Unity and stability. Viviana meanwhile, violent clashes in hong kong show the extent of dissent against beijing. There have been pitched battles all day long. Viviana Boris Johnson floats a brexit plan, but it is short of a done deal. There are some issues that are problematic. Vivana Australias Central Bank rolling out another rate cut. Already, traders are already starting to price in another cut for december. Viviana the u. S. Plans to slap more tariffs on the eu. The ultimate goal according to the u. S. Trade Representatives Office is to hit europe where it hurts. Viviana plus, an exclusive conversation with indonesias president. He is pledging reforms that will attract investors. You will see many sectors removed from the negative investment list to create new jobs. Viviana its all straight ahead on bloomberg best. Hello and welcome, im viviana hurtado. This is bloomberg best, your weekly review of the most important business news, analysis, and interviews from Bloomberg Television around the world. Lets start with a day by day look at the top headlines. The week began with markets on edge in the wake of a bloomberg report the Trump Administration might set limits on u. S. Investment in Chinese Companies and Financial Markets. On monday, the white house walked that story at least part way back. The u. S. Has no current plans to stop Chinese Companies listing on american exchanges. Now, thats according to a treasury official. Its in response to a bloomberg report that the administration is looking at ways to limit flows into china. It comes at a time when china is vowing to continue to open its market to foreign investments. So what have the chinese said so far in response to the news . It has been pretty restrained so far. About 30 or 40 minutes ago, we had a spokesman for the Chinese Foreign ministry give the most direct comments about the news so far. They emphasized that Financial Cooperation has been good for both countries. They said that forced decoupling would be bad for american and Chinese Companies and for the people of both countries. They also said that that sort of thing would cause a lot of instability in global markets. Vonnie is this posturing on the part of the chinese, or is the Trump Administration really looking to decouple Financial Markets . Well, as we reported on friday, these discussions inside the white house are in early stages. No decisions are really imminent, but you can already see the impact that these ideas are having in setting the tone for a round of trade talks that are coming up next week in washington. So the main focus now is to see if the chinese trade negotiator brings a deal to washington next week and if he does, what is in it. Chinese president xi jinping has kicked off a mammoth series of parades and celebrations to mark 70 years of communist rule. Xi said nothing can stop chinas advance and china must remain committed to the onecountry twosystems approach to maintain the longterm stability of hong kong. Theres no force that can shape the foundation of this great nation. No force can stop the Chinese People and chinese nation from forging ahead. The message really is one of unity and stability and certainly economic and military might. This is china putting, of putting across a miss putting across a message for the domestic audience of military strength and stability and unity. Of course, at a time when china is facing incredible pressure domestically, or the external environment where the u. S. Is challenging china on a number of fronts. But today, china and the communist party would like us all to focus on the military parade behind us and president xi jinping. Beijing is celebrating with unbelievable pictures and events and music. [protesters chanting] on the flipside, in hong kong, protests are intensifying. There have been pitched battles all day long. In fact, 31 protesters have been hospitalized so far. Two are in critical condition. One is in serious condition. We have confirmation from the police that a Police Officer actually did shoot one protester with a live round of ammunition. This tells you just how far this protest movement has gone and how far the police have gone as well to repel it. The city obviously completely on edge right now while beijing, a very different celebration for the anniversary of the peoples republic of china. It was an anemic 10year bond option for japan. Bonds had their worst monthly performance since 2016, a huge selloff in treasuries and european debt followed that. What was behind that failed auction . It all has to do with plans to steepen the yield curve, and those plans have been stiff enough to really alarm investors. The reaction was swift. Yields spiked, then we saw a reaction as well as spill over in europe and in treasuries, too. The ism factory index posting its weakest reading since the end of the last recession. U. S. Stocks sharply down. This is obviously the second month in contraction. It is a cause for concern. We were here in 2016. The euro zone manufacturing also showing the worst month since october 2012. The question is, does manufacturing pull down the consumer or does the consumer pull manufacturing back up if demand stays strong . That is what the fed is waiting to find out and it will take a while before we get a better clue. Caroline what a topsyturvy trading day it has been. We started in the green, had a selloff in bonds, and then the complete reverse happen. After we get ism manufacturing data, woeful out of the u. S. , adding to the mood music. I dont see a lot of good news. I have been optimistic about the Global Economy, and it is harder to remain an optimist these days. Yeah. Boris johnson unveils his brexit plan and warns the eu to compromise or watch the u. K. Walk away from talks. The u. K. Prime minister spoke to the conservative party in manchester earlier with his outline of a new brexit plan. He gave a warning of what could happen if it does not go through. Prime minister johnson the alternative is no deal, and that is not an outcome we want. It is not an outcome we seek at all, but let me tell you, my friends, it is an outcome for which we are ready. What we saw today, the brinkmanship where he said im giving europe nine days to come up with a deal, or we are going to go out at the end of october without a deal, and that is one week before european leaders are set to meet in brussels to go through this proposed deal. We also saw a bit of conciliatory language from Boris Johnson, who says hes not against europe. I love europe, he says, but the bottom line is his new proposal is unlikely to be anything european leaders, including the irish, could possibly agree to. Brutal text selling day it has selling been. The roughest open to a quarter since 2009 as we question growth around the world, the worries about the jobs data in the u. S. , worried about manufacturing worldwide. Joe pretty ugly start to the quarter, to the month, to the jewish new year. Very rough all around. A very explicable selloff. Theres not a whole lot of mystery this time about what the anxiety is. It is very datadriven, very much about those recession fears. Just when it started to look like we were maybe coming out of that or putting this behind us or maybe other things were going on, that ism number yesterday i think still reverberating, still causing a lot of anxiety. Theres nothing real good out there for people to hang their hat on. Vonnie markets are waiting for the latest services data. That would be september services from ism, and it is a miss it is coming in at 52. 6. The market was looking for 55. The markets are getting clobbered, vonnie. That is a huge miss we are getting. Weaker than economists were anticipating, very much consistent with what we saw in the manufacturing ism earlier this week. All of this contributing to this negative tone in the market and concerns about potential recession in the u. S. The Economic Data up until this week looked more like an economy growing above 2 . Now that slower pace of activity is starting to settle into the leading economic indicators. Scarlet at one point, it looked like we were headed for a Third Straight day in losses. Third decline over the fourth quarter, and then things turned around here. We have recovered because we believe the fed is going to come in and save everyone. Certainly it puts a lot more emphasis on the jobs report tomorrow. Eu leaders express doubt over Boris Johnsons brexit deal. Johnsons plan would keep Northern Ireland in the eu Single Market for goods, but see it leave the Customs Union. The Prime Minister told the house of commons that it is up to the eu to compromise and agree to his deal. The europeans now have 24 hours to really digest this new plan. They really see there are issues that are problematic. The fact that you stay in a stable market but pull out of the Customs Union it is unclear who would deal with the vat collection. At the same time, it almost implied there would be checks. This is something the irish said would never happen, that the allirish economy was their priority. At this point, we understand essentially europeans will tell Boris Johnson we need Something Better in a week, or actually there is a big risk we may not make it in time for the october 17 summit. They want to come into that summit with something that is clear will be approved. It is friday, jobs day. 136,000 jobs were created in september, just shy of estimates. August numbers were revised higher by 38,000. Septembers average Hourly Earnings growth missed, still up 2. 9 . The Unemployment Rate unexpectedly improved, dropping to 3. 5 . This is a muddled middle sort of report. Not weak enough to concern that confirm that weakness is spreading on Global Manufacturing throughout the economy, but not Strong Enough to suggest that we are immune. For americans across the country, the headline number here is the 3. 5 Unemployment Rate. It is a 50year low. I think the economy is now in a turning zone, and i think we have had a soft two quarters, but i think now we will be moving into a much Stronger Economic story. I think we are turning, but i dont think we are turning into the fast lane. In fact, i think we may be looking for a tougher slog over the next couple of quarters. So while we have been very conditioned to 2 plus gdp growth, what we will see in q3 and q4 is really a lot of engines of Economic Growth shutting down. We saw hints of that in the ism surveys. You see it showing up in the payroll slowdown. I think you will see it in a lot of other Economic Data over the next couple of months. Viviana still ahead as we review the week on bloomberg best, the chicago fed president , charles evans, responds to some of the recent downbeat u. S. Economic data. I dont know if one more rate cut at this point is the right decision or not. I think we will have to go into the meeting and see. Viviana plus, an exclusive conversation with indonesias president. Up next, more of the weeks top business headlines. Consumers in japan rush to stock up on stable before a sales tax hike went into effect. One of the hottest selling items toilet paper. Viviana this is bloomberg. Viviana this is bloomberg best. Im viviana hurtado. Lets continue our global tour of the weeks top business stories. The wto ruled on a dispute between the u. S. And europe. That decision immediately escalated tensions over tariffs. The wto has given President Trump the green light to impose tariffs on a recordsetting 7. 5 billion worth of european exports. That is in retaliation for illegal government aid to airbus. The wto today handed President Donald Trump a pretty big weapon in trying to rein in some of europes trade abuses. Governments in the eu have unfairly subsidized airbus to the tune of 7. 5 billion, and now the u. S. Can retaliate against european goods to that amount. Paul the u. S. Is ready to slap tariffs on billions of dollars of european products following a landmark ruling from the World Trade Organization on aircraft subsidies. Not surprisingly, aircraft are on the list of retaliatory targets that the u. S. Is going to hit. Its going to hit a 10 tariff on large aircraft coming from a few european countries, including the u. K. And france. Also, though, are other items completely unrelated to aircraft. 25 tariffs on things like olives and cheese. And what the ultimate goal is, according to the u. S. Trade Representatives Office, is to hit europe where it hurts in order to get them to the table for a negotiated settlement. The impeachment inquiry deepens. Rudy giuliani, secretary of state mike pompeo, and attorney general william barr are drawn deeper into the house inquiry after new details about the administrations foreign contacts emerged monday. Kevin the house issuing a subpoena to rudy giuliani, the former new york city mayor, as well as the president s personal attorney. They want to know specifically what his role was in orchestrating some type of overseas communications with ukraine following that phone call now in question between President Trump and the ukraine president. Yesterday, there were also reports secretary of state mike pompeo was on that phone call. Meanwhile, another phone call now in question. The New York Times first reporting last evening that President Trump reached out to australian Prime MinisterScott Morrison to see whether or not he would be willing to look into the origins of the Mueller Report and work with attorney general william barr. It is just the latest in a series of questions for this administration about President Trumps communications with global leaders. Shery now, the japanese government finally raising the National Consumption tax to 10 after twice postponing the move over concerns about its impact on the economy. Tax hikes are rarely popular anywhere in the world, so how are japanese consumers reacting to it so far . Yeah, over the weekend, stores put up signs, enticing customers coming in to dine in or buy some of those bigticket items ahead of the tax hike. One of the hottest selling items toilet paper. Thats right, customers were going to shops and buying up, stocking up on toilet paper ahead of the tax hike, and local shops were saying they are completely sold out. It is a sign consumers are thinking about the tax hike in some way or another. That said, economists expect the burden on consumers to be less compared to 2014, when the tax hike rose from 5 to 8 . Chinas september manufacturing purchasing Managers Index rose to 49. 8, fractionally better than forecast. What does it all suggest . Economists do not see the slightly better than expected numbers as a sign of recovery or stabilization. The focus here is really on the official pmi readings that show chinas Manufacturing Sector in contractionary territory for the fifth consecutive month. The pboc has been stepping up some monetary support, but any additional stimulus expected to be very moderate, considering the fact that the pboc is trying to prioritize stabilization and avoid any runup in financial risks. Amanda the economic pain in hong kong is intensifying, with retail sales posting a record plunge past the longrunning and as the longrunning and escalating protests cripple tourism and spending. It does not seem like there is any let up in sight went it when it comes to where demonstrators want to go next and also where the economy is headed, too. Tourist numbers, we knew they were down throughout the summer. Now we have hard evidence that in august, it was the worst on record. Visits from many from Mainland China falling by 42 in august and we know during this golden week holiday period, most of the shopping is from the mainland chinese, so the value of retail sales down 23 . That was the most on record yearoveryear in august. So the economy obviously feeling the impact of these ongoing unrests. The global easing cycle continues. Australian stocks surged, the most in a month after the countrys Central Bank CutInterest Rates. The rba also said it is prepared to further ease Monetary Policy if needed. What weve seen from the ecb and the fed of late have been the slightly more hawkish rate cuts, certainly dubbed that by some, and yet from the rba, we have seen an allout dovish rate cut, havent we . Certainly, that is the way the market seems to have interpreted things. Yeah, quite remarkable. They managed to achieve something the other major Central Banks havent. Not only did they cut basis points by 25 basis points, already, traders are starting to price and another cut for price in another cut for december which will take the rate down to just 0. 5 , so they managed to achieve something which the