Marketmoving news from all around the world. From beijing to london to istanbul and washington. Our bloomberg voices are on the ground with this mornings top stories. Worry going to start now in the middle east. Syria sending Government Troops to the north after u. S. Withdrew forces in the area. Mr. Erdogan is down playing the threat of an escalation. Whats happening in Northern Syria, whats the risk of a clash here . Reporter were hearing that Syrian Forces are teaming up with the kurdish rebels after the u. S. Allies abandoned them. And now theyre moving towards the Northern Syria where Turkish Military operation is taking place. However, turkish president has down played the risk of syrian and Turkish Forces clashing. Saying that the russians are mediating between the two nations. And weve just heard from the Turkish Defense minister. He says y. P. G. Kurdish militants have emptied a prison for isis suspects who then fleed. Now of course this is a very Troubling Development because when u. S. Troops were pulled from the region, u. S. President donald trump said that turkey was in charge and responsible for those isis prisoners. So well be following those developments very closely. Of course turkey is facing International Criticism for its syria operation. U. S. President donald trump has said that there could be further sanctions against turkey if it steps out of line. German chancellor Angela Merkel has called for an immediate end to the operation. And were also learning that european officials are weighing up the idea of an arms embargo against turkey. Some nations have already implemented this and there will be further discussion of this at an e. U. Leader summit later this week. Alix thank you very much. And we turn to london now as Queen Elizabeth just finishing addressing parliament to open its new session and outlined Prime Minister johnsons new legendive agent agenda. Legislative agenda. What have we learned, if anything . Reporter yeah, hi. So we learned a lot about what a conservative Party Government would do if it had a majority. Basically. You can view this queens speech a little bit differently from others in the past. This is in normal times an opportunity for the queen to set out in the words of the government what the government plans to do with the next year in parliament. But that assumes they have a majority. This government does not have a majority. The been denied the ability to call a general election because opposition parties have been fearing a nodeal brexit. So because of that, the government went ahead with the queens speech queens speech anyway and that means other people in this count, othe parties are seeing this as part of an election campaign. So this is we saw the queen setting out the brexit plan, and other domestic plans that the government would enact if it had a majority, which it doesnt have. Such is the confusing state of british politics right now. The action later on this week moves to brussels where we see, of course, e. U. Leaders gathering to see if they can get that lastditch attempt out of brexit deal by october 31. Alix thank you very much for joining us. Want to turn now to the latest in the trade dispute. China wants further talks to hammer out the details of the partial trade deal that was agreed upon last friday. Wheres the current state of play . Reporter clearly it seems china is trying to manage expectations a bit more than the messaging that came out of washington on friday. For example, in both Chinese State media and through the official commentary we have yet to hear them refer to the word deal. The Commerce Ministry spokesman in beijing today told reporters that china and the u. S. Are working to meet each other halfway. Now this latest news interest our colleagues in beijing suggest theres a bit more work to go before they get to signing off on a formal agreement. Some sticking points could includ whether or not the u. S. Jacks up those plaining tariffs in december under the remaining 150oddbillion of chinese goods. Clearly by all accounts, chinese sending a message out that theyre willing to do a deal but theyre not quite there yet and they have a few more weeks of negotiations to go before anything is signed off. Alix how bad is the economy that in china, if you come inside bloomberg, you can see imports and exports for august and how they rolled over every which way. The problem of the data that weve learned overnight. Reporter yeah. No doubt about it. The export trade data overnight was reminded that the economy is under pressure. Its not all about the trade war, of course. China has its own domestic issues going on. Theyve been trying to get a grip on the level of debt and financial risk in the economy. So thats why credit has slowed over the last few years and theyve been reluctant to push through stimulus. And of course it reflects the slowing Global Economy and slowing Global Demand as well. Throw it all together, when you look at the especially the weak imports on chinas trade data today suggests that chinas economy continues to slow and that in and of itself is something of a drag on the World Economy too. Alix great point. Thank you very much. Then we go to d. C. Where we focus on the latest on the p. M. I. Investigation. We learned over impeachment investigation. Where is the state of play now, what do we expect this week . Reporter former Vice President joe biden saying that he did not consult with hunter biden regarding his decision to step down from that chinabacked private equity firm. He says he wants to clear the field of any signs of potential conflict of interest while maintaining that there was no illegal wrongdoing on behalf of his son. On the flip side of that, President Trump over the weekend speaking to fox news, standing by his personal attorney, Rudy Giuliani. Just one day after here at the white house on friday he questioned whether or not giuliani was still in fact his attorney. The question surrounding Rudy Giuliani, particularly over his relationship with ukraine officials, and lawmakers set to resume back in session this week, have plenty of questions for Rudy Giuliani and have issued subpoenas. The president over the weekend saying that this was a part of a quoteunquote deep state effort to continue to pressure Rudy Giuliani. Now, the white house feels adamant that they will be cleared of all wrongdoing. They also feel adamant that there is not republican support for a conviction in the senate should it go there and articles of impeachment be brought in the democraticcontrolled house. Tomorrow, another debate for the democrats and its unlikely that this will not come up. No doubt they will b pressing the administration and really pressing for impeachment. Alix thank you so much. Coming up on this program, were going to have much more of your morning trade and analysis on the markets in todays first take. Happy monday, everybody. This is bloomberg. Bloomberg. Alix time now for bloomberg first take. Well give you the news and you get to trade in the analysis of the markets. Chief asia economics correspondent is here. Former trade and voice of the bloomberg audio squawk and global head of rate strategy. No doubt trade number one. You wake up, i mean, the question was, do you want to buy into the rally or fade it . That was my question. Obviously thats now been answered. Yes. Obviously the rallys been faded somewhat. But i think overall its a pretty optimistic take. Alix really . You are saying that . Yeah, i feel good about this. Alix how is that possible . Mr. Pessimism over here. What happened friday, the markets went down. Come on. [laughter] alix why are you optimistic . I think both sides need to get a deal done. Weveeached that stage where you can see from what came out of the trade talks what really was shocking for me was that the idea of intellectual property was brought up, the idea of the Technology Transfer was brought up. It still has to be put in writing. The fact that it was actually on the table shocked me. I thought we were going to get away with nothing but an agpork deal, something the markets wouldnt accept. Got the plus side of this, the markets rallied hard on friday. I think a little bit too much. As we see a little bit of pullback today. But were pulling back because its not in writing. It cant be yet. Theres still more of a conversation let let left. But in general, i think we got the first phase or at least the initial start of what we need to see down the road. Will we get this final grandiose deal . Probably not until after the elections. But instead to keep the markets at least calm Going Forward i think. Alix what do you think . I would say yes. The sort of worst Case Scenario was avoided. T when the details are written, do they actual tulely address Technology Transfer and finer . Im a little nervous that this might just be a currency deal, agriculture product, and then when i think about Business Uncertainty globally, does this put a floor on Global Growth . Im not that sure. Does it actually reduce uncertainty on the Business Investment front . Because i think the critical issue in the u. S. Is that Business Investment is weak because of uncertainty. And that might spill over into hiring which then effects the consumer. Im not sure theres enough in this deal. It it stake it did take the steel risk out but i think chinas going to want a rollback of tariffs. I dont know if the u. S. Is going to allow that. So the uncertainty on the consumer, on the business sector, im not convinced that thats actually behind us. I think one point i would make as well, to agree with you, theres a disconnect in the language. The u. S. Language was enthusiastic. Were on the road here to a phase one deal. But china hasnt used the word deal since it has responded. Neither through the state media, which is an important proximatey, or through the official commentary and even today in beijing, the spokesperson was talking about meeting each other halfway. So theres obviously something on the table here, both that may come to the middle ground and sign off in some kind of at least a lowlevel agreement, but we clearly have work to go yet. To agree with both of you, seriously, its not a deal. Were a trade truce. Thats what i meant by positive Going Forward. It could last, it could be very temporary. The tail risk is off the table. Thats what the markets want to see. Is it going to generate capx . Only to the extent that it needs to. What you have to do for 2020 to get things done. Is it going to generate a substantial amount of investment . Unlikely because you still dont know where to go yet. As to whether or not china would be the place for trade. You do what youre going to have to do. Its going to keep things growing probably very steadyy. Nothing dramatic. But just to keep the feet under the table and keep things moving forward. Just on the Global Economy, not all about trade war. Dont forget the slowing or the tired tech nothing cycle. Thats a big issue in east asia. All the geopolitical hot spots, whers bret or whats happening in the middle east. Then just general slowing demand. We have a slowing Global Economy. If we get some kind of fix on the trade war, that may not necessarily solve all of these other issues either. I was going to say that the markets saw this trade deal as well as potentially brexit and took out a lot of fed cuts that was priced. I was surprised because the fed hasnt made this entire easing or rather the propensity to ease any further, all contingent on trade. Theyve been talking about Global Growth. I think the fed is trying to say that Global Growth is weak not just because of trade. So the fact that we took out almost an entire cut for next year out of the market in the last week, that was a little surprising. I think the markets almost saying that because we have this trade truce ordeal or phase one, that the feds not going to ease. I think thats a little optimistic. Alix to me theres two narratives. One is that any good news is not priced in. To your point of, ok, were going to see snapback if it starts to get priced in, even look at the cable rate, right . And the other is that nothings going to then. So unless you get some kind of rollback and then you get capx and c. F. O. s feeling better, its doom and gloom which ones which wins there . Its hard to call a win right now. What can the fed do . You roll back a cut, you add in a cut, at the end of the day, Central Banks are normal rlt the conversation. Really the conversation. Its a pacifier to the market. If the fed cuts rate by 25 basis points we feel good about equities to a point. But that doesnt effect capx. To your point, that does nothing for investment decisions. 25 basis points helps no one. The fact of the matter is the trade war is the issue and its not been resolved. Its just a minor little truce. How get from here, if youre an investment manager or a business alix but then the cable rate. Over the last few days, volatility picking up and you see Goldman Sachs climb another 2. 5 move because nothing good was priced and it has nothing to do with the actual underlying economy. That to me is baba in a s. Political risk is hard to price. There are extraordinary binary outcomes. You can have a macro view. I have one of lower rates but you have to trade within the range. When we get too low, thats when you lytton up. Im waiting for that 180 level to go back in and go long. I dont know if you get that. I figure within the next few weeks well realize that maybe we got too optimistic. We heard it within two days, chinas not calling it a deal. So maybe this is a level to start linking in. You kind of have to trade these narrow ranges because Political Risk is essentially what were trading which is impossible to [indiscernible] it does go beyond tariffs. This is something that the market seems to be wary of. Even if we had a deal on the merchandise good side of things. Last week toss us u. S. China relations are head taught us u. S. China relations are heading into a rocky space. We went into the area of Human Rights Concerns and of course we had the culture wars in terms of the nba and hong kong. Even if we have this truce on tariff, the broader u. S. China relationship is in a rocky space right now. Alix thats why youre here. Youre going to go to the i. M. F. World Bank Meetings and we assume a downgrade of forecast again. To bring in your point about china data, the imports, thats not a trade story. The imports into china that are so weak, thats a domestic demand slowing story. Domestic demand slowing story. Alix look at the car sales. That was really bad. In fact, imports of audio parts, thats a big part of the story as well. No doubt about it that there are domestic issues in china. Theyre trying to get a grip on debt. Thats why they havent gone to the races when it comes to stimulus. Thats keeping the broader domestic economy somewhat in check. You can see import numbers today. Its not all about trade wars. There are other issues too. Chinas economic engine isnt firing on all cylinders right now. The debt story is brilliant because we have the same situation here. And which is the reason fiscal policy is stymied. Where what can you add with 23 trillion of debt . It needs to come from somewhere. Its not coming from germany. It cant come from the u. S. And china. And the Central Banks arent really helping. So i think at some point someone has to look at the picture and ask if prices are a little elevated. That means basically, back to prias point, you look at the asset clace, find out what the range is class, find out what the range is and trade it . Somewhat. You have to Pay Attention to positioning as well. When you get too much in one side. But for the i. M. F. What im watching is, is there some acknowledgement here that we need structural reform, we need fiscal policy we need something globally. Were probably not going to get that in the u. S. But does germany put in any sort of fiscal stimulus here . Because i think the e. C. B. And d. O. J. Are telling us theyre trying to reduce the counterproductive effects for the easing. You really need Something Else to push aggregate demand higher. Youre not going to get that help from the political side. Thats where the conversation is moving, from more fed and central bank easing to Something Else. Alix lets talk about that. I thought it was fascinating the politics that are playing out within the e. C. B. With the exofficials coming out and pushing draggy. Then you have the Financial Times coming out and defending him. That to me is a whole different world. Even if they had more ammunition, what could they do when it feels like a political debate happening within the central bank . Exactly. I think its all coming from the fact that people do realize a Monetary Policy is essentially pushing on the strings. So i think the hard part for a central banker, can they actually say that were done, this is it . Now youre on your own. Alix any more clearly than they already are. I cant wait until draghi gets out and he