Optimism come around the trade deal. I feel like i have said that before. We will continue to monitor. Tom we are going to monitor all day. The news flow is extraordinary. Kevin cirilli is ready to travel to nashville for that debate. That is tomorrow with all sorts of news overnight in the United States and frankly around the world. Just one data point we will talk about in a moment. Renminbi out to new strength. Right now in new york city with first word news, here is ritika gupta. Ritika nancy pelosi and Steven Mnuchin are moving closer to a deal on a new stemless package. Alysia hope she can get an agreement this week. That is crucial to getting a bill passed by pull losey hope she can get an agreement this week. Theh mcconnell is warning white house against a pelosi led deal by the end of the month. Trumps campaign has burned through almost all of its money through september. His campaign cut back on advertising in some key battleground states for a while. Department antitrust lawsuit against google may just be the start of it. The case is expected to be followed by more. It is supposed to be the most significant antitrust case in america. British Prime MinisterBoris Johnson will impose the ukase hepatitis coronavirus restrictions on Greater Manchester. Talks with local officials broke down, and johnson one that lives would be at risk if the government fails to act. The Prime Minister left open the prospect of a National Lockdown if infection rates keep climbing. 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. Tom thanks so much. Equities, bonds, currencies, commodities. We will do data checks throughout the day as the markets move, not so much in equities. Futures at negative eight, dow futures 62. The vix, 30. 44. That does get my attention. It is in bonds that you have news, and it is real simple. An adjustment. 83 was seen earlier. 8214, were watching it carefully. The price move has been 1. 8 lower price in the 10 year yield since the peaks of a number of months ago. I will leave it there. I know anna has got so much more. Just simply, dollar weaker. You dollar weaker, and answered that interesting news about the pound. Moving againstso the euro, so the recent as well as the dollar weakness story, the light was being used by the chief negotiator for the e. U. Around brexit looks to be pushing on the right buttons to unlock further negotiation. Thisean stocks falling hour. Down by 1. 2 as we cling to all the latest news lines around stimulus. Thekson up by 6. 7 in Telecom Equipment space. Huaweis loss is another business gain. Experienceecades of of defining support and. Esistance, Valentin Marinov the bloomberg dollar index is a nice set of mathematics with emergingmarket balance. We are at dollar support. Do you forecast reaching where we do see weaker dollar . we will see finally weaker dollar, but it will out weight the u. S. President ial election. If indeed we have a blue wave, the democrats gaining control over congress and the presidency in three weeks time or so i guess the markets may be tempted to preempt in these positions well ahead of the vote. But i think cautiousness may be indeed warranted. Road, 3, 6n the months time, i believe that the downtrend in the dollar could indeed continue. Tom anna from Queen Victoria street emails in and says i have to make some money fast for halloween candy shopping. Am i going to get a big figure move of dollar versus euro or dollar versus yen . Valentin i would think euro may be the better option. I am puzzled at the moment why the dollar is so weak against the yen because it highlights the move that the treasury yields in the steeping of the treasury yield curve. These are all positive for dollaryen. Sell allng, i want to riskrelated currencies rather than the japanese yen. Annika you got my memo, tom. How weak is dollar trading at this point. It is a theme many people see the logic to. Valentin some people are already on it. Iu mentioned eurodollar would not describe it as a crowded trade, but there is interest. That may be structural in terms of exporters converting revenues back into renminbis. Some part of that is speculative , expecting further dollar weakness again. Of dollar weakness is already priced in. We will have to wait and see who this after the election. Anna is the dollar paying conversationsnd between republicans and democrats at this point, preelection, or are there longerterm themes . Thentin the main impact on moment is the risk appetites. I think that some of the simplistic that is somewhat simplistic, especially if we see treasury yields heading higher. I would not be selling the expecting breakthrough, potential breakthrough on the fiscal stimulus. Apart from that, i think cnh is now sort of a highyielding safe shaping that is taking shape, and to a similar degree the stories on the dollar as well. In commodities, in stocks, and foreign exchange, what part of the bond market do you look at right now . What part of the curve or what spread market matters to you . Valentin from our point of view on the fx side, we look at the curve. E slopes of the ,his is the part of the curve indeed the slope between those two points that is the most impactful for the markets. The one we monitor. Also highlighting real yield, very important for us as well. There is no denying that most of the dollar since march correlates like oneforone. A fiveyear breakeven for inflation or fiveyear real yield. That is another important variable to monitor ultimately for the dollar. Tom i was going to do this later. We are going to do it right now. Give me full screen on this, tonya if you would. Folks, you have phenomenal yield, them in some form of inflation measurement, fiveyear breakeven as valentin mentions, and minus this it gives you the real yield. What is so important in the United States, the fife year, fiveyear breakeven has just broken out to a new hire you level higher level. Is that persistent and will that continue . Valentin part of the story is the expectation that the fed will keep a dovish policy outlook, which will keep real yields in the u. S. Closer to the potential to push them lower. I think the argument is valid, and indeed is the reason we expect the dollar to weaken over the next six to 12 months. However, near term, the fed has signaled that politicians are ready to help the economy, through a matter of fiscal rather than monetary stimulus. But it may be premature to be playing that particular story. I think the longerterm negative with the dollar, the family low and the flock to treasury yields. In the near term, there is a steepening of the curve, which is counterintuitive given the dollar weakness. We have seen in some point the Dollar Benefit from that. Tom Valentin Marinov, perfect for having him with us. Level,out to a higher. 8125. I will get the percent move here. We have seen the bond price the 10 year yield down about 1. 8 from recent months. Peak pricing and low yield. This is going to be fun over the next couple of days. Coming up on bloomberg markets, the former chairman of the Federal Reserve system, janet yellen the other day just on fire about the need for fiscal stimulus. Alan greenspan at 1 00 p. M. Stay with us. Anna edwards in london, im tom keene in new york. This is bloomberg. Good morning. I havent yet seen his comments, but from what im hearing from you, it sounds incredibly and posited he is talking about the sovereignty of the United Kingdom, and we have always entered these prerequisiteon the , which is only fair and right, that we are treated as a sovereign and that we negotiate as an independent sovereign nation. And i hope that we can agree with Greater Manchester that we can provide the 60 million that is offered to them. ,e are already at 200 billion wrapping our arms around the ministers the prime quite rightly reminds us. That was nadim so while he speaking to me earlier. One of the things that we talked about was getting a u. K. Fromnment response brussels earlier this morning. Brussels talking about how the u. K. Is a sovereign nation, talking about achieving a balanced compromise. It did sound we heard from was thatwhile he your thing . It would make it easier for Boris Johnson and his government to sell the deal, whatever the deal is, at home, and from that point of view, i think that maybe he had the right approach. Something that will get us a deal in the end. The pound has been listed initially, and it was already on the rise this morning. A much stronger do we get in this phase of the conversation . The pound still at that 1. 30 level. Has been on it offer so long, but so long as we are hopeful that the deal will come, the pound will continue to appreciate. The thing that ultimately we to 1. 30, 1. 34, or higher in the case of cable, lower in the case of sterling. In the interim come as we await more detail, we have to follow the story, the brexit negotiation story, and the pound will likely remain in the very near term, depending on the news flow, it could very much receive compromise. Ultimately the view is still that the deal will come by mid november, so rapidfire by the u. K. And parliament by year end, and that should give the case a pound the pound the push against the euro and the dollar. Anna is your assumption a barebones, skinny deal . If we dont get that, where does the pound fall to . Valentin that is still our assumption, though i have to say that i have been surprised by the persistence of sections like fisheries, and i think that may ft the balance in favor barebones in terms of a partial trade deal, where most of the key issues regarding trading are being sorted out. Fisheries may be sorted out for later, in 2021. Thatound reaction, i think with most of the issues dealt with, i believe that is the ultimate outcome. There will be a sense of finality to the whole brexit drama, and that will remove a huge air of uncertainty hanging over the pound and shifted over the outlook for the currency. Even though some of the additional income assets of the deal may have to be sorted out later. Is the level of degrees of freedom that the United Kingdom has fiscally now . Do they have a lot of room to provide stimulus relative to the u. S. Or to other european nations . A relativelyis much smaller economy, lets be clear about it. The liquidity premium in economies like the u. S. Or the euro zone when they are trying to sell their debts to International Investors needless to say, the result of the latest downgrade by moodys gives a different outlook to the u. K. Treasury, and i think some form of physical distancing may be needed a bit sooner than in the case of the u. S. Or for that matter the euro zone, but we are not there yet. For the moment, there is weak pushing bond, yields lower. From that point of view, i dont have any. Will difficulty selling its debt anytime soon. Down the road definitely, however. I think that we grow out of the recession and indeed the Global Economy recovers and investors are seeing various opportunities , that the u. K. Will have to do a bit more to attract investors to the gilt markets. Tom Valentin Marinov with us with credit agricole. This is absolutely extraordinary. We have a breakout in yields in the United States, and i notice that we did not have a pop in european yields. They came income of the swiss 20year came in i will take the point, but it is going to be amazing to see the fiveyear, fiveyear breakevens difference between europe and the United States. Inflation where the Inflation Expectations go. We have inflation data out of the u. K. This morning. We show a pickup but still lacking momentum. It was presuming some of the stimulus the government had put in. The conversation here around debt levels, we had this from the minister earlier. A nice line i was taken by a few hours ago. Most since 1960. I dont remember 1960. Tom you dont remember 1960 . Who let her on . Give me francine back. She is nicer. Come on, anna. This is such a nerd patrol. Were looking at historic times. Gap, a at the fiscal deficit dynamic is extraordinary. Did she say 1960, she doesnt remember . Anna i apologize. What is really interesting with the guests this morning, when the debt level starts to matter to markets, are we seeing some of that already with the pickup in yields that we have been talking about . Valentin marinov did give you that term, that it will matter down the road. I heard that phrase this morning, and governments will not understand how long that road is. When will it start to matter . Going to be interesting to see. Futures at negative two. They were negative seven earlier. This is fun. She is the most interesting person in tradable markets today. Adena friedman runs the nasdaq shop, always an important interview. Look for that in the 9 00 hour. Stay with us. Markets on the move. This is bloomberg. Ritika this is bloomberg surveillance. John mckay has been the ceo of Whole Foods Market for over 40 years. He sold his company to amazon for 2. 4 billion and agreed to stay on. The question is when will he live. On the davids rubenstein show. I will leave whole foods sometime in the next few years. I have not announced a retirement date yet. Covid is a crisis. I am dealing with the crisis here for that. I always make this joke that whole foods is like my daughter and i literally married my daughter off to the richest man in the world. I just kind of came along to make sure the marriage settles , butll, and im still here i know that the time will come eventually for me to leave. It is just not yet. Im not quite sure when it will be. Anna you can see ritika that entire ritika you can see that entire ritika you can see that entire interview tonight on bloomberg tv. That is the Bloomberg Business flash. Data. A quick look at the European Equity markets under pressure this morning, down for a third day. Coming up in the latest episode a the David Rubenstein show, conversation with john mackey from whole foods. This is bloomberg. We need support for the economy, both for monetary and cal policy and military monetary has already done a decent a lot. Fiscal response in the United States has been impressive, but it is much larger, the fiscal support, then what we have done after the 20082009 financial crisis, but the fiscal support has now lapsed. To focus on market power in our economy, the low wages, the fact that at the bottom, wages are the same they were 65 years ago adjusted for and most importantly, we need the aggregate demand going up so the economy so the jobs are there for all americans. And that wont happen if we do not have that fiscal stimulus janet was talking about yesterday. Tom no, it is not job. Back to back days talking to chair yellen and joseph there. Its a great privilege. We throw a hat trick, that is by speaking to a rep from ubs. Now advising the union bank of switzerland. Wonderful to have you with us. Central banking, how is lagarde doing . Thanks for having me, tom. At the moment, the policy is continuing very much in the old way, so businesses usual. Business as usual. How to this review, we know it will be more green, more digital, but we dont know what happens to Interest Rates. I think going negative is likely to do more harm than good in the president recently recently said that she recognizes herself the risk of going more negative to start damaging the economy. The market is worried about impact negative rates, but on the other hand, the market is penciling in negative rates until q4 of 2029. Say, its another decade for us. Tom with the changing of lagarde at ubs, i know its inappropriate to speak of executive actions at ubs and other banks, but i want to talk to you, and we have talked to davos about this many times, i want to talk to you about the level of impatience across continental banking, not to be more american like but to get it going on profit. Thehat unthinkable given negative Interest Rate structure . Huw i think its a great question. If i put ubs to one side, profits were Third Quarter profits where the best for a decade. And blah, blah, blah. [laughter] you had him on and he can say that, but switzerland and the u. S. Is allowing banks to pay dividends but europe is not. What i sense as there is a growing pivot amongst policy members who are worried about the low equity prices, implied cost of equity so the euro sun Banking System is about 15 . Iseurozone Banking System 15 . There are few loans in the system. I since policymakers are getting more anxious about who will find the recovery for the Government Support of guaranteed as big Government Support for guaranteed loans expires. The negative rates environment is tough, the buildup of deposits is really tough, and the lack of scale. Is theng i feel strongly pandemic is accelerating the winner takes characteristics. Its not just firms. Wealth fantastic management. Put ubs to one side, but the challenge to same european banks, is there is this winner takes most dynamic accelerating into a digital exhilaration, how will they respond . Thats a tougher question you should be asking. Anna good morning to you. Winner takes most dynamic, and with me for scale sounds like an argument for m a. Is that the story for 2021, do you think, for european banking . Huw but i think it will be a couple things. I think we will be looking for scale but in genius ways. Italy,e we see in spain, market m a is clearly one solution for that, and you heard the ecb comment on it. The other is, do you accept you outsource your back office to one of the tech giants . Firmst at least 31 outsourcing their back office were moving onto cloud. Another way to get scale is teaming up with big tech. I think an interesting theme will see how many interesting inme will be them investing technology. For the average european bank, that quest for scale will be important. Anna how much of big banking can big tech to . With bits of the chain . Which bits of the chain . Huw cloud, it is clear they can host. Software as a service, you can buy all the shelf packages. The payment rails, if you look at who is supporting the growing number of the payment giants and the banks, that scenario, its almost like the lego blocks are readjusted, like the reconstruction of financial services. I was at the World Economic forum kickoff last week, and this sort of reconstruction of the Financial System and some bios is between big tech and financials was one of the really big themes people wanted to investigate. Tom but will that affect will we get a traditional commercial banking embracing digital in the first world . It has happened in other nations. On and i did a panel thats years ago. The world is still behind on tech embrace. Will they . Are i see the customers speaking, so across financial services, i see a great exhilaration in the digital agenda. Take one example, the use of Digital Payments has probably fastforward two to five years fast forwarded two to five years. As we are working from home, lets hope its only one more year but maybe it is two years, the focus on going all in on Digital Payments is accelerating. Tom it cant be two more years because i see the piano behind me where you are forcing children to practice their piano. Anna [laughter] tom that is child abuse. Huw look, they love it, tom. But they would much rather be out there competing of course. Anna lets hope we all get back to the b back to the piano and sports. Huw, stay with us. At ubs and former Senior Advisor to bank of england mark carney. Lets get to a Bloomberg News update. Ritika Mitch Mcconnell may stand in the way of getting a new stimulus package before election day. Bloomberg learned macconnell warmed the white house not to rush into an agreement and has not committed to taking a vote. Nancy pelosi and Steven Mnuchin are moving closer to a deal. Pelosi says she is hopeful for an agreement this week. The coronavirus pandemic is quietly Gathering Force in a region that has already suffered greatly. Bythern states in the u. S. , absolute numbers, the region is the National Center of the pandemic. More people are hospitalized with covid19 across the south than any other part of the u. S. Kentucky just hit record hospitalizations, West Virginia and oklahoma did so friday. A new report on president trumps taxes reveal details about his activities in china. According to the new york times, that includes a previously unknown bank account. The paper says the president spent a decade unsuccessfully pursuing projects in china and had an office there. The president and his allies to denounce for being soft on china , a point and points to his sons business dealings there. Western worlds premier found a new focus with the rise of china and president xi jinping. The network is made up of u. S. , u. K. , canada, australia, and new zealand seeking better intelligence on everything from the coronavirus to child trafficking. Other nations want to join in. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta, this is bloomberg. Tom riddick a, thank you ritika, thank you. Have belmont university, there shortage, noic surprise, and Kevin Cirilli will be in attendance. Look for our debate coverage tomorrow night at 8 30. Stay with us with Huw Van Steenis. Markets higher, dollar weaker. This is bloomberg. Tom bloomberg surveillance, good morning everyone. Im tom keene in new york. We are looking at markets on the move. Yields are higher, and that is whispers of inflation out there. With us is Huw Van Steenis with ubs as a Senior Advisor to mr. Armani. The changing of lagarde at ubs, he was Senior Advisor to the bank of englands governor mark carney as well. I have eight ways to go here, but i thing i really want to talk about what janet yellen talked about the other day with the group of 30 when jacob frankels with jacob frankels leadership, the idea of how to finally figure out im a change. I would submit auction theory, across the continent, has been a failure. Janet yellen is adamant about attacks on carbon. Can we affect to that . Topic is, i think this something i spent a lot of time on. In the climate stress test for government carney and the bank. I think the first bet would be to find a carbon tax. Its tough to then work through exactly what the white what the right prices. Will we get a get an agreement across nations . Carbon taxes have been neutral, in city centers. If we dont get the first, at least we can ensure the Financial System is aware of the risks. What was in the g 30 report, which we also contributed to at , was we need better reporting and it is fantastic that 1000 firms have agreed to this. On there are 15 Central Banks that copy Governor Carney and want to stress test the system. Probably more importantly, this year has been the worst year for the Energy Market for seven years. Tiny Energy Stocks are a portion of the market cap up 83 , and big oil is down 51 50 2 . Iat ripping apart, when engage with cfos, im reengaging their portfolios because what they thought were theoretical constructs on Climate Change tens of 20 years out become Council Projects in the next five years. I think the world is pivoting around this, but im not sure they are not waiting for a carbon tax. Tom i agree we cannot affected without a global reach, so within a global reach, and lets say if we get a president biden, we get a reaffirmation of the paris accord, how do you finally develop a global agreement on Climate Change . I dont see that mechanism there. Where is it . Ive been focusing more on how the Financial System can play a role. One example from last week, parts of the committee tried to think through, can we create a voluntary Carbon Offset market where people can trade permits . We all need to be thinking for not just tented 20 to 30 year 10, 20, 30 years, but what we need to think about the next 50 years. A all the tree called voluntary carbon market. It came a lot he came up a lot in the meetings last week, with the volatile actions of financial firms. One thing to flag, one of the biggest sources of growth across ubs this year has been the climate aware strategy. If i look in the public market, the single fastest category of funds growing has been climate aware funds, growing 62 annualized this year. So theres also money chasing, and the more asset owners or investors are asking tough questions, you can work through. The best way anna the Financial System is adapting, and you mentioned the disclosures, what about the range of data out there . There is so much. Measures onovides factors, and there are other providers as well. Do you think the market has the basis in needs to discuss around climate . Huw i think its got hussle. The increasingly increasingly, it is turning to the gold standard. Governor carney looked to mainstream this and he is looking to looking for it to be mandatory. New zealand became the first country to mandate this. , but its are doing this depends on what the question is. If your investor asking is a firm if you are an investor, asking whatm the firm risks are. You need to go deeper, asking what the risks are, and i think that plays an important role. Having a clear, consistent, comparable standard, which is preferably put into the annual report, is something we all hope we will get to in the next couple years. Anna thank you very much for your time this morning, Huw Van Steenis, ubs Senior Advisor to the ceo and former Senior Advisor to bank of england mark carney. Mark cooper. E ceo this is bloomberg. Ritika this is bloomberg surveillance and i am ritika gupta with you Bloomberg Business flash. U. S. Inspector generals found more Quality Control problems at the eli lilly plant, making a coronavirus drug. That could keep the company from meeting its goal from producing 1 million by the end of the year. Factory is in do jersey in new jersey. They have been working with the fda. Another series of mergers rescraping resaving the shell oil industry. Parsley energy has been agreed to be bought, creating one of the biggest producers in the Permian Basin in west texas and new mexico. Itsral motors unveiled batterypowered hummer. The truck is based on a military vehicle and will have a starting price of 80,000 dollars and range of 350 miles. 2021 inon will start in the fall. We spoke to the gm president. As we announce the different markets, we will see. Keep in mind, it is engineered and designed and made to be a global vehicle. Ritika that is your Bloomberg Business flash. Tom greatly appreciated. Markets on the move. We will do more through the morning. She is a gentlelady from the Smith College of massachusetts. Shes with the World Economic forum and has really card out carved out an interesting space, thinking about how we work. Then, a pandemic happened. Lets listen to her with francine lacqua. Pre2020 would have been we have somewhere between five to 10 years to get this right. I would not try to guess exactly what that number is today, how many years, but it got shorter, and we need to ensure theres a sense of urgency today. As to how that will happen and what that would look like, the good news is it is not just Technical Skills we need, it is also a number of those human skills you just mentioned that rise to the top. For most workers, its about acquiring that experience on the job, working with others, on teams, and less about formal training. However, there is a large subset that has to be delivered through formal retraining, and we have to find the time to reskill. Even if you want to reskill in a job related to ai or data analysis, we are talking about a few months. So it is achievable. Post pandemic, are people going to go back to the office or will we see this working from home or hybrid continue for many years . Saadia the report is a summary of the views of the people at the front lines of making the decisions. Majority aree thinking this kind of a hybrid workforce is here to stay for some time to come. They are changing how they invest in their physical workplace, spend much more time and what would be digital collaboration, and many are recognizing the social fabric of the workplace does start to pull apart after some time of working in this way. They are starting to invest in new tools that creat create community. Most of the heads that are responding to us, it is here to stay for the white collar workforce. Francine do they worry about more connection amongst employees are the sense of they worryor do about productivity . Saadia theres a mix. You need that sense of community and connectivity between workers to enhance productivity as well. This is not just about providing the best technology but is about the element of Human Interaction that makes things to can people come up with the best creative ideas. Two things those two things are intimately linked. Tom Saadia Zahidi of the World Economic forum. We have much more, coming up. We are doing a backdrop of markets on the move. Let me review this for you. Stimulus in the air, inflation breakevens in the United States but up higher eb up higher and have broken up many months. The result of this is a 10 year yield. 83 , high for the day is. 81. 81 percent. 1. 6 . Year bond is curve the steepening. But this is huge, curve is steepening. None of this is huge but it puts us intention tension points, including a weaker dollar. Dxy eurodollar advancing 1. 1845. Coming up, we touch on the markets with christopher az. This is bloomberg. From new york and london in our audience worldwide, good morning this is bloomberg surveillance, live on bloombergtv alongside tom keene and lisa abramowicz. Francine lacqua is away today. This wednesday, its about the price action and 10 year yield north of 80 basis points. Tom markets on the move. We get to the brexit headline in a moment. Brexit is so important and different from yesterday or a week ago, but the bond market is different. Have we broken through key levels here with the 10 year yield. 81 . Thats the theme for today. Jon the high the first week of june, lisa, around 96 basis points, distance away from that still, but it is a move. Off the back of the talks, the deadline that is apparently not the deadline. It i get that right . Lisa what does a deadline mean anymore did lisa lisa i get that right . What does it deadline mean did i get that right . Lisa what does it deadline mean anymore . We c