China signals a broad u. S. Trade deal is off the table. Talks pick up thursday in washington. Hsbc cuts deeper. Another 10,000 jobs will go at the bank. European operations are said to be the hardest hit. Activists in hong kong call for more protests today as the city recovers from one of its most violent weekends yet. Good morning. Matt good morning. Less than a halfhour from the start of european trading, looking at the futures, sorry, the 10 year yield to start off the week. This is a threeday chart. You can see thursday and friday there. We came down a bit on thursday, but we have not moved down much further today. We dont really have a great clue as to the direction equities are going to take at the open in just about 30 minutes time. Take a look at the futures trade. Thats also mixed this morning. 0. 2 . Dax futures gaining cac and ftse futures down this morning. U. S. Futures are also falling, and more seriously across the board. Daye it could be a risk off after markets started to get into the action. What do you see on the gmm . Anna that mixed picture in europe echoing what has been going on in asia overnight. We are without china and hong kong in todays trading session, so without the volume and the guidance. This is a mixed picture for the asian session. These latest headlines on trade, not expressing any concern with china and hong kong closed. We will see how that goes down with europe. We have data out of europe. The factory orders story not building positive momentum for the start of the trading week. That came in below market estimates, more negative than the market had been anticipating. The Australian Market down 0. 25 . Economy, the speech given by one of the policymakers over the weekend. Lets look more broadly. Lets talk to our markets live reporter in singapore. Great to have you with us on the program. We got headlines around trade. As we move toward the end of the week, thats when we are going to get into the real trade talks, we until we get more guidance. That is what everybody is waiting for. We had this big rally in stocks on friday after the jobs report. The trade report that came out today is going to put the kabbalist on at all. Kibosh on it all. China is going to narrow the scope of the negotiations is diplomatic talk for the u. S. Is not going to get what it wants. Chinas stocks are closed today. Downward probably put pressure on china shares when they open. One narrative i have heard because of theat impeachment proceedings in the u. S. Against the president , china is taking that as an opportunity to become more aggressive. Im not sure i am convinced of that. That is some talk that is going around. We have had these trade tariffs for months now. China has been reluctant. Im not sure they are becoming more reluctant. Im not sure at this point we even expect a big trade deal. Saying thish up by could be one of these bad news is good news pieces that winds up helping shares. Anothereaking of that, sort of reason the chinese may be feeling more powerful is that the u. S. Economy is looking weaker. Seen the president s negotiating hand even further. As the jobs report showed that . Amidst it missed the official survey number, but you had the unup limit rate fall to 3. 5 . The Unemployment Rate fall to 3. 5 . You must have heard this expression going around lately. Bad news is good news. Anything that is bad for the economy will lead the fed to cut interest rates, which will help stocks and turn out to be good news. I think that is sort of what happened with the jobs report. It was pretty good, not great. Sort of lukewarm. It will lead the fed to cut interest rates. Maybe twice more by the end of the year. I think that falls into this bad news is good news pattern we have been seeing a lot of lately. Maybe goldilocks is back. Let me ask you about the question of the day. We have been asking, what does bitcoin need to become digital gold . We have been tracking how much gold has benefited. Bitcoin was supposed to follow the gold path. Is this a supply story . What is the story . Needs. Not sure what it bitcoin, i look at bitcoin and gold together because the one thing they have in common is they dont pay interest. As treasury yields fall, that should benefit bitcoin and gold. The theory is holding pretty well with gold. Treasuries and gold are following the pattern and actually have a pretty hike correlation right now. Bitcoin seems to be going its own way, tumbles over the weekend. Is not correlating with anything. Traders are becoming more , differentiating bitcoin from gold. Much fornks very joining us. When goodman is a bloomberg mliv reporter. Remember, you can join the debate on todays question of wes werewhich anna and just talking about. What does bitcoin need to become digital gold . Reach out to us. Type ib tv on your bloomberg terminal. Cull. Quinns hsbcs interim ceo plans to cut 10,000 jobs. What that means, next. The welcome back to european open. Futures looking mixed. Disappointing data out of germany. Dax futures suggest upside. The u. S. Equity market rallied into the close. Europe does not seem as if it wants to pick up on that. U. S. Futures down by 0. 3 this morning. Lets get the first word news update. Prospects for a brexit deal have faded after talks stalled with eu leaders, casting doubt an agreement can be reached before the deadline. Johnsonhnson boris struck a defiant tone, saying the u. K. Will leave with or without a deal. Johnson is prepared to launch legal action to prevent a delay. Theu. S. Will not stand in way of turkish operations in Northern Syria according to the white house. It comes after president erdogan signaled an imminent operation against kurdish militants. Suspects the u. S. Is backing kurdish aspirations for selfrule. Turkey is prepared to use military force to prevent that. There is no reason to ease policy unless the slowdown gets worse. That is according to esther george. She dissented against the last two rate cuts because the u. S. Economy is doing well. She is prepared to cut rates if she sees a sharp slowing of growth. George is widely considered one officials atawkish the federal reserve. In the u. S. , the second whistleblower may be ready to emerge in president trumps impeachment saga. The lawyer representing the First Law Firm representing the first says it is acting on behalf of multiple whistleblowers. The second has not yet spoken with the committee is investigating the president. The white house says this does not change the fact that trump did nothing wrong. Is north koreas assessment that Nuclear Talks broke down after pyongyangs top negotiators at the u. S. Arrived emptyhanded. Global news, 24 hours a day on air and tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. Matt i will pick it up. Cutting more jobs. As many as 10,000 could go as part of a costsaving plan on top of the 4700 redundancies already flagged. Europe could bear the brunt of this initiative. Joining us now is jonathan tice. This struck me as a big number. Have 238,000 employees. Where do you expect that number to be . Longterm, the number has to go below 200,000. The Retail Network is a lot of people. This is more about removing management. With the last cut, they said to percent workforce, 4 costs. Oneare probably looking at half billion annual savings. I guess that means a charge of a couple of billion they will take. How much of this is in response to the fact the environment has changed again and they are looking at revenue . Playing catchup . Math, nowhey do the they are trying to capture revenue downward. Shrinking the ivs definitely needed. How bad has the environment got . Anna what is it about the revenue environment and hsbc specifically that is working against them . It is about rates, i guess. It really is. Upt franchise, when rates go , six months ago we were expecting the u. S. Again. Now there in the u. K. , theyve had a lot of excess liquidity into the mortgage market. These things are destroying their margins. What about the ceo search . How much of it is noel quinns attempt to make his mark and claim the longterm permanent job for himself . It makes an awful lot of sense. It is the only game in town costcutting at the moment. What are they going to do with the u. S. . You are going to sell it because it is such a low business. Hes doing all the things he can do. He has the clear mandate. His hands are somewhat tied. Anna what does that mean for the European Business . Pain. Means quite a lot of we know with the disposal in tonce, that is probably 3000 4000. I dont know whether thats included in the additional 10,000. We will get more clarity, but at the moment, unfortunately, this number will continue to fall, headcount wise. They are playing catchup against falling revenues. Anna thanks very much. The latest news reporting around hsbc and what that means for analyzing the banking sector. Sticking with the hong kong theme, hsbc has a large presence, hong kong is leo is really from one of the most violent weekend since protests began in june. The order to ban facemasks did little to deter protests. Another protester was shot in clashes with police. Joining us from hong kong is sophie kamaruddin. Another round of protests. Bring us uptodate with what has been going on over the weekend . There are calls for protests across each district of hong ,ongs island and territories references being made to v for vendetta in online messages. Because today is a Public Holiday, that increases the chance for people to participate. Masks. The ban on the government may adopt other measures such as using a curfew, limiting internet access, with crisis not abating. Has rejectedt here two attempts to suspend it. A judicial challenge filed by 24 lawmakers will be heard by the end of october on the grounds mask ban masked man is unconstitutional. Among the criticisms leveled against the chief executive with this is how it reinforces the perception the government is just hiding behind the police. The weekend some more arrests, more teargas used by police. Bombsters deployed petrol and targeted businesses, shops, and banks deemed to be probeijing. Today, the first two charged under this new mask law appeared in court. Had hundreds today gathering in support of these two that were charged at the courthouse monday. Of politicalnd action is beijing taking and what of the responses been from hong kong . With the new law being put in place under the emergency ordinance, the question is whether or not this would invite eventual intervention from beijing. There has been commentary in support of carrie lams move. Other than the pla being more over theo point out weekend, there has not been much of a response from beijing. The Peoples Liberation army, the barracks here, well protesters were filing pass on their way to a gathering point using a laser targeting the pla barracks, you had the pla responding by raising a yellow sign saying they will be prosecuted if this activity continues. Other than that, we are not seeing much in the way of official response from beijing area from beijing. Much fornks very joining us. Sophie kamaruddin giving us the latest on the current situation. We are 10 minutes away from the open of stock trading here in europe. We will take a look at which issues you need to watch, including hsbc after a report it may cut up to 10,000 jobs. We will continue to get you more details on this story. This is bloomberg. Anna we are seven minutes until the start of the equity trading day. Watchget your stocks to around the newsroom. Annmarie hordern looking at that hsbc story. Dani burger focusing on alls ram. Osram. First, hsbc. It is the report everybody is talking about signaling 10,000 jobs could be on the chopping block. It comes on top of that 4700 they flagged in august. One person saying the bank is looking at their reasoning, saying why do we have 70 people in europe but we are making returns in doubledigit returns in asia . Matt whats the story on o sram . They did not meet the minimum percentage of they came 10 Percentage Points short. They are still looking at ways to look at alls ram osram. They issued a separate statement. Shares called lowered by 5. 2 . Thats what they are trading versus amf, which is up premarket. Anna look out for that. Joe, tell us whats going on. This one could be a father. Announced a have Trading Update where they warn the last few weeks, trading is deteriorating even further than they wanted two months ago. They have announced the sale of two units and the sale of their air handling business around 220 Million Euros to a Company Called france air, not to be confused with air france. They have announced the sale of their Construction Solutions business. Really the profit warning is the key thing this morning. There saying it could cut pretax profit estimate in half according to jeffries estimates. The stock is already down and it could fall even further this morning. The story on a few of the stocks we are watching. Thanks very much for joining us on that. Our viewers can get the latest stock stories as well by typing first go on the bloomberg terminal. You can also get the first word news on your mobile device. We are still seeing a mixed trade in terms of futures. We have losses on ftse futures and cac futures. Gains on the dax futures. We will see if it is riskon on or risk just four minutes time. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of Wireless Network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Anna welcome to Bloomberg Markets the european open. The picture from asia looks a little bit mixed. We are without china, without hong kong. That means we are without the normal volume. The big story out of china, moving the chinese currency, is to do with narrowing expectations around trade. Inuld we expect less washington . S p 500 futures weaker this morning, which rallied on jobs data at the end of the trading day. Waiting for the next clue as to where we had next. We got the jobs data. Waking waiting for trade talks to resume. The chinese managing expectations a little bit. We will see what meetings in washington deliver at the end of the week. Untiljohnson being given friday to find some kind of resolution. Ftse, dax, cac futures looking big. Disappointing data coming out of germany. That was on the factory orders front. Lets get these markets open and see what the start of the first trading day of the week has for us. The ftse 100 out the gate, down by a 10th of a percent. The british pound is down. Reports coming through from scotland at the end of last week. We could have put upward pressure on the pound. We see downward pressure as Boris Johnson doubles down on his commitment to leave at the end of october without a deal if necessary. Even though it seems the legal story points us in a different direction. Down 0. 2 . The spanish imacs a little bit weaker. The euro is entirely flat, not getting any growth from the single currency. We seem to be flat on the equity market and we have a bias to the downside on the sector story this morning. Financials predominantly in the red. Big news. Energy and basic material stock are very much in the red. Money going into health care. A typical risk off session. Money going into those more i am looking at a particular split right now i am looking at a particular split right now. I am looking at a particular split right now. Industry isutical doing quite well this morning. Investors weigh the possibility that the u. S. Will be able to cut drug costs. Take a look at the downside. Oil is down. Hsbc is only down 7 10 of a percent. Some employees will be leaving. Hsbc is looking to cut more jobs. Opening mixkets are this morning as chinese officials signaled their increasingly reluctant to agree on a broader u. S. Trade deal. What do you think about this limburg scoop that the chinese are no longer willing to give donald trump the broad trade deal that he is aiming for . Think it is probably beyond expectations. It is all about political optics on both sides. It is whether he wants to get a trade deal that he can take to the electorate ahead of the 2020 election. There is not really that much from the white house that signals that. When we think about what u. S. Politics and the potential for the white houses next move, we dont think there is anything that could be potentially damaging to markets or the u. S. Economy. Ahead of the november 2020 elections. It is all about political optics. Things do not get progressively worse. We are not looking for any meaningful trade deal. That allows markets to become more stable. I have a chart that shows Market Expectations around the fed. You,that make sense to given that prolonged answer to be around trade . I think if the fed is truly independent, then that theyll the couple of rate hikes and then next couple of months. It is a question of whether the fed is ready to get ahead of the curve. There is no sign that the economy is in a downward trajectory that will extend out to the rest of the Global Economy. Investors are talking about being openminded for october. Chime with two rate cuts . It does not. That is potentially where miscommunications could happen. When you have two rate cuts already priced in and liquidity shortages. That is more than just marginal rate cuts. That is not coming from the signals we have. A great function on my bloomberg terminal. You can see a lot of information. Financial conditions have dip back down below zero. This chart goes back to the middle of 2019. The big dipper is the Fourth Quarter of last year. We are now heading back toward that. Are you worried about a repeat in markets of last years Fourth Quarter . I think that is a warning sign for the federal reserve. The financial conditions should serve as a reminder that the economy is not pricing at the same level as the reserve. s friday was apparently National Manufacturing day in the u. S. Not much great to celebrate. What is your assessment on how thatly and extensively kind of crosscontamination from the manufacturing slowdown gets into service