If we get a currency pact, maybe we see a weaker dollar. Time now for global exchange. We bring you todays market moving news from all around the world. From hong kong to london to washington, this mornings top stories. We start off with china. After decades of waiting, china is setting out a timetable to remove its Foreign Ownership cap on financial firms. On the phone from hong kong is bloombergs enda curran. What does this actually mean . To wind is a roadmap they can fully take over their operation in china. Theyve been pushing for this for years. It will begin next year. Its just the latest step on chinas part to attract more foreign capital into its Financial Markets, to buy more stocks and bonds, and that is a good thing for their companies. The timing is hardly coming to dental, coming in the background is hardly coincidental, coming in the background of trade talks. It remains to be seen whether and how quickly these approvals are granted to foreign firms. Alix now i want to turn to the tensions in the middle east. Iranianiles struck an oil tanker off the red sea coast. They initially accused saudi arabia of the attack, but later withdrew that claim. Walk us through the facts and what we know. Reporter what we know is very early in the morning, around dawn, this oil tanker which belongs to the National IranianTanker Company, was struck by two missiles. It has a capacity of lifting around one Million Barrels of oil, and it is now slowly moving its way back towards the persian gulf. As you mentioned, iran initially suggested that it suspected saudi could be behind those missile attacks, but has since backtracked on those comments, and has denied it even made those claims in the first place. Alix nevertheless, brent above 60 a barrel. Now i want to turn to europe, where there are signs of optimism for a brexit deal following a positive meeting between Prime MinisterBoris Johnson and irish Prime Minister leo varadkar. I am now convinced ireland and britain one third to be in and britain once there to be in agreement, and i do see a pathway to an agreement in the coming weeks. Alix joining us from brussels is maria tadeo. What was in that deal that no one knows about that made the irish Prime Ministers so positive . You canhe market, as see, is buying into that very positive music that came out of that meeting between the prime because and the irish thats the first time the two eared to be only appeared to be on the same page. Eusaw Michel Barnier, the chief negotiator, leave the European Commission jaime, looking very serious. He did not take any questions, and it was no comment from him. The mood here is much more cautious. It will all depend on those technical details. They will have a two hour meeting between the eu and u. K. Delegations. They are looking at deadlines for the technical moves to be made before the political decision gets done next week at the european summit, but again, it is clear we dont have any details, and the mood here is very cautious. Alix thank you so much. , whereturn to the u. S. The unprecedented blackout in california has coming to an end, but the public anger continuing. Newsomnia governor gavin called the blackouts appropriate, but had a dramatic he harsher tone at a press conference last night. This is not from my perspective a Climate Change story is much as a story about greed and mismanagement over the course of decades. Alix on the phone with us now is Bloomberg Intelligences senior utility analysts. What happens now . Can you hear me . Kit onks like we lost the phone. We will get back to him in a moment. We move now to the trade talks in the u. S. Day one of u. S. China trade talks apparently went very well according to President Trump. The president is set to meet with key chinese officials today, including vice premier liu he at the white house. With us is jenny leonard, bloomberg trade reporter. What can actually get done . Jenny we are a couple hours away from a highlevel meeting between President Trump and the chinese vice premier in the oval office, which is usually a good sign, especially after the president said yesterday that the first day went really well. What is on the table and can be packaged is the big question for today. Weve reported there might be a currency deal that might see some chinese large egg cultural purchases coming. Huawei can grab some licenses. I think that is what they are trying to figure out today. Of course, the president has to sign off on anything that will be negotiated today and presented to him, and his advisors now, so there is cautious optimism going into today. We are a couple hours away from really knowing what is going on. Alix thank you very much. We want to update you on some earnings. A nice pop in premarket, sales coming up on most a percent year on year, beating estimates earnings. Theres a little confusion as to what is comparable. We care about fastenal because it cans to be because it tends to be a bellwether of the industrial space. They did invest more intact. They are hiring more people, investing more in the people, so that readthrough on the part of the economy also doing well. Sales up by over 6 . Coming up on the program, much more in your morning trade and analysis in todays first take. This is bloomberg. Happy friday. Alix if you are a trader, you get these headlines about an Iranian Oil Tanker and missiles. Do you trade it . Vincent no. Alix exactly. [laughter] vincent its a kneejerk reaction. Theres conflict in the middle east, potential reductions in supply. The algos take oil a couple of percent higher, and everyone waits to see what the next news is. Iran blames the saudis, and says maybe it wasnt. We have absolutely no idea where this is coming from, so step back for now. Reporter look at what happened to one year brent crude the last time the saudi Oil Disruption happened. Iea you also have the lowering its demand forecast yet again. That was also part of it too. Katie i think we have to take a step back and look at the macro environment, which is just really slow growth, slow demand growth in oil. Ultimately that is going to set the price. Think the Political Risk is always going to be bubbling up and down, but ultimately it is going to come down to fundamentals. Vincent i think it is the perfect take. These could be opportunities to sort oil if the global to global economye is slowing. Alix i feel like a tanker had a missile fired on it of saudi arabia. [laughter] alix if that headline happened eight years ago i mean, a tanker was hit with a missile from saudi arabia. Vincent we dont know it was saudi arabia. Alix near saudi arabia, right off the coast. Vincent but we dont know yet. Alix but i think we learn something about this and potentially brexit. I feel like we learned yesterday from the cable rate that the good news is not priced into the market. If you get something good, what is the upside risk you guys see . Damian thats a really good point. The markets are definitely reacting to good news. Best treasury yields basically surged on good news with u. S. China trade. Bad news, they barely budge. We are in a bit of a consolidation phase with a lot of these assets at current levels. Katie this is going to have to be a show me market. I think we have volatility around the news, but growth and earnings are going to have to show up because i think investors are just fatigue at all of the noise in the news, and they just want something tangible to hold onto, and that is going to be fun the mentals. Vincent im exhausted. [laughter] vincent when you say whats priced into sterling, i think you could see, if you get a you need to have parliament involved. Do get a brexit deal, i think you could see upside on sterling. A lot of people have pulled out of the u. K. This is the downtrodden economy. This is the place where its been beaten up. Its got upside. Thats where you want to hide. Damian my question is are you funding euro or dollar . The dollar is basically going from strength to strength, and now with the ecb minutes and people doubting whether they can reach any extensive ash any consensus whether they can reach any consensus alix it feels like mario draghi was alone in extending qe. Ian yields went from 70 from 70, sorry, 250. Thats a pretty big move. A lot of the spreads are going the other way now. Its kind of interesting. Markets saying loudly that rates are going to stay lower for a really long time. The market is dominating, i think, the central bankers right now. Alix so then why did we see this move in the cable rate . Im going to bring it back is a microcosm. People are calling for parody, which weve talked about many times. Its going to be 1. 60 again. , end ofit is a buy conversation. [laughter] alix but all of the difficulties havent changed. If Boris Johnson hasnt come up johnsonrder deal has come up with the border deal for ireland, that could get through. That way imply hes brilliant, this is amazing, and an insult to the europeans, and cable is higher. Vincent remember, they are watching this in the u. K. , and what they are saying what you are saying about orest johnson, they are all shaking their heads. [laughter] alix the risk to the upside and where that may actually be. Damian just look at u. S. Treasuries sorry, global treasuries. I think this is the secondworst week for global treasuries in the last 52. Its a really good point, and the worst week was midseptember. So we are getting to the point where yields are reaching a bit of a consolidation phase, and markets are reacting more positively to good news than the bad news right now. Katie we were all talking about a recession two weeks ago. The ism data comes out, we see some fraying around the edges of even the good u. S. Data, so thats coming off the boil and you are starting to see that more priced into bonds. Alix but we had the thirtyyear auction yesterday, record low yields. At the same time, you had a selloff on the front end. That to me says that fear is not gone. Vincent there was a lot of concession going into that auction. I talked to fixed income guys. Why are treasuries selling off so aggressively after a down printed cpi . Novy wants to touch this into the auction. They need to make room for it so we can take the auction on. I think that was pure trading technicals. Damian look at the greek auction on wednesday. I mean, 0. 02 . Youre paying for the opportunity to own greek debt. Can you believe it . Vincent if that doesnt tell you whats wrong with the world, i dont know what does. Katie thats the point. This negative Interest Rate environment is going to be with us for a while, and we could get even deeper into negative territory. That was the signal i took. Im going to buy these because i think they are going to go even more negative. Alix with italy, too. Same kind of thing. So wrapped trade into this whole conversation. Is trade just immaterial trade just immaterial to everything that is going to happen . Vincent i thing what is actually going to happen today if you are not going to get a trade deal. Youre going to get the end of a trade war, at least temporarily. One name we havent heard all week, peter navarro. The fact that he is under wraps and they have him in a box someplace tells me they dont want to hear what he has to say because its always negative, and its always the seven deadly sins of china. To make him of that means they are really trying to at least get a concession. Itsurrency pact, garbage. We are going to give a lot to gives very little to get very little, but trump needs a win. The impeachment story is getting very hot. Giuliani is in very hot water. You are not going to get usmca. The democrats will not give him a win on that trade deal while they are holding his feet to the fire. Katie they are pretty busy. Vincent the one thing he can do is china. He can make that happen without them, and hes going to do that. Katie i think you are absolutely right. We will see some sort of truce or detente, so this part of the war might be over. We are looking for a small deal. Ag, buying more soybeans, buying more pork. We will see perhaps some give up on our side. We will delay or avoid the increased tariffs, but we are far from an actual deal. But to your point about how the market will react, expectations are really low, and theres a lot of trade fatigue in the market where people have said this is not going to happen. Beanything, it will probably viewed positively and we take just that bit of uncertainty off the table, which might be enough to push the market forward. Again, that is a shortterm view because longerterm, that has to manifest in higher confidence and better activity, and in better earnings. We will see if that happens. Damian i agree. If you look at the price action after the set announced after the fed announced it is going to expand its balance sheet, it tried to rally, but couldnt. Any time trump has been directly involved in negotiations with the chinese, something has gotten done. Alix thats a really good point. I mentioned a handshake or a hug. I was being glib, but i meant it. Vincent yesterday the president tweeted, im going to meet with liu he. The optimism just shot through the roof. I agree with both of you. Thats where the markets have a lot of fatigue. Alix to that point, youve got energy, financials, industrials, they led. Is that the trade today . See whost twitter to hugging who, and then you get a trade into cyclicals . You left me. Vincent thats not my you laugh at me. Vincent thats not my wheelhouse. [laughter] alix what do you need to see to make a more definitive rotation . Katie i think those have also been the most beleaguered in terms of the pressure from the trade war, so i think thats the shortterm play, but again, to have a sustainable rally here, i think you really have to see some fundamental improvement. Damian i agree. We are sort of seeing people nibbling at value dislocation in lower quality debt. Im a fixed income guy, but youre are right. We are not going to see real change in leadership from growth to value or defensive to cyclicals until manufacturing bottoms, and i think we are a long way away from that. Katie weve tried. We had a few fits and starts of seeing the transition from growth to value. We had a pretty good rally for a while and gave back about half of that. I think the market is still waiting to see which side to place their bets on relative to how this is all going to shape up. Alix show me story. Thanks a lot. Cignarella and damian sassower, thank you. Katie nexen of Northern Trust will be sticking with me. You can find any charts we are going to use on gtv under terminal. Check it out on your terminal. Check it out. California is governors has blackouts stem from greed and neglect. Pg e says we are sorry for the hardship. More on that next. This is bloomberg. Viviana youre watching bloomberg daybreak. The talks surrounding wework have gone from ipo to bailout. Thats according to the financial times. Wework is set to run out of cash soon. Bill mcdermott is stepping down as ceo of s. A. P. He will be replaced by coceos. For about a decade, mcdermott led europes largest software company. He embraced Cloud Computing and transitioned s. A. P. Through acquisitions and revamped products. Aregn renault and nissan working in sync to put the carlos ghosn era behind them. The french automaker naming their cfo as interim ceo after ghosns number two. That is your Bloomberg Business flash. Alix thanks so much. The unprecedented blackout in california is coming to an end, but public anchor continues. Governor gavin newsom blamed the company for not hardening its grid. On the phone with more is kit konolige, Bloomberg Intelligence senior utilities analyst. How does this play out over the next few weeks . Kit i think the Company Hopes for no more high winds and dry conditions. They are really between a rock and a hard place. , if they have fires that occur because they didnt cut off alix speaking about power, looks like we did lose connection there. Kit konolige of Bloomberg Intelligence. Stay with bloomberg daybreak. We are going to speak to the citigroup analyst who says theres a 75 chance that pg es stock goes to zero. You have the bankruptcy, which pg e does not have exclusive rights over. Then you also have Utility Companies having a deal with Climate Change and investing in their grid. At the same time, they have massive liabilities, 35 billion for this utility company. Coming up on this program, day two of trade talks set to begin in washington, including a sit down between President Trump and chinese like me are chinese vice premier liu he. Well talk about that with Henrietta Treyz, Veda Partners managing director. 0. 8 . W up by about this is bloomberg. Alix this is bloomberg daybreak. Im alix steel. Its the hope and optimism trade over the markets. S p futures up a full 1 . The dax really outperforming. Thats going to be trade between the u. S. And china. The other part is we may actually get a brexit deal. Whether or not you believe it, we are trading it. You can government bonds extending that drop. The 10 year yield rises 10 basis points. You have cable over 125. We are at a three month high. That continues the rally we saw from yesterday. You had the irish Prime Minister saying he is positive on a deal, that may be johnson has worked out an irish border problem. Curve a little steeper in the u. S. Brent up by 1 on geoPolitical Risk. Going with the trade war issue, two days of talks. President trump says so far, so good. Pres. Trump i think its going really well, i will say. I think its going really well. We had a very good negotiation with china. Theyll be speaking a little bit later, but they are basically wrapping it up, and we are going to see them tomorrow right here, and its going very well. Alix joining me from new orleans is Henrietta Treyz, ve