outcome, a weaker sterling, is stunning into the fourth quarter of this year. plenty onwe will have that smart note from kit juckes. let's get to first word news in new york city with ritika gupta. the chinese owner of tiktok is gaining confidence it's deal with oracle will be ok'd. bloomberg has learned it is likely to greenlight the deal as long as it doesn't involve the transfer of artificial intelligence algorithms. president trump is ridiculing fbi chief christopher wei, who told congress that rush is trying to hurt joe biden's presidential chances through social media and his operations. "chris,ident tweeted, you don't see any activity from china even though it is a far greater threat than russia, russia, russia." the vaccine -- they move by moderna and pfizer are moving off increasing fears that the coronavirus vaccine is becoming politicized. they're making statements about late stage trials and how they plan to gauge their safety and effectiveness. trade talks with the european union were useful, meanwhile the ursula vonmmissioner der leyen is convinced a brexit dale -- brexit deal as possible. upis johnson wants to tear sections of the deal he reached less than a year ago. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm ritikauntries, gupta. this is bloomberg. francine? tom? tom: thank you so much. equities, bonds, currencies, commodities. francine is dead on about a stasis in the bond market. it is remarkable, 6.8% on the 10 year. futures negative three, nasdaq green on the screen. 26.49. i'm struggling here. help me. 1.2979 on sterling. francine: i'm struggling, too, just because it is a holding pattern. it is probably awaiting some catalyst. i know measure shares are leading the declines. if you look at the u.k., restaurant stocks are also falling. -- are we had the bank of england yesterday -- i wanted to show you sterling, the pound at 1.2980. joining us to talk about all things currencies, we are joined by jane foley, rabobank head of fx strategy. when you look at pound, what happens with pound from now until december? jane: we have had good news overnight, and it is thought that a deal as possible, and it is good to see these high-level politicians weighing in because that gives a little bit of confidence. even if there is a deal, you've got to question whether there is enough time to get a comprehensive deal. it is quite likely we will have some sort of deal, but one that holds, one that the market will pick holes in, and there could be disappointment. even the -- even with a little bit of a rally in the relief there is vulnerability with the economic impact, if there is no brexit deal or a poor brexit deal, adjusting this negative rates story, if it is allowed to kick in in the u.k. as well. francine: we will get back to the benefits or not, in this case, with negative rates. but we are getting breaking news out of the you bank regulators are moving closer to ending a ban on dividend next year. so this is a bloomberg story saying that several ecb supervisory board members feel harm if they extend this band, so they would be in favor of lifting the band. it is unclear at the moment whether this is because they think there is more stability in the financial market or whether they think it will be too harmful to extend it. is there any read across come on your world of foreign exchange, if they don't extend the ban, doesn't mean they feel more comfortable about the stability of the system as a whole? jane: we have had some better economic data than was anticipated in may. that is what we saw in the ecb meeting last week that was revised up. we saw in the fed, the bank of england, the bank of new zealand as well this week. recognizef us had to that we are going to have to live with the impact, perhaps longer than we thought in may. still for some countries, a slowdown in trade as we all begin to realize social distancing is probably in some form with us for longer. if there is not going to be a virus for some years yet. -- if there is going to be a virus for some years yet. with a massivego distinction into q4 in 2021, which is capital flows and trade flows. so much of europe is trade surplus, something foreign to americans, and frankly a troubled united kingdom. the united kingdom, if they go to the zero bound or go negative rates, they are not europe, are they? jane: they are definitely not, and the u.k. has this very significant account deficit. i also explain to people the real way of looking at a current account deficit is considered to be a deficit of savers. and we need international savers to come in and plug that gap. international savers will come in if they like what they see, but if you look in the last few years, for instance at investment in the u.k. as a percentage of gdp a few years ago, it is doing quite well. but in the last few years it has dropped below france and germany. that suggests investors are not liking what they see, i.e., there is too much political uncertainty. if we continue to have uncertainty, investment flows won't be as strong as perhaps they otherwise could be, and that potentially meets downward adjustment in the value of sterling. tom: is it an adjustment that is gradual, or do we risk a junk condition off new slower trade flows? junkiee could have some movements off sterling. we have seen that through the brexit process and how the market reacts. some of this could be that could mean that this will not be such a big shocker if we get some headlines on this further down the line. but i do still think that sterling volatility could be quite heightened over the next three to six months, possibly over the next year, too, because there will be fallout. if brexit doesn't go particularly smoothly, there will be fallout on the johnson government. he has been firefighting all of this year in terms of reactions to the covid-19, in terms of internal to his latest markets. so he has been firefighting for a long time. if he carries on firefighting for the next three to six months, we could have a very difficult scenario and sterling will react to that, too. if the boe goes into negative rates, what could be the fallout for pound and other currencies? jane: for sterling it would be negative. this is something the market has been talking about for the past six months. there are other countries that have negative interest rates -- japan, switzerland, the eurozone . but generally these have i think all of these countries have current account surpluses. it is unique for the u.k., and you could argue that sterling could be more exposed. there will be levels -- u.k. access -- u.k. assets are looking pretty cheap. the ftse continues to underperform because those uncertainties are still outweighed, there is still potential on the downside behavior to sterling. am: with jane foley on friday, this is a brilliant conversation to get started. i really cannot convey the usual outcome of the week after the powell presser and the various shocks out of that, including mike mckee's important question, the tumult and the quiet that we observed in the bond market, and of course how it folds over with , 1.185 seven.r the conversation will be advanced. coming up, the atlanta fed president, always interesting with a distinctive view of the commerce of this pandemic. raphael bostic in the 8:30 time slot. it is an interesting friday. this is bloomberg. ♪ tom: "bloomberg surveillance." a most interesting friday, into the weekend, getting ready for -- and i dare say it already -- october. rebecca patterson will be with us. she works with a guy named bob prince at bridgewater associates. really working -- really looking forward to speaking with ms. patterson about risk parity and its challenges. i know we take a risk with jane foley at rabobank. we have a new prime minister but also an stuck in the water at 104. as many people make a big figure call for strong yen, why hasn't in moved that's why hasn't in moved and what is it signal? jane: and a lot of that move is dollar weakness at this point. i think the yen could be an interesting currency from here on in. we have a new japanese prime minister. the market is assuming that he will follow in the guidelines of abe.ay -- of the new prime minister does not have the experience in foreign policy, and this is where i think the yen and a lot of the geopolitics will be interesting over the next few months if not the next few years. tom: not to interrupt, but this is important. the intuitive feel is that if the prime minister is not up to it, the entered weekend -- should weaken, -- the yen should weaken, but that's not what happens, right? -- when therewill was that nuclear disaster with , what happened? the yen strengthened. this is why if the news is looking bad it will strengthen. policy,ok at foreign yes,is inexperienced but he will get up to speed pretty quickly. he has to. this is not just about u.s.-china tensions. we have a lot about pushing back in the south china sea. we have another headline about china's military showing in the taiwan strait. it will be a new headline. we have concerns that may be germany, maybe japan should join those states in watching and sharing information about china. and a lot of australia news about tengion with china -- about tension with china. there is going to be a lot of policy issues. vote, a billiday that japan could potential he expand past it's constitution, or a rereading of its constitution and get some land missiles aboard as well. this is all about china, so if we have concerns on this front, if we have concerns even about the u.s. and the contested election, we will expect that the yen will gain. francine: talk to us about the other safe havens. what do you do with swiss franc right now? jane: the swiss franc is interesting. it is a proper safe haven, but it tends to be more reactive to european news than you would that is where quite possibly investors are based. dollar swiss really has been thwarting normal movements, so i would expect to see normally euro swiss -- euro swiss could have gone higher after may after we had the recovery fund in europe. but he couldn't because of the movements in the dollar and the pressure that was coming through on dollar-swiss. dollar weakness, that is a real factor slipping through, if you like, on the impact on the swiss franc. francine: thank you so much, head of fx rabobank strategy. our next guest will talk about stimulus, talk about dollar. this is bloomberg. ♪ ritika: this is "bloomberg surveillance." in spain, a takeover will create the country's largest bank. that values the state controlled lender at about 4.5 billion dollars. signs that the long-awaited financial industry consolidation in europe is starting to kick off. facebook is again being sued for allegedly spying on instagram users. it's time it has to do with the unauthorized use of their mobile phone cameras. in july there were media reports that the phones app seems to be accessing cameras even when they were not being used. on the bug, which it says it is fixing. data security linked to tencent -- bloomberg has learned that the committee on foreign investment in the u.s. has sent letters to companies such as epic games. riot and has a stake in epic. that is the latest on the bloomberg business flash. francine: joining us is our asia tech executive editor, peter elstrom, to talk about tiktok but also the new scrutiny from the u.s. on tencent. peter, great to have you on the program. is there a concern that as the and,investigates intense they could invest tiktok or are they far behind us? ther: already tencent is in sights of the trump administration. the trump administration has come up with a ban on wechat, and now they are asking game companies about how they treat the data that their users are generating. tencent has been investing income is around the world, particularly in games, for a very long time. they have stakes in some pretty big gimmick companies around the world, with many users, including epic, the studio behind fortnite, and also riot games, which has league of legends. the administration wants to understand how that data is being used, and at the most extreme, they may push for tencent to divest some of these stakes that they have in these companies. the all-time midwest pedigree, the university of chicago school of economics. is this capitalism? i know you were not talk the stuff in the university of chicago, but the bottom line to me it is corporate dominance by political parties. is this going to have legs to it? will this continue to move into the future as trump wants it? is certainly not the free-trade philosophy that you would hear in business school. trump has taken a different tactic come as you have seen. probably most pointedly, we are seeing it with tiktok where they are forcing the parent company to give up control over tiktok, which has been this huge app challenging facebook in terms of online advertising. that view is under review by the trump administration. it is not clear whether they are going to sign off. it sounds like different factions within the trump administration with different points of view, some are ready to proceed under the proposal that would spin out global and have oracle in the venture capital firms take a state in it, but there is another faction that wants bytedance to give up control over tiktok global, and it's not clear which faction is going to win out. do you think that -- that this tiktok fail will have the consent of beijing? will they be ok with it? peter: we put a story out today based on sources that bytedance is getting increasingly confident that they will be able to get the blessing of beijing for this deal. it was pretty clear from the beginning that beijing would be ok if bytedance is holding onto the technology behind tiktok and maintaining majority control over the tiktok business. the key question was whether beijing would also be ok if bytedance had a minority instead of majority with tiktok. according to my sources, they say that would be ok as long as they keep tight control over the technologies used in the tiktok app. tom: why should the president of the united states agreed to what you just said? peter: well, the case that factions have been making inside the white house is that atedance is giving up substantial chunk of equity in tiktok global. the company has said that they will move the headquarters of the operation to the united states, they will generate 20,000 jobs, they will make substantial investments. they have also put together a detailed plan of how they are going to treat the data that is generated from tiktok. it is a 20-page document. there will also be data security experts to review this, so they will be able to check on it any that they want. the peter, thank you for update. driving forward the political conversation today, the speaker of the house of representatives will be joining david westin on "balance of power," an exceptionally strong performance by mr. weston today. we look for an anti-posey in the 12:00 hour. this is bloomberg. futures red and green on the screen. ♪ of thewaco call joins me book of the summer, richard haass of the world. this is a book that should be thrown at .veryundergraduate i want you to start with thomas hobbes, you stagger through hayek and the shift of the university of chicago, and then you melt william -- you melt william gladstone with the 19th century. where is william lincoln out there? where is gladstone and lincoln out there now? all, thank you, tom. tom: continue. >> thomas hobbes is important because when he sat down to write leviathan, about the structure of government, it changed in number of things. was the most powerful place in the world. more --e economy, far it had everything. but the west came back because it adopted -- when you talk about how to change government, we thought about what you could do if you used an imaginary figure. at one time we thought maybe we would take angela merkel in the white house and see what happens. that was more instructive to go back to the 19th century, and the reason why is that the 19th century is the last period when there was massive reform of government. tom: absolutely. >> and william gladstone from britain. we took him in aunt -- this is really important, -- the 19thfriend that is a fact. how does whoever is after trump, how do they begin to get us back to what gladstone argued about? >> i think you have to go back to basics. one interesting thing is that people are looking at the selection and thinking all we need to do is change the leadership. and there are some things which i think it's fair to say things are not done particularly well and does not play to his strength. you have to bring in experts and organize things. those are not really his strengths. whatever happens, the healthcare system is designed for the old and the rich. start policet causing violence in the streets. whoever comes in to american government, whether it is trump or biden, they have to seriously think about reforming things. empires do not reform. andcould have defeat america has been defeated by pretty much every big country except by britain. it is how to react to that is what makes the difference. suffered from i'm playing and gave in to sparta. spanish flu 100 years ago, countries actually reacted. it is up to america to actually reform. we celebrate the private sector repeatedly on bloomberg. we have a lousy public sector. >>. fall, you have to be self-aware. our politicians self-aware are not? >> i think the answer is no. i think too many politicians are beholden to special interests. you look at what is happening in congress, you have democrats who are unable to reform the public sector because they are so close to unions. on the republican side, you have a challenge. there $1.6ay why is trillion worth of tax breaks which almost exclusively to the rich? if you believe in smarter government to get rid of those and bring down rates, you should look much harder. why does warren buffett get a pension? why does bruce springsteen get a pension? it does not make sense in the real world where you want to redesign government. there are challenges on both sides. i think there is more action in america when it comes to people like mayors. >> this is why we have elections. why do people not vote out if they don't have what they want? >> i think people are beginning to see. i think the problem with the public sector against the private sector. in the private sector if you fail, you have no choice. you have to either copy them or you go out of business. timesea of america's 30 wears, they should start looking and trying to learn what other countries do well. all of the recommendations we make in this book are ones that people are already doing. they are not shooting for the moon, they are things people can do. >> we celebrate the waco call. this is 156 pages. from the first paragraph it is a walk-through of the competing two forces of our world political economy. we can continue this dialogue. right now here is ritika gupta. ritika: congressional democrats are weighing the next steps after president trump backed a bigger stimulus plan. some are keeping pressure on how nancy pelosi could bring a new relief bill up for a vote. pelosi says some lawmakers do not want to advance any legislation until they have an agreement with the administration. president trump announced $13 billion in farm aid in wisconsin. the move had been widely anticipated with -- wisconsin is a farm state that is critical to the president's chances. he is trailing in the polls there. joe biden is drawing a sharp contrast between his middle-class upgrading and president trump's wealth. the candidate was making a plea to voters in pennsylvania where he was born. aden returned to scranton for town hall meeting. he says he views the campaign as a campaign between scranton and park avenue. on bankmakes restraints dividend payments and buybacks. the fed says it will decide whether to prolong limits in the next two weeks. it is conducting stress tests. regulators imposed it in june. at the time the fed said potential risks to banks, its capital distributions continued at the same pace. 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. gupta.ika this is bloomberg. francine: make sure you catch the bloombergquint festival. it gathers for a virtual event focusing on climate change. they's highlight include cisco chief officer. that starts in 8:00 in new york and 1:00 p.m. in london. this is bloomberg. ♪ tom: a book you have to read. bloomberg surveillance. good morning. it is 156 pages. it is about the size of a good martini cocktail coaster. it deserves to be read by you and any offspring right now. wey have written before and are thrilled that the editor-in-chief of bloomberg news could darken the door in london. william lincoln, i get it. how cute. gladstone and abraham lincoln. i want to know ronald clinton is -- where ronald clinton is. clinton ran to the middle particularly with welfare reform to get things done. can biden run to the middle and survive or is a new liberal theology so much, he cannot do that? john: that is a good point. bill clinton did reform things and you are right, the welfare reform that began in minnesota. there used to be a tradition in america where people picked up on reforms in the state and that seems to have gone down. when you look for examples of things that are getting better, you tend to look at the local level. by the time you get to washington, it is so wrapped up in special interests and all the problems of gerrymandering and things literally drag washington politics to the extreme energy much harder. he is going to have a debt to people in virtually every kind of reform of the sector. the reform of government has to involve change their. that is the challenge for him. toward rugby. in rugby you can have something called the hospital past which is when i am running along and i pass the ball to you and you keep your eyes on the ball and you catch it and you are happy for about a millisecond before the opposition lands on you and flattens you. i think biden is concentrating on getting the presidency. when he inherits the american government and comes to terms with how fall -- far it has fallen, then i think it is a difficult challenge if you wins. trump would face the same challenges as well. francine: it took three years to teach cricket to tom. i'm not sure we are ready for rugby. that was your first lesson in rugby. tom: guy johnson gave up with me about three years ago. corbin is out as you mentioned in the waco call. centereds to a much tendency. is that their prediction that we will see the parties move to the middle or do we stay with this polarity keeping us away from our wake-up call? both sides face problems. i think conservatism is also under a lot of stress. the conservatives were famous for several things. they were famous for being pragmatic. they were the people you trusted to look after the economy and your defense. you see what happened, the coronavirus with trauma. behind that, i think conservatives are in trouble. you have one group that just talk about the need for smaller government. if you want zero government, go to the congo or go to new york when covid was at its height, when public services work unable to deal with the problem. zero government is not the answer. the other strand of conservatism which is what trump has been pushing is this national versions, america first of conservatism. that is what causes trouble for the business groups who like free trade and immigration. it is a bigger problem when you look at the whole point of this which is to compete with china. if you believe in america first, you never get allies to come with you. you look back at the way america won the last cold war, it did it by reaching out to allies and singing a song of freedom. if you don't talk about freedom and you always talk about america first, then that message does not resonate. if you look around the world, the democracies of the world are so much stronger. no matter that china has done is better than america. the focus should be how do you bring that together. i think that is interesting. i think conservatism ruled the roost for years. only tony blair and bill clinton have managed to win the main offices. francine: do you think the pandemic will be a reset? you could argue that the populists, boris johnson or donald trump actually offered some kind of new social contract . it was another type entree. john: on both sides. there is some element of truth. ofmp identified this problem white working-class being felt left out. people,has a group of although he may not sympathize with the way we described him, he looked at the issue of how to reform government as what drives them toward this idea that you could make london into singapore. you could refashion government. there are people in both places thinking about the same -- thinking about these things. populists are the ones who have done things. the water has gone out and they have been left unable to explain what they did. where youchallenge need someone who was pragmatic who could pull in experts. you look at the way america has handled it, they handled it six times better in terms of the level of death in germany compared with britain and america. that is the big difference. is the widert implication of the u.k. and the prime ministers saying breaking international law? john: i think it is very difficult. what is interesting on that is people have said how could you possibly lecture , ates like china and iran least in principle there has always been the idea that the rule of law really matters. it has given us some degree of gravitas with other people. remain onnsparently international law, you are in trouble. it is interesting that there is growing discomfort in circles about that. francine: thank you so much for joining us today. co-author of the wake-up call. star power behind that, exposing the weakness of the west and how to fix it. coming up, we speak with john tuttle, the new york stock exchange vice chair. we will talk about some of the tensions out there between the divorceschina and the in europe. 3:30 p.m. in london. this is bloomberg. ♪ ♪ is "bloomberg surveillance." the san francisco company priced its ipo above a market range to raise $1.3 billion. it has a market cap of $13.7 billion. it develops software for video games. a federal judge may put a temporary hold on president trump's executive order that own we chat in's the u.s.. it is a messaging, social media and electronic payment have used by more than one million people. the argument is that china can use it to spread disinformation and steal data. unioners in the european are crying fat and have balked at the plan to set limits for the next decade. automakers say they lack government support needed to achieve targets. that is your latest bloomberg business flash. francine: thanks so much. markets seem to be quiet. stocks are fluctuating. there has been mixed signals from investors. they seem to be settling into some kind of holding pattern. edging lower. i wanted to show you some of the u.k. restaurant stocks. they are falling because of reports that written may -- ontain may stem curbs. tom: the data front on friday, mixed market reading grain on friday. disparity green. the is really something. nasdaq is down 12%. apple down 21%. i will do that at the top of the next hour as well. weaker dollar but we had a good conversation with james foley. she is calling for stronger yen. sterling 129.86. without question, or interview of the day in our next hour. rebecca patterson will join us. you know her from j.p. morgan. we will talk to rebecca patterson about the theory of the market. stay with us. this is bloomberg. ♪ give you my world ♪ ♪ how can i, when you won't take it from me ♪ ♪ you can go your own way ♪ ♪ go your own way your wireless. your rules. only with xfinity mobile. this morning, oh, the humanity. highflying tech, the nasdaq down a stunning 12%. broader indexes, not so much. it is friday. do you know where your portfolio is? a greater inflation by monday, or maybe halloween? bonds have done nothing since the powell presser. it is 46 days since the election. dr. redfield, walter reed, the university of maryland. sachs has an opinion. good morning, everyone. this is "bloomberg surveillance ," from new york. from london as well. francine lacqua surviving a lengthy interview with our editor, john mickelthwait as well. traffic is backed, but new york is just not back. his london back? francine:

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