That 18 out. To see fascinating is the two different debates find, but then have it coalesce into a Running Stream on different websites and different media, including bloomberg. It was amazing. It was something completely modern and completely different. Like a european debate, tom, is how i would maybe describe it. You got a lot more policy than in the last debate. And possible shifting in some minds. Get to first word news with ritika gupta. Ritika President Trump and joe biden were on tv last night at the same time but on different channels. They held competing televised town halls. Instead of debating as the schedule had originally called for. At nbc, the president said he knew the coronavirus was a huge danger. Pres. Trump i knew it was a big threat. At the same time, i dont want to panic this country. I dont want to come out and say everybodys going to die. Ritika in a town hall monitor rated moderated by george stephanopoulos, biden was asked if he would take a vaccine once it is approved. Mr. Biden if the body of Scientists Say that this is what is ready to be done and it has been tested and has gone through the three phases, yes, i would take it and i would encourage people to take it. Ritika the two candidates will face next week in the final president ial debate. President trump will lean on Mitch Mcconnell if that is what is needed to get a stimulus bill passed, according to steven mnuchin. He told nancy pelosi that the president would personally lobby Reluctant Senate republicans. Mcconnell wants a bill that is much smaller than the boat then the proposal being considered by the white house and pelosi. It is breaks decision day for boris johnson. The british Prime Minister is set to decide whether to abandon trade talks at the european union. The leaders have failed to give johnson that deal that he wants to remain at the negotiating table. The top aviation regulator in europe says boeings rebound boeings 737 max is safe to fly. It has been grouted for more than a year because of two fatal accidents. Boeing still has to get approval for the faa for the plane can fly again in the u. S. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im ritikauntries, gupta. This is bloomberg. Equities, bonds, currencies, commodities. I only have one board this morning. Im going to go to the 10year yield, going from 0. 69 out now to 0. 73. Im going to call a little bit of a yield backup, ebbing away in the last two or three hours of trading. Francine, the euro at 1. 1705. A weaker euro seems to be a new theme in fx. Francine and something that could sway the European Central bank, their policy decision. The british pound reversing some of thursdays drop versus the euro. The british Prime Minister said to decide on friday whether to abandon trade talks with e. U. After the leaders refused to give him a clear indication they are ready to compromise. This will be a difficult decision for the Prime Minister. Stocks in general are gaining. We had Corporate News that was positive and people are getting used to these extra restrictions to curb the pandemic. Joining us to talk about the markets is George Saravelos, deutsche banks global head of fx strategy. Great to speak with you today. Especially on a day where they could be a lot going on with pound. S the right one to look at europound, eurosterling. George good morning, francine. Yes, we always prefer to look at dollarpound. Debateal versus no deal is running out of steam in importance. I think the market is realizing that even if you do get a deal, as is increasingly now being priced. You will still have a big negative shock at the end of the year. Very is all sorts of complex things that will happen to trade. For instance, the issue of accumulation. The u. K. Will no longer be able to export cars with foreign parts. So we will still be a negative even if you still get a deal, and the market is realizing that and that is why the pound is in rallying that much, even as expectations of the deal build. What happens if there is no deal . Is there a 50 50 chance that we get a deal, or is it higher right now . Or is the market ignoring a chance of a no deal . George i think the odds of the deal are much higher, probably closer to 80 or 90 . Remember, the Prime Minister threatened to pull out by the 15th if there wasnt a deal. But it is looking like, based on news reporting, that talks will go ahead. If you do get no deal, the sterling reaction is going to be very negative because that is the market will worry about a withdrawal agreement. Remember, the u. K. Has been taken to court by the e. U. For potential breach of that. The sterling reaction will be very negative in no deal, but by key message would be that in the event that we do get a deal, we will not get a big rally because it is already priced, and the benefits of the deal will be limited anyway. The other thing that is worth noting is we have this focus on covid cases that are rising, restrictions again, but what is remarkable is the governments reluctance for more aggressive fiscal stimulus. All of the european economies in Continental Europe have expanded the furlough schemes, they are with the help, and u. K. s doing will be damaging to the economy. Study of capital flows or interestrate differentials . George it will be both. To primes both do tend the markets, the real big event, the paramount event risk is the u. S. Election, which you talked about. , think there is huge potential Interest Rates and capital flows. So we think the potential by the presidency is underpriced in terms of the impact if we do get that. Tom what is the direction on that . Significantly weaker dollar. We have already seen the first signs of dollar weakness in q2. Potentialere is more for dollar weakness, especially against the emerging currencies, and even though the euro has been weak over the last few days, we have seen how well asian currencies are holding up, especially in china this morning. Tom an unfair question, but it is unfair friday, George Saravelos are you talking about a 3 move or something much larger, or are you talking about george i think much larger, tom. We could potentially be talking 15 lower move, especially against emerging markets. When you look at some of the things that we are worried about, how does it play out in currencies that are considered havens . We worry about the lockdown and inflation, so what would you do with yen or swiss franc . George here is how to think about these things. It does all go back to the u. S. Election. I think in the event of a biden presidency, the market will significantly reassess Foreign Policy. Imagine waking up to a world where we dont have to check our twitter account every day to understand trade policy and tariffs on china. That in itself is a very big risk premium on the dollar. I think around 10 . The more predictable Foreign Policy would be driving a weaker dollar. To the policy mix, in terms of this unprecedented combination ary of fiscal eating fiscal easing, if the presidency goes democratic that should benefit emerging markets. The key one in terms of thinking about the risks to the virus is a vaccine. We monitor the news flow closely and we expect the vaccine after december, and the market is forwardlooking, so even if we dont get a rollout, i think the market would react very positively to a vaccine announcement, combined with the u. S. Election. Tom absolutely fascinating and valuable on a friday. We will come back with George Saravelos and look at this troubling United Kingdom story of brexit and pandemic. Market, a churn to the the market looking for information and looking for direction. Gideon rose will join us, a Monthly Review of his Foreign Affairs magazine. This is an exceptionally strong and the capitalism future of international relations. Stay with us. From london, from new york, this is bloomberg. Good morning. Pres. Trump i knew it was a big threat. At the same time, i dont want to panic this country. I dont want to come out and say everybodys going to die. 4 of the we have World Population and we have 20 of the worlds deaths. What is he doing . Nothing. Pres. Trump we had the greatest economy in the history of our country, last year in the state of florida where we are now, pennsylvania, every place the greatest economy we have ever had. We had to close it down, we saved 2 million lives. A vpened it up, we have shape, and it is coming back very fast. Mr. Biden you have 91 of Foreign Countries not paying a penny. With a fair tax, you would raise 1,300,000,000,000 by that one act. Pres. Trump i dont know about qanon. You do know. Pres. Trump i dont know. What i do know is that they are very much against pedophilia, and i agree with that. Id and co , who is a when asked better leader, the president came behind putin as well as xi. And look at what putin is doing. Moments lastthe night of truly dueling town halls, the right way to put it. President trump and Vice President biden, really beginning to wind into the weekend. One of the changes this week is the shift we see out there. I have been guilty of avoiding a theme which is part of this president ial campaign. We talk about that theme now with George Saravelos of deutsche bank. I never really worry about it, george, because i have never bought the story, but lets bring it up, on the use organ in privilege of the u. S. Dollar on the exorbitant privilege of the u. S. Dollar. It goes back to france a zillion years ago. Is there any threat to the u. S exorbitant privilege if we see the debt and deficit that the Vice President spoke about last night . George i would be less concerned about that, tom. I think the key thing is what the central bank is doing, and if the central bank is there for the debt market, look at japan. Japan jet to gdp is above 200 and japan has never had a crisis because the bank of japan owns nearly half of the debt stock. So to be the dollar story is less about that and a lot more about the policy mix. When i think could happen if you do get the policy shift after the u. S. Election we have been talking about is this really unusual mix of what is keeping rates low and expansionary fiscal policy at the same time. Historically when you get that mix, it is an attempt to tom my chart of the year two years ago was a retake of the twin deficits, the overlay of the fiscal deficit, the overlay of the trade deficit. I dont know the number, but we are well out past two standard deviations through their to an ever larger between deficit. Doesnt that by definition lead to a structural instability which further weakens dollars . Crystalso here is the thing, tom. It is all about the fed. If you think about 2016 at 2017, the fed tried to cancel the trump stimulus. They were worried about unemployment being too low. They kept hiking even as the economy slows down, and they raised real rates. So back then, with similar stories about extreme deficit, the dollar strengthens. This time the big difference is the fed will act procyclical he. If anything, they could do more easing to prevent yields from going up. And that to me is the critical difference. The fed remains dovish, and december is important if the markets reprice after the election. That to me is the key dollar negative driver into next year. Francine that is very important, what youre just saying. What does it mean for emergingmarket currencies . George i would be, of all the currencies, most positive on emergingmarket currencies because we are talking about an environment where u. S. External accounts are widening. You are seeing growth leakage to the rest of the world. If you look at valuations in emerging markets, they have never been cheaper. Externaldity accounts have been improving, even in places like south africa or brazil. And of course the market is very underweight emerging markets, because we have been through so many years of crisis. We are reaching a tipping point, and depending on the outcome of the u. S. Election, and of course the potential shift in Foreign Policy and trade policy we are talking about, we could be in for a substantial rally in emergingmarket currencies, and of course we are already seeing it in asia. Look at how well the market is how well asia currencies are trading on the back of how asia has gone following the crisis. If we get joe biden in the white house, what would be the biggest shift on Foreign Policy . I know we talked about the u. S. China trade war, which would be different under a democrat, but would it really be different in substance . George i think it would. The biggest shift would be returning to more predictability in trade policy. To having toed check twitter every day or every hour to see how u. S. Foreign trade policy is changing. Andou look back to 2016 2017 to try to qualify that impact, it is very large. Uncertainty was increasing, you saw a big slowdown in global capex. Policy becoming more predictable i think would be a huge event for the market. But they would be a move away from current and unilateral Foreign Policy. That in itself should benefit emerging markets and growth. Francine thank you so much, George Saravelos of deutsche bank, still with us. We will have plenty more from george and we will talk more about what is also the longterm Economic Impact of commodity rich currencies such as the easy one dollar. At 12 00 p. M. In new york, 5 00 p. M. In london this is bloomberg. This is member surveillance. My ritika gupta with your Bloomberg Business flash. An attack on the popular Robinhood Markets app was more widespread than previously known. Almost 2000 accounts were compromised in a hacking spree that siphoned off customer funds. Last week robinhood said a number of customers had been struck by cyber criminals. Marsmarks group jack and Group Bloomberg has learned that aunts target is 280 billion because of strong demand, to raise about 35 billion in the sale. The Company Plans to list shares in hong kong and shanghai on the same day. Daimler posted betterthanexpected profit, recovering car sales and cost cuts also gave the company the confidence to predict its momentum will last through the end of the year. That is your latest Bloomberg Business flash. Tom thanks so much. Equities, bonds, currencies, commodities. A quiet screen right now, running green on the equity screen in the united states. What i want to point out is the persistence of sustained negative Interest Rates in europe. Are we out the lows, francine . Greater negative rates . Pound ine are at the germany and switzerland. Francine i think there are questions about what the limit of that could be. Im also looking at some of the stocks for example, lvmh shares dumping after they saw demand for rebounded the third quarter, so we are Getting Better than expected earnings in certain industry groups, a bit of a lift to stocks in europe. British pound reversing some of the drop versus the euro that we had yesterday, and we expect to hear from Prime Minister johnson on whether they will abandon trade talks with e. U. On brexit, and of course on negative rates. We will talk to paul tucker, former boe deputy governor. This is bloomberg. We are really assuming Interest Rates are pretty well zero for any reasonable planning horizon. It could be worse than that, in that the bank of england had been asking already this week to think about how we would cope with negative Interest Rates. I hope we do not go there. But thats clearly a possible outcome. I guessed most banks would be looking at effectively zero Interest Rates for the foreseeable future. Tom this is one of the great privileges of doing this. As all of you know, i dont have a job. I dont know if francine has a job. I will let her decide. Francine i have a fulltime job, tom. Tom you get to talk to sir howard, and then you get to talk to, without question, the number one guy in thinking about our institutions and regulations. Hes a former bank of england deputy governor, paul tucker. Hasne, i mean no one, thought harder about these institutions moving forward. , itsk unelected power a little bit wonky but absolutely definitive. In this election season and what you see central bankers like you doing, how do they deal with almighty citizen, the power that is out there, the over mighty electorate . Paul well, they have become first of all, great to be with you again. They have become even more mighty. You are sitting in a country where the rulers are now the supreme court, followed only by the Federal Reserve. You are about to have an election to elect the person who nominates the rulers, the supreme court. The Federal Reserve becomes the economic powerhouse. We have been through months now where congress obviously, there are splits between the house and senate, democrats and republicans. They are know they can sit on their hands and ultimately do nothing, because the Federal Reserve will try to do more. This is a desperate position to be in. At some point, some central banker somewhere is going to say , the reason you should not rely we have much, much less ammunition left than in 20 08 and 2009. You have got to provide fiscal support, however awkward it is, because that is what the