down at the bank of england where the debate is how hard has brexit been on the economy? and if they take a sledgehammer to the rate, the policy affected just a month ago. manus, as we go to the program, outside the bank of england a lot more to talk about. let us start with the bond market.i have a great chart u.s., 530 spread in the we have seen that widening for nine straight day. what we see here, many people suggesting that this is giving us a signal in the markets, that we have not seen since 2012. the yield curve deepening for nine straight days, investors went to be in at the shorter days, that we might not see an increase in interest-rate from the u.s. fed when they meet next week. a busy week for central bankers of course next week. and a policy is on hold, what is that due to inflation, and we see bond markets adjusting as a result.lots of talk about in the bond market as we go for the program. lots more from manus at the bank of england. let us throughout the risk radar, overnight we have for you the msci asian-pacific down 4/10 of 1%. a little weakness in the oil price, up right now actually at the bottom of the screen. but weakness has been weighing on the session with an asian equity session, weaker for the sixth day. down.and expectation in the japanese market weighing on the banking sector. manus? just digna, let us into those asian markets look at more. as you said, $2 trillion from the perspective. but the rub, david ingles standing by. david: thanks. some things we are following right now, hillary clinton has released what her campaign calls the comprehensive exposure of her health, saying she is recovering from pneumonia and all of her vital signs are normal. her medical condition became a potential election issue when she appeared to need help on sunday. the clinton campaign has criticized donald trump about his own health. he went on daytime tv to give a view of his condition, the first since december. now, china goes to the highest storm warning, and making landfall, leaving one dead and 38 injured in taiwan. financial markets shut for the rest of this week for the mid autumn festival of holidays. the government has told france it approved the controversial nuclearbuild two new reactors for 80 million pounds in southwest england, according to an official with the matter. theresa may said at the end of july she was casting doubts, approved by her predecessor david cameron, about the concerns of the scale of the subsidy for the plants, whether chinese involvement was a security risk. now, president obama has lifted u.s. sanctions in myanmar, after talks with the leader at the white house. he says it is the right thing to do. and praised the transition to democracy, a good news story. the asian development bank affects myanmar's economy this year, falling for percent, looking at the best performer in asia. >> as the first u.s. president ever to travel, i could see the enormous potential that was about to be unleashed. and nobody replicates that better than him. david: and should not expect any help from central banks to save the economy from an overheated property market, that is the message from the bank governor. he says while raising interest rates anytime soon is unlikely, it is still possible. and people should be ready for it. >> if you read what the interest rates structures are, people expect that once the policy rates are made for the next five years, so it is likely no, maybe not. but there is risk. yes, definitely. monsanto havend been quick to assure investors of the regulatory approval, after the companies agreed to the $66 billion deal. that is the largest ever foreign takeover by a german company. bayer's ceo says they are taking steps to ensure they get the go-ahead. >> revelatory challenge is very intense, as part of our negotiations, but also beyond, we have both had very large teams of our own people, antitrust counsel looking at it jointly, in order to assess how big the regulatory challenges might be. 24 hours aal news day powered by more than 2600 journalists and analysts in more than 120 countries.you can find more stories on bloomberg at top .i am david ingles . this is bloomberg. anna: david, thank you very much. let us check in on the markets in asia. haidi lun has all the action. another down day for asian equity markets, in particular japan. haidi: it is relentless, anna, the selloff we are seeing. you have to wonder whether this is going to be the narrative from now all the way through to when we have some answers out of the fed, bank of japan, because it feels like we get closer to those meetings next week, investors are trading ever more carefully. volatility does to be appearing today. take a look, the steepest losses coming from japan as you said. regionally, down for a sixth day. but for the nikkei 225, down by 1%. topics seeing a seventh day of losses, the longest losing streak since 2014. we have a slightly stronger yen, buying into other safe havens like gold, sing a pickup amidst this sentiment. here in hong kong, one of the markets beside the world trading on account of the mid autumn holiday shuttering the accounts, hong kong trading up by 4/10 of 1%. but take a look at chinese stocks trading in this market. we are looking at really the chinese companies in hong kong going from some of the best-performing stocks to the worst. down over 5% today ahead of that public holiday. hong kong will be close to mark. australia also worth noting, numbers come founding forecasters once again. we are expecting a gain of 15,000 jobs in august, instead we saw loss of 3900 jobs. but the takeaway is that h the employment rate is the lowest in three years, we have seen recovery over the last hour when it comes to sydney, by 1/10 of 1%. new zealand a down day there, kiwi gdp coming in this morning. seeing forecasts around the region pretty quiet, as it's a holiday in session, as we are really looking at that mid autumn holiday closing a bunch of markets around the world. but take a look at the topics. you were talking about the japanese losses, take a look at financials, down by 2/10 of 1%. but we are releasing the losses across cyclicals, utility, telecom. really on these concerns what more can the bank of japan do? but a number of bank saying look, what they are likely to do and next week's meeting is to go deeper into negative rate territory. and this is why we are seeing the decline when it comes to the banking stocks. take a look at the biggest losers when it comes to that tokyo session. 1.7%.lly is down by we have one of the leading decliners. on this concern that if this does happen, if we get a deeper dive into negative rates we're going to be looking at a pretty somber outlook when it comes the bank earnings, potentially the chances of recovery there. one of the out performers, the great spot on the market, convenience operators in japan. they bounced today on the news they have a proposal from mitsubishi, the largest trading house in japan, wanting to take e of up to 51%, as they try to dive away from commodities. anna: yeah, interesting story. and commodities, as you say. haidi lun in hong kong. five weeks since the boe delivered a strong response to brexit that many have forecasted. whether the outlook warrants a change of strategy. manus joins us from the bank of england. manus, what can we expect? give us more detail on what is at stake? manus: anna, i think certainly the markets resume this institution will probably hold pat, joined the cause that you saw from the ecb, wants the bank of japan and fed deliberates, the bank of england has really executed what some would say is an increased stimulus. really 75 basis point. that was last time was down here. there are a couple of different things. one, mark carney was saying i'm happy with what i have done. parliamentarians say you acted too fast, too quick on the draw. come down to data and the debate. look at the employment data we had, wages, two different story. on one of below 5%. that was core to carney's argument, rising over the medium-term to 5.6%. you are seeing unemployment at an 11-year low. go back nine years ago. since thee some time recession, taking even longer for the employment numbers to come. bloomberg industry has had a look at that uncertainty index as well all of this, with a low news, five years for brexit. no article 50. all of that coming to light. could the uncertainty index rise, and private sector wages, this is the one negative here, the weakest in almost a year. the data says they went to hard, too fast. for the data had the lag in it. anna: the data could have a lag. and whether to revoke, another as the actual departure from the eu. too many questions about that. but from the market perspective, lots we do not know. but we do know is sterling is considerably weaker than was pre-june-20 third. cannot continue? manus: look, a people say sterling is part of the fading bright spot on the brexit story on the current account deficit, but is also part of the problem? part of inflation potential for the united kingdom in terms of our propensity to import? you can look at sterling. crashed to a three decade low. we had a lovely bounce. can they continue? hsbc says you will have another 30%. looking at 115 against the dollar. the cost for hedging, that tremor, that concern has dropped to the lowest prices january. anna? anna: manus, stay with us. let us wrong the conversation. we have geoffrey yu from ubs joining us on set. whate a chart here, happens to sterling in the wake of the brexit vote. we saw that they plunge, down 11% i think against the dollar since june 23. inflation looms perhaps. this is what the bank of england is really having to wrestle with. geoffrey: the message has been quite nuanced when it comes to respect to sterling, not like switzerland or sweden, the small open economy's and the transition trends,, at least the past was the case. what i think there is going to be a very important decision on corporate's right now, especially in those exposed to rising costs. are they going to choose to pass it on to the consumer? what we have seen over the last two years in the environment, manus mentioned the concern of people might be held back a bit, but if you know the demand might be soft in the medium-term, do you really want to be first out there to raise prices? and risk market share as well? some for example, if demand is elastic, very happy to do so, you will need that anyway. but for example, i think others may be a bit more cautious. anna: inflation a foregone conclusion. geoffrey: absolutely is not. and we have seen many speeches over the past three quarters or so on this. the jury is still out. anna: manus, jump in. manus: we're going to get some minutes as well. three dissenters on the corporate bond buying. do you think that that language might change, in terms of the majority of the by me here getting ready for 0%? what do you put the odds of 0% in the u.k.? geoffrey: never say never. they are very, very low. and remember, mark carney he is ideologically opposed to rates in negative. even at landmark shanghai speech in february, where he called those countries in central banks pushing negative rates trying to push through, the fx channel globally, and not growing growth. and we know in the u.k. again that trade transmission on the fx side has never been as strong in europe, so i don't think they are ready to pursue the angle. anna: i guess theyanna: don't have a big say, weak pound, the effects of imports unclear to the u.k., as they might be elsewhere. fronts,: on two certainly the sentiment of manufacturers and exporters would actually welcome a weaker pound. you have also seen the earnings inflation as well. the ftse 100, that is where you have that stabilization mechanism. secondly, i would go back to the point about passing it on. fallen,es, sterling has at least there is a cushion there. for example, the exporters know they can choose not to pass on at this point, but if that is the initial state, the since it has stabilized, the function has demanded that they do not come off, they will have to actually pass on further down the line without too much effect. we need the data to hold. anna: we will see those prices. yu stays with us. lots to come here on the program. lots of highlights for your day ahead. at 9:30 u.k. time we get retail sales data out of the u.k.. and it is eurozone inflati. midday, the bank of england policy decision along with the minutes of this month's, meeting. an hour and a half after that, u.s. retail sales and initial jobless claims. backedup on the program, by blackrock the bank of japan games, and influential ally when it comes to the program aired that is next. at 6:30 u.k. time the u.s. election it's a fevered pitch. navigating negative rates, the swiss national bank has a policy decision. we go to zurich for a preview. and much coming up with manus from the bank of england. manus: absolutely, and a. we have ross walker from the bank of scotland joining us. and deutsche bank chief economist charles goodhart at the london school of economics. 9:00 a.m. price waterhouse cooper joins us. thisank of england views, is bloomberg. ♪ manus: welcome back. i am manus cranny, live at the bank of england. anna: i am anna edwards. time in london is 6:20 in the morning. let us get the bloomberg business flash. here is david ingles. david: thanks, anna. marco marelli named ceo, while massimino resigned. he joined bank of america, and is stepping down this month, the move comes as italy's third-largest bank is struggling to avoid a safe bailout. bayer and monsanto have been quick to reassure investors about the mergers, the comments coming after the company believes the $66 billion deal, the biggest and the largest ever of foreign takeover by foreign german company, bayer's ceo says they are taking steps to ensure that is the go-ahead. >> regulatory challenges have been discussed very, very intensively as part of our negotiations, but beyond, we have both had very large teams of our own people, antitrust counsel looking at it. they look at a jointly. in order to assess how big the regular tory challenges might be. says hend nokia ceo will waste no time in pushing through a merger without patel lucent. and he learned of the billions of dollars lost through the competition deals. >> immigration is going really well. one of the things we have had in immigration is be, so we have made all of the decisions and the frontline debates. we are in execution mode, without the rationalization of the portfolio, approximate 20 customers where there are overlaps in the portfolio. david: and that is your bloomberg business flash. anna: david ingles, the business flash in hong kong. the bank of japan has gained and influential ally easing concerns in the stock market. blackrock says investor fears bojng crowded out by the purchases have been overblown. compared to the $5 trillion market, compared to america's 8 trillion.the bond buying could make some stocks hard to trade. joining us now to look at some of the macro themes, geoffrey yu, head at ubs private banking. what are you expecting from the bank of japan? i have a chart that shows how we have seen the recovery, a little bit of recovery in the 30-year bond yields over in japan. this is for the month, back to the start of the year essentially, and we see some recovery from the recent lows, not far from zero of course. but 10-year still just below 0%, just coming towards that boj decision next week. geoffrey: what they are looking for is perhaps a wider range of asset purchases, and you know also assets but on the right side, additional cuts are likely. boj, wee thing for the go back to february and january, the volatility what they got right and wrong, i think the volatility is more about execution efficiency, communicating the right way. because if you look at the initial news towards negative rates, how negative rates look at the markets, but then, it was a very complicated design. it was tiered. not that they are the only central bank doing the tiered approach, but people had to spend some time looking at what they are trying to do. trying to protect the banks, so if you're trying to do negative rates but not doing too much negative painful side, it eases the effect. this time, the targeted and first identify you are achieving, execute the right level, that is much more important. especially for central banks, losing can ability in the markets right now. manus: part of that credibility that 2%urse reaffirming target in the timeline. we have seen that they might move on that, so is that part of the communication process, when we do hear from them? geoffrey: so, when it comes to 2%, they will reaffirm that. but again, how can they manage the expectations around the economy? if you look at the surveys on hascorporate side, 3% always been below 2%, so that is why they want to get much possibility as possible, to commit to hitting the target. they want to think about having a floating kind of target, but also possible they again do not make it to come located because the markets find out they really want clarity. anna: markets one clarity. but looking at banking stocks in japan, japan shares slide on the negative rate expectation. a lot of nervousness, but we see speculation of further negative interest rates hitting the banking stocks. geoffrey: it is always a difficult mix. but perhaps they can have a look at what the bank of england sought to achieve the last injection, and what the ecb finally managed to achieve. you actually cut rates, that will cut into bank president of the, but you give incentive to go out to lend. central bank will always take the view of short-term the margins that he hit but if you do enough, and we will help you do this, assimilate low demand, than the possibility will increase. so, i think that message from the boj, as we saw from the boe, is necessary as the policy effect over the world. manus: geoff, thank you very much. the u.s. election, it is fevered pitch. all about the health of the candidates. that is what they are focused on their the impact of the election on the currency market, that is coming up next. this is bloomberg. ♪ ♪ welcome back. you're watching countdown. i am anna edwards. manus: and i am manus cranny and the bank of england in london. anna: a new edition of daybreak is now available on your bloomberg and on your mobile. it is on the function go. manus, take us through what is making the edition. the cover story, difficult subject, up our discussion in the u.k. people familiar with the matter said the u.k. government has told france it has approved the controversial plan to build two new nuclear reactors for 18 billion pounds in southwest england.it has been a decision that was delayed of course by the news that theresa may's government looking closer to the end game on this one. you have the oil story, manus. manus: yeah, the oil story, the ever long road to algiers becomes winding. we have more production potentially on the way. the next lori all about oil and the glut, set to worsen with nigeria and olivia both preparing to add hundreds of thousands of barrels to the worldoil market. 's that is expected literally a few weeks. the correlation where oil goes in for the equity market goes, and that $50 cap is the all-important level. anna? anna: finally, daybreak focusing in on the bank of japan's policy. and naming marco marelli chairman. and massive mode resigned unexpectedly. marelli was cfo until 2010. this is the bank close to the edge of collapse, a lot more to learn about what is really going on at the top of this bank, no doubt. it has been five weeks some the bank of england deliver a strong response to brexit than many had forecast. today conn's makers are having to assess whether the outlook worries a change of strategy. manus, you have a guest with analysis. manus: we have come in the. we have ross walker joining us, from rbs joining us now. thanks for coming down today. look, five weeks ago some said they took a sledgehammer to what looks like not such a bad economy and the moment. what would your response be to the accusation? ross: not yet three months since the brexit vote so to paraphrase, churchill, this might be the beginning of a beginning. it is far too early to draw definitive conclusions, and frankly some of the commentary around the post-brexit data that we shrugged off the risk, is borderline unhinged. this is a very different shock to say the financial crisis, which was a much more abrupt and severe slowdown. i think it is a slow burn, much more cushion on corporate's, certain about access to the single market. the largest market, scaling back and revising cap fx. i think this is a multicourse, multiyear adjustment. and we cannot conclude we are out of the woods. manus: i think that is borne through that nine years ago this was the institution that bailed out bank that had the first run and almost a century. the debate is global central banks, this is the first institution that went hard and fast in august. do you think they will go on a ause, when are you expecting the next move, and if so what for my that take? ross: the august minutes said that a majority of members saw the case for taking the bank rate even lower, all the way to the lower bound, which probably means 10 basis points at the moment. it is not possible we see the mode today or further rate cut,, the balance of the data flow the last five or six weeks has probably not been dire enough to hasten that move. once we get to that 5-1 basis point lower bound, not a great deal more they can do. more qe possibly in the early part of 2017, perhaps in conjunction with a fiscal loosening seems to be hinting at that. but that feels like it is about it in terms of the heavy artillery they have. anna: in the studio. you reference suggesting -- manus: forgive me, anna. let me just interrupt you. we have a small technical problem down here at the bank of england.i would just up here, just to interject, bare with me. let us come back to you. interestis going to be of 50%. rhetoric, keep calm and carry on. this is where the difference is i suppose between the parliamentarians who say that carney was too trigger-happy. he said he was serene, but he is the bank governor of canada originally, and that is a mantle that should come down here. that is the formation of spectrum him? ross: i think his position and the bank position is ease aggressively early is entirely justified. they have to be forward-looking. they have to make an assessment about the balance of risk. and if they are wrong and if the economy gains some traction and the brexit risk is not shown up to be particularly severe, it is not a great problem policy wise. they can nudge interest rates up. if however, and i think this is more likely scenario, we fall back into a prolonged period of subprime growth, it will be the limited policy ammunition they have to spur recovery. bounce, little bit of a killer cure, lower sterling? ross: the next year, in terms of gdp do it is going to hurt. and once we start seeing much data, i thinkrm markets also to reassess the outlook for the u.k. economy. one of the futures we see and we see detailed numbers this morning, the volume numbers look pretty boy it, because you are doing a big negative inflation. take that price and you see sluggish underlining trends in cash spending. manus: one of the arguments we had earlier, the slightly hire, and if that gets passed on, not happening in sweden, do you think british copies will about the same process and not pass through those inflationary spikes? ross: i think we will see a temporary relatively sharp rise in inflation, not serving to materialize around the turn of the year. was stable.ined cpi we are only seeing the beginning of energy and food prices, but the early part of the new year a lot of retailers, are hedging that current exposure is hatched until after christmas, the end of the year. early 2017, suddenly cost will rise quite sharply in sterling, and we will then see how much of a pound there is. there will be some, but i think it will be temporary. we see inflation third quarter i-17, going below target. manus: thanks for your time here let us see what the effect is. misplaced commentary on the robustness of the data. anna, that is all to play for. let us see what the minutes deliver later today. anna: we will. thought with geoffrey yu, from ubs, lipstening to the conversation what is the extent, of the weakness you factor into the economy? geoffrey: firstly, we think the u.k. will avoid a recession, sluggish and flat growth next year, may be five or so. but taking a step back, here is where the cost of brexit actually is. not the opportunity cost, if we had not had the vote, maybe on the horizon the income he would have grown 4.5% in real terms, nominal terms we are going to get two of the next two years. 2% gdp growth, if i had to assign a cost to that, that would be it. but it is manageable. anna: and i think that it is planning out right now. yu staysigeoffrey: with us. manus: global equities, trillions of dollars wiped off of the value. investors getting ahead of the bank of england. ryan chilcote has the market story. ryan: $2 trillion worth of the value of global equities wiped off in the last week alone are the action right now is in asia, msci pacific down for the sixth straight day. longest losing streak in four months, for tens of 1%. leading,stocks in asia almost all the industry groups with the exception of basic materials are down today. really, a bloodbath in asia. the selloff continue. let us move on from there to japan, really the eye of the storm, topix down for the seventh days straight. leading the losses among the biggest headliners when it comes to industry groups would be the banks. this is the one-month performance. you guys were talking earlier but how to save the banks, the bank of japan what they might do month ofn 10% the december. issue of course where are they going to make money with this kind of interest rate inflation? the latest data we got was negative .5%. and the bank of japan is concerned about that. are we going to get more qe? so, keep an eye on that. obviously, you were saying yields, which i'm not showing here at least on the 10-year, still below that 0% mark. finally, there we go. oil, where would we be without oil? but let continues. we have inventory numbers yesterday out of the united states. what do they show? inventory fell by half a million barrels. the market when up for 40 minutes, declining yesterday then by 2%. in back some losses, up by one half of 1%. but as manus talk about earlier, there is concerns about new supply coming to the market opens like nigeria, libya, some of the tensions easing, the violence allowing that to come to market. everyone looking ahead to the meeting in algeria, saying are the producers going to get together to agree to a freeze. not so certain. one of the reasons we see oil really underperformed last week, close to a one-week low right now. back to you. anna: ryan, thank you very much. medical records have taken center stage. doctors for the candidates tell them both fit to serve. hillary clinton released details from her medical exam, and putting treatments last week for pneumonia. hours earlier, donald trump gave of they view of his overall health on the set of the dr. oz show. he has the released information publicly since december, when his longtime physician said donald trump would be the healthiest individual ever elected. joining us now not to talk about the health of the candidates, but to discuss the u.s. economy and what bearing the election might have on the global growth yu, ubs private banking. i guess you don't have any medical insight. we will leave that one there. the u.s. election, how that is looming large in investors? we have conversations every day about what the fed is going to do and whe almost as ifn, november is not happening. and it could be significant in your view? geoffrey: on the private banking side, everyone questioning the u.s. election. and the health position ahead of know, our view again is that looking at the overall portfolio basis is to stay diversified. whatever your politics, whatever you think about the news, if you're diversified you are protected. however, looking at the fx markets, we do think the swiss franc could do well against the dollar, the volatility, gold is something you are looking at as well. they really do have to pick and choose, get a lot of clients that don't especially want to position across one short-term event. so, looking past that, we have to look at policies. and one thing they are getting about your selection, both candidates are wary of anti-globalization sweeping us globally. so i think if we look at politics here in europe, and the u.s. globalization may be medium-term, so i think is one area where people want to be somewhat defensive and a bit more cautious. course, we do not know cst what donald trumponomi much look like. channeling reaganomics there. the market is absolutely square, ofshing like 2012 in terms the u.s. nine straight days, really when you try to divine everything that is going on at the moment, where do you see that longer-term rate going into next year? and denmark is deal with 2-3 rate hikes? geoffrey: i think 2-3. but how do the fed height? how about a debit height? you don't wase so a massive steepening in the yield curve, because globally markets are not going to be ready for that. s short-term rates need to go up. think they are very wary about the longer-term. the longer-term stocks cannot really go up, the i think the fed can manage that. l dollars weeks,ope they are wary not to tip that car. anna: are they worried about how the market reacts when the fed does something that is not priced in, to use that phrase? i look at of ability on work of rate hike in september, 20%. i saw a guest in city saying you think it will happen. the probably for december is 52%.does the fed ?or short take ? geoffrey: we never pre-commit, so we should be prepared for everything. but what central banks do, so when they talk about the rate hikes and the markets to react to that, at the very least what central banks want to do especially the fed wants to invest in volatility. i think what governor mark carney spoke about 2014 with the markets were too complacent, they would suddenly inject some volatility. do not rule out anything. we may hike this year. not expecting anything. but when the market prices and move towards that 25 basis points, i think that they want to stabilize things around the. anna: they sort of want to -- geoffrey: dismantling carney's legacy, when you try to ease, and producing more volatility than is necessary. yu stays with us. navigating negative rates, the swiss national bank has a policy decision. we go to zurich for a preview. that is coming up next. and we are back at the bank of england for everything you need to know ahead of the decision today. ends.ke up when september sometimes it feels that way. we have a chart. 7:15 london time. just how bad september usually is? this is bloomberg. ♪ ♪ welcome back. just on 6:50 a.m. anna: i am anna edwards. let us talk about switzerland later on today. we're hearing from the bank of sngland, where manifestation, we also get a rate decision from the swiss national bank today. nmb will keep policy unchanged, according to a bloomberg policy, a record low of -0.75%. for more come over to our swiss economy reporter, catherine bosley joining us from zurich. great to speak you this morning. can we expect any big news? is the decision itself not expected to be one of the change in interest rates what are we expecting,? snb hase: well, in fact not changed rates at one of its quarterly policy meeting since 2009. it is likely to say the franc is overvalued, confirmed to wait currency market intervention. snb is a greate, story written by the team out there, we haven't seen in 17 years. what else is in the arsenal, what else can they do in terms of rates, and terms of other instruments? the first line, of defense is probably currency market intervention.in addition to this , policy makers have repeatedly said they are not yet at rock-bottom on interest rates. further cuts are possible, especially the program in the euro area, where it is expanded massively. according to our most recent poll, snb could take the deposit rate at -2.5%. anna: catherine, thank you very much. catherine bosley joining us from zurich. geoffrey yu still with us from ubs private banking. get your thoughts then, no change in many years, and likely to say the currency is overvalued. what are you expecting? geoffrey: a similar story. they had been intervening over the last three quarters or so, and you see that deposit data, slight concern around brexit. and they managed it quite well. in terms of i would say they did take policy in january 2015, they shifted from interest rate policy, just currency intervention policy right now. and i don't think the floor is coming back. but i think they want to be as far as possible about leading in an efficient manner. geoff, one of the criticisms of course was the gains and losses snb has made due to the intervention. it is a very delicate subject for them, in terms of going deeper into negative territory. but intervention seems very well tolerated, which is a surprise giving the g-20 on a permanent basis. alwaysy: well, that is going to be the case. again, i think from a g-20 point of view that we will know the nature of the economy. even the u.s. and the currency intervention reports, current regulation reports turn to be another name that the swiss will have currency regulators, even when a flawless was in place. i think the population of switzerland understands the need to keep the currency, to prevent the currency from striking aggressively. however, negative rates, as we have seen and germany already and in switzerland and elsewhere, that proves a lot more controversial. not: let us remind you evident on any chart about risk, it seems the ecb what they do in the weeks ahead, how is that going to impact on the thinking at the snb at the moment? geoffrey: if you look at the recent forecasts again, slightly lower,, and they have the forecast horizon. so i think snb will look at that, ecb is not very optimistic, not very robust on the currency view or inflation the right now. so they can compare that, whether they are most exposed to the policy differential, ecb moves more aggressively, i think that is something snb that is probably first and last line as well. manus: interesting, the previous conversation where you refer to the risk of trump in america. that could be the swan for the switch? geoffrey: absolutely. the currency volatility in general around the u.s. willion, the swiss bankers benefit. they will be smart about intervention again. i think what will happen as we saw in january 2015, they're going to see the position, if there is volatility. let the stops washed out first, come in and intervene at a lower level. that is probably the least bad option in the most efficient way to intervene under difficult circumstances. anna: you are particularly interested in the comments from the governor of denmark's central bank. they have had a lot of experience with negative interest rates, what have we learned from the danish context about fiscal, monetary in the way they interact? geoffrey: denmark is interesting. if a bank has a lot of say over central policy, and you saw last year people going into the danish kroner, the next peg to break up. what is going to happen? almost immediately, the governor stopped issuing paper, stopping demand, even though they can borrow at super levels, the many austerity cutbacks, that kind of interaction is extremely necessary i think in this day. the other way, so when the economy is doing poorly, governments and central banks can tell governments right now you need to ease up on a fiscal basis. you can already have that happen in the eurozone. anna: fascinating that link, central bankers call on government actors to do fiscal. geoffrey yu, hea of private banking. manus? manus: up next, anna, brexit in the bank of england. willred to hold up, how mark carney and his cohorts actually respond? could there be dissent in the air? we are live at the bank of england, throughout the day. guests aplenty. pulse.wn, on the move, professors and economists. this is bloomberg. ♪ manus: $2 trillion wipeout. equity markets continue in asia as oil slumps. what brexit? the bank of england is set to release its+++ economy a miss reports it is holding a better than expected. campaign health checks, hillary clinton releases details of her medical exam. donald trump takes a day on tv to discuss his physical condition. ♪ manus: you are welcome to "countdown." anna: i am anna edwards. manus will be with you to get a look ahead of what to expect at the bank of england. numbers coming through from the car sector here in europe. vw's august european markets pain foro 26%, so that vw, the loss of market share continues losing market share in europe for the 12th straight month. that is the vw headline story. they have resumed growth in the month of august with a 9.5% gain. registration numbers for august, 9.5% outperforming vw's game of 6.3%. the gains in august extending recovery that began after sales in two decade lows following the global financial crisis. how will they hold up as we move further away from that brexit vote? as we learn more about what exit means, maybe too early to say. we'll keep an eye on all of those automakers when they open up later on. let's get to some corporate news. morrison's witches the u.k. retailer -- morrison's which is the u.k. retailer, we have numbers coming through for the first half. that looks to be a touch ahead of the estimate. the second quarter like for like sales, excluding fuel up 2%. that is a better performance than the first half. cost savings to exceed one billion pounds, the target, by the end of 2016 and 2017. what hason track to -- been a job done at morrison's has been a relatively new ceo getting to grips with a four-year slump halting the sales decline that we saw with this business that we saw -- and that we saw this business in his first year. one thing to renegotiate the distribution agreement, now seeking deals to supply customers. one thing to work with, amazon. plenty of strategy going on over at morrison's. the stock that has gained 30% since the -- 30% this year. next, the u.k. retailer also reporting numbers. reiterating guidance for the first quarter and say it is likely to be the -- profit guidance for the full year saying the sterling recent devaluation won't affect the business until the spring of 2017. the underlying numbers they , 342 million.s the estimate was 341 million. broadly in line there. we heard from them as we have heard from other retailers that weaker demand amid a tendency for britain's not to spend money on clothing but on holidays. manus, that will be one of the things the bank of england will be considering when they liberate interest rate policy. -- when they deliberate interest rate policy. manus: they will. i have been down here three times over the summer and it gets darker each time. the majority of the bank of england is's boca and 4 -- has spoken for a rate cut. because be there could let's get to the zero bound? you have to hand it to this governor, he is feeling serene about what he did. parliament accuses him -- parliament accuses him of being far too trigger-happy for his propensity to put admission into the economy. , ross walker was here saying you are misinterpreting. you are all getting exciting about this that's excited about this unappointed number. -- excited about this unemployment number. this. it early to call is the evolution of the data we should be concerned about. it is a cracking line to the parliament. there is a cracking line in the bloomberg story. easing couldts of i am talking about rate cuts, quantitive easing. is it too early to call the data ? no impact from brexit. one of the most critical points. i listened to every word that carney said, he berated. he was very the surface in his tone. he said i am concerned about the 500,000 people -- 250,000 people who might lose their jobs. the bank of england fix the unemployment will rise -- the bank of england things unemployment will rise. it took a long time before jobs were lost. this institution buildout northern rock nine years ago. this institution's responsibility is to make sure this economy even keels in the sight of what brexit might look like. anna: it was fascinating the comments ross walker made. he is saying this is just to channel churchill. this is just the beginning. he took on some of the critics of carney. we will see what the bank of england has to say. let's throw up the futures and see what that tells us about the start of european trading day. down .3%. we've got weakness in the asian session. if we go up the risk radar, we'll see where we have been on assets overnight. one of the big weights on that session coming through from japan, down by 1.04% on the topics. financials in japan coming under many investorse are asking themselves about whether we are going to see the boj go further into negative territory. we've got asian stocks for six days. japanese stocks down for a seventh day. at 43.72. whether we are seeing this real seachange coming through from central banks, they really cut the market back as they did earlier this summer. are on there we various 10 year bond products. 1.71% over in the u.s.. -- over in the u.s. 0.02 in germany. david: hillary clinton has released what her campaign calls a competence of exposure about her health. it says she is recovering from pneumonia. her medical condition came -- became an issue when she appeared to be helped into a car on sunday. the campaign has criticized rival donald trump about his own health. he went on daytime tv and provided a view on his condition. back here in asia, china has issued the strongest warming -- warning -- having left one dead and 38 injured in taiwan. china's desperate financial markets in china are shut for the rest of the week -- finance markets are shut for the rest of the week. -- 18 billion pounds in southwest england. that is according to a official -- to an official familiar with the matter. theresa may casting doubts in the project approved by david cameron. that is amid concerns of the scale of the polling subsidy for the plans. and whether china's involvement was a security risk. president obama -- the white house. he said it is the right thing to do and praised the country's transition to democracy. -- toian developed bank expand 8.4%. making it the best performer in asia. >> when i visit as the first u.s. president to travel, i could see the enormous potential. better ouresented friend. dames should not expect any help from the central banks. that is the message from the banks governor. he says while raising rates anytime soon is not likely, it is possible. people should be ready. >> people expect week interest rates terms. people expect the monetary policy rates to be negative for the first five years -- for the next five years it is a likely? know, maybe not. years.the next five is it likely? not. -- no, maybe ever: -- the largest foreign takeover by a german company. the ceo of bayer says it is taking steps to ensure that they get the eagle landed. >> regulatory challenges have been discussed. that is a part of our negotiations. we have had very large teams of both people and counsel looking at it. -- looking at it in order to assess how big regulatory challenges might be. david: global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . i'm david ingles. this is bloomberg. manus: david, thank you it asian stocks up for the six-day -- david, thank you. asian stocks up for the six day. haidi, the day. not much of an improvement from when we last connected. although having said that, the fx is up a session. those up by .3%. regionally, anna mentioned it earlier, this is the sixth day of declines. in particular the selloff when it comes to japanese -- the topics declining for a seventh straight session. that is the worst since 2014. the nikkei 225 ending by .3%. financial story, this prospect that when the bank of japan meets next week they will decide to go deeper into negative interest rates, really pouring some cold weather over the prospect of an earnings recovery for these financials. we did not see the gauge of japanese lenders tumbling 10%, as we take a look at the rest of the region, it is a holiday. we are seeing the festival. that will be closing markets here in hong kong tomorrow. chinese markets already closed today. the hang seng in a shortened week, up by .6%. -- we are seeing a real selloff when it comes to these stocks in the city. we are seeing these stocks go from some of the best performers to the worst performers as this idea of central bank stimulus is starting to fade. this is what we are seeing. you got to wonder if this is what we are going to see until we get some answers from the boj and fed next week. anna: haidi lun in hong kong did five weeks since the bank of kong.d -- hong five weeks since the big of england delivered a stronger answer to brexit. joining us is ana armstrong. -- tell me an horizon through which you view this brexit story. we see comments such as this one from john lewis today which is a k -- iniler here in the the u.k. they are referring to the vote on brexit. we have no idea what brexit means. ana: after initial market volatility, we have not seen much effect on the economy. i don't think there will be -- most work has started to go slow toward 0.8%. and then picking up again to 1.5%. i have to say that so far, the newest that's the news has been good -- i- been quite don't think the npc needs to do anything today, of course there is a hiccup -- there is no pickup in the economy. just above zero, i don't think they need to make any decisions right now. at the same time -- manus: good morning. ana: good morning. manus: good morning. a wonderful quote from one of our guests. now is not the end, it is not even the beginning of the end, but it is the end of the beginning. when you look at unemployment numbers, if we take our minds back nine years ago, that is when northern rock went soft and i was talking to you about the horizon, is that the same kind of demise for sterling? i'm seeing calls for sterling down another 17% by the middle of next year. is it a slow demise on sterling? think when we discuss northern rock, i think it triggers much bigger crisis. it is already a part of the financial system. then we saw massive market selloff. here we have a different market environment. we can see the capitulation picking up for the first time in a long time. we can see strong growth in the u.s. economy as well. having in mind the market environment, i don't think there's a risk as such. it is likely that of course sterling will decrease further. especially as the fed will be brexit will- this oppose any massive selloff or spillover affect like northern rock did. anna: what kind of stocks are you looking at? i am interested in this idea of where inflation comes from in he u.k.. -- u.k. i saw this chart that it has cooled a little bit. this is about wage growth weakening. we have upwards influence on inflation, a lot of that is coming from the weaker pound. the background effects may not be so inflationary. how do you invest in that environment? ana: one has to pick up the stoxx. those that will be favored by the week sterling. picking the stoxx that will do well in the whole market and starting to commodities -- i have to say the job has not been easy over the last weeks because correlation was really increasing to 75% among the asset classes, especially as the markets imparted some fundamentals and mainly driven by central banks, bite liquidity which inflated all these asset prices and used volatility over the past few years. political uncertainty is a big driver in europe. anna: we will pick up on some of those broader themes when we come back. ana armstrong stays with us. manus. manus: thank you up next, wake me up. wake me up when september ends here it why this is the most desperate ends. why is this the most bitter month for investors? this is bloomberg. ♪ manus: it is 7:21 and here in london, welcome back. i am manus cranny at the bank of england. anna: i am anna edwards. we are two weeks into september. investors happily getting a taste of the -- data going back to 1927, the ninth month of the year has delivered the worst average return in the s&p 500 index. september ends with a monthly loss, 55% of the time. that is the most of any other month. armstrong. ana september is generally a pretty dreadful month. it feels like we had a pretty quiet summer this year, unlike the past few summers. september has taken on an identity all its own. ana: we are waiting for two countries having elections. italy will have their referendum. we have u.s. elections central banks all over the world have injected so much cash and they are still following easing monetary policy. join soon by the school policy in europe for the first time since 2010. volatility is expected to really stay and remain at those low levels. investors are looking for yield. they have been buying the bonds, taking capital negative -- and promise of a future yield. in investors job has not been easy. that is why demand is increasing. we have to remind ourselves this correlatedare not and not a substitute for -- anna: manus? manus: picking up on that. one of the themes and a and i have been getting from investors reticent. -- a real it gets really long of europe. given the fiscal life you just -- fiscal line you just use and the ability of the ecb to do more if they need to do more, does that make europe more attractive for a global investor? if people are searching for yields? armstrong companies are definitely of interest especially those who can benefit from physical easy -- ana: companies are definitely of interest especially those who can benefit from physical easing. thatve to remind ourselves and fiscal investment is a slow process and it takes five to 10 years to start some of those projects new to the political and regulatory constraints. the companies that are linked [indiscernible] are going to perform well and -- sting to anna: you mentioned volatility and i wanted to show a chart in the context of that conversation. this is one way of highlighting the markets of session with all until the at the moment. or how it is increasingly this asset class. in blue we got bank of america equity. bank of america shares. in the white we've got a .olatility product looking at how we have seen the white line though higher than the blue line, there is more volume going through some of these volatility products then there is going through some of the most highly traded stocks in america. bank of america shares in here because they were the best traded. what does that tell us about where investors are going? desperate for yields. anna: -- ana: looking for a place to enhance their returns it asset allocation has been the subject to the correlated other classes in the last month. it hasn't been very helpful. demand for cpa has been at an all-time high. low volatility has benefited them extremely. a high correlation between asset classes between the last -- correlation between asset classes in the last week has been difficult. swinging from positive correlation of .75 the negative correlation of -.6. any consistent there for sypris --utions would suffer consistent diversified solutions would suffer. extremely inflated asset classes and at the same time, inflated levels because it central banks are so easing. we mentioned policy is going to join monetary easing. bank of england is doing a great job of ensuring banks volatility is not being damaged two injections of liquidity. uses benefit from that because it does depend -- up -- ahave a scoop go scope to go up at we don't see any significant selloff until 2018. anna: ana armstrong, think you very much. -- thank you very much. manus is outside. a whole host of guest joining manus in the team. on the move is up next. on thes of the futures, back of little bit. stay with us for the morning. this is bloomberg. ♪ manus: welcome to on the move -- guy: welcome to on the move. we are counting you down to the european open. i am guy johnson. caroline hyde has returned from cologne. she is back in berlin. banking on the pound. sterling needs to be sliding to keep the u.k. economy on track. when will carney have to act again? the bank of england decision today. canning and ceo save the world's -- can ank desk can ceo save the world's oldest bank? campaign health checks.

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