Level with the stock down on euro strength adding into the downside for the European Equity markets. We are also seeing weakness when it comes to the cable rates. Not surprising after the war of words that broke out between the european commissioner and the u. K. Government earlier on today. Now, 120 862. 128 point 62. Today we are giving back a little bit of ground. Alix breaking news out of the european commission, the u. K. Has seriously damaged trust and has until the end of the month to amend the violation of International Law and joining us now with more from london, david, walk us through what we know and how this time might be different from the other extensions, deadlines, and harsh words we have seen. It really is extraordinary, an ultimatum for them to backtrack on the bill in london yesterday, overwriting key sections of the agreement signed by Boris Johnson less than a year ago, which she is now saying he regrets and doesnt think really serves the people of Great Britain and Northern Ireland and he wants to override noin the case that we have deal. Europeans are outraged. Talks are still going on in london. There is a possibility that things completely fall apart and both sides walk out. Now, we have seen moments of high drama like this in the past and then at the last minute a deal was snatched from the jaws of defeat but the language used here really is quite strong and emotions are running high. Youve got to think now that the chance of there being no deal is higher. Britain is going into uncharted territory. It goes to the heart of what brexit is about, britain on shackling itself from the laws of the european union. Things have really reached a climax. The u. K. Says that it needs to do this to protect the good friday agreement. How does the eu respond . Quite the opposite. That the whole point of the Northern Island protocol was to safeguard the Northern Ireland peace process. The americans themselves as well , nancy pelosi yesterday talking about how there is no chance of a u. S. U. K. Trade deal if they go down this path. For or against . It depends on which side you speak to. The British Government also say its about the unfettered access of Northern Irish companies to Great Britain. Asked here iseing why did they sign it last october if it was so difficult . Unionist a jet objected at the time, now they are supporting his overwriting it. The understanding of the details last october, if you remember the general election was fought on it, and now hes saying hes willing to rip that all up for whatever reason. Hugely controversial move. But it must have been calculated by them to cause this sort of response. Well thatesting as another wrinkle is being added by scotland, calling the market incompatible with that and they will push back strongly. David, thank you very much indeed. David merritt on the war of words between the london government and european commission. Lets get another angle on this. We are joined now by eric nielsen, who joins us now from berlin. From your perspective, our bridges being burned or is this a kind of high 10 city negotiation that we should have expected in the final stages of brexit . I am really worried that bridges are being burned. Suddenlyo longer whether or not there will be a trade deal with the eu or not. If all trust rakes down we could very well get a situation where it is not only the trade that doesnt go through, but the whole issue of the Financial Sector where there has to be trustents and if all rakes down, as nancy pelosi published in her statement, it is suddenly also about trade between the u. K. And the u. S. In the future the british have really increased the stakes here in a very problematic way, as far as i can judge. What changed now versus last fall . Yes, theres covid, you would think that would put more pressure on them to make a deal, but what changed to let Boris Johnson go there . Knows. If i have to be cynical, i think that what has changed is that when they did the deal first, the primary objective of Boris Johnson was to do something. He had this oven ready deal, as he claimed, which was nonsense, but he had to do Something Different from theresa may. Then there was this peculiar thing with Northern Ireland but to say that we cant have both but we can de facto split the United Kingdom in some way, that was always a mystery, how the heck they would carry that through. Either he knew that thought or he never understood what it was and now he realizes he has to go back on it to a worse place than we were before. Guy there is an argument floating around london that they would be willing because state rules are so restrictive that they couldnt invest in the areas that they want. Economy from. K. Low productivity to high productivity, does any of that hold water . Thats a matter of judgment, really. Having had state aid in many countries around the world, the u. S. Has been presenting aid in a crisis. Its not like its crazy. Its an irony that conservative parties have written, the heritage of margaret thatcher, of all governments that wanted to do this. But it is understandable to some extent, i think. By the same token its understandable that the eu says that if you do this, we need to have an understanding of what it is or we wont have a level playing field. This is the fundamental issue. They could have gone down that road. If they really wanted a no trade deal to have that freedom. By doing it this way, as i said, the action moves higher now as they break International Law admittedly themselves. Now they are breaking things and therethe u. S. Could be more on financial services. These are negotiation packages otherwise. Guy alix which would be better . Subsidizing these industries or transforming the economy through services . In my opinion clearly the better thing is having a freetrade agreement with the eu its more than 50 of their trade. Its not that you cant do any state subsidy. Its just about being part of the european group, how much you do and what the situation is about. I mean, i understand that this is what governments want to do. Im skeptical that Boris Johnson can pick the winners of the future of these companies. Im skeptical about any other government picking winners. But there you go. Its the new flavor of the month, state aid and industrial policies and all the rest of it. Lets talk about the other risk that this poses. Mike russell commenting in the last few minutes, saying that the internal market bill is incompatible with it. A Scottish Election coming next year, it is expected the nationalists will do well within that and that we will be pursuing a second kind of devolution vote. Splitting the u. K. Into different constituent parts in scotland getting independent. How big of a risk do you think that now represents . Thats clear at this time nationalism in scotland, without a doubt, if it was more sympathy in europe because of the situation, you would have Northern Ireland and it is no longer completely clear that that is possible in the United Kingdom. Ultimate, they are playing with the future of the United Kingdom, suddenly. Its just, for me its unbelievable. It is a risk i cant put a probability on. Way,e that goes the other but it seems the risk of that is higher than before. Alix its 2020, nothing is illegal anymore. Eric, thank you for hanging with us. This is bloomberg. Environment ofnt elevated uncertainty, the governing council will carefully assess incoming information, including developments in the Exchange Rate with regards to its applications for the mediumterm inflation outlook. Guy Christine Lagarde speaking a little earlier, basically nothing changing today except a few things. May be the ecb decided that actually it is ok for the euro to go higher, but for the euro to go higher until we see additional force showing up clearly in the data. Eric nielsen is still with us. Did Christine Lagarde give the green light to a stronger euro until we see the disinflationary report . Meant thats not what she to do. Whether she did is another matter, but im sure thats not what you meant to do. Lets not get too excited. In trade terms, the euro has not upbraided so much and on most indicators that i know of, thatsthis level probably around fair value. Moving quite quickly from the 115 below and heading north. You can see the fed changing their interpretation of the mandate and the rest of it and suddenly everybody in the market, including ourselves, think it could go to 100 25, 130, whatever. This worries them. For the First Time Since early 2018 we got euro in the opening statement. So, they are worried for sure. Careful, notde was wanting to sound too panicky about it. Did may have thought she too little, maybe. Is it going to turn into a world where we dont see currency wars but strategy review wars . At the end of the day it will be about inflation, right . The ecb has to follow the fed to. Arent they just balancing out under the guise of Strategic Review . Right. Ink thats its part of the big risk of globalization falling apart. Nowral banks have up until had the powers of the government to band together. I think that in frankfurt they are a bit worried about where the fed is going now on the Exchange Rate and how they feel about it. They are gearing up a little bit. I share your concern that we could be heading into not a currency war, but certainly a bit of something else. What about the fact that the ecb had accelerated its review to close the spread . A positive or negative effect on the currency, removing this kind of arbitrage. I understand why they wanted to delay it. The ecb has a big problem, right . They have to read this between so many people in parts where it was more easy for the fed and without them, the additional problems that they dont like to be seen mirroring, they are probably going somewhere in that direction, right . They need to kind of give the message that they want inflation up. When i read the statement and i hear them today, for me its not enough, right . Inflation is 1 . We are way below. Either we dont care or we care. Put the pedal to the metal. I think that before the end of the year they have to increase significantly and put some more words to it. They have to come out more aggressive. 1 is not good enough. Guy what does that mean . What would it look like to expand it aggressively . I say they do what they need by certainly within the next couple of months or december. They need to add that a minimum 500 alien and extended from the middle of next year to the end of next year and i think they should also come out and talk policyhe reinvestment and simply say, for example, reinvest everything. Its like saying we are in this game to, to close or help close the gap and prevent monetary tightening in this scenario. Its not enough what they did today. My opinion. Alix always good to talk with you, eric. I miss your sunday notes. Im on it. Thanks so much. This is bloomberg. Live from new york, im alix steel with guy johnson in london. One of the stories we are following this morning, for the first time a woman will run a major wall street bank. She is taking over from mike corbat, retiring in february. Joining us now, mike mayo. Everyone on the street wants to know what mike mayo thinks of jane frazier as ceo. What do you think . I think that change at citigroup is good and needed. They have improved over the last eight years, but they still have worst in class efficiency, returns, and stock market valuations. They have come away, but not as far as they need to go. Jane frazier can give a fresh look. As you know, i went to most of the annual meetings last decade. I would stand up and say why are you not restructuring more . They said restructuring is over. That should not be the case for an underperforming bank. With a new ceo, we think it will give them the chance to have a fresh look at reexamining parts of the franchise that maybe should be shed and reinvested elsewhere. Shes a woman, a woman running a wall street bank. You just talked about how if this was any other person running it is it significant woman . Es a they have chosen a woman. She has rocketed through the ranks. The business is sending a message not only to kind of the people that work for it, but to wall street more broadly. What do you think the message is . Citigroup like all of wall street is a meritocracy and you get to the top on the merits wo . And she has a very impressive cv having said that, this is a groundbreaking moment for wall street banking and finance, to have a woman at the top. Are clearly leading by example in a world that needs and seeks greater diversity. Alix you just mentioned needing the talent pipeline. Who does and who doesnt in now . Certainly jp morgan has a lot of women in senior positions. Of women there could replace jamie dimon when he retires. More years,ys five but when that day comes you could have a woman at the top there for sure. Guy does it change the way that look at the Succession Process . She doesnt come from nowhere, but her acceleration through the ranks has been fast. Good thing. Clearly this is a company that decided it needed to promote business,n its sending a great message about say. Sity, as you a fantastic cv, a woman that will make changes at this business. In terms of looking at other street, does wall this just widen the funnel of need tole that we consider that could be running those businesses and that shareholders need to figure this out . I had this discussion with my own family, my own daughter. You say a hand pipeline problem, on the other. And a role model problem by promoting a woman to the top of the firm you have a role for others looking to come up the ranks. Jane frazier has experience with u. S. Banking, latin america, consumer banking. Had many other positions. And she was at mckinsey. Its not like she came from nowhere. Track vip skipst the line task. That, people with similar qualities, it was a good citigroup to go ahead and have a woman lead the company for its time in its history as opposed to a bank that is mostly an Investment Bank . But thatsdnt be, the reality of this particular situation. You could just as easily have a read lead a bank that is more wholesale oriented. Look, the industry has a history of being a laggard when it comes involving with diversity and pulse their finger on the. The industry really has changed crisis. E financial they got the message, most of on largest banks have signed to the state Business Roundtable all shareholders matter think about diversity. Thats good for shareholders in the long term, if done correctly. This move, by promoting jane , you know, it could be. Ood for show shareholders we dont know her that well on the street. Its good for stakeholders, generally. We are going to leave it there. Really appreciate your time. The british pound down by nearly 1 . Hats the british market this is bloomberg. 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. 30 seconds until the end of regular trading in europe. The stoxx 600 near session lows, down. 6 . To be honest, relatively boring compared to where we have been equity session that has developed throughout much of the day. Most of the action, particularly in the bond channel and the fx channel. A huge debate between the u. K. And the eu. Lets start off with a quick look at where we are with the euro, spiking a higher. Maybe we do not see Christine Lagarde doing enough to hold the currency back. We did get through 1. 19. We have faded that a little bit but we are still seeing an upside move in the single currency versus the u. S. Dollar. It is the single currency going to continue to move higher until we see the ecb saying yes we are concerned about the disinflationary effect that will have . The war of words intensifying between the u. K. And the eu. The we are seeing is reaction to that in the market. There is also the concern about what this will mean for the scottish devolution story, the scottish independent story. Ultimately this could fuel the fire and scotland indicating it will push back on the internal market. That is the reaction to the cable rate, 1. 2870. That is meant of flattened ftse 100. The dax trading down. 1 . The italian market the upper former, may be a hit we are going to see further help for the eurozone economy in december. That seems the mart prognosis at the moment. Lets take a look at what is happening with the sector breakdown. You can do this on the grr function on your bloomberg. Everything in negative territory bar a couple of sectors. Why is germany outperforming . The auto sector is doing well. As is the travel and leisure sector. This turns the attention back to the idea that maybe the vaccine news will get better and astrazeneca paints a more positive picture, and that will read that will lead to a balancing of equity allocation towards companies that may benefit in a post covid world. Anic resources show assurance at the bottom end of the market. In terms of the stocks, i highlight acts to zeneca. I highlight astrazeneca. Fiat chrysler strongly on the move. That has been a help. The psa merger apparently on track. They are also pushing a new maserati which i hear will be in the new bond movie. A counter suit being filed in delaware related to the tiffany acquisition, tiffany filed a suit to persuade lvmh to proceed with the acquisition. Lvmh filing a countersuit in the same court. Lvmh up. 4 . Lets check it with the bluebird first word news. Here is ritika gupta. In beirut, atika huge fire has breaking out of the port. The Lebanese Army said the fires at warehouse. Last month explosions killed more than 190 people and injured around 6500 and damage thousands of buildings in the lebanese capital. It is likely to be the final stage of the monthlong battle over fiscal stimulus. The senate votes to date whether to advance a slimmeddown republican pandemic relief bill. Democrats they they have the votes to block to block the measure. It is not clear if that will lead to more negotiations. Democratic one and a much larger building republicans will go for. President trump insists he was right to keep his concerns about the coronavirus private. The president is on the defensive after his comments to Journalist Bob Woodward in march were revealed. The president told what word he downplayed the severity of the coronavirus in public because he did not want to cause panic. Bob woodwards book on the president is being published this month. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Am ritika gupta this is bloomberg. Deeper intodive what is happening in washington, d. C. Joining us is craig gordon. He heads up our Washington Bureau. We are getting headlines from nancy pelosi who is speaking to reporters. I want to start on the skinny bill. She says the skinny gop bill does not address massive problems. She says she does support state aid and it needs to be met with more from d. C. Where do we go from here when it comes to Financial Support for individuals and the state . Craig right now it is not looking good. The Republican Senate will take up their skinny bill of 500 billion. That is what passes for skinny in washington. Fail. L not pass, it will it has a clear 60 vote threshold. Right now well be back to square one with that. Bill they would trillion, a lot higher than that. In washington it does not feel like there is going to be a stimulus bill. A lot of republicans have reverted to their fiscal hawk roots and think the government has spent enough money. I think after this vote we are in uncharted territory. Nancy pelosi can say she wants money for the states all she wants. Im not sure she will get it. Politicswashington changed as a result of the quotes we saw from bob woodward . Clearly the president has been pushing back strongly. There are many that question the timing of the release of these comments, particularly those related to covid and the downplaying of it. Does it change anything or does it confirm the biases either side of the house already had . Craig look, the country is so divided down the middle that it is hard for much the swing the needle in either direction. I will say, i have always thought there is a small percentage of voters who are on the fence, maybe they voted for trump in 2016, maybe they did not love the way he handled the virus but they are seeing pictures from portland and seattle, kenosha, they do not love that either and our rest and are wrestling with things in their mind. What these words do from trump, they are caught on audiotape, he cannot say he said he did not it goes tohas tried, peoples worst fear of trump and covid. He did not take it seriously even though he told bob woodward it was much more dangerous than the flu, his actions do not bear that out. Hisel like if you buy argument, i was trying to project calm and not panic people, that is fine, that is what leaders do. You want to look to the leader, they have it under control. The problem with trumps he did not take any actions to back up his own knowledge of how serious it was. He told us it would go way over the summer. He said he praised president xi handling of it in china. Trumps words are bad enough and it is his actions people are judging him on. If you are still hanging onto trump and you hear these words, you hear he did miss the boat on this virus thing and im not sure he deserves a second term, which is exactly the argument joe biden is making. Where the stimulus conversation and that conversation lineup. The Pandemic Unemployment Assistance Program rose by 90,000. Those are the people who voluntarily leave the workforce do to caring for a relative due to covid. I wonder how pc is thinking about that as schools reopen, may shut down again, but no clarity, how that plays out on an unemployment level when we do not have any stimulus. I feelt is where like half of the Republican Senate is reverting back to a fiscal hawk and does not think the United States should add more to the deficit to help out on the virus. The job numbers were little better than expected, things were starting to recover. The other half of the senate and the entire Democratic Party is in a different camp, which is people are hurting. Every member of the house and a third of the members of the senate are all standing for election this fall, right there with donald and joe biden. Those people are worried voters are looking to them and saying maybe jobs numbers were not as cataclysmic as we thought, i lost my job, my brotherinlaw lost his job. What are you doing to help us . I think there is a lot of members of congress quite worried about going into the election without giving any more relief at all. That may eventually swing some of the republicans around. We are hearing donald trump is open to a second stimulus bill. Steven mnuchin has been saying that for a long time. Trump is at the top of the ticket. Bill, maybeanother he can jam one through. Trump is not done a lot to help out on the skinny bill. He has been saying i think we should do more stimulus, i would not say he has thrown his weight behind it. I am not sure i would want to be an elected official going into the november election having done nothing more for stimulus, unemployment, paycheck protection aid for covid. People are hurting and they could pay for it at the polls. Jonathan have to leave it guy have to leave it there. Craig gordon, Washington Bureau chief. A little fade into the close for the ftse 100. The dax under a little bit of pressure as we came through the close as well. All of these markets near session lows. Some of the insurers hurting. We will carry on the coverage with a particular focus on the ecb and what is happening in the u. K. Will do that at the top of the hour and continue the coverage on those two subjects with a cable show live on bloomberg radio, on dab Digital Radio in the london area, around the world on all of your bloomberg devices. This is bloomberg. Ritika this is bloomberg the european close. I am life and the principal room. Coming up later today, brian nichols, chipotle ceo at 3 00 in new york. This is bloomberg. Guy 42 minutes past the hour. Welcome black welcome back to the story we have been following. The eu giving the u. K. Until the end of the month to amend its internal market bill. The eu says it is now up to the British Government to reestablish trust between the parties. Joining us is paolo gentiloni. Commissioner, good evening. Lets talk about relations between the u. K. And the eu. How quickly are they were tearyeyed a how quickly are they deteriorating and you think bridges are being burned as a result of what the u. K. Is doing with its internal market bill . Bill was seriously between the u. K. And the eu. Stressing is it is up to the British Government to reestablish the trust. Time is running because our is either we reach this agreement within one month from now, you know the formal deadline is the end of the year, but to have an agreement, we need to have decision taking at the beginning of next month. Reestablishing of trust, which means changes in this bill that was introduced in recent days is of essence and it is very urgent. If the u. K. Does not back down, will there be a hard brexit . Com. Gentiloni as we always the european not proposal. This is not the european will. This is not the solution we envisaged. You need two parts to have a deal. Is not any seriousness onrespecting the agreement the basis of the negotiation now going on, i think things get very difficult among the eu and u. K. We are not working for this. We are not working for a hard brexit. We do have a trustful partner who will have a deal. Heard from the ecb they revised upwards there 2020 forecast, but they see the stabilization of any rebound next year. What is your assessment of the european economy right now. What letter of recovery are we in . Com. Gentiloni we are in general with a similar analysis of the ecb. Ourevaluation, we will have winter forecast the beginning of november. Is we have a fast recovery, especially in june and toy, but perhaps according highfrequency data and new granular data, this beat of recovery has slowed down this speed of recovery has slowed down in recent weeks, in august. I think we still have the strengthround and the speed of recovery. Our task is to bring forth confidence in the markets, in the citizens, and in the business community. This is what without recovery plans we will try to do in the next weeks. Uncertainty is still there, and we are not sure of the speed of the recovery which is unfolding. Euro,o you worry a strong and im curious where you think a strong euro is, but will a strong euro slow down the european recovery even more . Will it further undermine the inflation europe so desperately needs . Do you think europe needs to do a weakeralk about currency. What a weaker currency be better for europes economic trajectory . Would a weaker currency be better for europes economic trajectory . Com. Gentiloni in the mediumterm and longterm we can discuss these issues. In this moment, in the weeks what is mostly affecting or could affect the speed of our recovery is uncertainty connected to the health situation, the different reaction from different Member States of the health situation, and the fact this creates difficulties, especially in travel, in services, more than in manufacturing. Running, butis other sectors of the economy are not running at the same speed. I think now the most important confidence restore on the fact we are not facing a pandemic,e of this and we are able to manage the and back to work, back to school, back to not normal, but full life. Alix part of that is the recovery plan, the 750 billion euro recovery plan. What is your level of confidence it can get past. There are individual countries like hungary that seems to be holding up the deal. The difficulties agreement,reach this but you also know how absolutely unprecedented and extraordinary innovative this agreement has been. We are talking of the european a common debt for common purposes, and discussing, and this will be the discussion of the European Finance ministers in the next couple of resources for the union to repay this common debt with common resources. In front of such an extraordinary new thing, im not surprised of the fact there are still difficulties and reluctant countries. Will have thiswe plan in place the beginning of in unanimous agreement of the leaders of the union at the end of july. I have to say even in berlin, meeting in the bundestag and with different authorities, i have plenty confirmed the importance and the awareness of the importance. Governments are looking for resources to help them pay for all of the eight they are giving to their economies. They arel of the aid giving to their economies. They are looking at a digital tax. Is there more Common Ground on a digital tax . Do you see this process accelerating . When you think we could see europe proceeding with such a plan . Com. Gentiloni the base is completely new. Having decided to issue a common task to have now the have common resources to repay this debt. Repayment will begin in 2026 and from 2026 to, 2056. The momentum for common resources, including a digital levy has never been so strong in europe. The pressure from the european parliament, the agreement among are there. At the same time, we are committed to trying to find a global solution, not only a european proposal. This is what we are working on through the oa cd, both from the digital taxation and on the mammal taxation and on the minimal taxation. We are not declaring failure of this process until there is a chance to bring this process to a good result. Alix it was wonderful to speak with you. Paolo gentiloni, european commissioner for the economy. Thank you. Tomorrow will be a joined by paschal donohoe, irish finance minister. Breaking news. Bloomberg is reporting the Trump Administration is considering whether to give more time to tiktoks chinese owners to arrange a sale of tiktok. They are likely to miss the deadline of september 15. We will follow that as the story unfolds. This is bloomberg. Alix live from new york, i am alix steel with guy johnson in london. Checking out markets. He stopped the nasdaq in positive territory, but it has been a jumpy session overall as we look for direction. The euro climbing higher on Christine Lagardes comments. I am also watching the 30 year bond option. Look for that takedown. That wraps it up for me and guy. Coming up for me coming up in the u. S. , former Massachusetts Governor on balance of power. This is bloomberg. David from bloomberg World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power or world of business. We will start with the president ial election. With the attention of both campaigns consumed with the explosive reporting with Bob Woodwards new book about the president s handling of the coronavirus, something the president himself addressed yesterday. President trump we do not want to have to show panic, we will not show panic. I was very open whether it is to bob woodward or anyone else, it is just another political hit job. Whether it was bob woodward or anyone else, you cannot show a sense of panic or you will have bigger problems than you ever had before. David for her analysis of the politics of the book, we welcome bloomberg lyrical contributor jeanne zaino. This was a blockbuster for all of us. Explain the potential political ramifications for the disclosure the