Pelosi helping a little bit. She was sounding a little more optimistic on stimulus in the united states, the s p trading down by 0. 9 . Tech is underperforming a little bit, but we saw a lot of call buying yesterday. The pound is recently is reasonably well bid. Big day tomorrow, as Boris Johnson speaks to ursula von der leyen. We are expecting a u. K. Briefing after the eu briefing this afternoon. Crude off of its earlier lows. Now down only 4 . Alix part of that may be, as nancy pelosi speaking earlier, says the trump diagnosis changes the dynamic in the stimulus talk. Stephanie kelly joins us from Aberdeen Standard Life investments, their senior political economist. How does it change the dynamic in stimulus talks . Stephanie it is kind of tricky because if you look at the nature of these negotiations, it hasnt is been republicans debating with the democrats. It is much more around President Trumps desire to get fiscal stimulus, and certainly in light , this diagnosis could shift the focus on to covid, which is what he wanted to shift away from. The challenge is that the Republican Party in Mitch Mcconnell has tend to be more downbeat on significant stimulus. Bear in mind, yesterday the Democratic House past their to trillion dollar deal in the house. Anyway, a lot of the dynamics remain the same in how you square the circle around republicans and democrats. Clearly, for the administration, they are concerned this is now going to be all about covid, which is what they did not want for the campaign. Guy is stimulus a powerful enough message to get off of the new cycle dominated by covid . Stephanie it is really tricky. It is a good news story in ways, particularly for those who were on Unemployment Benefits that were quite generous. They are definitely running out for people who have been able to get them through the state system. Certainly come a stimulus could be helpful come about helpful, but it is hard to say that is helpful just for the republik and. Who it is a political the republicans. Who would is a political win for is less certain. We dont know, in terms of Trumps Health and how he deals with covid, that is one of the big challenges in what all this means in the next couple of weeks, both for his campaign, but also deeper tunes about the election. Alix speaking of, lets tie these two things together. What we did see was Boris Johnson, when he contracted covid and got very ill, he also wound up getting a boost in the polls and in likability after that. Is this comparable . Stephanie i think the challenge youve got his two things. One is timing. Boris johnson got ill quite early in the pandemic, and at a time when everyone was very nervous, and at least in the u. K. , quite on board with issues like luck nouns and having to take this approach with the health crisis. The second is that the u. K. Political environment and u. S. Political environment our very different, and in the trump loader base, there has been a huge amount of skepticism about covid itself. Quite a lot of research has suggested that the administration contributed to some of the uncertainty around the information provided for covid. So it is not the same, and if anything, it is challenging for those swing voters. This is ultimately going to be all about swing voters. Trump voters will vote for trump. Nontrump voters will not vote for trump. It is really those independent voters. Do they look at this and say, hes going to downplay this and now he has got it . Or do they say this isnt that relevant because it was never going to be relevant for me . That is the challenge in such a polarized environment. The trump are nervous about it for sure, but how it actually plays the trump team are nervous about it for sure, but how it actually plays, we will see in the specific graphics in those states. Guy lets talk about what is happening with brexit. Lord frost is currently briefing right now. We had the barnier briefing a few moments ago. Lord frost saying the talks are between himself and michel barnier, constructive and in good spirit. They were encouraged with the progress being made on law enforcement, but very little time ahead at the European Council meeting. The leaders meeting takes place on the 15th, or just ahead of the 15th. We had a whole series of events taking place today around brexit. We now understand theres going to be a call between Boris Johnson and von der leyen tomorrow. Merkel was sounding quite positive, almost talking about the fact that while we are not going to be entering the tunnel, we are getting into a heightened level of negotiation. Frost and barnier, mixed messages. Are we expecting a deal, or is this a new deal scenario . Stephanie i still think all of the incentives aligned to get a deal. It doesnt mean there is not a risk that you failed to. I think it was probably inevitable that johnson and von der leyen were ultimately going to have to get involved to get over that hurdle because if you look at barniers statement, he says it is not too contentious politically. We need to see come for mys over compromise over fisheries. These are big political issues, but i think ultimately have to be decided by political leadership, and that is why johnson and bonder ryan and von der leyen is absolutely crucial. It looks like the eu will not walk away from negotiations as long as there is the conversation to be had. Guy the u. K. Is now saying the gap on fisheries for the eu risks being impossible to bridge. If you cant get a deal on fisheries, do you not get a deal on anything . Stephanie fisheries is one of those issues where it is economically a very small issue, but has become quite a hot button political issue. I think ultimately, the impact of no deal because you couldnt get a deal on fisheries i think is not where the real issues are. Aidreal issues lie on state , and some kind of agreement on state aid. I think fisheries can be worked out one way or another. The big issue is really state aid, but theres always a risk that these things end up becoming the kind of linchpin upon which other things fall. That, wepivot off of johnson and about bonder lion meeting, but will and von der leyen meeting, but will von der leyen be able to trust anything that he says . Stephanie i think that is the real tricky bit here. Theres a lot of focus on the lawsuit. The lawsuit itself just underscores the fact that, as the internal market stands, it does violate part of the Withdrawal Agreement. Lowver, clearly trust is between the partners, even lower now as a result of the moves of the u. K. We should bear in mind, even if we get a deal, the deal is worse than we currently have as investors in terms of Market Access between the u. K. And. And eu. There could be ongoing political ints between the two sides terms of implementation, how the relationship works overtime. Issues around brexit dont go away just because january comes and goes and you get a deal without tariffs. Lion meetingonder 8 the vendor lion the von der leyen meeting a walk in the woods meeting, or is it lower down in the hierarchy . Stephanie it is definitely highprofile. What it is reflecting is the fact that the is keen that any decision made at this point is eu wide. Challenge you had with the Withdrawal Agreement is it was very specific to parts of the Northern Irish good friday agreement. I think you could certainly see this being crucial. However, never say never when it comes to brexit. We know that things can fall apart, and a couple of days later, someone makes a call. Be highprofile politicians, but i dont thing we should ignore this weekends meeting as an opportunity to reach those european whitecaps. Ok. We are going to leave it there. Stephanie, have a great weekend. Thank you very much for your analysis. Stephanie kelly of aberdeen standard. Alix coming up, we are going to break down the impact of trumps positive diagnosis. Plus, the jobs number. Where the weakness would really be without the stimulus. Constance hunter, kpmg chief economist, will join us. This is bloomberg. Alix the recovery is slowing. That is the read from the headline number in the september jobs report, with just 606 to 1000 jobs added last month. , constancewith more hunter, kpmg chief economist. One number that stood out to me was the permanent job losses seems to be increasing. I am wondering how you look at that Going Forward over the next two to three months, as stimulus checks wear down, as schools are starting but not starting, and layoffs inlso the pipeline from delta, disney. Constance normally, temporary ,ob losses peak at about 50 and that is usually after a recession has occurred. So we actually had an opposite pattern in this recession. Obviously, temporary job losses firmsout percent, and as begin to realize that the recovery is going to take much longer than expected, that getting back to normal is going to take longer than expected, that is the virus persists, firms are now faced with choices about laying people off or mentally. We ares ash people off permanently. Offre seeing that people permanently. We are seeing that number fall past what it would normally be in a recessionary environment. Guy i assume we are now seeing the effects of the stimulus package fading out of the system. If we were to see another one, how quickly would it kick in . Constance it really depends on the complexity around how it is deployed. There was a lot of talk about changing it so that it was a percent of income rather than a lump sum. There are some technicalities with regard to how that would distributed. As actually speaking with the other day, and he was mentioning that the white house had worked out a system where the treasury would ascend direct sendnts to people would direct payments to people. That would be hugely beneficial, and would get the money out fast. The great thing about the first stimulus package, while it may not have and has targeted as some people liked, it was very swiftly deployed. Even in that case, it took three to four weeks to get out people. That would be our best case an area. Best case scenario. Alix how do you model the next few jobs report says we had to the end of the year . Constance we have been anticipating a slowing pace of jobs growth. We are, like many other people, looking closely at some Realtime Data indicators, on things like indeed. Obviously, the weekly unemployment, even though there is a lot of noise there, would we triangulate that with some other data, it helps give us signals. We are looking at that from a topdown perspective, and from a bottomup perspective, we are looking at each individual industry. We can see that the most impacted industry is still leisure and hospitality, with 3. 8 million jobs below the prerecessionary level, and we just expect it to be very slow going there because people are concerned about going out. Fear of goinggo, out, is really dominating the economy. Guy do you think the president testing positive may only increase that . Constance i do, actually. I think it is going to make people more concerned, more aware that they might be more vulnerable. Perhaps they thought they were invincible. And at the margin, and all economics happens at the margin, that will impact the willingness people have to go out and do things. Hopefully it will also affect the willingness to wear masks and take other precautions that can really help slow the spread of the virus. Alix i was actually thinking about flipping it. If President Trump continues to have these mild symptoms as reported, if it makes the lockdown conversation just totally off the table again, and people feel more confident on the flipside. Constance because the symptoms are mild and it is not that bad of an illness . True. Think we will have to see how it plays out. To certainly very early we dont really have any data. Certainly there is a risk that that is how it goes as well. Swiftainly hope he has a recovery. Guy we are going to leave it there, but i am hoping you are going to stick around. We will get her thoughts on europe as well. The u. K. Worth talking about, too. We had a very weak inflation print out of the u. K. Today. We will do that next. This is bloomberg. Ritika it is time for the Bloomberg Business flash. Im ritika gupta. Walmart reportedly will sell its british pressure unit to a Consortium Led by tdr capital. The price, about 8. 4 billion. One of the losing bidders was Apollo Global management. Walmart has been looking to sell asda for at least two years. Tesla delivered a little more quarter,000 cars last maintaining its dominance in industry. Last year, tesla had a 16 Global Market share in electric vehicles. Pressure on the European Central bank, which is debating whether to add stimulus to support the recovery. The inflation rate came in at 0. 3 . That is your business flash. Guy thank you indeed. Lets talk about that inflation story. Still with us, Constance Hunter of kpmg. We had negative 0. 2 on the call, which is a record low. Eurozone has a massive output gap right now. Weve got covid to deal with. Edve basically got unanchor Inflation Expectations. The fiscal response is questionable at this point. If the idea of an inflation trade in europe hard to imagine . Constance certainly without more fiscal stimulus. There is a technicality we need to think about, which is germany cut their valueadded tax, so that has reduced inflation and could help consumption. That is also a stimulus measure. We need to see how that plays out. Think the thing you mentioned that is most concerning is whether or not Inflation Expectations have become unanchored and are falling down. I also think it is important to thell that, prior to covid, softness and inflation was marginally in goods and commodities, and was being driven down by global factors, and in a large part, chinas oversupply to the world economy. Now we are seeing covid most impact services, and we are seeing a decline in services prices. That is what has led these prices lower, so it is very much tied to covid and the economic situation, and the lack of demand brought about by covid. ,lix do you think that the ecb seeing the Central Bank Governor talking about how the price has been deflationary, do you think the ecb is going to have to change their inflation targeting like the fed did . We let actually work . Will it actually work . Constance that is a big question. The ecb is very wed to their 2 target. I can still hear mario draghi saying the ecb target is at or below 2 and 2 inflation. I think the fed didnt so much as it clarified what symmetry meant, and said it would be willing to withstand inflation above 2 . The ecb is a long way from that, given their historical stance. They have been inching towards this clarification for several years. Laterk it would be an out an outlier for the ecb to suddenly switch. Certainly the more hawkish numbers of the governing council to move in that direction furthermore, what is really needed at this point in the pandemic is more fiscal assistance. Way to a more durable make sure that the pandemic doesnt cause lasting scars here and in europe. Guy lets pick up on all of that and look at it from another angle. What i am hearing you talk about and the ecb talk about is what the central bank is not going to do on either side of the atlantic if we start to see a pickup in inflation. What i am not hearing is what is going to happen if we continue to see numbers like were posted today. What else can Central Banks do . In anld still be inflationary environment in the united states. These are bad numbers, miles away from the mandate. What do they do if it keeps carrying on like this . What is the other symmetrical side of the policy response . We know what they are not going to do if there is inflation. Do they do if there is more disinflation . Constance unfortunately, i think the reason we are having below inflation, the reason we are having police inflation the disinflation and deflation is because of a downward stock to demand. Central bankers are not doctors. They cant invent a vaccine. They cant necessarily cause the virus to go away. That is really what is needed to get rid of the demand shock and the demand gap. So unfortunately, i think Central Banks hands are tied, and that is why you hear central bankers jumping out of their comfort zone and talking more about the need for fiscal policy. That is not something central bankers used to talk about because that is the only thing that can really help in the face of this demand shock, other than having a cure for covid. A vaccine might certainly help. You wonder whether a vaccine would be inflationary, given the amount of money supply there is in the system. Constance, really appreciate your time today and urinalysis. Constance hunter and your analysis. Constance hunter of kpmg. The ftse is back in positive territory. The dax and the cac 40 mildly negative. The european close is up next. This is bloomberg. Guy the action is coming at the back end of the session. Indicating the deal could be done on stimulus, providing an upsurge of activity in the markets. We saw the same thing over here. Stocks finishing and positive territory. These are the numbers as we have them at the moment here in europe. Ftse positive. Seen a drage have from rollsroyce. Travel stocks as minions in focus as well. Iag, etc. , trading lower. The dax down by. 4 . 40 down almost. 2 . Eurodollar is a bit weaker. The dollar catching a big. Now, the dollar is trading cautiously against things like yen, but it is interesting that we are seeing things like dollar strength. It is ironic that the dollar acts as that safe haven. 117 1. 17 17 is where we are treated. Canceled itself out with a positivenegative story. Progress was being made. Time was short. Is that enough to upset the whole apple card . Trading now below 40, but off of our lows. At one point, it was found by around 5 . The other thing i want to mention, what is happening with the ruble. If you want to see International Markets react to the prospect of en when, look at the russian markets. And the ruble today very sof