A move that would mark a stark change for the owner of craft and burger king. Nejra welcome to daybreak europe. We are coming to the tail end of earnings season. We have numbers breaking from abm amro. The thirdquarter operating income comes in at 2. 1 billion euros. The estimate was 2. 13. Buts a little soft thirdquarter operating income pretty much in line. The thirdquarter profit income ratio, 59. 4 . Comments coming through here is that the timing of the completion of the dutch probe is uncertain. A few things to digest. We will speak to their cfo, coming up. To the markets. We are seeing a down day in asia. We heard a lot from President Trump yesterday, speaking about trade and the fed, comments we could see a trade deal. If we dont have a tariff hike. We are seeing risk off in equity markets. The hang seng leading declines with a Third Straight day of protest in hong kong. Volatility rising in that index as well. The kiwi is jumping the most in nine months. Switch over the board to take a look at you as futures. Yesterday, we saw a slight gain in the s p 500, closing shy of a record. Thats with the latest bank of America Survey shows. Expectations for Global Growth surging the most on record. Cash levels have been plunging as well, to the lowest level since june 2013. The dollar holding onto the gains from yesterday. Global stocks have dipped as donald trump says the u. S. Will increase tariffs on china if the first step of a agreement isnt reached. He said beijing once a deal to happen. Wants a deal to happen. They are dying to make a deal. We are the ones that are deciding whether or not we want to make a deal. We are close. A significant phase one trade deal with china could happen, could happen soon. But we will only accept a deal of its good for the United States and our workers and our great companies. Nejra traders havent been interested in betting against chinas you want and months. Its close to the lowest since before it weakened in august. Bnp paribas has warned over complacency, saying theres no reason to be optimistic about trade resolutions. Now is Portfolio Manager for fixed income at marion global investment. Welcome to the show. Do you think we have reached peak trade war . That, the era we have gone through with the tariffs will go higher and higher, perhaps it is coming to an end now. To hike tariffs if a phase one deal isnt reached. There is reason to feel optimistic. Interests tosides come to a barebones agreement and set the course on a progressive deal. Think about it. The electrical cycle may be coming. I dont think trump can afford to have a downturn in the economy. You heard his speech yesterday. It was focused on his economic achievements above everything else. Stocks are around 50 higher since he took office. Thehey fall 10 before election, that is the tempers and people will remember. View, a china point of lot of the stuff that has been in the phase one deal is stuff they need to do anyway or want to do. Thing is in their interests. But helps with trump and swing states in the midwest. Intellectual property, they want to encourage capital inflows. Capitald to encourage into the country when hong kong is under threat. That has been avenue for capital into china. There are plenty of reasons from both sides why it makes sense. Nejra the market has been getting optimistic about this. Bank of americas latest survey shows investors are now rushing to the equity market. You manage fixed income. Your portfolio, are you skewing the bias more towards risk at the moment . We have been for a while. There has to be a thought in the trade war. You can see there has been a Movement Towards risky assets. I wouldnt say it has been overwhelming. If you look at the core Government Bond market, yields are low. Extra bit of yield they wanted to be in safe havens. It is deeply negative. You are seeing that unwind. Core Government Bonds have been unwound. I wouldnt say theres overwhelming optimism to get a reflationary boom. There is money to be made in low inflation bonds. The capital flowing into the u. S. During the trade war coming you see people by whether it is u. S. Fixed income or simply u. S. Money market funds. The fed rates are higher than the rest of the world. You have not seen that unwind yet. You have to unwind these short positions but you are seeing that capital flow out of these usa pagans into the rest of the world. I dont think that actual cash flow is taking place yet. There is still room. You need investors to have more confidence on the trade front. A pickup and acceleration in that. China credit data was a bit too weak. Your positioning for that rotation, what does that mean for the dollar . They are a risk. People are reluctant to come out of those u. S. Capital markets. The situation is still uncertain. Trumps speech underwhelmed Market Expectations. And tor to get that flow weaken the dollar, which we think will come, you need better data than the rest of the world. It will be interesting to see what powell says later. You have seen already some Interest Rate convergence with the insurance cuts. He clearly wants to be on pause for this of the foreseeable future. The dollar still trades quite strong. He indicates that hes willing to cut rates further, if the data does come lower, that would support people moving out of dollars. Policy, we see some stabilization, and no further escalation in the u. S. China trade talks. It hinges on china. What are your expectations for china policy . Would you be buying chinese bonds . I would not just yet. There will be a Good Opportunity to. Before i get more comfortable, i want to see how, whether there is any spillover from high oil prices. You are seeing a big jump in headline inflation because of this jump in oil prices. I want to see if that feeds through into broader inflation. In terms of the chinese response, you are seeing a tiny cut in the loan primate last week. Thats a good signal that there is easing on the monetary side. It is not aggressive yet. The premier said that there is pressure on the chinese economy and they acknowledge that rates have fallen substantially. They are at multidecade loads. Lows. They are hoping for a phase one trade deal to give chinese growth a break. Along with the more elusive physicals from china, i wont by chinese bonds yet. ,nce those prices hit through there will be opportunities to buy chinese bonds. Nejra lets get the bloomberg first word news with one half in hong kong. Good morning. Hong kong security chief has warned of unthinkable consequences if violence continues. This as the citys Financial Center braces for a Third Straight afternoon of protest. Earlier, commuters passed under the first trains amid calls from activists to impede rushhour traffic in a show of anger over police tactics. The International Energy agency says Global Oil Demand will likely plateau around 2030. Its as the current growth rate of 1 will hold for the next five years. Says lower Global Demand growth once it has been. The president of lebanon has sparked public anger by calling on demonstrators to give up and go home. His comments out a new surge of unrest which claimed the first death. He urged people to stop being negatives. He warned lebanon could die. Demonstrators reacted by blocking roads and setting fires across the country, restating demands for the removal of corrupt leaders. New delhi is choking once again. The air quality reading rose above 400 on tuesday, eight times the safe level. Wind blowing from the northwest brought smoke from burning rice fields, piling pressure on the government to find a solution. The World Health Organization data shows india has the 10 most polluted cities in the world. 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. Nejra thank you so much. 3g capital has a new evidence elevator pitch. Vying for an elevator unit. It is competing against a number of other firms and strategic bidders. Here with the details is dani burger. Why would this private equity germane interested in a lift business . It comes down to returns. Its as simple as that. And consumer goods, they are wellknown for their kraft deal. They see their consumer goods business see multibillion dollar writedowns. This is really a story of crowding. Private equity is so crowded. You are seeing players having to move away from their core focus in order to look elsewhere for returns. 3g is moving to this elevator unit. It has to do with how much dry powder there is in private equity. 3g has about 10 billion of Investor Capital they need to employ. They are getting a lot of pressure from their investors to do something with it, to go after those big deals. Lot of investor interest it would me the bill of a big deal. Nejra is this an asset that is insulated from the economic slowdown in germany . Any german asset, especially industrial conglomerates, feel the pain of a german slowdown. Deals actually why this has been made possible. When you have slowing growth, you have big German Companies thinking, we cannot get as much organic growth as we thought we could. We need to look at spinoffs and narrow our focus. Germany,pply side in you have more assets coming into the four. On the demand side, you have investors that usually would look in the u. K. When it comes to european deals. They are fine moving into germany. Conair raise their biggest European Fund which focuses on western europe specifically. This is just one of many deals taking place in the region despite any of the economic slowdown weve seen. Up, looking for clues. Jay powell appears before congress today. Investors will be looking for confirmation that he sees the economy on solid enough ground to hit pause in december. Protests have continued across hong kong today. This comes as hong kongs security chief cautioned that unthinkable consequences may come. We have plenty more coverage ahead as the hang seng leads losses in asia. This is bloomberg. Listen to me. Dont listen to them. Freedom of speech. Nejra a day of protests in hong kong. They have announced suspension of all schools on thursday. It comes amid protests across the city today and Hong Kong Security chief has cautioned that unthinkable consequences may come if violence continues. Lets check in on the markets in asia. Juliette saly has more. Good to see you. The hang seng wheezing leading losses today. It certainly is. Protests continuing throughout the week. The hang seng index on track for its lowest close in a month. A number of property stocks have fallen through. That negative sentiment from hong kong really flowing through to the ridge rest of the region. Asian stocks are having a bad day. The nikkei giving back yesterdays gains. Australia stocks closing the where for a second session. Marketz surprising the by leaving rates on hold at 1 . They say they are waiting to see the impact of recent rate cuts flowing through the economy. Fx traders have been caught out. The kiwi jumping the most in about a year. Holding onto those gains. Its the best g10 performing currency today. Have a look at my chart. The interesting to see fading correlation between the s p 500 and the hang seng index. It had been moving in tandem until we started to get these protest ratcheting up over the last couple months. Falleng kong index has while the s p 500 has risen about 12 since june. Mark cranfield saying traders in hong kong can no longer wake up and see what has happened on wall street to dictate their days trade because it all really is being driven by domestic issues. Those who have tried to chase momentum on the hong kong index by tracking the s p 500 could have lost by around 12 so far this year. Nejra volatility has been increasing as well. Thank you so much. Lets get the Bloomberg Business flash from hong kong. Thanks. Roundusk says tesla will out its Global Manufacturing network with a factory in berlin. Willsay the german plant build both batteries and vehicles. Until now, the company has relied on a single facility in california but its now on the verge of starting sales made at its chinese factory. Says media in Hong Kong Alibaba has won approval to pursue a share sale that could raise more than tell billion dollars. 10 billion. It has given the green light to the move. Alibaba is proceeding with the years largest Stock Offering despite violent protests within hong kong. Amazon,breaking up with ending a Pilot Project where it sold its products on the website. The company says the decision is part of its focused on more direct relations with partners. Nike ads that it will continue to use Amazon Web Services to power its apps and services. That is your Bloomberg Business flash. Nejra thank you so much. President trump has renewed his assault on the fed, saying policymakers are hurting the u. S. Economy. Is at athe u. S. Competitive disadvantage because the fed has failed to follow other Central Banks into negative rate territory. Now many are actually getting paid when they pay off their loans. Known as negative interest. Whoever heard of such a thing . Give me some of that. Give me some of that money. I want some of that money. Our Federal Reserve doesnt let us do it. I dont say thank you. The smart people are clapping. [applause] nejra investors will be watching jay powells appearance before congresss joint Economic Committee today for confirmation that he sees the economy on solid enough ground to hit pause in december. In new zealand, the kiwi dollar surged the most in our ninemonth. The Central Bank Held out on the fed, saying it is standing by to add further stimulus if needed. Our guest is still with us. Lets start with the fed. It would be surprisingly rare for the fed to not change policy in one direction or another during a president ial polling year. It has done so in each of the last 10 years. Willoughby on hold through 2020 . To row Jerome Powell would love to be. It will be nasty as we head into the u. S. Election. It will be a luxury that he doesnt have. View, political point of he will probably have to cut rates again next year. The u. S. Data has been reasonable. We have not seen bases saint week next a sustained weakness in the u. S. Dollar. Even though the u. S. Economy is dollar is still the predominate currency out there. Two thirds of global liabilities are in u. S. Dollars. If you get a stronger dollar and you have high Interest Rates in the u. S. , thats a burden on the rest of the world. , this haseen recently enabled em Central Banks to cut rates as well. Before, they had this dilemma where if we cut rates in our domestic credit and demand, our currency is going to we can you getcan get capital outflows from the country. Loath to cut rates to aggressively. We have seen some of those cuts in em. Nejra i want to get your take on the rbnz. Does that signal to you that develop market Central Banks are hitting the pause button . Is that something investors need to take into account . There has been a partial thaw in the tray were trade war. New zealand is an incredible open economy. The trade war would have a big impact on how that currency trades. The rbnz cut quite aggressively in august. They want to see how those rates play out in the economy. You sawres any Inflation Expectations drop. The rbnz forecasted a sharp we acceleration in growth next year. We will wait and see how that plays out. They want to keep their powder dry for now. If the economy does continue to weaken, they will be back. It is handsoff, much the same way a lot of european Central Banks, who have slightly different problems because their rates are a negative territory, theyve hit the pause button two. That has allowed this to take place. People are no longer to worried about excessive rate cuts happening in Central Banks. Nejra you are short core Government Bonds. Long with a lot of em rates. The fed is on pause and not cutting as far as we know for now. Did that complicate your long em trade . The long em trade would be easier if there wasnt an easing bias in the fed. If the fed is on pause, it relies on the improvement in Global Growth and continued thaw in the trade war. Some of the european banks we have seen recently, it is not incredible. Weve seen underlying improvement in things like new orders and future expectations. The iso was better as well. You are seeing exports pick up in some of the more tech focused economies in asia. There seems to be some improvement. If you get that translation into hardly hard data, em can do pretty well. Nejra staying with us. Coming up, what is holding back a Banking Union for the euro area . We will bring you that. Hong kong has announced an extension of all schools on thursday. Continued protests across the city today. We will keep you uptodate. This is bloomberg. Nejra this is bloomberg daybreak europe. Chinese giant tencent releases thirdquarter earnings today. Its expected to report fairly any growth in net income. Thats because a number of concerns have snarled what was supposed to be their year of recovery following a brutal 2018. This includes a sharp chinese economic slowdown, competition , in the hong kong protest. Our opinion columnist joins us. Great to have you with us. Traders are bracing for big moves after these earnings. They are br