Good morning, everyone. Welcome to bloomberg surveillance. Im Francine Lacqua here in london. We are getting some breaking news out of the u. S. This is President Trump, according to bloomberg sources, putting up to 100 million of his own cash into the president ial race. This is what the markets are looking at. If you look at eurodollar, there is a bit of movement on eurodollar, but also pound. European stocks are sliding, led by technology stocks. Oil dropping 28 two month low to a two month low. There is concerns that President Donald Trump has been stoking these tensions with china and germany. We are seeing construction companies, Mining Companies leading losses across the stoxx europe 600. Lets get straight to the bloomberg first word news. Good morning. Lets start in the u. K. , where the chief brexit negotiator has called for realism from the eu ahead of the latest round of trade talks today. Hean emailed statement, warned britain must be treated as an independent country if progress is to be made. Both sides are seeking to settle outstanding issues before a summit on october 15. Boris johnson has appeared relaxed about the prospect of leaving without a deal, telling supporters it would be good outcome for britain. Germanys debt spending may become the new normal. That is as the finance minister said the economy should not return to a balanced budget anytime soon and that normality does not necessarily mean running a surplus. Chancellor Angela Merkels government abandoned its socalled black zero policy this year and is set to borrow millions of euros to counter the virus crisis and modernize its economy. Argentina has officially emerged from its night default ninth default. This follows the restructuring of 65 billion of overseas debt. The upgrade is a culmination of more than four months of negotiations with argentinas biggest creditors. New bonds were issued last week to replace securities that had been in default since may. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am leighann gerrans. This is bloomberg. Francine . Francine thank you so much. Big news out of europe. A top tradeamed post. He replaces and succeeds phil hogan. It shows the importance that the commission at the eu is attaching to some of its commercial policy. Vski highlights that they are worried about curbing some of the markets distorted practices that may be chinese officials are putting in place. Ia tadeo is monitoring moderating a panel with mr. Vski. O he is the executive Vice President in charge of the euro at the european commission. With the appointment of him as the top trade commissioner, really once again shows us that the eu is serious when it comes to trade. President donald taken another shot at china as President Donald Trump has taken another shot at china. He has threatened to scale back economic ties with the nation by punishing American Companies that outsource to china. Pres. Trump end our reliance on china one sent from, whether it is decoupling or imposing tariffs. We will impose tariffs that punish companies that deserve america to create jobs in china and other countries. If they cant do it here, then let them pay a big tax to send them to other countries. Francine for more on all of this, we are joined by brenda murray. A lot of stuff to do with trade. There is what we heard from President Trump yesterday and then just moments ago, we have a new trade commissioner and the eu in the eu. His trade is traded the biggest unknown for top world economies in the coming months . There are definitely a handful of big events that will come together over the next couple of months. It has been a big year for trade already. We are looking at a number of other risks. The one you mentioned at the outset was President Trump, who spoke yesterday mainly from a script that we heard already about decoupling from china. What was different about this is it wasnt to his base or a rally of his supporters. It was a labor Day Press Conference where he made this point about china in stronger words than we have heard recently. Vskis is an interesting pic, he is not a hawk or a dove when it comes to trade. He is pretty much down the middle. That will be interesting to see how it pairs up with the more protectionist u. S. Officials. Francine what do we know about how Bidens Administration would be different from the Trump Administration when it comes to trade around the world . Biden said that he will put the trade war kind of to the backdrop, at least initially, while the u. S. Tries to get a handle on the pandemic and economic downturn that it is undergoing. Know, mayexpect, you be issues with china and the eu to be delayed for six months to ntil any sort of recovery is seen. It sounds like a cessation of the hawkish rhetoric both on the transatlantic and relationship with china. Francine all right. Thank you so much. Brendan murray with the very latest on trade. Vskis of the European Union will become the eu trade chief. Fivewas announced four or minutes ago. The man of the hour is right on a panel with maria tadeo in brussels. We will be speaking to nancy pelosi later today about trade. She is the u. S. Speaker of the house. We will be looking forward to that interview. This is bloomberg. We also need to get that could work. It is important for being able anresolve trade disputes in orderly manner. We need International Organization dealing with trade. Therefore, we need w2 and we need to reform it. We talked about this idea of a european identity and europe being more autonomous. We are stuck with a trade deal that could potentially happen with china, another with the u. S. Are you confident that you can negotiate the two at the same time and get to something may be by the and of the end of the year. In our conversations with u. S. , as you know, we are discussing some meaningful deals. ,f you want some targeted deals in a sense, we are avoiding further escalation of trade conflicts. Indeed we arena, working now and focusing on investment agreement. Ifcourse, it will be great we were able to conclude it this year. Be ambitious agreement and it needs to address challenges and imbalances we are facing in our investment relations with china. Thats a good word that you mentioned, and balance. You feel imbalance. You feel the relationship needs to be more balanced at this point and they are aware of that. Europe is aware that the relationship at this point is not equal. That is exactly subject of conversations we are having with china. We had a round of discussions on euchina economic dialogue in july, where we were discussing in depth all those issues. And from eu side, also clearly indicating problems which still needs to be addressed. Firm, i guess tough but thats how you want to be as the commissioner. Are you going to be ready to fly across the world . I am sure d. C. On your agenda next. What is the number one priority for the European Union now . I know you are taking on more roles, more trade portfolios now, but what is the number one thing you think we need to address at this point . If i need to say in one word, i would say implementation. Because we were able to agree on a substantial crisis packages and some of them are still to be implemented. An economic recovery plan, so now we need to put properly in place, implement it, make sure this money really reaches the economy, really reaches the people. Maria implementation of those agreements is what really matters next. I want to put that same question to maya and martin. What is the number one thing we just think we have to francine that was mr. Dombrovskis moments ago being appointed to the top trade post, in conversation with maria tadeo in brussels. He is one of the European Unions top Economic Policy makers and now has one of the top jobs of negotiating trade. This was after the resignation last month of phil hogan. Joining us to talk about trade and Central Europe and what can negotiation in the or actually with trade is kevin daly from Goldman SachsAsset Management. Great to speak with you, as always. Thank you so much for coming on bloomberg surveillance. Let me just ask you about trade, because we see or it seems to be at the forefront of everyones minds, right. We had of this news about President Trump and china. We had a new appointment for trade at the eu. What does it mean for the countries you covered in Central Europe . Kevin for emergingmarket economies more generally, i think trade is absently vital. These are absolutely vital. These are cyclical countries that depend on the trading environment. If there is progress on trade talks, if there is a freer, better environment for trade Going Forward after the troubles we have had in the last couple of years, then that will certainly be positive for ems and for the region. Francine if you look at growth in general, are we seeing positive signs and growth that are here to stay . Is this a trend . Or do you worry that a second lockdown will bring us back to further lockdown and therefore, more economic pain . Kevin we are relatively optimistic. I mean, we have very much a vshaped recovery in growth and we are well above consensus for growth, not just across the region, but also globally, for next year. We think that the consensus or the majority out there are underestimating the degree to which economies will snap back, simply from easing of lockdown measures and turning the economy back on again, if i can put it that way. We expect five poor 5. 5 growth, while consensus is around 3. 5 . Will there be legacy effects from the crisis on the level of gdp there will be legacy effects from the crisis on the level of gdp. Things like Industrial Production and retail sales, not just in emergingmarket economies, but so far globally is bouncing back faster than we anticipated. Francine if you look at growth and in your notes, you know that basically growth could be innate vshaped recovery. What does it mean for Monetary Policy . Kevin one could argue that actually oil growth would be very strong. I think there will be a legacy effect from the crisis on the level of gdp and on star capacity. The Spare Capacity. This is where growth rates with those violent swings in growth from the crisis, growth can sometimes provide a somewhat misleading picture of the overall state of being. We think there will be a lot of overall Spare Capacity. Rising unemployment from businesses that unfortunately will in some cases fail. We think that will put a downward pressure on inflation across the region, both in high yieldersands low alike. We are below consensus on inflation. We think there will be a u or n rates. L in interest francine we are just getting some breaking news out of china. We understand that the australian tv anchor that was detained by china, this is basically the australian tv host , a broadcaster who was detained in beijing as tensions between the two countries have been rising. We understand now from china that she is being probed for state security violations. Offnt want to be an question, baz you see tensions china,tween the u. S. And between china and australia, are we going to see stronger ties between china and some of the emerging economies that you follow . Kevin those are links that have certainly increased in recent years, although you will have seen as well that there are tensions as well, in particular between the recent visit from czech officials to taiwan. I think that on these issues, actually european economies will very much hide behind what is negotiated from an eu side. It is not something that they will actually pursue bilaterally, at least on the trading side. They will from the investment perspective. From the trading perspective, it is very much in the eu domain. Todays news of the appointment of the commissioner i think is a critical appointment, both for the eu, central and Eastern Europe as well Going Forward. Francine thank you so much. Goldmanly there from sachs Asset Management stays with us. South africa is expected to announce gdp collapsed by the highest levels in three decades. We will talk about that with kevin daly. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua here in london. Lets take a look at some of todays key events as the latest round of brexit negotiations begins later. We will get a final reading on euro area gdp. We will also get an idea of how the South African economy is faring after one of the toughest lockdowns in the. It is expected to contract by an annualized 31. 1 in the second quarter. Still with us is kevin daly from Goldman SachsAsset Management. If you look at south africa and you look at the inflation outlook, what does it mean for Monetary Policy and the economy . Kevin i mean, south africa had the toughest experience within covid. Ion in terms of covid, by far, the worst growth rate in terms of cases. Haveally, mortality rates remained well below western european and u. S. Levels. It still has a very tough lockdown. We expect, as with consensus today, we expect an annualized decline of around 40 . In an economy that was already crisis came at the worst time. We expect there was already a lot of Spare Capacity in the economy, so the crisis is to some degree pushing on the door that was already opened in terms of creating Spare Capacity in the economy. Inflation has a ready fallen significantly. We think that next year, inflation will remain at or even below the 3 lower bound of the Central Banks inflation target range. We expect that to drive to eus Monetary Policy further next year. We are much more dovish than Market Pricing in terms of what we expect to happen to Interest Rates over the next year in south africa. Francine where do you see rand heading . Shock asabout an fx the main risk. Do you think there is a real possibility of a big fx shot . Shock . Kevin that is a real risk in south africa. We are somewhat surprised. We have been somewhat surprised by the recent strength in the rand. It actually will play into a weaker inflation dynamic. Over the medium term, i do think that there are a lot of risks. Round the currency situatione of payment in south africa has become somewhat more healthy but fragility is a main risk in south africa. Francine thank you so much for joining us. From goldmanere sachs Asset Management. Coming up, Boris Johnson wretches ratchets up the chances of a no deal brexit. Our other big story today is trade. We will also talk about trade. This fits exactly into the narrative of brexit. The eu has named mr. Dombrovskis as trade chief. The deal with the u. S. , and then of course, we have the trumpbeijing relationship we need to look at more. This is bloomberg. Give you my world how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with Xfinity Mobile. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. To theet straight bloomberg first word news with leighann gerrans. Leighann good morning. Donald trump has promised a sharp cut back of americas economic ties with china. The resident threatened to pulmonary to punish American Companies that do business in china. That puts him in stark contrast with his president s arrival, joe biden, who has accused trump of being soft on china to secure a socalled phase i trade deal in january. Breaking news in the last halfhour. E. U. s next trade commission has been named. Phil hogan resign last month over a scandal in his native ireland. Skinny back transatlantic tariff the globalupholding commercial order amid a rise in protectionism. Germanys debt spending may become the new normal. Thety finance minister said economy should not return to a balanced budget any time soon and that normality does not necessarily mean running a surplus. Chancellor merkel supple is setrate government to borrow about 218 billion euros to counter the virus crisis. And modernize the economy. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Francine . Francine now to the u. K. Serling declines are piling up as Boris Johnson the odds of leaving the e. U. Without a deal. Johnson said monday he is willing to walk away from talks rather than compromise on what he sees as Core Principles of brexit. Joining us to discuss this is dani burger. Just how negative has he turned aga