The u. S. Could get a covid19 vaccine before the yearend. Astrazeneca resumes its trial after last weeks pause. Boris johnson growing rebellion as his controversial bill is defended in parliament. Brussels will keep an eye on the development in a call with president xi. A. M. 96 billion worth of deals from pharma to tech. What strikes me is the amount of cash being used to do the deals. Good morning. Certainly a number of deals across the sector. The one im interested in his tiktok. Larry ellison seems to have won the race for the u. S. Business. And then there is the regulatory hurdle. U. S. , the European Union, and china. What do trade tensions mean for this deal . Manus the other thing is Larry Ellison and mr. Trump were closely aligned. Why would oracle by tiktok . I want to focus on the structure of the deal. Three quarters of the gilead deal is in cash. Nvidia, 50 in cash. The oracle deal is about the playing cash, but it is nowhere near what it was in 2015. Good morning. Annmarie certainly not what we saw in 2015 or years prior. This has been a weird year. But it feels normal to have a little bit of an m a monday. Lets look at the markets across the world. Msci asia pacific trending higher. S p 500 futures up more than 1 . Euro stoxx 50 futures looking for a higher start. This comes off the back of the first consecutive week of decline since march. News flow certainly positive with a few deals to digest. Manus mentioned this, astrazeneca resumed their trials. Deploy acould likely covid inoculation before the end of the year. The pound certainly in focus in london. A lot of brexit drama that into the market. Brent trading under 40 a barrel. The cartel celebrates their anniversary. 10 year 0. 66 . A lot to watch as we wait for the fed today. And of course astrazeneca talking about their trial, back on track again. It is m a monday. For u. S. Nning the bid operations. Microsoft has said bytedance has rejected its bid. Oracles deal appeared more like a Corporate Restructuring. Nvidia will buy softbank for 40 billion. Licensing chip fundamentals and selling processor design, technology at the heart of more than one billion smartphones sold annually. Manus gilead has agreed to a the maker of promising Breast Cancer drug therapies. The drugmaker seeking to bolster its line above lineup of cancer treatments. Recapped pretty much all of the details on that. Majortalk about the other things driving markets. Bank,n sachs, deutsche computer trading, two bruising weeks that have pushed the markets on the downside. Lets have a quick chat with dani burger. Good morning. Dani they are one group of investors according to jp when we saw the nasdaq takeoff. Because the markets were so thin in terms of leadership, one of the funds already had low exposure. They do different things. It is hard to take them as a monolith. In general Jp Morgan Says you have this market where they are not fully invested. That makes them pull back even further. This actually is good news. It means they can jump in more. They have more firepower to add to the comeback we have seen. For now they are not playing in the market. Compare how does it with the rest of the market . It means one group is pretty negative and they cant buy into it. The rest of the market looks pretty invested at this point. Here i have apple and tesla. It is still extremely elevated. Players were undeterred by the losses we saw. According to alex young of tactical alpha, we need to see a lot more damage before these investors are willing to throw in the towel. Retail traders still in. Lets continue discussing this with the head of economics, and cross asset at societe generale. Outlined the view. We talked about what Deutsche Bank was saying. Where do you sit when you take in all of this . They have a momentum bias. They will typically buy stocks that do well. Theook at the nasdaq and , a callback will reach wreak havoc. Whether the is trend will reassert itself. Thesees of volatility, sorts of strategies do suffer. Manus good to see you this morning. We have you had a slight disadvantage. We put the clinic the critical ratio on screen for you. You know where we are in terms of the put to call ratio. The proposition from Deutsche Bank is that the ratio has righted itself to a more normalized level. When you look at the options positioning on the equities side of the market, how do you see the skew . Saw prior to the wheref was a call ratio we saw a lot of demand for call unusualwhich was pretty. It has a tendency to under perform on the way out. What we find interesting is that as we move forward, there is a lot more option premium. , thes really interesting option seems to have more premium than around the election. The market is prayer pricing more risk. Even after the election, which is something we find compelling. Jp morgan put out a note saying it is not u. S. Election day, it is u. S. Election week. Is that with the market is telling you . There could be a contested election and things may be unclear . Absolutely. If you look at brexit or other geopolitical events, you have a hump in the term structure of volatility. This is one of the very unusual situations where volatility is not expected to subside after , so we aren expecting, or the market is pricing more back and forth when it comes to news flow and consequence of the rotation as well between november and december. Will get your calls on the volatility. Your first word news this morning. Optimism over a coronavirus vaccine. The chief executive of pfizer ays the u. S. Will deploy vaccine before the end of the year. The boss of the pharmaceutical giant says it is dependent on Regulatory Approval but it has a good shot of knowing the efficacy of the vaccine by the end of october. Onna is totaling the rules the latest attempt to curb risk in the nations industry. The new regulations will require licenses for Nonfinancial Companies that resume business in at least two financial sectors. Israel is imposing a second nationwide lockdown. Governmenttanyahus despite appeals from the business community. Restrictions will remain in force for three weeks. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Up, brexitoming drama continues. Boris johnson sends his lawbreaking brexit proposal to parliament this week. Japans ruling party holding an election to hold choose the new leader. This is bloomberg. Annmarie this is bloomberg daybreak europe. Just 14 minutes after 6 00 in london. Boris johnson will send his brexit proposal to parliament. The bill is facing a growing rebellion from his own mps. The former attorney general said the Prime Ministers damaging Britains International reputation. Manus u. K. And e. U. Tensions are growing. Negotiatorsen the over claims that food imports to Northern Ireland have been thereened in talks and are deepening tensions in the negotiations. Read a host of additives. Adjectives. Nomura is talking about a chaotic risk to brexit. I find this interesting. Bluebay saying we are reaching maximum bearishness. Go long, long eurosterling. How do you look at volatility and the potential risk for chaotic brexit . The pricing of sterling volatility is something to price the risk of a disorderly brexit. The important point is that the risk premium is going to be high. That is sort of typical of where we were before. Now, this is why i suspect volatility is found to be volatile over the next few months. Annmarie brexit is a known unknown. Obviously difficult to trade. In anreading tony blair opinion piece and they were reminiscing that the government that set a trade deal would be ready. What does this mean for trade at the end of the year . It is clearly the key risk. You would expect the u. K. And the eu to find a way to come to a deal. Pandemic in the ofkground, a huge issuance t, adding an additional burden on the economy is not the most rational outcome. Point,hat to my earlier a lot more is expected to begin the year. In the meantime, some might decide to stay away. Yesterday afternoon i gamed up the definition of theory. Went to wikipedia. I put it to you we are not dealing with it. It is a concept in economics. There is an assumption of economic maximization. This assumption that the players within the game are rational to maximize the payoff. I put it to you we are somewhere rationality with very little regard to the payouts. That is a big assumption of game theory. Also a process where when you have a government, you would expect the more rational outcome to be put forth. You have a point. The most Logical Group of experts might not always lead you to the outcome that is optimal. This is why we think this is a known unknown. We are also going to hear from the boe. Saybrexit hurdles you might in terms of whats going on with a deal to parliament this week, is this something the boe needs to start including in their strategy . Absolutely they have done so in their risk assessment. A lot of focus has been around the economic shock of the pandemic recession in terms of the qe rate cut etc. I think this is an additional shock to the economy. A risk that will be factored in. They have a tricky balance. Sterlinghe collapse of and quarter inflation. The recessione, and unemployment picking up, creates deflationary pressure. Complex forquite the bank of england to navigate. , what to coming up expect from the fed . Officials have said rates remain low as the economy recovers. How does that fit with powells approach to inflation . Elections to choose the next leader who will become japans next Prime Minister. That is next. The bank of japan liquidity campaign was accompanied by shinzo abes policy era of Government Spending on critical infrastructure. The third arrow aimed at Structural Reforms from oprah tax cuts and getting more women in the work or to nurturing a tourism room. But hiss tax cuts other reforms missed the mark. The record on inflation is mixed. The boj did break the back of deflation, but like the fed and the ecb, has not been able to reach its target and keep their. Negative rates have crushed bank profits. Government spending did spur growth and push down unemployment, but also left japan with the highest debt to gdp ratio in the world. And what many consider his biggest misstep, an illtimed consumption tax hike the pandemic hit. Combined forces pushed the country into its worst recession on record, leaving japans next Prime Minister to fire his own arrows. Annmarie japans ruling party is choosing its new leader. The front runner to replace shinzo abe remains his righthand man. More, bloombergs reporter in tokyo. What is expected today . The ldp has decided on a scaleddown election. The boat is happening at this tokyo hotel with the results expected in about an hour at 3 30 local time. Between lawmakers and the local chapters of the ldp, there are 535 vote. Says he wants to create a government trusted by the people. Reporting he will likely win 60 of those 535 vote , beating out his opponents. When it comes to the general election, it will have to be called over 2021. Some senior lawmakers have hinted at a staff election after the new pm is elected. An election may come soon. When it comes to international relations, that is something suga may absolutely save. Manus the line he said this morning, victory is right before our eyes. His own mandate at the ballot box just by him being there. When it comes to international relations, what do you think the biggest challenge is . Shinzo abe has a special relationship with trump. Inexperience may be one. Shinzo abe has a Strong Political pedigree. We know he is wellversed in diplomacy. A family ofrom strawberry farmers and has climbed the ranks since starting his political career as secretary to a politician. He has been the righthand manned of shinzo abe for the past eight years. He was asked about Foreign Policy at the debate on saturday and he emphasized the importance of the alliance with the United States. Foraid it is important japan to get along with other asian countries, too. When it comes to china and south korea relations, both of which have been strained, he said he would pursue strategic relations. Annmarie japans major mobile carriers are falling in tokyo. Part of that is to do with what he has been pushing for in terms of reform. What exactly is that and what does it mean to consumers in japan . Suga has kept pressure on japans telecoms by Standing Firm on his push to lower mobile phone carrier fees. He said some charges in japan should be cut 40 from current levels. He said he wants the cost of plans with large data packages to come down. He added the government should consider charging carriers more for the use of public radio waves to generate revenue. Lets see what the outcome is. Victory. The potential we have to put the markets in context. The equity markets are ripping up the script. We are at the beginning of a new phase of the upside. S p futures up. It is about the deals. That is the driver this morning. And the vaccine. Annmarie the vaccine front is looking very bullish. Astrazeneca starting their trial. Pfizers ceo saying we could get inoculation before the end of the year. Yields, 0. 6 . We have the fed this week. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Good morning from bloombergs European Headquarters in the city of london, im Annmarie Hordern with manus cranny live from dubai. It is m a monday. Oracle to have won a deal for tiktok she was operation. Plumps up the cash to boost cancer focus. The u. S. Couldys get a covid19 vaccine before years end and astrazeneca resumes its trial after last years halt. A growingson faces rebellion as his controversial bill is debated in parliament. Brussels will keep an eye on developments amid a crucial call with president xi. Good morning. It is certainly a busy week. Flow ofit has been the these deals and the positive news sentiment weve seen boosting markets. Tiktok, a big one weve been waiting for, especially as donald trump wanted something before september 15. The other big one is, you are arm deal, Arm Technology used in sales annual but i wonder if they can get through the regulatory hurdles. , to a it is a question theain extent, independence. Immunomedics, three quarters of that deal is in cash, 21 billion. Nvidia is paying 51 in cash. I havent gotten the details on the oracletiktok deal yet but this strikes me about this frenzy you do in a 0 world and how do you grow in a covid environment in a 0 world, for cash is of no use on the balance sheet. J certainly annmarie certainly and you can see what they are doing today, and the vaccine front. Astrazeneca is back with their trial after last weeks pause and pfizer says the United States could see a covid19 vaccine before yearend. 50 days to the u. S. Election, does this matter . V doesi think the triple matter. Lets talk about how the triple v plays out. The vaccine, recovery, and victory for trump. A flash across these markets. The catharsishave of the options trades falling out of the market and it is time to go along. Goldman sachs Deutsche Bank says the u. S. Selloff is close to an end. Roll it up and you have a look at the rest of the markets because i would say it is through the fx prism i look at the risk in the market. In the eye of the storm, the rally to dotiger, a with dollar weakness rather than sterling strength. Back like a bad rash according to tda. I cant do anything but applaud softbank, rip it up, nearly 10 on the day. 6391. Lets talk about Central Banks. We are going to have a slew coming up through the week. Wednesday, the fed holds its last meeting before the president ial election. The fomc is expected to keep its policy flexible. Brazils Rate Decision that day and on thursday, we will hear from the boj and the boe. Yes and on thursday, we could see a rate cut in south gdp their shrink an annualized 51 in the second quarter. Indonesia and taiwan discuss their decisions and we will get details on the bank of russia, which has published a draft guide 2020 20212023. Policy wont remain loose for a long time. In the latest Bloomberg Survey of economists show more for what guidance in the september meeting, likely linking achievements in Interest Rates to the near 2 average inflation targets. Koukou is still with us. Going totlined he is let the economy run hot, average inflation in jackson hole so how do they communicate this in september . Do we get a new strategy to this guidance in september or do they wait until after the u. S. Election . I think theyll have to give action because if you look at the current environment, they are struggling with the inflation or realized inflation, adjusted. Part of the inflation basket showing relative strength, but going forward, they are faced with a massive amount of what i tion of fourfica corporate through low Interest Rates and this is creating excess supply versus demand and you do not have destruction balancing. This is deflationary and this is why the need for the central bank to work with the government, fiscal stimulus is big enough to start to generate actual inflation is going to be key going forward, hence average inflation to try to normalize Inflation Expectations in the long run. Had this rampup in steepeners. Weve had this momentum behind the inflation expectation. They seem to have tapered in the weeks. O what is the most efficient way in the near term to reinvigorate Inflation Expectations . Is it to give us a very dovish 23 dot plot . Kokou well, i dont think the dot plots are enough. I think it will be a question of forward guidance, the aggressiveness the government will relaunch the economy through Infrastructure Spending and other fiscal measures, but it is an environment that is complicated because of the pandemic, creating a decreased output cap and the expectation longerterm, the amount of government zombie issuance will be significant. We are more likely to see real rates going negative, i. E. Inflation creeping up in the longterm bond yields put in check by the central bank to avoid things going out of control when it comes to cost of financing. Annmarie you talk about uncertainty the fed is seeing. We have a weak dollar and mliv talked about gold and a fitting from the election. Do we get a new boost into yearend . Kokou i do believe gold will have one leg to go forward because if you look at gold, it is a bit of a measure of the value of the dollar, and clearly the recent selloff created a bit of profits taking, but going forward, the liquidity like to likely to be injected is going to be bearish for the dollar and positive for gold. StayInterest Rates negative. Think we roadmap a lot of the risks ahead. For me, it is about volatility. For me it is about fx. That is where i am perfect perhaps most focused. You like it relative to rates and equity vol. Why and argue you a buyer of it and is it expensive in a relative sense . Kokou this is very interesting, because if you look at the Asset Classes backdrop, Central Banks are doing whatever it takes to control the bond yield market. The best example is the btp or its sovereign debt coming back in check when you compare it versus bunds. Amountorward, given the of public deficit, you cannot allow bond yields to rise because it will create a negative feedback loop. Our view is bond yield volatility will be controlled by Central Banks. That excess distortion needs to be reflected in other asset you start to see that with eurodollar, cny, sterling, and this is why isrency vol versus rate vol attractive at this stage and when it comes to equity vol, more dispersion across sectors. Fromrie kokou agbobloua societe generale, please stay with us this morning. Lets get to the first word news with laura wright. Laura oracle is said to be the winning bidder in the battle for tiktoks u. S. Operations after the main rival microsoft announced its offer has been rejected. Sources tell bloomberg the deal with oracle is narrower and appears more like a Corporate Restructuring then an outright sale. Terms are being discussed. The u. K. s rule of six comes in force today. No more than six people can meet indoors or outdoors to stem the spread of the virus. Rising at a pace not seen since may according to the institute for employment studies. The u. K. Faces twice as many job losses in the coming months than the session following the financial crisis. Semiconductor industrys largest ever deal, nvidia has agreed to buy arm for 40 billion. Over half of the deal will be paid for in stock and softbank may receive a cash bonus if arms meets targets. Regulatory approval may prove challenging. Needs sign offs from china, the u. K. , eu, and u. S. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Manus thank you very much. Coming up, vaccine optimism. Pfizer ceo says the u. S. Will likely get a vaccine to the public by the end of this year. We discuss. Annmarie as we head to break, holding aning ldp is election to choose a new leader who will almost certainly become japans new Prime Minister. This is bloomberg. Annmarie this is bloomberg daybreak europe. Lets take a look at markets this morning. Global equities are caring higher this monday morning. S p 500 futures, up more than. 3 . Nasdaq futures up more than 1 , euro stoxx 50 up and asian shares up. 9 . All of this comes as, you collect the three vs. Today is about the vaccine. Pfizer has injected optimism in the race to find a vaccine. The ceo says it is likely americans get a shot before the end of this year. That is a shorter time frame the most Public Officials have suggested so far. He made the comments on cbss face the nation. Joining us for more is asias consumer and health reporter. What are the prospects of the vaccine . Astrazeneca is restarting their trial. Thats right and what we know about the vaccine trials and final stage of testing is the these trials will be available as soon as next month, which means we will know if these vaccines work and if they are safe. That timeline puts us on track for the first people to get vaccines by the end of the year. That is the timeline. The concern was this would be artificially accelerated to have a vaccine available before the president ial election. That is what people worried ,bout but in terms of yearend that is optimistic for everyone. , how realistic is the yearend . Promise the president we get something before november. How realistic is this time frame we are being promised . Is it now more credible because it comes from the pfizer ceo . Rachel the timeline is very realistic. The data will be available as early as next month and manufacturers around the world are already lined up to create vaccines once Regulatory Approval is in place. What we have to bear in mind is the first group of people receiving the vaccine, people like medical workers. It will not be for everyone. There is concern the first vaccines will not be the best one. It will be like the first generation iphone. There needs to be improvement later on. That is what we have to bear in mind about yearend. It will not be a universal panacea, but the first of many to come. Manus our asian consumer and Health Care Reporter rachel chang on the vaccine race. Raging higherket, this morning at ahead of the opecplus meeting this week where we assess production cuts. Opecs 60th birthday. Happy birthday to the secretarygeneral and the team. The group was formed in 1960 with five countries from the middle east and south america. Its aim was to shift the balance of power in the oil industry from the u. S. It now is 14 member states, controls 80 of oil reserves around the world. Kokou agbobloua is from societe generale. Has run certain extent up quite aggressively. I put it to you, the one thing that underlies the runup is confidence and compliance and compliance is sadly lacking. Overproducing and having to backpedal. That instills a lack of confidence, when a core member breaches the dam. Kokou absolutely, but you have to remember where we came from. We had negative oil prices a few months ago. This has led to a huge amount of supply cuts and most economies back to some normality. You have consumption and demand that has picked up quite a bit. And theterm structure view here is that the supply and demand is balanced, clearly putting upward pressure on oil price. The shortterm ability for the members to comply on that might not be as important as the underlying demand picture. Annmarie the market is not tightening fast enough, but citi sees 60 of oil to return by 2021. Is that within reach . Kokou i think it is, but it will be contingent on whether we have a second wave and whether it would lead to a massive relief in the lockdown we saw in q1 and q2. That is unlikely because the would be so severe, governments would find alternatives. I look for demand to be healthy into 2021 and given the supply costs, michel oil industry, a lot of them having credit issues, it is within reach for next year. Manus what is the biggest barrier to 60 . Is it tariffs . A real reescalation of the chinau. S. Disquiet . Kokou that could be one risk, but it is ultimately global trade and Economic Activity has to be under pressure should there be another second wave or and other economic disruption. I also think the u. S. China lesson is likely to be shortterm before the u. S. Election because there is no upside to the escalating from a chinese perspective. We will have more clarity next. Ear manus kokou agbobloua from societe generale, covering the latest on the oil markets. 1060 be obtained . Can 60 be obtained . Annmarie well find out when they meet. Coming up, frances finance minister says the eu has to be strong and independent from china and the u. S. We will look at todays meeting between xi and merkel. Thats next. Ldp isand japans ruling holding their in Party Election as we speak, choosing their new leader who will become japans new Prime Minister. We discuss. This is bloomberg. Manus it is daybreak europe. Im manus cranny in dubai. It has all the hallmarks of a monday. Annmarie good morning, and lets get the latest. Manus european politics. We are going to take a look at a new weekly segment. It is called the brussels edition. Every monday, the essentials of need to know, the guide to the political week ahead. 27 countries that make up the European Union and the one lady that tracks them all in depth, maria tadeo. The brussels studio. You have an important meeting today. Take it away. Maria we know the euchina trade talks continue today and this was supposed to be a very high profile event, supposed to take place in germany, the euchina summit has been canceled in person because of coronavirus and we will have around midday, a phone call and angelasident xi merkel, who holds the rotating presidency of the eu, head of the commission and council. Hear fromat we will the europeans is recalibrate to make the situation more balanced. Chinese Companies Operating here. We hear from officials the idea that it is not fair competition. They worry about dumping. They worry about predatory behavior. Have a lot ofies state support in europe but for European Companies to and the market, it is more difficult. This is something we will hear for the months to come. This idea of recalibrating the euchina relationship. I would ask a i would say the expectations of a major trade deal from now to the end of the year is looking difficult. A lot of officials tell me they prefer substance over time and the time pressure. Deadline. Today, we are not expecting a joint communique out of the phone call but we will be doing this on a weekly basis on the brussels edition. We have an interview coming out with the chief strategist officer at rasmussen and that 9 30 europe time. Annmarie very excited for this brussels edition. Ive heard it on radio and im looking forward to it on television. Korea taddeo, thank you for joining us. The other thing in brussels lingering is what is happening in london this week and that is the brexit plan Boris Johnson is sending to parliament, which is very controversial but also starting infighting within the tory party itself. Manus when you see an oped, for example, tony blair, don john major, and a number of other luminaries from the houses of parliament really lambasting Boris Johnsons plan to breach international law, we write the brexit deal, this is a very emotive issue, especially the north of ireland. Im seeing lots of various rhetoric. Breakupays chaotic could be. The funds came in and bought the pound last week. Annmarie and it is a monday risk on mood. You can see Global Equities ticking higher around the world. British pound, 1. 28. We will leave you with the city of westminster. Anna welcome to bloomberg market the european open. I am anna edwards live in london. Matt today, the markets say reasons to be cheerful. Asian stocks rise as u. S. Equity futures amid a flurry of deal activity and signs of progress toward a vaccine. The cash trade is just an hour away. Here are your top headlines from