He will propose to tell the eu you will let brexit talks fail rather than compromise. The Withdrawal Agreement is a legal obligation. Congress returns amid a standoff on stimulus. President donald trump says its democrats that dont want the deal. ,e speak with a high speaker nancy pelosi, later today. 9 00 a. M. In downtown. Annmarie, good morning to you. You rummage around in a top read stories. We both converged on tech and beyond. Peter oppenheimer, who we both interviewed several times, believes in tech. As we come back after labor day. Its not 1990. I will ask how old you were in 1990. Evaluations are not stressed. Good morning, how are you. Annmarie i think we are probably in very different places in 1990. Manus [laughter] annmarie oppenheimer is taking the bullish view on tech. Their Technical Strategist says history, if its to repeat itself in terms of the market, we will have a third day, which would be today. They are seeing this downdraft, but oppenheimer is looking at the pricetoearnings ratio and is saying, yes, everyone is talking about as having these incredible technorati rations, but they are nowhere near the dotcom bubble. Manus they are all in on the digital revolution. We will morph up. What we seen will multiply. That is the base case of the oppenheimer view in tech. Strong cash generation. You can use the term later on. I know you want to. Strong cash generation. Earnings, stable balance sheet. The transformation of the economy and talk market are further to go. Yes, there is a risk. Stall, andvery could that could give you a 10 drawdown. Annmarie certainly. Lets look at where markets are this morning. I want to kick it off with the nasdaq 100 futures. They were under pressure yesterday and this morning. Down for 10th of a percent. Csi 300, chinese equities under pressure down by a half of a percentage. This comes as we have rising trade tensions, which we will talk about in a moment. Trump pledging to scale back economic ties with china. Mulling this trade in terms of banning some certain cotton from china. Pound this morning, 1. 31. Down she goes. Brexit talks kicked off in earnest in london today. But yesterday they said sterling was carried hilar higher by Short Covering of the dollar weakened. He says that Short Covering rally is over. Ymex down 2 . The lowest we have seen in two months. This comes as opec has their 60th anniversary. Our mliv question is whether the price of oil will ever get to 60. Have trade we headlines heading back from the chinese equity gains, resident donald trump has taken another shot at china as a election rhetoric rises in the u. S. Beijing faces decoupling or massive tariffs from the u. S. , adding that American Companies who outsourced to china will be banned from winning federal contract. We will and our reliance on china once and for all. Whether its decoupling or putting in massive tariffs like i have done already, we will impose tariffs on companies that desert america to create jobs in china and other countries. If they cant do it here, let them pay a big tax, build it someplace else and send it in to our country. We will prohibit federal contracts from companies that outsource to china. Annmarie the United States is weighing a ban on cotton products from china over human rights concerns. We are joined by our Senior Editor derek wallbank. In terms of trade, what is at stake . We have heard a lot of this. Is this just Election Campaign rhetoric . Thingsi think one of the that is at stake in this election is a little bit of style between joe biden and donald trump. Certainly, both of them are projecting that they be tough on china. Indeed, this move that you are seeing, as Kevin Cirilli reported in the new york times, also reporting that the Trump Administration is weighing banning cotton from xinjiang. That is something a Biden Administration might also do at some point. The Biden Harris Team says they want to be tougher on china about human rights in xinjiang. But what you are seeing under donald is seeing the Trump Administration come out off of a multi polar front, trying to be tougher on china. This one, if this goes through, this is on human rights. But you are also seeing things related to hong kong. You are also seeing things related to broader tensions more generally. Manus good to see you this morning. Try and differentiate for us where trump and biden diverge in terms of their stance. Is this a new escalation in the trump narrative . We saw this in the previous election, which was make america great, bring the jobs home,. Derek on style versus substance you see more on the style. You would expect under a bied den administration for things to be more targeted rather than when you start seeing these reports you start saying, i wonder if they will go through with it. Bidens administration might be more predictable on things like human rights. You can expect similarities on things like hong kong. Trade generally, that might be where you get a couple of differentiators. En has been someone willing to work with china. He has hardened a little bit recently. If you got this, into a Biden Administration, you wherebyve an opening both sides of the table would sit and assess where they are and where they wanted to move. So you would have an opening somewhere there. If trumpme juncture, wins four more years, china would know they have to put up with donald trump for four more years. Maybe you would see some assessments changing their. Its a little bit of a difficult game to play going that way, so its just a little bit of uncertainty. Manus we saw some comments from xi talking about the need for a Global Response in terms of the overall narratives. Globalization on top of the xi and the isolationist from the u. S. Our bloomberg Senior Editor, thanks. Lets get you first word news. Nor all right is in luncheon laura wright is in london. Laura deputy finance minister said the economy should not return to a balanced budget anytime soon, and that normality does not necessarily mean running a said they arellor set for 280 billion euros because of the virus. Jpmorgan is doubling the number of Investment Bankers coming into its london and new york offices. Sources say that bank as question that 50 of the offices has any given where day up 25 . Half of the sales are already coming into the london office. Argentina has emerged. Countryal listed the with a stable outlook following the restructuring of 65 billion of overseas debt. The upgrade is the culmination of four months of negotiations with argentina. Issues were listed to replace securities that had been in default since may. 24 hours a day, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Manus laura, thank you. Our guest host is the Senior Executive officer of Capital Management. And where wederek are with chinau. S. Relations, its irrelevant and a daily short board its irrelevant, it only changes when there are tariffs. The risk of that is low. Do you read price any china or asia assets on the back of this next move overnight . We will see a lot more from biden and trump. Fora will have the excuse anything. Both candidates will take a swing at china. What we have seen his info into china over the past few months, especially into the currency. The currency has come back down a bit relative to the dollar. This is being smooth out by the chinese authorities. In the shortterm i would just take this with a pinch of salt as normal rhetoric. Inont the gets massive terms of social investment to china. I think its more of what sounds good for headlines right now. Excuse, the proverbial i guess we have to ahead of november. Just eight weeks away. I want to ask you about chinas 10 year yield. Is it the highest over the year it hit the highest over the year yesterday. Due to geopolitical tensions and trade tensions, is it something you want to potentially not get involved . Even though when you look around the bond market, its the only place you can get a decent yield. Is a tremendous amount of flow into six into fixed income. Especially with china. But at the same time i think we have to look at the inflationary trade thats being put on across the market space and that includes gold and might include the back end. You are seeing rates all of the sudden change momentum from pushing lower in the short term. I expected to continue into the fed. We will see if they tangible change in terms of the duration. I think that is more driving across the board into china and the u. S. There is a very strong correlation. We know that from the u. S. And chinese fixed income space. What is the expectation for the inflationary trade thats actually being put on more so post jackson hole . Reflation trade you think is topping out. If you believe that it is possibly topping out, how do you respond to that . What do you actively change or allocation on the back of that . Saed when i say i expect a topping out in the short term, i am expecting a onemonth topping out about trade given that we are going into the season and it will be in the fixed income space. The shortterm is one of the reasons china is benefiting in the short terms. We think that perhaps after course which i know will pass. They try to up the stakes two weeks ago with the chinese. They passed through the negotiation. You have to begin lightening up in terms of crude and in terms of hard commodities. At copper that is a responding, but you are seeing some changes, especially in the soft commodities space. You are seeing some selloffs and sugar, for example. Space,s of commodity australian dollar, new zealand dollar, which has been the main beneficiary of inflation, it might be time to shift out of those positions into something a bit more conservative. Annmarie thank you so much. Stay with us, ark capital manager saed stays with us. Sterling slumps. A no deal brexit. We discussed the latest on eu brexit trade talks. This is bloomberg. Manus this is bloomberg daybreak europe. U. K. , piling the the pressure month this week. The Prime Minister increases leaving the eu without a deal. Johnson is willing to walk away from talks rather than compromise on what he sees as a core principle of brexit is. Here a very latest on just how negative the sentiment has turned against sterling. Good morning. Dani sentiments have been turning at the moment. Seen the decline as much as 1 overnight. The Summer Holidays are over for traders in sterling. Trading around 1. 31. Those declines continued this morning as johnson steps up that rhetoric, threatening to leave without a deal. The level of sterling going as low as 1. 20. Here is the issue with sterling. It does not necessarily have that much of a discount price into it right now. If we look at the city pain indicator, which is a way to see what speculate of traders are positioned in the pound, they are currently for active traders at their most net long in two years. From one year ago, all of this net short we saw and the pound has virtually disappeared. Not to mention that sterling is basically up on equal footing with the euro, and is more expensive than the yen according to the purchasing price parity index. Its not just brexit, a u. K. Economy is set to contract 10 in 2020, 1 of the worst readings in the entirety of the world. We have that issue, we have coronavirus cases mounting, then you add brexit to the mix, sterling could certainly fall further. Annmarie thank you dani burger. We have seen a fall from 1. 34 last week to 1. 31 today. Saed is still with us. I want to get your take on the talks. You have the u. K. Saying they expect realism from the european union. If you look at the risk reversals, we are less bearish to investors and they were in 2018 and 2019. Do you think investors are a little bit too cavalier about a trade deal coming to fruition . I think the sterling story is actually interesting. For the past few months we have and dollar weakening sterling is one of the most under owned currencies out there in terms of structural trade. They have not really adjusted their positions. Have seen his hedge funds and fast money. There is definitely optimism in the markets regarding a deal in the pipeline. In the one side there is a government will not pass on a chance to make a deal, especially given the covid a potentiald respike in covid cases. On the other hand, johnson could be willing to walk away from the table. The latest actions indicate he is willing to walk away. Its now the market in the past 24 hours that has begun to reprice. We will see repricing of that risk over the course of the next few days. Past two weeks we have seen a loss of negative rhetoric from the u. K. But we havent seen a price reaction as far as what we have seen in the past 24 hours. I think this pricing will take place the next few days. It could go back to 129, 128 in sterling. But until we have further priorities from the europeans and johnson, what their ultimate intention is, i think will stay in that range. 20us talking about a book on a hard brexit. But a look at what goldman is saying. This is what we need to decide. The u. K. Government my ultimately decide minimum Market Access is the price worth paying for maximum regulatory economy. But from a political narrative, the brexit deal before the end of the year is going to be hard to resist are in on a hard brexit i would be surprised if they only put in 120. Ultimately, they will do the deal . What is the probability factor for you . Saed it was probably 70 last week. I felt that the British Government was willing to proceed. What we have now seen is this move by the government. I am much more optimistic regarding a deal than no deal. We could see an extension again. We have seen that so many times, as you know. I think we could probably see a of a dealhe framework over the next two or three weeks. I would give at 60 , 70 . I think there is a pricing of the risk that has been no deal and very passive the last few months. Manus do not hang up the phone. Complex from our capital. Arch capital. Return to washington after the summer break. This is bloomberg. Annmarie good morning this is bloomberg daybreak europe. I am in london with manus cranny in dubai. Lawmakers return to washington after their summer break. Hopes of congress and white house reaching a deal on further economic stimulus has faded. From our us is saed Capital Management. Will they ark Capital Management. I did not hear you, say again . Stimulus the fiscal deal, the hopes of the deal, will that lose urgency in washington because of the august payrolls data . Saed i think there is more pressure right now from the Trump Administration to get the deal going, given that they will be a decider in the elections. People are looking for numbers in terms of the fiscal stimulus. They have had the paychecks. Now they are looking for a new stimulus deal, especially given that this is the respike in the recovery and jobs still a ways off. We are still off february and march numbers. I think the Trump Administration will pressure more for fiscal deal, but it will be a political talking from the democrats and republicans of how far they are willing to go. I think its still on the table. And more of it to become an issue in the elections over the month next month or two. I want to get a quick comment on bonds. Jpmorgan management saying investors are capitalizing sacrificing capital we have to stop making rich bets on bonds. We are paying price only. Is that a narrative . Is that a risk that you see . Saed in terms of the fixed income space and the 10 year yield, most of them are looking for a lower yield, given that the feds position on rates for a long time. Obviously the fed is interested in keeping the curve. There is definitely a repricing in terms of risk on the back and. I do expect the 10 year to go back to 1 . Especially given where the fed wants to take us. If we buy into the fed narrative, we are looking at inflation and we will maintain the amount of accommodation that they have, especially given the recovery in the post covid world. We are looking for a rebound in the 10 year. Abukarsh from ark capital. This is bloomberg. Annmarie good morning, from bloombergs european headquarters, im annmarie with manus cranny. These are todays top stories. President trump thousand to scale back economic ties with china, saying he will bring back jobs the United States while touting made in america tax credits. The pound dropped as Boris Johnson prepares to tell the eu to let brexit talks fail. The Withdrawal Agreement is a legal obligation. A nobrainer over pulling out of nord stream 2, following the poisoning of alexey navalny. That interview is ahead. Good morning. There is so much to digest this morning. More rhetoric on the trade front with our guest host. Who says this is basically going to be the case in point the next eight weeks as we head into the november election. I am interested to see how the fares today,ace given the fact that we had labor day yesterday, u. S. Equity markets closed, and there are two different notes we are looking at. Oppenheimer is all in. Another Technical Analyst says it will be a thursday of drawdowns. Is Peter Oppenheimer at Goldman Sachs saying they are all of theerweight markets. They do say, it could be Global Growth that tops out and that andd go in equity markets they would drop by 10 . It has suddenly shifted in gear. Aed made the point about the pound, we are repricing it. Are we repricing a new global risk that we have dispensed with in regards to brexit, ripping up a Global International deal with the partners. We have seen this Prime Minister. One could say theres nothing to stop him f