will start to fizzle out. The premise of this rally for the students to not give up. They are telling them to not give up. Despite what we heard from the government here, not ruling out the use of this emergency law which can make it easier to make arrests, for censorship, as well as different type of property seizures. At this point the student say those are scare tactics that are not going to deter them from coming to these rallies. You are seeing very big extremes here. Francine thank you very much. Yvonne man with updates from hong kong. Still with us, peter dixon. Policy and trade war and the hong kong protests. His hong kong protests at the top . Is hong kong protests at the top . Peter we start to get the chinese becoming much more heavy. That is a different ballgame. At the moment, it is geopolitical. I think for the world at large it is something they are keeping a watchful eye on. Francine does it change the Economic Outlook for the world . Peter i dont think so. It depends on the extent to which the u. S. Ratchets up the sanctions against china. War. T the trade that could be a catalyst. Francine when you look at Central Banks, their main concern which is the markets that they misread geopolitics or is it Something Else . Really, think it is several banks are consumed by the fundamentals. It is growth, it is inflation. Cases, in certain Central Banks on the sidelines even though they are going to be the focus of attention for the markets. They have to take a step back and say a way to deal francine if you have one scription for such a banks for Central Banks, is it what . Make a get worse so fiscal policy has to take over . Peter the general reaction is dont do things that will make things worse. Dont give markets false hope. Doing iswill end up send the markets into the stratosphere. Strategy for Central Banks is to do no harm. The ecb is likely to come in with some sort of monetary easing. Francine is there anything they rates mitigate mitigate negative rates . Peter negative rates are not good news for the european banking sector. Cutting Interest Rates isnt going to make this any better. It might offset some of the worst of the pain. , what central what wehave to stop, is are doing the right way to go . Mandates. They have do they ignore the mandates . Peter the mandate is inflation. Not suffering from deflation in the euro zone. A Central Metric is to look at the inflation in the gdp per target. And the gdp target. Rates insideerest is zero inside zero. Interest rates to me are way too low compared to where there economy really is. Francine which is what . It is a policy mistake. Peter you could say that. Saying inflation this month, inflation xmas. Whatever. Without stepping back, the economy is not where it was. Francine peter, thank you so much. We get the latest on Hurricane Dorian as it batters the bahamas. This is bloomberg. Francine this is bloomberg surveillance. I am Francine Lacqua. U. S. Equity and bond markers are closed today for the labor day market day labor day holiday. In the meantime, dorian has crashed into the shores of the bahamas. Florida the devastation is really mounting in the bahamas from dorian, 185 mileperhour winds. Catastrophic storm surge flooding is likely occurring on grand bahama islands. Florida is not out of the woods yet. Fluctuations in weather patterns means dorian could hit florida a further up the coast in georgia or the carolinas later this week or not make landfall at all. Fort lauderdales airport is closing at noon today. Now, florida fuel supply have drained this week. Drivers are fueling up. It is labor day. As of now, about 36 of gas in miami Fort Lauderdale are without gas. That is according to retail tracker. You can track the gasoline in real time. Florida has a very unusual situation. It relies on chips to bring most of its on ships to bring most of its fuel. Weekly the last thing i am watching our bonds. I am watching our bonds. These are all the other hurricanes for the past so keep an eye on them on how this could affect them. Francine thank you so much, annmarie hordern. Up next, Boris Johnson. The parliament returns, we will preview the crucial weeks for exit and for pound. This is bloomberg. From the 5am wakers, to the 6am sleepers. Everyone uses their phone differently and in different places. Thats why Xfinity Mobile created a Wireless Network that auto connects you to millions of secure wifi hot spots. And the best lte everywhere else. Xfinity mobile is 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 buy an eligible phone. Click, call or visit a store today. 110 billion in products, apple watch is affected. The fate of the uks exit from the eu and Boris Johnson hang in the balance. After another weekend of violent protest Hong Kong Police and radical behavior they report more than 1100 arrests since june. Good afternoon if youre watching from asia. This is interesting in the context of brexit. The pmi falling to 47. 4. Anything below 50 is a contraction. They were already expecting contraction at 48. 4. Now, lets focus on brexit. The weeks that could determine when and how the u. K. Leaves the European Union are about to in an interview, the Prime Minister says colleagues has to choose have to choose between his vision and Jeremy Corbyns takeover. Lets speak to terrazas rafael. Thank you for sticking around and welcome to the program. The concern is it is unclear whether he will go the full mile and give us a nodal brexit. I think Boris Johnson would like to meet on its terms. That is highly unlikely now given the redline that Boris Johnson has set. It is clear that the administration have to leave on october 31. His own political future in the future of the entire breast the tears rest on that deadline he is endears setting up to scapegoats. Itself, whoament will get the blame if they do not allow him to negotiate with eu. The other is the European Union. That is what we are seeing, johnson preparing the ground for notlection saying, if im allowed to press my case with European Union, this is what i am going to say. Francine the exit will be after a nodal brexit . No deal brexit . For johnson it would be a new deal brexit. Itll make a threat like that unless you are preparing for an early election. It seems to me that the administration is keeping a lot of options open including an early election. Dealine a possible no inglot . No deal being blocked. It is a very occult route to get legislation to the house. Then on the statute books in time. As you said, what we have never n up to now francine peter, this is an exciting week for brexit. You dont believe that a no deal will happen . We will not be a no deal brexit. The threat of legislating mps have ratcheted up the tension. There is no real sense that the opposition to no deal is sufficiently unified. The risk therefore that a no deal brexit happens by accident. I think it is now getting critical. Francine is it by accident . If you take them to the word, they say theres a small theres a small chance for no deal. Is it ise simple truth not a good look to crash the u. K. Out of the eu when the likes of operation yellow , pretty bank of england much anyone on the street has done the same. Maybe johnson gets away with it if he holds an election sometime soon. Economic costs. Francine if we are going to have an election before october 31. We find out very soon if parliament did succeed in trying to thought a no deal brexit. That is when johnson would it is interesting that the government is spending 100 Million Pounds on this Advertising Campaign telling people to get ready. The perforations the government is making the preparations the government is making. Us we arelling gearing up toward an election more than they are gearing up toward a no deal brexit. Francine if we get a if we get ready for no deal brexit, are the stocks cheap and u. K. . Peter they are cheap if you look at the prices. They are still potentially can come out of the u. K. Market. Stocks which are exposed to , there isnal trade potential upside. It is not a risk which a lot of estors francine how do we get ready . ,orres stock up on olive oil. Book holidays to cornwall and not italy. I dont know. That is the whole difficulty with brexit. It is hard to prepare. That is what we see in the markets and what we see company saying to the government. That is what makes this week so fraught. Lets get straight to the bloomberg first word news here in london. It is Sebastian Salek. The u. S. Slept tariffs on chinese imports yesterday. The 50 hit consumer goods. China retaliated. Trump told reporters facetoface talks that is still on. Police are patrolling key hong kong subway stations after calls for more protests. It follows another weekend of violent clashes between demonstrators and police. The top officials have not ruled out emergency law. Argentina has improved capital hasnt posed capital culture has impose capital control. Except in the case of international trade. The president tried to stem the growing crisis in the country eight weeks ahead of president ial elections. In germany Angela Merkel the euro skeptic alternative to the result may stave off a crisis in berlin. Have pushed it to leave. Saudi arabia is spinning its industry is splitting into two ministries. It will lose a fight over industry and mining. The move comes as oil trade is breaking below the level. Tolys premier says he plans present a