Fierce. About 90 miles east of daytona is where it sits right now after really devastating the bahamas. David i dont think we still understand the extent of it. It is really tragic what happened in the bahamas. Theres a lot of rain and water coming. The storm surge they are worried about up and down the coast. Alix in the markets we are paying attention to the broader political sphere. 8 10 upres up by by 0. 8 . The cable rate up over 1 . Yields in the u. S. Now up by three basis points. Commodities, buy everything but the u. S. Dollar. Time now for the global exchange. Joining us in hong kong is bloombergs chief north asia correspondent stephen engle. From outside westminster is bloombergs anna edwards, and from new york is bloombergs michael mckee. First we want to start with hong kong, where leader carrie lam announced the government will formerly will formally withdraw the extradition bill. M the government will fully withdraw the bill in order to relay consent. Alix can we say the worst is over, stephen . Stephen absolutely not. In the last hour or so, we have been hearing from protest leaders. We have the prodemocracy lawmaker very harsh in her criticism of carrie lam, saying, too little, too late from carrie lam. ,he was also quite colorful saying, were you asleep the last three months . You cannot put out the hurt in the fire in hong kong with a simple garden hose. She went on and on. We are just hearing from joshua wong, a highprofile protest leader from the rela movement five years ago. He is speaking from the Umbrella Movement five years ago. He is speaking from taiwan. The protests will continue. Hong kong people will never stop until hong kong is a place with democracy and freedom. Right now, the initial reviews of carrie lams speech from the protest group. David thank you. Now we want to go to brussels, where the incoming ecb president Christine Lagarde is being questioned by european lawmakers, signaling continuity with her predecessor mario draghi. The euro area economy faces some nearterm risks, mainly , anded to external factors inflation remains persistently too low, persistently and certainly below the objective. Objective. E i therefore agree that highly accommodative policy is warranted for a prolonged period of time. David lets go to our bloomberg correspondent. Is this mario draghi 2. 0, or is she differing at all . Reporter that is a very good point. Indeed, Christine Lagarde is trying to stick very closely to the ecb playbook, saying that the ecb needs agility to act against too low inflation, and mentioned the fact that we have to stick with policy that is highly accommodative, as she said. To that extent, it sounds like mario draghi 2. 0, but there were a couple of points where she was trying to differentiate herself. First of all, she said we need to be mindful of the fact that there are some concerns about our negative rate policy. People are concerned, and we have to give those concerns in mind. Thats one thing. Tots an important nod german criticism of the fact that the ecb policy has been a big issue here. Said,cond thing is she and i think it got a lot of market attention, we should not be guided by markets. We should try to understand markets, but our responsibility is for the people. Nod towardsn a people in europe, but what she is essentially trying to save is that the ecb needs to guide its course with policy, and markets are important to that, but essentially, the economy is what is most important the Economic Situation is what is most import for the ecb. Is she is trying to raise the possibility of reviewing the monetary framework for the ecb, so clarifying the inflation target, which is now below but close to 2 . She says we should really make it clear what we mean by close to 2 . Alix thank you very much. Now we want to head to westminster. The u. K. Could be in for another brexit pushback and a potential for snap elections after Boris Johnson was defeated in the house of commons. No doubt, mr. Speaker, this means that parliament is on the brink of wrecking any deal that we might be able to get. Alix joining us is anna edwards. Lay out what happens in the next 12 hours. Its even difficult to tell you what happens in the next 12 hours, such as the state of uncertainty and flux around u. K. Politics, but this is how we think things will play out. We have Prime Ministers questions that have started in the house of commons behind me. Then we have a Spending Review being sent out by the relatively new chancellor of the exchequer. The voteay, we see that was being built up to yesterday on whether to block no deal. It is what happens after that that is going to be of particular interest. If the government loses that vote on blocking the deal, will vote ontinue to bring a whether to hold a general election . Theyve already been told by the labor of the labour party and the leader of the liberal democrats that until there is legislation that passes, and that perhaps mean passing all of the houses, there wont be a general election because Boris Johnson cant call one all by himself. He needs 2 3 of mps to back him, and that means relying on an opponents that wont back a general election unless they are sure that no deal is taken off the table. David thank you for that report. Back in the United States, Federal Reserve bank of boston president Eric Rosengren said the u. S. Economy remains relatively strong despite heightened risk, saying in part, if the consumer continues to spend and Global Conditions do not tear rate further, the economy is likely to continue conditions do not deteriorate further, the economy is likely to continue to grow, and no immediate policy action would be required. With us now is michael mckee. The fed is not entirely consistent, but the data arent either. Michael the most interesting thing perhaps from rosengren, who is a voter this year, is the idea that if the data deteriorates and we saw bad ism numbers, and more data today on the trade war with the trade ,alance coming up this morning and it is expected to improve a that is important because it affects the size of gdp. The problem for the fed is that it had gotten into this political dispute with the president over the trade balance , and he trade balance has actually gotten worse under donald trump. It is about 9 billion worse than when he came into office. Alix the other headline dealing with the fed today is former new york fed president bill dudley responded to his own oped last week, trying to clarify what he meant about the feds relationship to politicians. Suggesting was if the fed pushback, it would be able to achieve a better i atomic outcome a better economic outcome. I was nots adjusting that the fed should do so regardless of the consequences for the economy or that it should stand by and allow a recession. I was not trying to suggest that the fed to take sides on the upcoming election. Michael a lot of people thought that bill dudley was suggesting the fed actively work against Donald Trumps reelection. He made it clear today that is not what he thinks, but he is afraid the fed has been unduly politicized by the president , and people who question whether they are cutting rates because the economy needs it or because the president once it, and that is an issue the president wants it, and that is an issue the fed should pushback on. Alix thank you very much. Coming up, more on your morning trades and the analysis of the markets. This is bloomberg. David we are watching Jeremy Corbyn, the leader of the opposition labour party, asking Prime Ministers questions. Now it is time for the bloomberg first take, where we give you the news and you get the trade analysis of the markets. Here to discuss our gina martin , and, Vincent Cignarella jordan rochester, nomura ethics nomura fx strategist. On the pound in the u. K. , explain the trade given what is going on in parliament. Vincent i think what we can see is a bit of a respite as it looks like things will be delayed one more time out to january. What will this accomplish, probably not a lot, if anything. I think the eu take is if we delay as long as possible, the people of the u. K. Will become so fed up that eventually they will reverse the vote and remain, and this will all quietly go away. One of the rating agencies put out a report today, a little dramatic,s adjusting this could lead to the breakup of the united kingdom, that we would see referendums in scotland and actually even in ireland, and that the entire u. K. Is just going to be so fed up and every what is going to go their separate ways. Alix didnt we already have one in scotland . Vincent yes, and they are putting together the potential for people to be so fed up that they call another. Alix this chart really made for you, jordan. If you come inside to bloomberg, it is the implied volatility of the pound, the argentine peso, and the mexican peso. Talk to me. [applause] talk to me [laughter] talk to me. [laughter] jordan but this chart is implying is a mixture of things. It is saying the pound is going to move. We may have the eureka moment, which is, i know what brexit is. Sell the pound. Buy the pound. If you are a corporate, you are told is going to be a 5050 chance of a no deal brexit and the pound is going to go down 10 . Thats going to hurt the margins, so youve got to hedge yourself, so demand goes up and up. Nobody wants to sell this stuff because its a very liquid market the closer you get to know deal. If mps made their moves, if they delay it for january 31, that thing is going to collapse on the cliff because you push that date out again, but we have to bear in mind the election. We will have to think, what is the chance of Jeremy Corbyn . Thats the next thing. Brexit is a problem. A Labour Government is a problem for the markets as well. You are talking nationalization and high taxes. So youve got no deal on the left, corbyn on the right. What is your positive scenario . It is the bloomberg river it is the liberal democrats in the middle. If there polling numbers shoot higher, thats the only shimmer of light at the end of the tunnel. If youve got a labour led government or the hard brexit tory party, it is pretty dim. Weid listening to jordan, have not narrowed the options at all. If anything, weve broadened them out. We dont even know when we will know. Does that just mean you dont trade . You just sit on the sidelines . Gina i think you are seeing it reflected in u. K. Stocks for sure. U. K. Stocks didnt make new highs this year. U. S. Stocks were the only safe haven traits that make new highs any summer months. New highs in the summer months. It is interesting because the only thing the u. K. Stocks have going for them is the deteriorating pound. Economic surprises have been a little bit better, but not great. Expectations are already very low, and that has certainly helped a little bit as well, but the lower the pound goes, the better the prospects for some of the exporters and the giant companies within the u. K. That is relatively elevated, so as you get more volatility and downdraft and the pound, you probably see u. K. Stocks to ok. I think the worst scenario is you get a rally in the pound and u. K. Stocks are still kind of stuck, and they lose their eminence. Jordan if you had a brexit alve back in 2018, you had Global Economy doing pretty well, expansion in the u. S. , above trend in the euro zone. It is probably the worst time now. You have data in the u. K. Excluding brexit. For me, it is kind of unclear how far it goes because if youve got a session in the u. S. Or the euro zone, the pound does not do well. Problems in the u. K. Are not going to help the european situation at all. People keep looking at the pound, and no one is looking at the euro over what that means for the european currency. Have a hardou brexit, in the five days leading up to that, thats when i think that will work. Say Boris Johnson goes for a no deal. The majority of their trade in their Portfolio Holdings is in the u. K. See you are right. David as Christine Lagarde decides she is going to take over the ecb, one of the things she said was interesting about the markets. This is what she said. De the ecb needs to listen to and understand markets. It need not be guided by markets, but it certainly needs to listen and understand. David how do you listen to and understand the markets right now if you are Christine Lagarde . Gina i think the markets are telling you very clearly the deceleration and the deceleration in Economic Growth is the biggest problem for markets. I think it was really interesting that lagarde 22 fiscal policy as a potential haven, and certainly we need to lean on fiscal policy to some degree to elevate conditions in europe because Monetary Policy cant do anything. I think it is very clear she acknowledges a lot of the former ecb action has resulted in suppression of european banking activity. That is going to be the really big key going forward. Does Monetary Policy impact rates and markets, and start to soothe the concerns of the european banking sector, while also continuing to push back on fiscal policy makers who probably need to intervene to stabilize growth. Trade policy is not going to be combated by Monetary Policy. It has created Economic Uncertainty that Lower Borrowing costs probably wont solve. Alix so how can the ecb not do anything . When i hear the fed officials switch back, im like, fair. You look at consumer confidence, fair growth. Haven expectations collapsed. They have to show they are willing to do something. Already, rates are superlow. Inflation is going to add very little. With the euro zone, it is not the supply of credit. Foreignexchange needs to keep going lower, despite heading higher today. The problems are so structural now, not just cyclical, that they have this double slowdown, so weaker currency, lagardes appointment, it seems like they want someone who would be able to unite the eu nations. She might be involving herself and that debate much more. When i talk to clients come of the two things that make eurodollar go higher to the end of the year into next year is a big german fiscal stimulus, and if you do get it, it could be in green technology. The other thing would be massive stimulus from china. We seeing the credit impulse picking up. If that were to go into super positive territory, that its your catalyst. But china is holding back. Weve not seen that big bang for the time being, so this story probably continues. Im trying to find a happy note here. Sorry to be the bearer of bad news. [laughter] david valeant try. Gina martin ash valeant valiant try. A reminder, you can find all of our charts by using gtv on your terminal. This is bloomberg. Reporter this is bloomberg daybreak. Its ipoill kick off roadshow as early as next week. Bloomberg has learned the Office Rental companys meetings with companies will target a sales share of about 3 billion. Ebays ticket market place stub ab is drawing interest from number of potential buyers. Kkr and silver lake are considering bids. About 3ould fetch billion. Ebay begin the sale process in recent weeks. Tomorrow on daybreak, we will talk to the founder of another big name in the ticket business at 8 40 new york time. That is your Bloomberg Business flash. Alix thank you so much. The other thing we are watching is former new york fed president bill dudley responding to his response in a bloomberg oped last week, where he talked a lot about the relationship between politics and the fed. He said, i was adjusting the fed pushback, that it might be able to achieve a better economic outcome. I was nuts adjusting the fed should do so regardless of the upcoming election. I was not trying to suggest that the fed should take sides in the upcoming election. David he tries to draw a line potential. Wing that alix how do you say your actions will cause this to happen in the economy, therefore, we must react in this way, but we are not trying to choose sides in this election . David but he did not back down over what he said initially. Politicalt has consequences, and those affect the economy, and you have to take that into account. Alix i dont know if you can separate Central Banks from politics and a nor pump from politics anymore. 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That moment you walk in the office and people are wearing the same gear, you feel a sense of connectedness and belonging right away and our shirts from custom ink help bring us together. [announcer] custom ink has hundreds of products to help you look and feel like a team. Upload your logo or start your design today at customink. Com alix this is bloomberg daybreak. You have a classic risk on rally. Is it sustainable . S p futures are up by 0. 8 percent. Yesterday it was about punishing cyclicals and building up defensives. Today could be reversing that kind of trend. One of the out performers in new york is italian equities because it looks like italy will have its 66th government since world war ii. Apparently it is good news for the equity market, and good news for the bond bulls. Another the 10 year at record low, at 84 basis points. You just cant make that up. The curve is a