Reporter hong kong drops and unpopular law but unrest continues. You can see the level that has been built up. Reporter argentinas debt crisis deepens. They have to do something to contain the flow of dollars out. Reporter the fed given more food for thought. A strong correlation with the session ahead. Not a great report, it is decent. We want to remove obstacles to Economic Growth. Reporter the top interviews on topics from trade to race. These give us reason to double down our efforts. Low Interest Rates have significant effects on turnover. We have the fundamentals right to deal with a slowing bubble economy. Reporter it is all straight ahead on bloomberg best. Hello and welcome. I am kailey leinz. This is bloomberg best, your weekly review of the most important analysis and interviews from Bloomberg Television and around the world. Lets start with a day by day look at the top headlines. The week began with the u. S. And china entering a new phase of the trade war with tariffs imposed by both sides kicking off sunday. Paul u. S. Tariffs on 110 billion on chinese imports are now in effect. China will retaliate. Even so, President Trump trade talks in washington this month are still on. Mr. Trump we will see what happens, but we cant expect china to rip us off anymore. We cant allow china to take 500 billion a year out of our country. We cant do that. Paul this is a sharp acceleration in terms of the titfortat tariffs. We saw the u. S. Side putting 15 tariffs on 110 billion of hinese imports including shoes and textiles and Technology Components like the apple watch as well. The next round of tariffs for the u. S. Side will be on december 15, targeting 160 billion worth of chinese imports and you have got all of chinas imports into the u. S. Market hit by tariffs. China put tariffs on things like soybeans, beef, chicken and they will impose them on december 15, u. S. Autos as well. About 75 billion worth of u. S. Imports in total in terms of september 1 and december 15. Business groups say the time for a tariff truce is here. People are looking at negotiations. Trump says may still happen later in september in d. C. The u. S. And china struggling to agree on a schedule for planned trade talks. They delay the latest tariffs. They are having trouble getting to the table quite frankly. Furthermore, there has not been moments to set the contours of the decision, what would be on the table, what might not. Its not a break, but it is a pause, but we have more contours and it turns out the difficulty is we are not sure what we will talk about. We are not sure when we will talk about it. We are getting some manufacturing dado. This is in keeping with ism and pmi across the globe. The s p taking another leg lower after that. Truly awful report some of the purchasing Managers Index alls more than a point to 49. 1 from 51. 2. Its the biggest drop and it is the first contraction since 2016, january. Even worse the underlying numbers, new orders 47. 2, unemployment 47. 4 , inventories rise to 49 . When you have inventories rising faster than new orders, there is a strong correlation with recession ahead. Britain could be going to the polls yet again. Boris johnson will try to trigger a snap election. If he loses a crunch about in parliament this evening. The first thing that may happen is mps will have to ttempt to seize control of the government agenda, the order paper. Then there will be a vote sometime this evening on whether r not the first hurdle of that rebel bill will be allowed. What mr. Johnson said is if that happens, he loses that tonight, he will tomorrow table a motion to dissolve that parliament when they just got back and call the election for october 14. Pm johnson the country wants this done. They want the referendum respected. We will be by october 31 in all circumstances. There will be no further pointless delay. David well he was speaking, the arithmetic changed significantly. This morning he had a majority of one. During his statement an mp from the conservative party walked to the other side of the house and joined the liberal democrats. It went to minus one. We now have a minority government in the united kingdom. The ayes to the right, 328, he noes 201. Not a good start, boris. I dont want an election but f mps vote tomorrow to stop negotiations and to compel another pointless delay to brexit potentially for years, that would be the only way to resolve this. I can confirm we are tonight tabling a motion under the fixed term parliaments. Here he wants to table a motion for a general election. Fine. Get the bill through. First in order to take no deal off the table. A dramatic move in hong kong with chief executive carrie lam saying she would remove the extradition law which triggered 13 weeks of sometimes violent protests. It was long in coming according to the protesters. They have been demanding this from day one when she said she would not formally withdraw this controversial extradition bill. She would suspend it and basically calling it dead. But today, in her words, to fully allay the public concern, she is withdrawing this bill. But she addressed the other four main demands but did not acquiesce to any of those demands including setting up an independent inquiry into what protesters say was Excessive Force by the police. That has led to a slew of criticism from the prodemocracy camp. You can see the level of distrust that has been built up by the protest community to the government. Boris johnsons bid to trigger an election has been blocked. The british Prime Minister suffered a string of heavy defeats. Johnson was thwarted twice in the house of commons by the opposition parties and tory rebels to block the new deal brexit which came in second and hird readings. Later, he failed in an attempt to force a snap general election. The answer for an election today is like an apple from snow white and the wicked queen. What he is offering is the poison of a no deal. It is absolutely unbelievable. It is totally unfathomable about what is going to happen. There are some who believe there is some machiavellian master plan. From the outside, it doesnt look like that now. China and the u. S. Are planning to have negotiations to end the tariff war in washington next month. Skepticism remains on both sides that any progress can be made. It is good that they are talking and have agreed to have these facetoface negotiations. It is good that they are talking. These were at the ministerial level which were scheduled to take place this month, september so we see a delay. Both sides trying to manage the markets, neither side wants to be the one that walks away from these talks. There is no harm in meeting. The showdown over brexit got personal today. The Prime Ministers brother quit the government in apparent protest over the brexit strategy. Johnson is still arguing for a snap general election in an address today. Pm johnson i dont want an election but the only way to get this thing done and moving is to ake that decision. What we are hearing is the government will ask mps once again monday to approve an early general election and they plan to do that because they expect a bill working through parliament to prevent a no deal brexit. It will be back at the comments i will receive royal assent. There are on monday, we will have another showdown with mps. We are euphoric on the news. We dont have any specific date, but who cares. We are above the 50 day moving average. Bond bulls were given a tough wakeup call thursday on the enormous surge in yields on the Treasury Curve showing bond trading is still a twoway street. This is the biggest bond rally in years. It was depending on which part of the curve you are looking at, shery, but no matter what part you were trading, you got hit hard if you were not expecting this to happen. This was something to see. Probably the biggest oneday move we have seen in 10 years. Vonnie Companies Creating a a below forecast amid trading uncertainty and slower global growth. The jobless rate held steady at 3. 7 . It is a decent report, it is decent. There was a big miss on job creation but higher wage growth, hours worked, decent. It shows you the labor market is holding in. Sec. Kudlow we want to remove obstacles to Economic Growth. We want to remove obstacles to Economic Growth. An inverted yield curve and a premature hiking of Interest Rates last year, maybe the year before, generated an obstacle to Economic Growth. Lets remove that, and you will see this economy with low taxes, low regulations. Those are the factors that will lead to 3 , 4 Economic Growth and keep this job story as strong as possible. Jay powell make remarks in switzerland. It is his final comments before the blackout period. Mr. Powell we will continue to watch all of the geopolitical things that are happening and we will continue to act as appropriate to sustained this. Jay powell was extraordinarily disciplined. He stuck to his talking points. He made the case that the u. S. Economy is in a good place, continues to perform well and he is used this line several times. Still ahead, as we review the week on bloomberg best, a fund sticking with you can investments no matter what happens with brexit. The e. U. Trade commissioner said the forecast is cloudy for a deal with britain when it finally leaves the bloc and more on the top headlines. Angela merkels coalition staves off a populist challenge. It means there was unrest which will quiet down for some time. Kailey this is bloomberg. [note] kailey this is bloomberg best. I am kailey leinz. Lets continue our global tour, of the weeks top business stories in china where the government in china responded to economic headwinds with moves to stimulus. Paul the council of china is signaling a reduction in the amount of funds a bank of reserve must hold is on the way, a move aimed at releasing cash into the slowing economy. What did the council say . The state council was asking for the targeted and brought use of ratio cuts in a timely manner, after a meeting held by this was the premier, and it is expected the pboc will follow the heed. This is what happened in january. They also called for the issuance of special bonds to be used by local government to boost infrastructure spending. Many economists are expecting this cut to come as early as this month. It doesnt come as a surprise given the pressures facing the economy. We had many economists lower their forecast to below 6 . There is a lot of headwinds facing the economy and we heard from the state council themselves the external pressure is placing enough downward pressure on the economy the reserve ratio is necessary. Tom there is breaking news, china moves the reserve ratio is important and some banks will see a full percentage point. This is about the ongoing slowdown of the chinese economy, ongoing headwinds from the trade war with the u. S. , but the ongoing concerns the government has about what would happen if it let loose with stimulus, it could cut Interest Rates or flood the economy with liquidity. It is fragile and it risks bubbles so what happens this evening here when essentially limits that using step which could put a floor under the slowdown. Angela merkels Ruling Coalition stems the surge of farright populism. The eurosceptic alternative for germany didnt make a breakthrough in the local elections in the Eastern States of brandenburg and saxony. The result could stave off a deeper political crisis in berlin. That was little bit of a surprise for merkel. Do you think the key is whether they can carry through on this . You can say merkels party and the social democrats are partners, they are breathing a collective sigh of relief. Polls had shown the alternative for germany would actually win the election outright. That did not happen. They did come in second and had a strong showing, but the social democrats hung on. What does it mean for the coalition here in berlin . Thats what we all care about. The unrest entially that will quiet down for some time. In a rare sunday intervention, argentinas president imposed capital controls in a blunt policy result aimed at containing the countrys escalating financial crisis. The announcement came after 3 billion of foreign currency reserves friday and thursday. This is about containing argentinas economic crisis or about containing the president s political crisis. It is hard to separate the two with elections eight weeks away. This started because of the primaries. August 11, he had a stunning loss nobody saw coming and the money started flowing out of argentina. 3 billion in two days, it has been 12 billion since august 11, so they had to do something to contain the flow of dollars out of the country which will impact inflation and everything lse. It is the president trying to make it to the end of his term, but also trying to fix the Economic Situation in argentina which has become a massive crisis very quickly. The ecb has signaled a note of caution on restarting quantitative easing. He told a french magazine the central bank doesnt have to use all of its policy tools at once. He joins a rollcall of others making hawkish or not dovish noises over stimulus. How significant are these comments . They were pretty technical in nature. He clearly remains potentially open to being convinced qe should be restarted. He labeled the main concerns, one is the two things the ecb is after changing is Inflation Expectations and shortterm market yields. Hey are best dealt with by Forward Guidance and official rates. The u. S. Placing additional sanctions on iran after france tried to extend the economic ifeline by restarting with 15 billion of free purchases. 15 entities were designated. Iran keeps rejecting our efforts to resolve our differences diplomatically. We will intensify our campaign of economic pressure. Iran has a basic decision to make. They can behave normally or watch their economy crumble. A month after being forced from power, the italian president finds himself at the head of the new government coalition. Investors rallying behind his second term as premier. There is a history of bad blood between the two parties. This government has a tall order because first of all it should undo part of what the previous government did. It would require much more leadership than honestly he displayed in the first government, but certainly he has matured. He has shown more leadership ow, and the renewed good climate with the European Union would be a very poor component. Kailey you are watching bloomberg best. I am kailey leinz. The head of the Largest Sovereign Wealth Fund is looking past the medical turmoil and will invest in the u. K. No matter what. But the ceo does consider negative rates of significant concern. He spoke with our editor in chief, john mickelthwait. We are a longterm investor in Great Britain no matter the outcome. Norway also as a country has lived being outside the e. U. But still within europe. Britain is close to europe and will be longterm. We have 2 of the u. K. Market substantially and we will continue to be that. I think also for countries we are invested in, it is good to know we are longterm committed to the countries and we are able to investor and stable investor. The fed is leading the Central Banks towards lower rates and you have negative yield and a variety of things. You are trying to receive 3 a year. Bonds are negative. How do you do that . 3 is what you have with people spending and backbone, we achieve that, that is challenging. The worries we have with regards to markets, one thing on top of our agenda should be the urpose, lower Interest Rates will have significant effects on the return over time. John this relentless push towards ever lower Interest Rates all the way around the world . I think the market has been quite surprised so far this year. There has been a change from Interest Rates going up in the. S. And turning and Interest Rates half world now actually is approaching that territory. Kailey coming up on bloomberg best, more compelling stations. A top chinese Bank Executive explains how the pbocs plans to fix rates will foster growth. Australias trade minister and new zealand finance minister. Another official keeping an eye on brexit, the e. U. Trade commissioner who would like to make a deal with the u. K. , but the leadership is not making it easy. There is an agreement. The basis is if mr. Johnson and the British Government want to change that, he has to come up with proposals. Kailey this is bloomberg. [note] we call it the mother standard of care. Its something we take personally, and believe in passionately. Its the idea that if our mothers were diagnosed with cancer, how would we want them to be treated . Thats exactly how we care for you. With answers and actions. To hear your concerns, quiet your fears, lift your spirits. With teams of cancer experts and specialists, delivering advanced Treatment Options and compassionate support every step of the way. All here in one place, with one purpose. To fight your cancer, together. Thats the mother standard of care. This is how we inspire hope. This is how we heal. Cancer Treatment Centers of america. Appointments available now. Kailey welcome back to bloomberg best. I am kailey leinz. Last month, the peoples bank of china unveiled a major reform to its system of benchmark Interest Rates. It will release a low prime rate each month hopes to encourage investment and fostering growth. Ceo cg lai told bloomberg told bloomberg exclusively why he thinks the new policy makes sense. Cg you look at the lpi, it is almost like the equivalent of primary loan, and when they announced that and forced everyone to apply for this rate, when you look at the first day of the fixing, it was down at 4. 2 . At that time, the medium