A lot of the focus is on the tension in hong kong and what that means for european stocks. You can see a shift to the downside. Pound is your time to figure out whether we will see a deal or not. The dup is pushing back on what was optimism in the markets. The u. S. 10 year yield is at 1. 72. To a chiefwe speak executive. They have a new way of looking at risk, dont miss that interview at 11 30. Lets get straight to first word news in new york city. Ohio, joe biden defended his son against Donald Trumps attacks and Elizabeth Warren faced criticism of her how she would pay for her vast government programs. But the Democratic Candidates reunited on one thing, the need for an impeachment inquiry into President Trump. President mounting on and kara ankara. They face sanctions and accusation of war crimes. Moscow says the operations are quote unacceptable. A former pentagon chief says that recent actions could lead to a return of the Islamic State in syria. Surprise injection caught traders offguard. The loans, head of data this friday and are expected to show a further slowdown in the domestic economy. The pboc out of the equivalent of 28 billion. Its a surprise because it usually happens when the loans are due. Germany is warming to the idea of fiscal stimulus. Lawmakers have long been the most vocal opponents, but they could be ready to move away from its commitment towards a balanced budget. We have learned that if the economy needs it, the parties ready for a gold stimulus package. In south africa, escon is carrying out rolling blackouts due to a shortage of capacity. They are battling 30 billion of debt and outdated power plants. They are reliant on state bailouts to remain solvent. By the end of the month, they have announced plans to restructure eskom. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine . Francine thank you so much. We will get to hong kong in a second. Carrie lam is out with a new headline saying she regrets that the hong kong bill will be passed by the u. S. House. We are looking at live pictures of carrie lam. Earlier, she gave a couple of responses and says this is what we are looking at, whether the government should bear responsibility. Andty more from hong kong, with the last hour, u. K. Officials have said the chances of a brexit deal are low. Resume while to Boris Johnson appears to be closer to a deal abroad. He still has to placate conservative hardliners and the dup. After foster issued a terse statement saying further work is required. Lets get more from our reporter in brussels. Volatile negotiations. The mood had soured and looks like the problem is on the u. K. Side. If you look at the negotiations, the tone has become much more downbeat. We expect a breakthrough that would move things forward. That has not happened yet. We are seeing more talks between the u. K. Delegation and the europeans. Both sides are saying they want to get the deal and its a town that is constructive. The issue is the fact the penny has dropped. Its difficult for europeans to get clarity on whether Boris Johnson would be able to get that hypothetical deal through parliament. The parliament is not in a position to give a clear answer dupand we are seeing the pushback against any deal that would treat Northern Ireland differently. More eu leaders have made it clear they are not going to negotiate on the night. They want clarity today. The u. K. Government, that position has not changed. Boris johnson will come here to get a deal. If he does not get one, he says they wont be asking for an extension. Date after that will be when parliament decides when they want to go forward. Francine thank you. Lets bring in our next guest for the hour, the head of multiasset Royal London Asset management. I guess the concern is that there was mood music playing to optimism in some kind of deal. The deal is probably better than what theresa may got. It is satisfactory for everyone but the dup and hardline brexiteers. Im not sure in what sense the deal is better. The terms of the full package, talking about a freetrade agreement. The governments own Impact Assessment earlier in the year suggested an 8 drop in gdp 15 years out. I think it was 6. 7 . It is still a pretty poor outcome. Francine i need to quantify what im saying. Better in the eyes of Boris Johnson. I dont think he has gotten anything out of the eu. Were going back to a version of the deal the eu first offered theresa may, the Northern Ireland only backstop. Theresa may at the time said no Prime Minister to could minister could agree to this. Is Northern Ireland really in the eus custom union . But with an adjustment as if it was in the u. K. Or vice versa. But they dont seem to be playing for either. If this is a deal westminster wont sign up on, are we going towards no deal or is that taken off the table . Richard it is really uncertain. It is really uncertain. There will be a lot of choreography about lastminute negotiations. The Financial Times reported the dup was negotiating how much money Northern Ireland should get. Got one billion pounds for supporting theresa mays government. So its possible the dup comes in the line. Even then, tight numbers. You will probably end up with either a deal which then goes into a wider vote on saturday. Or most likely, some kind of extension. Is swearingson blind he wont send that letter but he is legally obliged to. Francine what happens to the pound . Trevor i have not looked at it this morning but the pound is strengthened a lot. Thinking thereom is no deal to the been act to the verge of a deal. We are bank in the middle of the trading range against the euro. The upside is now a bit more limited. You could get quite a big correction if a deal is off. But the markets are now thinking a deal would be positive for the pound in the shortterm. It may well be that a deal passes with a second referendum added to it. In which case it could be positive in the longterm. Lots of two way polls. Francine this is my chart of the da loongt implied volatility. What happens if we do get this deal through . What happens to cable by year end . Trevor nothing has been said about volatility. Its not a good sign. Its normally a sign the currency is collapsing. Thes risesual is has been call option volatility rising. People putting on bets the pound will go up rather than down. But still, its a very fragile very volatile market. If there were a deal, the pound has further progress to make. But quite quickly, you get into the question of a transition. Its too short. Then you got this fta after december. I think the market will then start to focus on the difficulties. There will be further progress in the shortterm because the uncertainty over exit would have ended. But i think there is a very short window before the uncertainty over future relationships kicks off. Francine Trevor Grissom stays withended. Us greetham stays with us. China threatens countermeasures if the u. S. And asked legislation supporting protesters. We bring you the latest on that. And the two front runners for the democratic nomination finally confront each other. We bring you highlights from the debate. This is bloomberg. Francine economics, finance, politics, this is bloomberg surveillance. Lets get straight to the business flash in new york city. Regulations stopped jpmorgan from calling the repo market according to jamie dimon. The lender says they had the cash and willingness to steady shortterm funding markets when it they went haywire in midseptember. He says they did not redeploy money into repose do to liquidity acquirements. Warren buffett is asking the fed for permission to raise his stake in bank of america to more than 10 , the level that triggers a regulatory review. Berkshire hathaway disclosed it is filing with the federal reserve. They say they will remain a passive investor. Is for the third time, roche boosting its outlook as sales look better than expected. The Growth Drivers are new drugs which performed well in the last quarter and the erosion in sales has not been as bad as some feared. That is your Bloomberg Business flash. Francine thank you. Lets get the latest from hong kong. Threatened unspecified countermeasures if the u. S. Congress and next legislation supporting protesters. And in her annual policy address, carrie lam admitted the city has entered a technical recession. These industries have recorded the worst Business Performance ever. The hong kong economy has already slipped into a technical recession. In midaugust, the government lowered the Economic Growth forecasts for 2019. Francine joining us from hong kong is bloombergs yvonne man. Can the measures help break the political deadlock . Its hard to say. She delivered this 29 page policy address but not without drama. It was quite a raucous scene in the chambers today where prodemocracy lawmakers disrupted her doing during the speech. She was forced to take it the other video a couple hours later. What was entailed was mostly about trying to bridge that economic divide, particularly when it comes to the Housing Market. They want to free up land and make it easier for First Time Buyers to secure a mortgage. What she did not mention was the politics or electoral reform. Its hard to see whether this actually eases the tensions between the city and protesters which we have seen escalating their tactics. China says it will retaliate if the u. S. Continues to push the bill through congress. Do they mean business and what is the likelihood it gets asked passed . We have heard this rhetoric before. If this bill does get past, it would allow annual reviews of hong kong, whether maintaining its economy from beijing to justify it special trading status with the u. S. We spoke with a congressman, a republican, who was backing this bill, saying there is bipartisan support because of this very issue. We need to come in a predictable way, say to beijing we are not kidding. Whenis our Foreign Policy it comes to this special treatment hong kong receives. It is very special on a variety of areas. The senate is yet to vote on this bill. But as mentioned, is likely to pass. A lot of questions as to how china can respond, but we have been here before. They blasted Tech Companies and we did not see any followthrough just yet. Its hard to see if they are willing to sacrifice a trade deal for this issue. Francine thank you very much. We will get plenty more throughout the day. Lets get back to Trevor Greetham from Royal London Asset management. I dont know whether this is a hong kong and not hong kong economy angle or whether this transforms into the trade war. We track to a range of global trade indicators as exports from china to hong kong. Normally, thats a sign of what is happening in the engine of global trade your at the moment, they are plunging. That is reflecting the fact that hong kong is paralyzed in terms whats economy i dont know people talk about with technical recessions, it is a recession. Politicization in the u. S. Is going to add further flame to the relationship. In the big picture, im not sure it will make much difference. What is more interesting is if President Trump continues to talk about a phase one deal, something china does not even seem to recognize. Trump is trying to say he has done something by setting an intermediate stage, i think youll want to keep putting on that. Francine does he actually veto the hong kong bill . Trevor i would not rule it out. Francine how difficult is it to predict markets. It feels everything is interlinked more than in the past. It just seems one thing could ga house of cards. Trevor a lot of the issues are trade related. You mentioned they feed into this trade war. Brexit is also about trade. No deal brexit would affect euu. K. Trade but also country trade. It is holding the World Economy back. But the fundamentals underneath are getting better. He stepped away from the noise, you have got Central Banks with inflation low, experts getting stronger, i think if we can get through some of this noise, next year will be quite a lot better for financial markets. Francine what are Central Banks a hindrance or a help . Trevor a help, but they need to do more. We are positive on the equity market outlook. If things get worse in the , and you could name a list of things, stress in the middle east as long as there is world with more liquidity. Ices, they are already cutting rates, the worse things get them the more they will cut. Getting to the point wherews i. Francine will get back to Trevor Greetham from Royal London Asset management. Coming up, u. S. Bank earnings. All the major lenders reported we discuss that next. This is bloomberg. Francine this is bloomberg surveillance. All the big banks that reported a thirdquarter results closed higher. Jpmorgan rose to a record after reporting a jump in fixed income revenue. Goldman did not fare as well, taking a hit on investments such jpmorgan rose to aas uber. Earnings season gets into full swing with bank of america reporting later this morning and netflix after the close. Lets get back on earnings with Trevor Greetham from Royal London Asset management. Thist know whether earnings season will be telling on the impact of trade frictions. We have seen a lot of quite bad readings from business surveys. The isn survey dropped quite sharply you might start to get some bad numbers or bad guidance from the companies that are most exposed to global trade. But at the same time, people will be interested in what they are saying. We have had this 10 year expansion and two or three scares along the way from industry. Youve got 3. 5 Unemployment Rate in america, the lowest and america, the lowest and 49 years. What you find in 49 years. What you find is reporting not bad numbers and trying to figure out the health of the consumer. In the end, business comes back to the consumer. Francine if the consumer holds up, can we avoid a recession . Trevor i am convinced we can. I think it is unlikely we have a recession. Consumer spending is up, unemployment is low. The one wildcard is the middle east. Every single recession in my lifetime has been either been caused or worsened by an oil shock. Without that, theres a good chance of recovery. Francine thanks so much. Trevor greetham from Royal London Asset management stays with us. Up next, Elizabeth Warren under pressure with her new frontrunner status. Details next. This is bloomberg. 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. Francine progress in brussels but trouble and home, Boris Johnson edges towards a deal but can he win over skeptics in the u. K. . Countermeasures supporting hong kong protesters. Bites back and defends his son, challenging Elizabeth Warren as she overtakes him as the front runner. Good morning. This is bloomberg surveillance. We are getting data out of the u. K. , pound moving on brexit, the latest headlines of the dup. The inflation rate is staying at 1. 7 , a touch below expectations. The focus is on these negotiations on whether the e. U. And u. K. Can agree to a deal and the parliamentary session on saturday. Lets check on what is moving in the equity markets. That headline that u. K. Officials are turning pessimistic that a deal can get resistingo the dup the plans drawn up and brussels, we saw a sharp downturn in u. K. Domestic stocks. All but two are leading the way , u. K. Domestic focused stocks. Kingfisher, st. James financial services, domestically focused banks, properties, all of these are sensitive to brexit optimism we saw flying high earlier in the week. One u. K. Stock that is bucking the trend is a sows, surging up 17 . They are making a comeback into 2020 and see a solid performance into next year. Francine Annmarie Hordern with some of the movers. Lets get to the bloomberg first word news. The u. K. , downbeat chances of a brexit deal. Progress, the irish party that propped up Boris Johnson in parliament. Its leader says more work as required. The aim was to have a deal before the e. U. Summit tomorrow. China is threatening to retaliate if the u. S. Enacts a bill supporting protesters in hong kong. One would suggest Hong Kong Special trading status to it annual review. The bill passes to the u. S. Senate. Says she sees hong kong flipping into recession as her annual policy speech was interrupted by protests. She was forced to deliver the speech by video as the country forces its biggest political crisis in decades. The south Korea Central Bank cutting its policy rate, warning that growth will be weaker than forecast as the economy slows with trade tensions continuing. The rate now matches its record low of 1. 25 . 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. I am viviana hurtado. This is bloomberg. Francine thank you so much. Lets get the latest on the 2020 president ial race. Impeachment was a hot topic. He doesnt want me to be the candidate. He is going after me because he knows if i get the nomination i will beat him like a drum. This is about donald trump, but it is about the next president and the next president in the future of this country. The impeachment must go forward. Mitch mcconnell has got to do the right thing and allow a free and fair trial in the senate. I dont think this impeachment process will take long because as a former prosecutor, i know i confession when i see it. One reason i am running is because of my age and experience and what comes with it. Francine joining me now is ohio, letsmin remind the viewers they picked the last the candidate to win the last 15 years apart from one race. Areie most people anticipating once again, the race for the president will come down to a very few number of states, and ohio is always an important one. Last night we saw the focus on impeachment and acrosstheboard support for impeachment of the nowident, but really right the numbers are suggesting that the race is between warren and biden. It affected the debates last night, because a lot of the focus was on Elizabeth Warren. A lot of people targeting her policies and holding her feet to the fire. Francine take a listen to some of the contentious exchanges between Elizabeth Warren and joe biden. Agreed with the great job she did and i went on the floor and got you votes. I got votes for that bill. I convinced people to vote for it, so lets get those things straight. Do you want to respond . Grateful toly president obama, who fought so hard to make sure that agency was passed into law, and i am deeply grateful to every Single Person who fought for it and who helped pass it into law. I did a hell of a job in your job. Thank you. Francine can Elizabeth Warren defend her status as front runner . Leslie it is interesting because she is trying to position herself as the change candidate, and joe biden is calling on his deep experience, but these are both candidates in their 70s so the notion of one being inexperienced and change oriented and the other in a different category is interesting, when you contrast it with pete buttigieg. Phasene is this a new for the democrats . Is it them choosing who can win against President Trump or trying to figure out who is best equipped to change the Democratic Party . Leslie as we approach the primaries, inevitably who will win amongst those who turn out and vote who tend to be more progressive, but the democrats are aware there is this important objective to win in a general election, a different voting population, much more moderate. The critiques out of Elizabeth Warren are aimed at saying, you are not a moderate, your plans will hurt the middle class she is saying that is not true. Her plans on health care are radical and her plans to break up Tech Companies, any of these would be a significant shift. And frankly, with a lot of americans would not go down well in a general election. Francine do markets need to president ling what a Elizabeth Warren would look like . Trevor i think the markets are busy trying to battle trying to model next week. Francine if you have a model and would like to send it in, we would be grateful. Trevor people will focus more on this when we get closer to thember, and we are on second order of trying to choose a democratic candidate. Once you have a single candidate , people will focus how they differ from the incumbent and the policies the incumbent may try to enact to stack the odds in his favor. The big question is whether with goes after his bait china or wants to go stronger toward the s p. He is trying to think now, i want to get the economy going and do not want to be in a recession. Francine well Elizabeth Warren struggled to find donors . Leslie she has a strategy that is reaching out to a broad base. Ok, butt she will be the bigger question is whether a more moderate voter will take her seriously, and whether independent voters will vote and support Elizabeth Warren, and i should also add Republican Voters who would like an alternative to the president , but Elizabeth Warren is likely to be too far to the left. Ri andne leslie vinjamu trevor from chatham house, both stay with us. Syria, what itr means for geopolitical risk. Today marks 10 years since greece triggered the euro zone debt crisis. This is bloomberg. This is bloomberg surveillance. The e. U. Is expected to unveil untagged trust antitrust measures against fraud, a rare occurrence of asking a company to pause activity before the conclusion of the investigation. Companytell tell the they could tell the company to stop buying chips. Bellagio it is under pressure from investors to unload its remaining casinos. Africa, as calm as carrying out rolling blackouts due to a shortage of capacity. The state provides about 95 of the nations power but is battling outdated plants. The government will restructure scom by the end of the month. Francine turkey has rejected the Trump Administrations demand for a ceasefire in syria. President erdogan signaled compromise over two key towns. This comes after the u. S. Sanctioned three members of while lawmakers are considering further measures. What is the mood music like in washington over president theps decision to out of blue pullout troops . Leslie this has been interesting, because for the first time on a major foreignpolicy decision, there has been pushed back some of the president s most important supporters. Lindsey graham, mitch mcconnell, a number of evangelical, high profile leaders have spoken out because they are worried about the christians in northeast syria. So many are worried about what will happen to isis fighters detained in the region and the cleansing and the violence against the kurds. It seems that bad foreignpolicy decision with grave consequences, so the domestic has been intense. Francine is this more problematic for President Trump and the impeachment process where the republicans have stood by him . Leslie it is interesting to watch these juxtaposed because what is not happening is the decision on turkey, the decision notull u. S. Troops back has taken impeachment off the front papers. If anything, they are running sidebyside, so there is a concerted push forward whether the decision on turkey, the decision to bring u. S. Troops back that has had such negative feedback from key supporters, whether that will spill over and affect their views on impeachment, there will not be overt evidence but inevitably will have some effect on their thinking as these impeachment proceedings go forward. Francine how difficult is it to bring it into investment . Trevor the impeachment question seems to be a major misstep by trump. There is a lot of pressure on impeachment and they keep asking questions about impeachment, and all of a sudden the agenda is moved to the kurds in turkey and it is trumps doing. Allowed troops have russia to fill the vacuum and it does not feel unrelated to the impeachment question, so investors need to look closely at what will happen in the senate. Most expect impeachment to be enacted by the house, but this may be changing. Francine how do you trade impeachment . Trevor so difficult. Technically, if mike pence is viewed to be implicated in the ukraine conversations, he cannot take over as president after an impeachment. It then has to go to speaker of the house of representatives and we would have president pelosi. Francine unexpected. Leslie we are so far from any of these things. The key thing to take seriously is if as people expect the house moves to impeach and goes to a trial in the senate, i dont think we can anticipate what the results will be. There are so many unknowns. Some are known unknowns and some are unknown unknowns. There is a strong possibility of a resurgent isis. There are so many things happening in the background. Attitudes will change as the hearings proceed and as the crisis in turkey and syria unfolds, so it is difficult to be sure impeachment will not proceed. Francine is it difficult to see who republicans would replace President Trump for in 2020 . Leslie it is difficult, and it is one of the moments that will move at lightning speed in the way we have seen british politics move. If we get there, things will move rapidly. The president himself as part of this. If you watched president clinton during the impeachment, all eyes were kept on the ball of governance, foreignpolicy, and moving forward in a rational way. This president is obviously different. This is a self impeaching president , people have said. Andh him unroll on twitter that will affect public attitudes, which have increased. The public is more supportive of impeachment than before pelosis decision by roughly 9 . Those attitudes in congress will change in part in reaction to donald trump. Francine apart from incurring the wrath of the president , how does this affect fed policy . Trevor the big change was the mexico terrace, because people had the view tariffs, because people had the view that there were two pieces of legislation that trump got through. Period ofolling tariffs because of something at the border. The fed views this as an unpredictable president which means lower Interest Rates because inflation is low. Trump knows this and he has been misbehaving intentionally to get more rate cuts. Every time the fed cuts rates, it is not enough. He was complaining at jackson hole. He clearly is trying to get rate cuts. As you get closer to november next year, he will be thinking about getting the economy moving rather than getting bad news to move the fed. Francine a little bit of food for thought. Both stay with us. A decade since the debt crisis, today marks 10 years to the day since greece admitted it was in serious trouble. The road ahead for the euro area, next. This as bloomberg. 10 years ago, greece unveiled a black call. An unprecedented debt restructuring, and they did not stop at greece. It was the first of five euro area nations to be bailed out, calling into question the single currency, but it has held together. Toh of that can be ascribed the ecb and president mario draghi. The ecb is ready to do whatever it takes to preserve the euro. And believe me, it will be enough. Has been mostport apparent in the bond market. Programt purchase helped greek 10 year yields fall from 44 to below 2 . The sustainability of the recovery is what counts. Mario draghi has stressed that Monetary Policy alone is not enough and is calling for more for active physical support. The baton passes to Christine Lagarde. The euro zone imperiled as the story of the former head of the imf knows all too well. It will not make her job any easier. Francine Christine Lagarde on eaters with liquid leaders lacqua. While i dont know whether the last 10 years have gone fast or slow for you, but are we now over the crisis or are there legacy concerns that could come back . Trevor we dont know. The last 10 years has coincided precisely with the longest uninterrupted economic expansion in u. S. History. The economy has been motoring on since 2009. We have not had a global recession and it is really in a recession you test the cohesion of the euro area, because the southern countries with higher Unemployment Rates will suffer. That is when you need fiscal transfers. Francine fiscal transfers, stimulus is what the market is expecting when lagarde takes over. Are we seeing opponents of fiscal stimulus in germany, around . Trevor we are, mainly because there is a deeper session in germany having to do with global trade and the transition from diesel to electric cars. Germany is really suffering, certainly on the industrial side. The consumer is ok and the Housing Market is rising considerably. Germany. A two speed the motor of the economy, the industrial sector is suffering. It is not the same as germany saying we should ease because of the benefit of everyone in the euro area. Macron has a euro area budget started that we need to keep watching. Francine trevor greece from, head of cross asset. John key tom keene joins me in the next hour from new york. We will be talking to Thomas Buberl about how they manage risk and negative rates. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. Francine progress in brussels but trouble at home. Wins over the e. U. But can he win over skip six. Beijing has countermeasures. Back, the former Vice President defends his son and challenges Elizabeth Warren and she overtakes him. Good morning, good afternoon from asia. I am Francine Lacqua in london. Three clear top stories. With and, what the president ial race means in the long term. Tom washington and the imf meetings. We have ian with us in the next hour, and we will focus on turkey and syria. Francine and brexit. Let us get to the first word news. Hello. In the u. K. , forrest johnsons government is Boris Johnsons government is pessimistic about reaching a deal, the problem, his ally in ireland. Of party is opposed the idea having custom checks between Northern Ireland and the rest of the u. K. Turkey rejects the demand for a ceasefire against syria. The president has turned down a u. S. Offered to broker talks between turkey and the kurdish melissa. The president says that turkey will not sit at the same table as terrorists organizations. Kong where the chief executive is acknowledging the impact of the protest. She says she expects to hong kong to enter a technical recession and unveiled a number of measures reducing the costs of city of cost of living for poor residents. Elizabeth warrens medicare for all plan, she would us he was asked if she would raise taxes on the middle class to pay for it. I will not sign the bill into law that does not lower costs for middleclass families. We heard it tonight, a yes or no question that did not get a yes or no answer. This is why people in the midwest are frustrated with washington and capitol hill. Boringigieg called extremely evasive on this issue. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Tom thank you. Equities, bonds right now, and we are watching that sterling is a barometer for the back and forth on brexit. We come up a little bit on 11. Let us move on to the second stream screen. We had 14. 21 on the vix. 1 08 65. 108. 65. While we were doing this you were reading up on the e. U. Francine this is according to spoke according to sources that have spoken to bloomberg. Not seeing a brexit deal possible unless the u. K. Moves. In two or three days we thought brussels and the u. K. Were follow far apart. , soaw the gap shortening the fact that they could find an agreement, which seems to be the Sticking Point now is that Boris Johnson is close to signing an agreement, which is why the sides entered these negotiations. It would be the probe brexit in dup that and the would reject the deal. The problem would be westminster more than brussels. Tom back and forth as far as we go. Let us look at the sterling charge. Boris johnson 30 days. The the Prime Minister having a good week. The move shot up a stronger sterling and gives you a perspective of the pullback. 126, 127 elevated on the 122 level of 10 days ago. Francine if you look at my data, stocks are down. There are tensions over hong kong and the investors are awaiting the next batch of corporate earnings. The pound retreating as this brexit deal faded. I want to bring you my chart of the day which is the one week pound volatility spike. If you look back on pound they have been put in mainly because traders thought the pound would strengthen. Joining us now is jane and derek. Thank you both for joining us. What happens to the pound . We had an agreement and we were closer to an agreement, but if the parliament does not vote it is no good. The this is going back to issues that theresa may had had. It is not getting the deal from the e. U. , it is about getting it supported by the u. K. Parliament. Some of the reports were indicating this could be about money. If the dup had a significant amount of money from the u. K. Government, they would be more open. They are principles had suggested that they do not want Northern Ireland to be treated any different from the rest of the u. K. , which meant that the dup have not been open to having a border. Put was an idea that was forward by a lot of academics and the e. U. At the start of exit and that was pushed out by the dup. It will be interesting. Francine we are back to square one. It is crunch time and we need to decide by saturday whether we have a deal or not. Derek we are in a little bit of a better position than we were before, because we have had movements where we have potentially a deal between london and brussels. Yes, parliament is the problem, but we could be in a different situation if we have to go into that extension, then we enter a general election probability, and, of course with a deal armed in the tory manifesto, that puts them in a strong position. Certainly, versus labor when it comes to getting support, because brexit is a word we are using a lot and i think the country if they see a deal in manifesto, they will go for it. Francine every time we talk about brexit, tom glazes over. Tom we have our own afflictions over here. You, it is wonderful to have both of you on the said. What is the state of the u. K. Economy . Is in thein, it backdrop at the moment, but we are seeing notable shifts in the communications from the bank of england towards the potential for rate cuts no matter what happens with brexit. Yesterday we had the jobs data, which indicates that the uncertainty on the consumer side of the economy had not really come through, but the risks are building that that is beginning to materialize, and that will reinforce the data that suggests that the economy overall is be and openss weakening up the prospects of monetary easing. Could ask a guess i fancy foreignexchange question, but let me not do that. Let me look at tradeweighted sterling. I know there is noise, but what is your forecast for aweighted sterling . Jane low forecast is it is clearly rate dependent on if there is a deal or not. Expectations are based on the idea that there will be a deal or compromises. From that point of view it mean sterling is likely to be traded higher against the dollar and a much better position against other currency as well. On that sort of scenario we have been looking for 130 1. 30 three months. As we were mentioning we had scenarios about headwinds facing the economy. Assuming that there is some sort of brexit deal, the attention will be placed a little bit more on the u. K. Economy. Left employed including according to yesterdays data. Bankse most central indicating a dovish position on Interest Rates. Sterling will be faced with other headwinds in addition to brexit, and how the economy reacts in a postbrexit environment will be crucial to trying to determine what the economy will do. Francine thank you both. Us. Stay with in the meantime we are looking into the brexit secretary taking questions from lawmakers. We will continue following that testimony and bring you the very latest. We are looking at pound. This is bloomberg. Francine we are getting breaking news the u. K. , this is quite significant because stephen barclay, the brexit secretary says that the u. K. s committed to securing a deal. We have a brexit roundtable to figure out what the next step is. Yesterday we were being briefed by our brussels insiders, and in the last couple of minutes we see the pound dropping a touch. The latest brexit up date let us get to our bloomberg reporters. Emmae kick off with because it feels like the Sticking Point is at westminster once again, it feels like we could get a deal with e. U. And Boris Johnson would come back to parliament and certain brexiteers would say we are not interested. Emma the issue has been it has been quite easy to get a deal with brussels. Night, the dup talking to the number 10 and they came out very clear that there were gaps. Last night you had the hardline brexiteers making positive noises. The problem is that the conservative hardliners will take their cue from the dup, many of them at least, which makes the parliamentary mass even harder. What we are hearing from both sides, pessimism that talks are stuck and that london has to move. I suppose the question is is this a part of the negotiating fro, wee normal to and will have to wait and see. Francine what is the mood music like in dublin . Week was a bit of a roller coaster, certainly yesterday around 4 00 p. M. There was an optimism that a deal was at hand. And then last night we start to rollback, i think talking to people this morning, his sense was that nothing about brexit has been quick or easy and it is likely that the end game will be neither again. Because a bigger game, i sense a real concern over whether force johnson Boris Johnson can pass a deal. Yesterday the Prime Minister said that Boris Johnson had reassured him that he could get a deal through parliament. Thee is worry that part of house of commons will oppose the deal. Can he get the deal through parliament . Tom as an outsider, i looked at at the telegraph and i could not tell what the reported stories and what were the opeds. We move the timeline closer to cut off date, but has the debate changed at all or is it just that we are moving along the timeline . Changedsuppose what recently is that we are sort of in constitutional crisis mode, and we have already had constitutional crisis is this a lot crises this autumn and we may have another one if Boris Johnson is forced to extend. Then we will be in this debate on whether he really has to obey the law and we will be into legal battles. It isk that is what quite likely that we will be seeing some of that. There are real questions about the british constitution. I saww mr. To scott whatask talking turkey does the Eastern Europeans play in this debate . Do they have an affinity to get this deal done . An idea that has been floated many times. Somehow the Eastern Europeans would break rank and veto a deal. First of all, we do not know whether tomorrow we will get a deal or the conversation will flip to an extension. When you look at the e. U. Position including the Eastern European countries, nothing has changed. They have managed to Stay Together and behind the Irish Government and they continue to take the lead. What we are looking at is a briefing where it will become clear whether or not there is a text that european leaders will be able or not to endorse. If not, the conversation will flip to whether or not they grant an extension. Francine there are 200 moving parts, and saturday is the big day. We have to see if there is an agreement, whether they sign anything or if Boris Johnson does not think he could get westminster, could he sign anything . Emma yesterday officials will tell were telling our reporters that they did not think johnson would sign anything he could not get through parliament. We have seen theresa may fail three times, the act sets out that if he does not get the deal signed and approved on saturday he has to write the letter. Then we are into the debate on whether he writes two letters or whether he has to obey the law or not. Tom thank you for this reporting. This, another matter, remember to join us in the next hour. This is the president of turkey managing the message of some of the drama of the protest in support of the conservative president and a deeply divided turkey. Not many headlines coming up, but the National Security adviser of the United States of america is scheduled to meet with turkish leadership. Let us listen for a moment. [chanting in foreign language] [applause] francine you are watching you are watching bloomberg surveillance. Will unveil Union Interim antitrust measures against broadcom. Toulators will tell broadcom stop inhibiting its clients from buying computer chips elsewhere. That will be the first time in two decades that the e. U. Has told a company to stop activity before an investigation is over. Roach is boosting its outlook. They pushed outside cancer treatments is paying off. It drugs for multiple sclerosis and blood clotting continues to perform. General motors and the auto workers move union working to end the strike. The union summoned local leaders from around the country to detroit for a meeting. That will be in preparation for a vote on a deal. The strike is in week number five. That is your Bloomberg Business flash. Years since0 one the Legislative Council of hong kong changed from the control of colonial britain over to some sort of colonial beijing. We have an update on hong kong and she is outside the legislative offices. The weekend, how serious is the tension between legislatures in the United States and mrs. Lamb. We certainly sought with the bill that was voting in in congress, the senate will be next, but we were speaking to a congressman earlier saying that it is likely that if this gets enough i partisan support for this to go through. Sign off on has to this but does that constant complicate the u. S. China relationship as well. Pressure is ramping on ramping up and protesters were disrupting her, and she had to deliver this through tapes and broadcasts. It goes to show that it will be tough to break his political stalemate. Francine thank you so much. Let us get back to jane and derek. Of crosses into something that morphs into a trade argument, or a trade escalation. Derek the bill that has been passed is about reviewing the special trading relationship between the u. S. And hong kong. It is not as threatening. Through,potentially go but it has to get to the desk of donald trump and get signed. It certainly has the prospects of entering into the realms of the u. S. China negotiations, but based on what is before us at the moment, i do not see it as being a threat. Obviously there was an escalation in protests and the political pressure in washington rises, and the economics could change. Jane we had china indicate that this is the u. S. Meddling in domestic affairs. We have taken the view for a long time, and this is becoming more obvious that the trade wars are about a lot more than just trade, and the position of a lot a people on both sides of the spectrum in the u. S. Are hawkish about china. You can take the argument that china needs to show a firm stance against the u. S. I think that the trade wars are a lot about more than trade, and these are about deeper rooted tensions and the u. S. Wanting to contain the growth of china as an economic front and a military might. Tom we will leave it there. Just a broad speaking, he hopes they will be in agreement. Stay with us. This is bloomberg. 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. He doesnt want me to be the canada. He is going candidate. He is going after me because he knows i will beat him like a drum. Trumps is about donald and the next president and the next president and the future of this country. Impeachment must go forward. Mitch mcconnell has got to do the right thing and allow a free and fair trial in the senate. I dont think this impeachment process will take very long because as a former prosecutor, i know a confession when i see it. One reason i am running is because of my age and experience. With it comes wisdom. Tom american politics, the fourth debate in ohio, Kevin Cirilli there. Won andot way in on who who lost. Is 10, 11, 12ay people on stage is a uniquely american thing. ,t is extraordinary to see this versus the way we did things in my childhood. Francine it is very american and 12 months before the election. Everything can change and we go on to funding and donors. I wonder if because we are 12 months out it is too early to start modeling a possible orakup of big Tech Companies a change in taxation. Will haveomorrow, we special coverage from washington for the imf and World Bank Annual meetings. A number of great guests will be joining us, including erik nielsen, the former white house economic advisor, and Jacob Frankel of j. P. Morgan. Tom that is a terrific lineup. We will head over to the International Monetary fund to speak to any number of ministers. Nath speaking to us yesterday. Viviana a potential brexit deal may slip away. As e. U. Views an agreement impossible unless the u. K. Changes its position. Boris johnson needs the support of the dup but they still they say there is still work to be done and are opposed to customs checks. If the u. S. Congress passes a bill supporting protesters in hong kong, China Threatens at will retaliate. The u. S. House has a package of measures that would subject hong gs specials trading special trading status to an annual review. Million and the peoples bank of china kept the Interest Rate study steady. They are expecting a further slowdown. Rudy giuliani will not turn over documents demanded by the House Committee leading the impeachment, giuliani calling the probe unconstitutional and baseless. 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. I am viviana hurtado. This is bloomberg. Tom thank you so much. Maybe it is the chart of the year, as we go to jane foley and Derek Halpenny. I am introducing this as maybe my chart of the year. What a stunning statement on a global trade war. This is u. S. Customs collections and boy, is it a trend on a log chart and then it is not. It is out five standard deviations. Three is normal, four is financial, and five is ugly. This inertial force, what does it do to u. S. Dollar . Jane the question is what is it doing to Global Growth . Chinae have seen is in and spreading to germany to countries like south korea that have open trade and strong links with china. It isnt just because of the trade tensions that we have seen a slowdown in Global Growth, but that is a significant part. When we try and layer the u. S. Dollar onto this, the dollar is strong. We dont necessarily see normally tech normal textbook economics working for the dollar. Dollar see is a u. S. Which is hugely dominant in the global payment and we have seen the rise of demand for dollars grow with the rise of emerging markets like india needing to buy more oil and needing dollars to do that. We see the dollar is strong. As long as we have headwinds in the Global Economy, headwinds suggesting we are looking at more uncertainty and slower Global Growth, the dollar will generally remain firm because people around the globe need their dollars. That we areiled it outside textbook economics. Viviana hurtado just had the first word news where chinas surprising injecting loans and liquidity into their banking system. Moment wheread hoc it is not only every nation for itself, but almost every nontextbook move that you can make . Look at what is happening globally, the trade impact has been seen on a global basis. The u. S. , because of the tax policies of the Trump Administration were isolated. I can see certain textbook analysis in terms of relative growth and the u. S. Has held up better than elsewhere. That could start to change. We are starting to see the emerging of the manufacturing week is spread into the broader economy weakness spread into the broader economy. The fed may have to do more. We will have all the uncertainties, but the impact of what trump has done on global trade could have an impact on u. S. Economic data and that would be a huge turning point. From current cyclical highs for the u. S. Dollar, if we see that relative macro change, that could be a catalyst for correction. Francine what does the fed get influenced by . Jane mostly by domestic headwinds. If we get the u. S. Slowing down, the fed will have to react. The fed does understand that unlike a small economy, it cannot just look within the borders of the u. S. It has a significant influence outside the u. S. Because of the dollar and the payment system. It is our view that the fed will cut every meeting until next year and we could have a zero fed funds rate. I would expect the dollar to be softening, maybe not hugely, but softening. Francine jane foley and Derek Halpenny stay with us. The u. K. Brexit secretary steven barklay takes questions from lawmakers, talking about the preferred option to have a deal. We look to others in westminster including the dup to see whether Boris Johnson can pass a deal if he manages to find a line with the e. U. Through parliament. This is bloomberg. Viviana this is bloomberg surveillance. Johnson johnson wants to resolve all claims accusing it of fueling the opioid epidemic, offering to pay for billion dollars as part of a potentially larger deal. Earlier, several drug distributors offered to pay 18 billion to wipe out all seats against them. United airlines raised its profit forecast for the second strongt quarter, citing travel demand and fuel prices lower than expected. At ceo says the airline is head of pays to achieve its earning target for next year. Tech bill gates says big should get ready for the government to play a bigger role. He was a guest on the David Rubenstein show. There well be more regulation of the tech sector, things like privacy, and there should be Better Regulation that relates to that. The fact that now this is the way people consume media has really brought it into a realm it so theed to shape benefits outweigh the negatives. Viviana you can watch all that interview on the David Rubenstein show at 9 00 new york time on bloomberg tv. Thank you so much. Hillary emailed in from athens and we thank you from watching from athens as you do each and every day a chart idea. Lets look at a chart that explains the emotion of the United Kingdom, eurosterling volatility including the financial crisis, ugly, brexit, ugly. It shows you how we are getting back to that summer of 2016 level on volatility. That is a great indication of the emotion we see during the autumn 2019. Francine we will have plenty more on brexit. That is an outstanding chart. Joining us is alex stock, a stock, aive alex conservative mp. When you look at the chances of a deal let the moment, are you pessimistic at the moment, about thessimistic u. K. Securing a deal with brussels that will be passed through parliament . I am cautiously optimistic. As little as two or three weeks ago, people were saying there is no chance of renegotiation of a backstop, this is a done deal, and now there are clearly intensive negotiations. Is this going to get through parliament . Labour mps andor conservatives, and i sense a renewed belief we need to get something over the line. Mps arethose labour sitting in the most leave seats in the country and they rep they recognize we need to get this done. Francine the gloomiest estimate for the pound is the dup raised objections. What can the Prime Minister give them to keep them on side . Lk the first rule of politics is being able to count, and i sense there are enough people throughout the house of commons that could offset any concerns the dup might have. Even if Boris Johnson is not able to allay their concerns i think he well be able to there is a sufficient groundswell of support across the house, people who recognize delay is not in and of itself a painfree solution. It causes pain to the british economy. I think we will get something godless of the dups position. Francine the previous Prime Minister thought the same. Will Boris Johnson put a vote through parliament if he is not sure he can get it through . you are right about the previous occasions, but my sense is the mood has shifted. People are being smoked out. You say you want no deal, but isnt the truth that you want no brexit . The best way to avoid no deal, which would be bad, is to secure a deal. That is starting to resonate in a way that it hasnt before. One key concern i have is even if this gets out of the line on saturday, that is not the end of it because theres something in the order of 50 votes that would have to go through. People will be looking for a solid majority for any deal that will survive trials and tribulations over the coming two weeks to ensure that the legislative ends are tied up. Tom it is london, london, london. You are in cheltenham where they have shot so many movies they dont even keep track anymore. How is Boris Johnson to conservatives and labour in cheltenham, west of london . Halk we have to make sure we are not stuck in a london bubble. One of your correspondence was saying, a lot of this is emotional. The longer we pass between the referendum and now, the more people give vent to their prereferendum position. Cheltenham ore in other parts of the country, whatever your view was on that decision, there is a growing sense that this has got to be , solved one way or another whilst you will find people who do not like the Prime Minister, equally you will find people loving the Prime Minister. On the others there is a growing consensus that we need to solve this. In aine what will happen new election . What are the chances of you keeping your seat . Mr. Chalk it will depend on important things, when it takes place. If there werent a deal, seats like mine could be vulnerable because you would have on the right, hard brexiteers saying we should be crashing out with no deal and others saying to cancel the whole thing. If a deal is done, the issue will not be about brexit, it will be about all of these other issues that people like me came into politics to talk about schools, social mobility, so it comes down to timing. Some of my opponents, liberal democrats, they want to cancel the whole thing and a lot of moderate people in my constituency are saying, i do not like brexit but you cannot say, you are wrong, we know better and we will forget what you have to say. People in myrist constituency are saying that is a bridge too far. Tom he liz he is the parliamentary private secretary to mr. Raab,. Edging the and message in managing the message in turkey. It is an exceptional story on the turkeysyria order. This is bloomberg. It is a combination of facts, including the trade tensions and country specific factors in emerging economies. To get to the position where we have more countries in a recessionlike environment, that is when Global Growth goes below 2. 5 , and we do not have that in our projection. Tom she is the chief economist of the International Monetary fund, always a great way to imfn our coverage of the and wmf. A great lineup of guests to be seen tomorrow. We are thrilled to begin our sky,rage with john lip erik nielsen, dr. Fuhrman, expert on americas fiscal policy. Mainstay ofn is a economics and Jacob Frankel is the founder of how we think about economics at j. P. Morgan, and we are thankful mr. Domb rovskis can join us as well. There is a wall of wary, there there is many walls of worry so it takes time to loaded up. What gets your attention . Francine what i would think about is what is optimistic. If you flip the conversation, it makes it interesting because there is actually maybe not much that you should be looking at apart from earnings strength. Lets get back to jane foley and Derek Halpenny. You live this day in and day out. Is there something we should hold onto as being optimistic as the encouraging news over the next two years . Derek we had possible signs signsermany positive from germany about fiscal spending, a wave of easing across the globe. The impact of that is diminished but we should not ignore it completely. The Central Banks have been active. Brexit could change at any moment, but we are in a better position. U. S. China,trade, we are in a better position. Those uncertainties will not go away, but those are some of the potential movements that could make things a little bit less wary yang. Worrying. Francine do you have an indicator that says, this is a good time for investors . Jane they earnings were good. Labor markets have been stronger than we expected, but that could be clutching at straws. It is easier to look at the risk. People like derek and i, our job is to point out the risks to investors and i dont think you have to look far in the current environment to find significant risk. We do have trade but we have Foreign Policy risks as well. We could be coming to the fore, syria, turkey, chinau. S. , russia, and where is europes position . Is the Foreign Policy too weak . There is a lot of questions. Tom where are you on eurodollar . Your call out 12 months . Jane euro has some relief if we get a brexit deal. Germany,l position in if that relaxes it is good. I still think the dollar could see more strength and we have got a three month forecast for 1. 07. Then eurodollar turning higher on a 12 month view. Tom Derek Halpenny nj jane foley and jane foley, thank you. Particularly on International Relations and geopolitics. In the next hour, we are thrilled to bring you ian bremmer and Thomas Buberl. Erdoganw in ankara, mr. Is still speaking. This is bloomberg. Tom this morning, a clash of American Foreign policies. Well we move forward the trump way or make a return to normalcy . Yields are higher. Stocks too. It went on and on and on and on. Democrats debate. Did anyone listen outside the Political Class . This is bloomberg surveillance, live from new york, Francine Lacqua in london ready to jet to washington for the imf meeting. All of this debate of the United Kingdom is about 10 or 20 votes of the dup in Northern Ireland. Francine 10 votes of the dup and the erg is the most brexit heavy faction of the conservatives. Ar and borisradkl johnson met, there was optimism they would get a deal and it seems the problem is in westminster with the possible deal, for which we have the blueprints not making it through the house of commons. Tom it is a story influx, as are many others. Mr. Erdogan is still speaking to the assembled in turkey. Here is viviana hurtado. Viviana the European Union and u. K. Are pessimistic about reaching a brexit deal. The big problem is the allies from Northern Ireland, the dup resisting plans from brussels. Johnson will not give the green light unless he is sure the party will back it. Turkey rejecting the Trump Administrations demand for a ceasefire, and erdogan turned. Own talks he says he will not said at the same table with what he calls terrorist organizations. Carrie lam is acknowledging the impact of the protests on the economy, expecting that hong kong entered a technical recession. She unveiled measures aimed at lowering the cost of living for residents. Medicare forrens all plan, which she raise taxes on the middle class to pay for it . I will not sign a bill into law that does not lower costs for middleclass families. We heard it tonight, a yes or no question that did not get a yes or no answer. The is why people in midwest are frustrated with washington and capitol hill. Viviana mader peeper to gag called warren extremely mayor pete would a gig called warren 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. I am viviana hurtado. This is bloomberg. Tom lets do the data to get to dr. Bremmer. Euro fractionally stronger. Yields moderately higher, the 30 year bond 2. 22 , very different from a few days ago. Francine i am looking at stocks down over tensions in hong kong. Investors are awaiting the next batch of corporate earnings. The pound retreating as the chance of an imminent brexit appeared to be fading. Reform andtime to International Relations and geopolitics, and in movable feast of a wide variety of stories, mr. Erdogan speaking now. Times said the void on the border of syria, ian bremmer is with us. Does america have a Foreign Policy now . Ian sure, we do. You have the Foreign Policy establishment which absolutely maintains a level of u. S. Presence and engagement around prettyld, and it is consensus between democrats and republicans. Pushing against state you have andp who is more unilateral transactional and less oriented toward values, and is starting to have an impact on the way other countries think about americas durability and presence in these various places. Tom my grandfather was different from mr. Trumps father but both were isolationists. Isolationism of this president with that phrase that we know from our childhoods. Ian i have never liked the phrase when it comes to trump because it is not as if he does not want to use american pressure to ensure better engagement. Tom he wants our troops out now and look what happened in five days. Francine he does want troops out ian he does want troops out, but the way he looks at trade engagement and the way he is more than happy to have additional american troops sent to saudi arabia when they pay for it, that is not an isolationist stance. It is a shortterm nonstrategic stance that undermines American Allies because it views them as being able to shut them off and turn them on at a moments notice. Francine what does it mean, therefore he wants a transactional deal with china, or is the Bigger Picture he is giving an overture to Vladimir Putin in the middle east . Ian clearly, everything trump does in Foreign Policy music to prudens ears putins ears. Space for more chaos within the u. S. , more divisions inside europe, within the transatlantic elation ship, and in the middle relationship, and in the middle east as a whole. Trump has focused maniacally on the trade deficit and a little bit on things like intellectual property theft. President xi jinping no longer believes he can do a deal, that he can trust trump to follow through. He feels like he has put Political Capital on the line that has not paid off. Now that less leverage elections are getting closer and the economy is softer. China is offering essentially nothing Going Forward and we are at best status quo until the election. At worst, the relationship will deteriorate significantly. Francine we will have plenty more on that. Coming up, we discussed the key ally holding up progress on Boris Johnsons brexit plan, the dup. This is bloomberg. I agreed with the great job she did and i went on the floor and got you votes. I got votes for that bill. I convinced people to vote for it. Senator warren, do you want to respond . I am deeply grateful to president obama, who fought so hard to make sure that agency was passed into law, and i am deeply grateful to every Single Person who fought for it and who helped pass it into law. But understand i did a hell of a job in your job. Thank you. Tom the nostalgia, with ian bremmer of Eurasia Group. What in gods name happened . How did we get to this point of 12 candidates speaking to the political elite, the Political Class, and everyone else going, really . Ian there are lots of good reasons for these individuals to be on stage, whether being president is feasible. They have careers to look after, theireals, increasing social media, some want to be vp, and five or six or plausible for the nomination. You are going to attract everybody. Tom the foundational idea that Vice President biden and senator warren and others know is you do this and move to the middle. Then you predict they will move to the middle, or President Trump will move to the middle . Ian biden is in the middle right now but he is not the front runner anymore. If you look at the way the Financial Institutions, the big Tech Companies, the big Energy Companies, they are in norma sleigh concerned about a potential warren presidency enormously concerned about a potential warren presidency. Who is her vp . Will she pick a candidate to make her more of a centrist, and will she back away from policy thoughts that not only wouldnt cut it in the light of day in congress, but would cost and in normas amount of money . No nuclear enormous amount of money . Fracking, ban on things that do not work from a practical standpoint but on the democratic primary stage, i have no question Elizabeth Warren would not focus on electability. Francine does she back away from the more leftist things we have heard because it will be difficult for her to retract donors . Attract donors . Ian i dont think she will move facebook because beating up on Mark Zuckerberg is popular. The same with pulling out of syria. There are a few populous tropes part of her policy message that dont need a lot of thinking. How she thinks about health care, how she thinks about the budget, immigration, how she thinks about treatment of corporations, even the wealth tax, i expect if she were to get the nomination, her actual policies on the stage would look very different from what we heard last night at the debate. If i am wrong, it will be harder for her to get the presidency. Francine let me bring in Kevin Cirilli in ohio. Kevin i think it was a strong night for senator Elizabeth Warren but also for Bernie Sanders as he picked up a key endorsement from the progressive base. I was told by senior members of his campaign that they feel that as a sign he will be able to coalesce the generational argument and sees the millennial youth vote turnout. On joe biden, a report was published but found he was significantly lower in fund raising in the Third Quarter behind Elizabeth Warren and Bernie Sanders, giving an gig tive like pete 30 or cory booker. It will be the conversation, who is the alternative centrist candidate to joe biden who has lost his inevitability factor . Tom how did this play in the 17th district of pennsylvania . Forget about the beltway elites like you. 17thid this play to the district of pennsylvania, mr. Lambs district . Kevin if you are conor lamb, you are looking at look and Elizabeth Warren booker and Elizabeth Warren. She will face autobiographical questions, not just pertaining to the attacks from the conservative movement but previous positions she has held. In terms of where this goes from ire, biden is not out, but was struck that senior members of his campaign stepped into the spin room last night, several that were not there in the previous debates. They say they are in this for the long haul. He has name recognition and is top of the polls, but there is a new reality that the inevitability factor is no longer there. Tom what is next . Kevin senator Elizabeth Warren is without question the front runner, as is Bernie Sanders. This becomes a fight to see whether Elizabeth Warren and Bernie Sanders are ready to they the mantle and unify conor lambs of the Democratic Party. Tom Kevin Cirilli, get out of the rain. Hurricane coverage from westerville, ohio. Lets look at the markets, not much to talk about after the very good day yesterday. Futures negative seven. Sterling really volatile, moving headline by headline. With us from Eurasia Group, ian bremmer. This is bloomberg. Viviana you are watching bloomberg surveillance. Bayer warning a significant increase in the number of suing over roundup. 18,000 lawsuits have been filed. They lost three lawsuits claiming the weedkiller causes cancer. Outlook forng its the third time this year. Cancer treatments are paying off. Drugs for multiple sclerosis and blood clotting continue to perform. That is the Bloomberg Business flash. Francine a lot of breaking news from the e. U. , this is an e. U. Diplomat briefing our reporters, saying it is too late to get a formal brexit. A possibleise about second summit ahead of the deadline. The spokesperson for Boris Johnson saying he wants to make progress but it seems the Sticking Point is at westminster. Maria tadeo inis brussels. How much frustration can you sense that they think they have a deal but it seems Like Parliament may vote against it . Maria that is right, and this is the core of the matter. The headlines he referred to really sum up the debate. The europeans believe they are close to a deal but are not sure the Prime Minister has the numbers he needs to get it through parliament. They do not want to move too much until it is clear he can do it. From a european perspective, they do not think this week is a final deadline. They still think october 31 is the final make or break moment. 31, there is speculation we could get another summit. We are hearing from diplomats involved in the discussion that they believe it is too late. We are waiting for michel barnier. He will finally brief e. U. 27 ambassadors over where the negotiation is standing. Francine what do you mean it is too late, there is no chance brussels will sign off on a brexit deal . Maria the thing is, one of the things we were told many times as european leaders do not want to negotiate on the night. This is not a market. They do not want to negotiate late in the night to get a deal that is not guaranteed to go through the u. K. Parliament. They wanted to get a clear legal text to go through before the summit. If we dont get that text today, it is likely tomorrow they say they do not have enough to give a formal yes. Tom maria tadeo in brussels. Ian bremmer has been aged by brexit. We are worn out by it. Is this normal british process . Is this what happens during parliamentary processes . Ian are you really asking that question . Tom when does this end . Francine he is on the crown episode 55. Ian you want to bet on an extension, but Boris Johnson is showing for his constituency he is doing Everything Possible to avoid the extension he promised he would not to he would not take. If he is forced after bringing the irish together and moving the germans and talking to brussels, has early election process looks better. He is more likely to pull off a tory majority. Tom do you blame this on the parliamentary rule changes of 2011 and 2012, which were done in good spirit but have not worked out because they cannot get to when election . Ian i blame it on cameron. I blame it on a referendum he believes was not a real risky taking so he could shore up his base, get rid of ukip. I remember having that conversation with him a few months before. He was completely unconcerned the brits could vote for something so extraordinarily stupid and against their selfinterest, just like people were so convinced trump could be elected could not be elected in the United States. Francine that is backward looking. What happens in the next two months . Ian the most likely outcome is they come close to a deal with the europeans. They probably do not get it through parliament, which is why you suggested brussels has reluctance to give them much at the last minute, and they force an extension. Some of the force of the extension is to get Boris Johnson to move his people more, but he is limited. This is not set up for a last gasp like you did with the greek negotiations. Here we are looking at an extension and a likely early election where johnson is better positioned than labour and. Orbin, better than farage who is more likely to come out as a win, it is Boris Johnson. He is a better politician which is why he would be able to argue against brexit. Tom we showed the chart of the litmus paper of sterling showing a better Boris Johnson morning than what we saw. An important report looks out five years of some of the great challenges. Thomas buberl will join us. Ian bremmer on turkey and syria in a bit. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. Bloomberg surveillance. I will be joining you in washington tomorrow. We have a number of great guests including john lipsky, erik nielsen, katherine mann, just to name a few. Also, Jacob Frankel. We will talk about the wall of worry and the crossover between politics and the market. Lets get the latest from hong kong, china threatening unspecified countermeasures if the u. S. Passes legislation. Joining us now from hong kong is yvonne man. Do protesters or rioters feel and bolded by the house bill emboldened by the house bill . Yvonne certainly, if this goes through in the senate, it is aimed at supporting these protesters. This bill allows an annual review of hong kongs autonomy from beijing in order to justify the special trading status with the u. S. That got beijing angry and they were quick to respond, threatening retaliation, and for the u. S. To pull this bill in order to was viewed avoid further escalation in the relationship. We have heard this type of rhetoric before. Francine if they do retaliate, do we have any idea what they would hit . Yvonne it could be a lot of options. We have heard things like the nba controversy, which u. S. Companies, multinationals are trying to deal with the pressure on both sides. Everything from the likes of restricting immigration and maybe u. S. People will have to apply for visas to head into hong kong, that is something we are talking about. We have heard this before. When the u. S. Blacklisted eight Tech Companies china threatening to retaliate but we have not seen followthrough. Perhaps this language is catered more to read domestic audience because it seems at this point the economy is slowing and it would be harder for beijing to sacrifice a trade deal over this hong kong issue. Tom thank you so much. , october of a tumultuous 2019 and there is any number of reports piled up on my desk. Ais provides ian bremmer with voice on geopolitical events and International Relations, strapped around the financial ofurance operation of axa france, Thomas Buberl their ceo is with us. I want to cut to the chase of 10 big picture things except the major message is the mathematics of how everything seems correlated in 2019. That is an extraordinary insight. This time is different because of these correlations. Thomas absolutely. The top risks remain the same over the last couple of years. They are independent and what has made humans successful in the past might and dangerous Going Forward. Tom we have social issues, climate change, but i will go to social discontent and local confluence conflicts which you were right on. Underpinsocial unrest so much of the geopolitical instability now. It is happening in 2020 as the Global Economy starts to slow down. One thing you could say about the geopolitical risk trends, the Technology Risk trends, climate risk trends as they were happening at a time the government had affair a fair amount of money to throw at them. ,he level of social instability the major demonstrations in countries around the world whether it is ecuador or hong ,ong, people on the streets extremely angry their governments are not getting it done for them. In 2020, these things come together. Francine is it not just a general level of uncertainty that is the most difficult thing to predict . When you look at the intercon activity of risk interconnectivity of risk, are we understanding the consequences . That the butterfly effect something could go wrong in hong kong and we do not realize the impact it has on western democracies . Thomas absolutely, it is different now, the interconnectivity and the link to social tension. If you take Technology Risks, we have spoken about cyber and it is well beyond cyber, now to the question of artificial intelligence, they use and storage of data. Technologyleverage for a geopolitical perspective . That has consequences on the cohesion of the population because many people will not participate in the fruits of this Technology Revolution and they use to in the past. This interconnection and the uncertainty about what will happen and how do you make growth out of it, really creates a massive difficulty in an environment where the multilateralism, the multistakeholder approach is not guaranteed because today you see many initiatives that do not necessarily show a big amount of coordination. Francine if it is the same risks over the last possibly five years, what does it take for these risks to get fixed . Ian increasingly, you are focusing on governments that are not capable of action. When i look at the advanced industrial democracies, places we are counting on major responses, the only government that is strong as Prime Minister abe in japan. That is shocking. It will not come from the governments or the multilateral institutions or u. S. Leadership. It is coming piecemeal, coalitions of the willing on individual somatic issues, which would be fine. That is what we saw at the United Nations on education. That would be fine if the issues were not macro and interlinked, but they are. It is not so much the risk environment, but the interlinkage is making it much more urgent and it is clear they do not get resolved in 2020. This is not a fun report. Henry, 1939, the , and basically nobody saw it coming. Thethere elements here of late 1930s where this cacophony of emotions that get us to real challenges, i am not saying to world war ii, but gets us to real upset in 2020 . Thomas i would not exclude it. When you look at those social fragmentation and the Interest Rate environment, i do not exclude a broader way within countries. You have seen many pieces of it in hong kong and ecuador and france. This is likely and we need to prepare. Ian most of the fights are internal, not international now, but to be clear, that internal fight includes the United States. For the u. S. To be such a significant piece of the global risk environment tom is the leadership just not there with the president . Ian it is actively expanding the risk environment. If you look at what is happening in u. S. China, look at what is happening with turkey, syria, russia, the americans have inflicted great a risk on the global environment. It is not just about being missing in action. Thomas one figure was about the 80 believeelieves, the governments are not ready to solve those conflicts. Who will be able to solve it . That is the big question. Francine how difficult is it to lead an organization like axa . Insurance companies to look at the risk, but how difficult is it to make the right decisions and how to lead the Country Company in where you grow . Thomas from an insurance perspective, it is a prosperous environment because risks and aversions to risks have increased. We are there to help people understand the risk so you could call this a golden age of insurance. Changing your company, conforming your company and redirecting your efforts toward new risks always comes with a massive amount of anxiety, a lack of courage, and leading an organization in that direction is very difficult because not one person has the answer. Tom congratulations on a timely report. Axa group. Rl is with thyssenkrupp, black star, and carlisle getting together to look at the competition to otis elevator. Tom huge news flow today. Bank of america out with earnings and a bit. We will cover the good efforts of mr. Moynahan. Single best chart with ian bremmer, and i want to get back to the u. S. Here is a chart i have never , rubellira or lirarubel. There has been a long term stasis within the relationship until there wasnt, and this is recent russian strength. What a history of russia and turkey across the black sea. Ian talk about onagain, offagain relationship. You remember when the turks shot down the russian plane and the russians cut them off. Turkey was in freefall. Trump talks about his ability to destroy the turkish economy if they do not get him what he wants. Putinow do you determine kurds,mascus, assad, the and the aloneness of erdogan . Ian trump has moved the needle in that he has allowed isis to consolidate. He has allowed the russians to get stronger and consolidate power with assad and the kurds who had largely been fighting against them. That is a big change, but at the same time, most of this was happening under obama. What do i mean by that . Won, the basically civil war was mostly over, but the United States was keeping the turks out and the kurds were doing better and the caliphate had been destroyed. Now we have those pieces in play. We are more likely to get a United Nations brokered agreement of some political outcome in syria now that the americans let the turks in, precisely because the russians have the ultimate authority. Obama found that an trump will find that. Francine i think we have go we have a shot before we to the capitalism of bank of america earnings, i am not quite sure where this is, but i am sure that is smoke from the battles out front. We have earnings on bank of america. Yesterday, j. P. Morgan was the undisputed leader. We are just getting bank of america thirdquarter trading 3. 2, the estimate was 3. 1 billion. Just a touch above estimate. I dont know if we have a premarket. Bank of america is quite difficult to get through in terms of the earnings report. Look you are looking at the Financial Statement and im trying to go through headline by headline. Ex dda a touch better than estimates. Year, lets year on go to sonali basak with tom in new york. A little bit of a mixed picture. Sonali a mixed picture is not a great thing when jp morgan came out so strong yesterday. They had four straight quarters of record profit. Are they people to keep that positivewell as leverage, are they able to keep up with jp morgan . Tom what is the Technology Platform . Jp morgan killed it. What does Brian Moynihan have to do to catch up . Sonali they want to attract all the millennials, and they will highlight how many payments are happening online and what their mobile banking platform looks like. There Branch Network as well, so they will have to spend more while keeping the Expense Ratio below 57. Tom you have been a great student. I will not ask you a securities analyst question, but you can talk the place talk about the place of too big to fail banks and the candidates are removed from these Merchant Bankers of new york. What do the bankers have to do to get back in the grace of americans . Ian on the one hand, it is not the focus. It is the focus of the tech and Energy Companies because those are the immediate newsmaking problems. One thing under cleat under trump we have seen as less enforcement. The fines are smaller. The willingness to go after these companies is much less. Were Elizabeth Warren to get the nomination, one thing we see clearly is enforcement would be significant. That is where she made her chops in the senate, so the Financial Institutions might have the most to be concerned about of all of them. That is where an attack toward centrism will not help the banks. Tom what else do you see . Sonali net and stressed Net Interest Income and net banking revenue are above expectation. They lost a lot of bankers last year. You see bank of America Holding strong despite that. Are trading came in across expectations. They have an impairment charge but we knew that was coming. Francine i was just going to spend two seconds on this 2. 1 billion pretax impairment charge, but we knew about that. Sonali that was about the end of their tie with their first data relationship. We willon is a lot so see that raised and after four straight quarters of record profit, not the greatest sign. With bank of america, people are looking at their top line and for them to be gaining share, so the fact that they beat strongly on trading, Net Interest Income does mean something. Francine what do fed cuts mean for someone like bank of america . , worse foris bad bank of america than pretty much anybody else. They are more tied to Interest Rates than almost anybody. Net Interest Income Holding Strong is a big thing. Tom ian and i do this. The kids go, can you just mail it to me question can you just zell it to me . , 16,is a stunning chart 17, 18. This is what everyone is talking about in digital banking. Sonali all the stock prices, the payment charts are way above. Blowing thek bank out of the water. People still go to branches. Tom no, they dont. Ian i dont and i am old. There is no excuse for me. Sonali they have a huge Wealth Management unit as well. Tom how does he catch up with james dimon . 10. 4 every year. 8 k of america, not bad, up given what he was handed. How does he catch up . Sonali that 18 return on tangible equities. It is the return to shareholders. You give a little, you get a little. People are ready to invest in you and you invest in the bank. The david wilson giving us equity view on bloomberg surveillance on radio. There is a number of ways to go in terms of news. We talked about turkey. Having yvonne man with us earlier in hong kong, hong kong wont go away. Speaker pelosi is doing what would seem natural in the house to say, we support hong kong, and yet there is clearly immediate ramifications from beijing. Away,ong kong will go china will not go away. Tom that is a loaded statement. Ian the influence, power, decisionmaking is all in beijing. Hong kong is about 2 of the chinese economy. It was 13 when the handover happened. Xi jinping can wait these guys out. These demonstrations continue every weekend but they are a lot smaller than when school was out and they are a lot smaller than when they took over the airport, causing all that inconvenience for so many. The Chinese Government is willing to give these guys more rope and they dont feel like they are taking much international heat. There isinside china, no support for these demonstrators. You saw the reaction to nba. Ing james came out and said, am with the Chinese Government. I may be critical of the u. S. Government, but when there is money at stake, i will support our new masters in beijing. Talk about ao changing risk environments, recognize the Chinese Government is going more independent, going their own way, and that is a danger for people who want to invest in a Global Economy. Francine will the u. S. Passed the hong kong bill orwell trump veto it . Ian they will pass it and im sure i am not sure if he will veto it. He is talking about a phase a deal that has been signed and the chinese have given nothing when negotiations were closed. Chinese feel like they do not need to give him anything because he is not going to expand tariffs or make their lives more difficult. He wants a deal but does not want to look weak. Can he sell it . He is going to take a lot of hits domestically because china is the one Foreign Policy issue where you have strong bipartisan agreement in a harder line direction. We did not see that last night on the democratic stage because no one asked a question on china in three hours, which is kind of astonishing. This is not an easy one for trump to get right. We we under francine understand from the Trump Administration they want to phase a mini deal. Can china sign up to that . Ian they will, but they will not give anything further. Trump will have to accept there will not be a new legal structure around intellectual property protections. They have to accept the fact that the chinese are not trumpng this is a deal was not prepared to accept a couple of months ago. If he comes back and says, this is a deal and we will take the tarasoff, markets may be happy tariffs off, markets may be happy but he will take some serious heat from democrats and republicans. Worse if he lot tries to give the chinese something. Tom images of turkey pass the euphrates, this is the bread basket of syria, green. Is russiansthis keeping the turks and the syrians apart. I get that for propaganda, that is the messaging. Is that the reality that russia is trying to keep turkish and serious forces apart . Ian they are the force on the ground. The russians are trying to ensure that the turks do not take too much land. Morningogan saying this 30, 35 kilometers. Is that a new gaza strip . Ian that is too harsh a statement because i dont think you will see large numbers of syrians returning. T will be a no mans land you have to recognize that you have 100 u. S. Troops stopping an invasion that was keeping about 5 million syrians comparatively safe. Opening the floodgates for the turks makes it more dangerous for those people. The one loser in this has been the syrian people. Tom dr. Brammer with us for seven hours today, so much to talk about. The Eurasia Group and their timely report with axa out today. Discussion. What a lineup, dr. Lipsky, erik mann,n, dr. Fuhrman, dr. Dr. Franklin frankel. This is bloomberg. Alix brexit mission impossible. Eu says theres no deal unless the u. K. Moves as the Northern Irish Democratic Unionist Party stands in the way. China and the u. S. Clash over hong kong. Bill that hong a it willthat china says bow retaliation if it becomes law. Welcome to bloomberg daybreak on this wednesday, october 16. Jp morgan closing at record yesterday pickard yesterday. Bank of america jumping higher. Equities down 0. 2 percent. Maybe more of a macro fear. Cable rate down. Lots of volatility as the brexit headlines are coming fast and. A big rally continues within the bond market. We look to be seeing a steepener early this morning, but now in a modest flat and there across the cu