Ministers brief reporters, and it is brutal on the negotiations. Tom brutal is the right word. There was one photo ice saw. E looking justutt exhausted. For those of you who have not followed the soap opera, it is still not over. This monday isn deceptive, extraordinary. Out of china, the virus particularly in america, and this european donnybrook it is amazing. And then the market reaction. Francine it is quite a lot for a mid july market. Now lets get straight to the bloomberg first word news. Here is ritika gupta. The their repeating European Union may be on the verge of a deal with denmark and Sweden Holding of the oceans. They appear to be ready to greet that 450 billion of the fund would be made available as grants with the rest of it coming as low interest or loans lowinterest loans. Brexit negotiations are in a tense standoff, dashing hopes of between the u. K. And the European Union, which failed to make progress last month. British negotiators say the e. U. s concessions are not enough. The e. U. Says its attempts to compromise or not being reciprocated. Our not being reciprocated. Told abc there should be a lockdown of the entire state of florida. The mayor of los angeles and his city says his city is on the brink of restrictions because of the increase in virus cases. His comments suggest that months of tradeoffs between health and the economy are far from over. The president is questioning the competence of joe biden. Told fox news that if he had to sit in an interview, he would bond the ground crying for mommy. Biden stillhat joe leads the race. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, im ritika gupta. This is bloomberg. Francine . Tom . Tom let me go to the data right now. Equities, bonds, currencies, commodities. You have to go right to the bond market, the litmus paper off the e. U. Meetings. 1. 1459. Stronger at the bond market in europe really has not moved all that much. That will be critical to watch, up to what our new york 10 00 a. M. ,russels 10 00 brussels 4 00 p. M. Meeting. We will be watching the reaction of the bond market. Francine you are right that if you look at european bond lookds narrowing, if you at euro, it did strengthen to a fourmonth high. There are a couple of interesting notes. George saravelos publish something early this morning. We are fans of what he says, and he says the markets at this point may move on quite quickly. Im also looking at the. Urodollar, 1. 1458 made aus Recovery Fund breakthrough. Joining us now is Christian Keller, barclays head of economics research. It has been a difficult summit. Negotiations were very difficult amongst e. U. Leaders. The market is out pricing in a deal. Is the deal enough to deal with the economic catastrophe in certain countries, and what does it mean for the Recovery PlanGoing Forward . Thinkian first of all, i this is still a success. You describe the brutality of the meeting if you want to call it that way, but this is something quite a story. Whether it is 500 billion dollars or less than 400 billion, it is an economic debtery fund, european backed by the community that will have and it is a large part to grants to countries that are in large part in the most crisis. It will not prevent it. It is going to be a very deep recession this year, but i think it will set the conditions, for the potential successful recovery in the coming years. This is a crucial year, and i think the markets are pricing not necessarily the exact side of the fund, but the signal europe is giving here with the summit. It is not 100 a done deal. Does it make a difference if it is postponed, if they dont lock it down today, if it is done in a week . Is this about symbolism . Christian it is always a part of symbolism. It will not be correct for me to say it doesnt matter until a week later. It happensthat before august, so in the span of the next two weeks. Fromere is a postponement this week with a lot of acrimony that could take away from it. So ideally they do get a deal done today. If they go out and say we could really finalize things and come back for technicalities a week later, that is fine. Light, if there is a bus where several of the participants go out and speak angrily about the others, that will be a negative, but i dont think that will happen. Tom good morning. Im fascinated in my reading over the weekend on this, the internal politics of each leader. I would like to focus on what i see as a desperation with mr. Rutte as he looks at the netherlands coalition government. Is he playing to the whole audience or his he trying to do or is he trying to do diplomacy here . Christian i think a bit of both. He is in a particular precarious he hason, given that only half of the vote. He is reliant, his coalition, to a position vote. Nevertheless, i think there is a by to have, being led i think there are others, not only by the frugal four, but also by the german government. How is the accountability, do we spend the money . Forworst thing would be europe to spend 400 billion by the end of the year, and you may not have the results you wish for. With all the acrimony that comes out with this kind of diplomacy that we are used to in europe, i think it is useful debate, and conditionality is not necessarily a wrong thing. That is even seen by many economists that way. Tom how great is the divide between the continent and the new members toward Eastern Europe . There are so many memories there, back to the iron curtain, back to world war ii. Great is that distance to warsaw, to budapest . Yeah, that is an entire new element. To have of course simplify, i guess you could call it that way given what you just mentioned. T is mainly hungary if you are cynical, and that is what i hear from some of the diplomats. They say they are making this point in the end to be bought off and they will ultimately be agreeing, but they would want more of a package. That cannot really despite the fact that there are these differences in views between what europe stands for and how liberal it should be between western countries between germany and france and what the current governments have to say this is not something that is necessarily intrinsic in these countries, but it comes with governments that come and go. Francine what does this mean for euro . What happens from now until the end of the year . Currencieswell, always have two sides. What we could see here is optimism on the euro, and also some pessimism. I think you discussed this earlier with regard to the u. S. So uncertainty in the u. S. , the more optimism in europe, possibly a deal. I think it took leaders to a stronger euro, and that is on the weaker dollar side, it should leave us higher and eurodollar. Francine thank you so much, Christian Keller of barclays, who stays with us. Coming up in the next hour, chetan ahya. That interview at 6 30 a. M. In new york, 11 30 a. M. In london, and this is bloomberg. Tom bloomberg surveillance. Heres where we are. Sleeping monday in the summer not. The markets are sleepy. Full disclosure, we have not the news the vix on politics and interNational Relations, the ramifications in august really extraordinary. Christian keller with us from barclays. I want to go to where we are in the u. S. , which is a gaming of furlough to lay off, and the gaming of how businesses are going to adjust, and the firings to come. Does europe have the same challenge right now, where there is that sense of pending layoffs or rightsizing by businesses . Christian i think it is to some extent a Group Forward phenomenon. We had different responses, given the different labor market institutions, employment schemes, etc. Payroll support act in the u. S. , and you had germany, the short work scheme for workers. That creates a different situation and how the rate goes keeping, but also people on the payroll or supporting them generously when they were unemployed. This can come to an end. To seew, it is difficult how this will be prolonged for a very long period, and at the same time it seems like structural changes to the economy where a lot of these workers may not be able to jobs in particular, that may be permanently damaged from the corona. Francine bring that to price change and also through inflation. Is it a europe of disinflation, or can there be bouts of deflation indicated by the negative rates . Well, there is always the risk of a deflationary scenario when you have this type of economic encounter plus high unemployment. I would say that if you look at the policy response on the fiscal side, but in particular on the monetary side, a lot of that risk of an inflationary scenario is taken out. The question is then, is it enough to go back to a reflationary, inflationary scenario, whereby we are getting close to targets in a few years, meaning 2 . I think that jury is still out. The inflationary risk i think has been addressed by very large policy responders. Francine how much more policy space is needed to do more . Is a policy response at the moment appropriate because we think that there is going to be a gradual recovery, or that we dont go back into lockdown . How do you view it . If there were an on and off lockdown for the next 18 months, what does that mean for the economy . Christian that is correct. I think most of the forecast, based on this assumption that we will have a recovery from here and that it may be long, euro, not a vshaped come but i think it will get better from here. We gocall it a v, where back into a recession and possibly we will have to go back as bad asns, closing the ones that we had in march and april. I think that would raise difficult questions, particularly on the fiscal side. Is veryas inflation weak, i would assume that Central Banks continue to support the policy meetings. They would continue to load the debt that is being issued by fiscal agents on the balance sheet. If there is no inflation, it does seem that there is something that they can do for some time. I think that combination of fiscal largess, combined with an aggressive qe, would remain the policy response if we had a second wave. Kind of policy response are we going to see from pboc and chinese authorities . Rally two weeks ago was suddenly stopped. Does that give us more of a sense of things to come . Well, if you talk market,e chinese stock it is very much driven by the retail sector. That is at times being boosted or being taken back a bit through state media. I think it was interesting that on the day that we saw large declines in this chinese stock market, we saw a consensus for the second quarter. It doesnt really seem very much related. It is much more a matter of mood. At thefar, if i look situation in china, it does seem that the policy response, even though it is more muted than 2009, it is quite effective. The chinese economy is recovering relatively well, and it is a mix of fiscal and some monetary easing. Obviously not the qe that we see in the west, but they have more room on the fiscal side, and in terms of the policy response, i think china has room to support the economy. Tom Christian Keller, thank you so much, with barclays. A nice update in the midst of this fractious e. U. Summit. We will have a lot more conversation, purchase early at 10 00 a. M. New york time, where maybe we will get a photo out of it, who knows. Dividend up has will join us from the world bank. Where is the David Malpass will join us from the world bank. We will touch on that. From london, from new york, it is monday. Bloomberg surveillance. Good morning. Francine this is bloomberg surveillance. Julius baer kicking off European Bank earnings with a record first half profit. Bloomberg daybreak anchor manus cranny spoke with the bank chief executive earlier. We have seen continued client activity through the entire year with a bit of on and off, but coming out of the first half into the second half of the year, i still since there is a lot of dynamics of clients looking at what are the markets doing, how are those recovery parents happening in the different countries. Manus when i look at treasuries, the fx derivatives in metals, and half a billion swiss francs my question is, is that hedging, or is that actual active Client Engagement . How would you define that kind of number in the report . Philipp obviously are Balance Sheets come on the one side there is the treasury book, and that has been revalued with the huge change in dollar Interest Rates throughout the first half of the year. But obviously on the trading side we have been benefiting from very high client activity throughout that period, which is reflective in the numbers. Manus the guidance going into the second half of the year, are you going to need exceptional volatility to deal to deliver these kinds of numbers and margins . Philipp i think obviously volatility helps. We are a Business Model that capitalizes on all the till of the come as we have proven, and i think we are going to have it, and obviously from a market perspective. There is going to be stimulus, political uncertainty, but i think there are a few ingredients in the second half of the year can that that can drive volatility. Manus will the election in the u. S. Drive that . Philipp that is one of the risks, but not the only one. And a scope do you think there is a certain amount of detachment from our markets from reality . Philipp it is very hard to comment. I think obviously in reality come in the real economy, the impact of the crisis is going to play out over a longer period of time. In the first half of manus i think we are underestimating the length of time. Philipp maybe, but it is hard to predict recovery patterns. Those countries that have taken measures early and in a thorough and deep way, they will see faster recoveries, whereas other countries will be in for a much longer game. Manus the biggest risk going into the second half of the year what do you think it comes from . Negative rates, china . What goes through your mind . Philipp i think we are going to see uncertainty, and i think the uncertainty lies in the speed at the depth of the recovery pattern. Where does it happen and when . That uncertainty is a big risk. And then a bit of overlay from what is happening politically. But i think we are continuing the volatile situation, and it is good for those players to capitalize on that. The juliushat was baer chief executive speaking to manus cranny. There isnderstand that initial Public Offering with plans to list simultaneously in hong kong and chinas newtek force in shanghai. We understand that the valuation will be of at least 200 billion. Coming up on leadership why would david ridge sign david rubenstein, speaking with mike everts about how the chief commerce giant is navigating the covid19 crisis. That interview, 4 30 p. M. In new york, 9 30 p. M. In london. Right here on bloomberg. Many of those cases are young people who will heal in a day. They have the sniffles, and we put it down as a test. I guess it is like any 9. 7 . People are going to get better, and in many cases, they will get better very quickly. Audience, anglobal extraordinary sunday for the president and this nation. Oft was with Chris Wallace fox news. It was a contentious interview by all opinion get a lot of Fact Checking of the president and his posturing about mr. Biden as we stagger towards an election. Right now with a perspective on this is a man with a wonderful cv. Peter trubowitz is a professor within lses prestigious to National Relations office. Do you buy the polls . Thell remember in 2016 when polls did not work. Do you show do you buy the polls that show mr. Biden ahead . Prof. Trubowitz yes, if the election were today, biden would win and probably the republicans would lose the senate. But i expect this to tighten between now and november. It is fair to say that these polls have to be taken with a grain of salt. That is to say there are a lot of trump voters people who will vote for trump who are not saying this to the pollsters. It could be as much as 4 or 5 of the vote. Arehat of what you seeing the polls. By 15 is a pretty big margin. That was in the Washington Post nbc poll yesterday. Tom there was a swirl this weekend from the legacy of Voting Rights from the legacy of john lewis to the president questioning the quality of the vote in november. Should our viewers and listeners prepare themselves for a contentious counting of the votes in november . Prof. Trubowitz yes. I think it really depends on how close it is. If it turns out that trump is able to close the gap and we can talk about how he might do that and it gets close, that i think there will be disputes, especially if it is close in battleground states over these absentee ballots. You heard the president yesterday on this very topic in that fox news interview about how he has serious questions about the integrity of the absentee ballot. Close,t that, if it is they will push on that, trumps team. It comes as no surprise that biden is lowering la wyering up. He has 600 lawyers in his stable if this issue comes up. Francine good morning from london. How does the president try to get it back to win in november . Prof. Trubowitz i think he has two ways to go here. One is to blame everyone and anyone for the pandemic. And you can bet your Bottom Dollar that china will be singled out. He is already moving on this front. Why . Because in many voters minds, china is already seen as an economic threat to american jobs. And since the pandemic, their views on china has become have become even more negative. There are if you pulls out, pretty recent polls, that showed two thirds of americans right now hold a negative view of china. The other side of this, though, is i think you will hear a lot more chatter from the president about a vaccine. And the vaccine may be the president s october surprise. Even if a vaccine does not materialize and time for the election, i expect to hear a lot hope is just around the corner as we get closer to election day. Francine unless the number of deaths goes down, the number of infections go down, it does not matter who you blame. Even if the president says this is all chinas fault, the handling of the crisis at home is on him. Prof. Trubowitz well, i think that i do not disagree with that. That is bide