President trump talks down a military response. Ab inbev is said to be looking for a valuation half what it originally sought rate asian unit as we worked delays its ipo until at least october. The case against Boris Johnsons brexit plan. The u. K. Prime ministers suspension of Parliament Comes under scrutiny in the Supreme Court starting today. Good morning, everybody. Less than a halfhour until the start of the European Equity trading day. This is the picture on european futures. We just came down a little bit in the expectations for the start of the trading day as far as the london and the german markets are concerned. The French Market looking more resilient. Weakness coming through in the Asian Session. Geopolitical tension, of course, in the aftermath of the weekend. Lets have a look at the gmm and show you where we are. Down 1. 7 on chinese markets. Hong kong markets also leading the fall. This is where the weaknesses is coming through. Some numbers be expectations from singapore in terms of exports. Still showing this rely less decline in exports coming through from a city that lays a big role in global trade. That is setting sentiment. Markets not being lifted by President Trump saying he has some kind of really deal on trade with japan. A big trade deal seems so far away between the u. S. And china. Some weaknesses in emergingmarket currencies, the Australian Dollar also a little bit weaker along with the chinese equity market. Lets put up the other side of gmm to highlight the calmness relative to yesterday. Yesterday, no design big moves at the start of the trading day. Maybeof people writing those moves dont have so much read across into other assets as they might. If that is what we have seen over the last 48 hours or so. This is the mixed picture we are seeing for other metals, commodities. We see a little bit of weakness coming into the oil price this morning. In the context of those very strong gains of yesterday. The timeline for saudi aramco to get back in talk about a stretch, the bulk of output at the damaged plant could be offline for weeks. Saudi arabia has said an initial investigation has shown weapons used in the attacks were iranian. Middle east anchor joins us now from rea. Riyadh. E restoring production will take a while, but we have not gotten a lot of facts about that. Absolutely. The Public Discourse in the conversation have had so far in the capital of riyadh made it clear there is an absolute shock , sheer bewilderment, as to how an entity regardless of where it came from was able to hit the heart and soul of the saudi arabia and energy industry. There is pressure domestically to come up with a firm answer. That is where the public sentiment has been steered towards. Globally, there will be . Marks about saudi arabias role. We had additional reaction from the Foreign Ministry as to what we can expect. I am pointing you directly to the statement. They are going to take all measures to ensure safety and security of the country, saying they are able to defend their land and they are going to respond strongly to this latest aggression. The first chapter of that could investigation to verify what actually happened and where those missiles came from. Nejra we still seem to be missing facts. We are missing the assessment of how quickly output can be restored. So much saudi output offline. Capacityly can spare realistically be brought into it will the alco come into play. The latest comments from the Supreme Leader of iran saying they are not going to negotiate with the United States. 3. 9 Million Barrels per day potentially in terms of the extra capacity in the opec group. It does not just work with a switch on or off. In the case of saudi arabia. If we were to bring that capacity, it needs to be routed through existing infrastructure. Countries, the other some of these systems have been offline for quite a while, calibrated, reviewed, fired backup. Arguably, a source of additional pressure on top of the existing structural premium that is being priced in. Nejra thanks very much. Lets get the market perspective a day after we saw the big spike in oil prices, of course, and other important market themes. Your thoughts on the Oil Price Spike that was . A number of Big Questions around the fact and how long it takes to bring production back, of course, the market does not know that yet. We are not clear whether this is some level of shortterm disruption or a real longlasting highly impactful oil spike. It matters, doesnt it . It absolutely matters. The reaction across markets is quite subdued. That seems to make sense initially. Oil reacts to these events and it was a powerful move. Time yesterday, it was at the low of the day even after that massive jump. Expected a release of supply elsewhere. We expected saudi arabia to restore production soon. It all seemed logical. It is todays subdued reaction that surprises me more. We now know it will take much longer for saudi arabia to restore that production. Oil prices up 15 since friday close. Massive. Of change is assumptions in terms of Business Plans that yearend, overall, this is definitely a supply shock. It is consumer shock as well. Other assets dont seem to be reacting too much. They are hoping we are going to get better news in the next couple of days. Oil is still up by the end of this week, there will be sustained impacts in the next month. Just 0. 3 , not falling that far. Let me ask our question of the day. I know you have been looking at movement in the repo market. Help us understand what this means. The question we are asking today, will repo market chaos lent the impact of a rate hike blunt the impact of a rate hike . Also asking whether the fed has lost control of the short end of the bond markets. Whats going on here . Large topicuite a to address concisely. The overview is that there is a story which impacts in many different ways, probably overhyped by the size of the move yesterday. He closed way below 5 . There are many factors. Tax payments from corporates. A dollar funding squeeze, which people are getting worried about. It does undermine fed monetary policy. It is kind of undermining fed policy at a time just a few weeks after trump is already undermining fed policy by challenging powell saying his job might be under threat. In the context we are going to a fed meeting where the economy needs them to cut rates, we have an Oil Price Shock. Is feds job this week difficult and now they are being undermined. President a undermining them as well. There we have on screen the jump we are talking about in repo rates. Let me ask you about something else. It seems the market is a little gripped. We are seeing selling in asia. Futures dewpoint down for the u. S. There is this geopolitical tension over markets. Markets dont seem to be too , too buoyed. That seems to have not cut markets attention. Before. Ve had promises unclear how powerful this would be economically. Headline takeaways would be the tax unwinds reduced to zero over seven years. People are like, who cares the this, yes, there is a marginal positive. We have Oil Price Shock going on. We did not get more easing on the chinese side. A host of bad issues. I can see why the pain is dominating. Thank you very much. Bloomberg markets life managing editor in singapore. Next, wework and ab invev facing ipo valuations. How hard has become to raise money . This is bloomberg. Anna welcome back to Bloomberg Markets european open. Asian equity markets certainly weaker, down by 0. 5 on the msc im asiapacific msci asiapacific. Bloomberg first word news update. Juliette saly has that in singapore. Juliette the Supreme Court will start healing hearing the case against Boris Johnsons suspension of parliament. The beginning of the bait the debate is whether it is a matter for the courts. The court may not rule until next week. Israel had to the polls heads to the polls. The final result may only emerge after prolonged coalition trading. Netanyahu failed to form a coalition after aprils vote. Russia is offering to sell saudi arabia its as 400 Missile System to bolster the kingdoms defenses. Riyadh has been in talks with moscow, but going through with it risks u. S. Sanctions. In the u. S. , the New York Times is reporting eight years of President Trumps tax returns are being subpoenaed as the da examines hush money paid to stormy daniels. The move widens the ongoing effort to obtain a tax record President Trump has refused to disclose. Representatives for the president declined to comment. Global news, 24 hours a day on air and tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. Anna we is signaling a delay to its much awaited ipo. It expects to complete the listing by the end of the year. The potential public value is far below its last private round of funding at around 47 billion. Bloomberg has also learned ab invev has revived its plans for isipo of its asian unit, but only projected to raise half the amount it previously thought. Why are these companies having so many challenges, having to jump through so many hoops . Rachel chang is in hong kong. Pavel is in tokyo. Lets start with ab invev . Why is the Company Pushing ahead with such euros dues devaluation . A ch a reduced tell you reduced valuation. It is a much reduced devaluation from what the company had earlier. They have taken out the Australian Business by selling that for 11 billion. That is a big chunk of revenue gone from the asian unit. It was a slower growing part of that unit. Another big part of the reasons is simply because they could not pull off that earlier valuation they hoped for. They could not get enough institutional funds. That was a key reason why that whole plan now the company is coming back with a modestly adjusted expectation. Anna do we know more about the timeline . We do know they are moving quickly. There will be a press conference in just a few hours in hong kong. The Company Plans to start trading i the end of the month, september 30. On the subject of wework, a different delay. Madeis a listing that has block after block it seems. Have just the opposite situation. Softbankhareholder in Group Pushing for a delayed ipo. The reason is really straightforward. Softbanks latest round of investment value the company at 47 billion. Now it is potentially worths less than a third of that. Softbank stand to take a haircut. The ipo only marks the beginning of that. That is why softbank with everybodys mind still freshly on the uber ipo and the share price 25 below, the potential for loss was so big, it is. Ignificant at this time the company is trying to raise money for a second fund, so poking that is just not a good booking that is just not good for their numbers. For thanks very much bringing us the latest. Those two veryer different stories. Ofutes away from the open the European Equity cash markets, next, we will take a look at the stocks we are watching, including an Online Clothing retailer. How much will be see that stock drop at the open . This is bloomberg. Anna this is Bloomberg Markets the european open. Six minutes to go until the start of the cash equity trading day. Lets get your stocks to watch. Annmarie hordern is looking at so lander. Lets come to you first. The actions of one of their shareholders. Whats the story . We are seeing shares dropped from 6 , so expect that stock to open in the red. One of its institutional shareholders has sold about 13 million shares, and now that reduces their stake by more than 16 . We are seeing the share selloff ahead of the open, so its going to be a big one to watch. Anna give us the latest on Sirius Minerals. The reasons behind corporate decisions around financing. That is right, so Sirius Minerals announced it canceled 500 million bonds after it first suspended a critical part of its financing plan last month. It will adjust the scope of the construction of a mind it is building in england. Shares fell 29 august. Today they are called down as much as 50 . Joining us. For get all the latest stock stories from our equity seen by going to first go on your bloomberg. Just a few other stocks to keep an eye on, obviously ab invev, the planes they have to bring to market their asian business. Now we understand they are coming back. We will talk more detail about the timing in the most recent reporting. Keep an eye on airbus. Of newere has been talk production facilities Assembly Lines in the french press. That is of interest. This is a real estate business managing temporary office space. That could be lower on the wework headlines. A business that works in hr and instore real estate has guided revenues higher. Smaller cap stocks to watch. The Bigger Picture is how geopolitical tensions still linger over these markets. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Anna a minute to go till the start of cash equity trading this Tuesday Morning in europe. This is Bloomberg Markets the european open. These are useful indicators as to where we might go at the start of the trading day. Japan is backfic, today the playing catchup for more positive than the rest of the asian story. Broadly, weaker down. 8 in the session, down. 5 with japan in the mix. Oil is weaker this morning, down. 7 compared to the rally we saw up by nearly 20 at one point in yesterdays session. It came off those highs. Got gold spot prices drifting down and putting the pound in the air, we saw weakness in the pound yesterday as Boris Johnson was touring luxembourg and beyond, trying to get closer to a deal which remains elusive. Startures, a weaker expected for European Equity markets as far as the london and german market. Open up the, lets European Equity markets and see what weve got. In theral, the divide Asian Session has been concern around geopolitics. Lacker day of digesting a of news out of saudi arabia and how long it will take to reestablish production facilities . Who was responsible . Questions remain pertinent for investors and without answers, the fears of whether it will be a sustained oil spike linger in the market. We havent seen a dramatic drop since this time yesterday. The ftse 100, opening weaker. Dax, down. 1 . The cac was suggested flatter than the other markets at the start of the trading day. We see slightly more resilient performance in these markets and you might have anticipated. There was good news around trade, President Trump talking about the early stages of a trade deal with japan but that doesnt seem to have cut through in Market Reaction today. Lets look at the sector picture. Pretty mixed. We had pretty much every sector in negative territory apart from those connected to the Higher Oil Price. Today, a mixed bag with a bias to the downside. Financials, weaker and health care in the green. Materials, also in the green. Utilities look negative, as well. Draw toohink we can many conclusions from that early picture and looking at the stoxx 600 and the movers screen, we have 395 stocks to the downside and 184 to the upside. The bias is still to the downside but lets look at individual warmest. Performers. Novo nordisk, up 1. 9 . We saw an upgrade from one of the brokers. We have numbers out of a cargo earlier on, 1. 8 . , lots to talk about in the u. K. Press. We see oil majors moving higher despite the entrenchment in the oil price and bp is up. 4 . To the downside, the big bank hsbc is lending the biggest waiting negative points. Rio tinto, Zurich Insurance in their. We had a downgrade from one of the brokers to Zurich Insurance. Opening prices on stocks we were covering earlier, ab inbev up. 4 . I wg response to the we work delay with a drop of. 7 . Bute not an incredible day zalando down 8 . One of the big shareholders has been selling a stake. That is a stock specific story will talk about. European markets opening lower with energy gaining and materials lower despite concerns saudi aramco may not be back at full output for months. With more, yousef gamal eldin joins us from the dead riyadh. As we wait for more details, for the response from the saudis. Yousef a sense of shock. The Public Discourse. How could any into tk close to the heart and soul of the Saudi Energy System . Quite a bitere is of pressure on the saudi government to come up with an answer and be able to defend themselves. They have come out with a statement in the last few hours, a direct quote from the Foreign Ministry saying they will take all measures to ensure the safety and security, they affirm they are capable of defending their land and iranians continue to dismiss any possibility of potential negotiations. Questions still around what comes next. Anna what about Market Reaction . In have saudi assets fared the last 24 hours . Yousef we just came back online in the last few minutes and quite a bit pressure continues on petrochemicals. They make the argument that higher oil risk premium could outlast the supply recovery, which could bode well from a macro perspective for the kingdom and some of the gulf states. In other asset classes, it was a different story, especially in the bond space where you had pip increase on saudi 40 mine paper and spreads when it came to saudi aramco. Anna yousef gamal eldin, our middle east reporter in riyadh at the start of the saudi trading day and we await further details of the saudi assessment on the ground. Entertaining and his chief european economist at Capital Economics and joins us. Good to have you with us, andrew. Readt to ask about the across of this spike higher in oil prices we have seen. Downey percent on wti, but not unwinding the gains we made yesterday. Does this look to you like a genuine oil shock with all the ramifications or an updated version of the ramifications that come with that, or is this a temporary blip. Whatw a lot depends on happens with supply been our view is it is most likely supply gets back reasonably quickly in the coming weeks. Apart from everything else, part of it is due to precautionary measures but there is also a lot of inventory, stocks available. We dont anticipate it is most likely this will turn out to be something very lasting. I read analysis over the last 24 hours of colleagues and talking about how there hasnt been as Much Negative read across the spike in oil prices as some thought there might be. Jpmorgan said it would take oil to get to 80 to create pain in the s p. I wonder what you think about how High Oil Prices have to get and the read across because the u. S. Is such a big producer of oil this time. It is difficult to draw parallels with history. Andrew thats right. The read across from Higher Oil Prices or loyal lower prices is much different than it used to be. People have the 1970s in the back of mind but that is irrelevant. Bigger2016, there was a downward moving oil prices from 115 to the low 30s and we thought that would reboot the world economy, u. S. Consumers would spend more and it was difficult to see that happening. On the consumer side and because the u. S. Is also a big producer and because shale is more responsive, supply is more elastic, it comes back more quickly. For all these reasons, the impact on the rest of the world is probably going to be muted. Anna good to read we shouldnt read too much into parallels with the 1970s. A colleague talked about it was just a few days ago when opec and friends were moaning in abu dhabi about excessive inventory after two and a half years about supply cuts to try and bring down the oil glass and pushed prices higher. Things have changed quickly. I suppose that was the backstory. If they were worried about excessive inventory, losing 5 could have happened at a worse time . Andrew certainly. There are also a lot of stocks outside the iea countries. The world has a lot of oil available, which certainly helps. Anna let me ask about the Global Economy and your assessment. I have one indicator. This is singapore export. Singapore has a special role in global trade, doesnt it . We will talk about the u. S. Economy, global trade story in a moment but your early assessment datas this morning this was better than some anticipated but it showed continuing weakness in the export story. Do you see upside for the Global Economy from here . Are we bottomed in any sense or is it down still . Andrew in terms of manufacturing and world trade, it is probably still down. Cap will run well into next year as far as we can tell and that will prevent any kind of major global recovery. Qc the u. S. Picking up later next year and that might lead to slightly better conditions, for the time being, it will be negative news. Primarily it is concentrated on manufacturing and trade and the service sector, domestic oriented parts of the Economy Holding a better. Anna thank you for your thoughts so far. Andrew kenningham at capical economics. We will get his view on the global trade story, the fed, and beyond. Text, stocks on the move this morning including serious minerals, shares falling after the mining business rebuilds some difficulties with its funding plan. They have to pull a bond issuance. To the stock is down, 64. 3 . Big move in that share price. This is bloomberg. We are not in some defensive cash oure strategy on investment has been to be over 60 in equities. The worlds second richest man, bill gates, sounded a positive note on the equity market. More from our interview with him throughout the morning and as we focus this week on Climate Change, we will bring his thoughts on related matters later in this hour. Lets get the stock stories that have caught the eye of Annmarie Hordern this morning. Annmarie zalando, down more than 2. 5 this morning as one of its shareholders has sold off 13 million shares, reducing its stake in zalando by more than 16 , weighing on shares this morning but Sirius Minerals is absolutely plunging this morning. I had to look twice, but down more than 63 . This stocks as it put a stop to its bond issuance, 500 million bonds in proposal and short cap and that is bad news for the company. They will now have to rebuy some of the strategic profits of a mine project they have in the United Kingdom and i wanted to. 8 ,you the stoxx 600, up the only sector in the green this morning. We saw oil and gas stocks rally yesterday with the names of onal still trading higher the stoxx 600 after yesterdays record day for oil. Anna thanks very much, annemarie with your movers. Was looking upside down on the floor in front of me, which adds complications. Lets talk about where annemarie left off. The Federal Reserve is likely to cut Interest Rates for the second time this year at this weeks fomc meeting, following the spike in repo rates, suggesting the fed is having trouble controlling shortterm rates. We talked about that with mark cudmore earlier on. Lets get the opinion of andrew kenningham, chief european economics that capical economics. Ive got a chart showing the Market Pricing in 50 basis points of rate cuts from the fed this year. How does the oil spike play into expectations from the fed . Andrew you might think Higher Oil Price is a reason to fear inflation and raise Interest Rates, but it could have negative effect on growth and demand. Dominate. Effect will if anything, it provides an additional reason for the fed to cut. We are certainly expecting a 35 basis point cut tomorrow. That is almost certain and we think there will be one more by the end of this year. Anna do you think the underlying data in the u. S. Economy suggests that is necessary, for is the politics getting to the fed, or do you think if you wait for the data, you will be too late . Andrew i dont think the politics is having yet a big impact. That is a concern looking forward, if President Trump were to win another term, you could see some politicization of the fed. Is a risk it management approach which is difficult to follow because the macro projections and the dot plots probably wont change that much and they arent looking bad at all but the fed might have made the judgment theyve got room to cut rates in case things get worse and because of various geopolitical risks around the world. Anna ive been looking at breakeven rates in the market, an indicator of u. S. Inflation and expectations over the horizon for u. S. Inflation. They seem to be picking up a little sentiment in market improves in september as a trade deal may look more likely in the last couple of weeks or so. Is that in any way meaningful, a pickup in Inflation Expectation stateside . Andrew they would have to move a lot to make a difference to what the fed is likely to do but what did happen is the markets got ahead of themselves. We think they are still pricing in too many rate hikes cuts in terms of what will happen next year, because the economy isnt that bad. Deflation risks are really low and because of that, after the end of this year, the fed cuts a total three times and that will be sufficient. Anna President Trump has said he has done the preamble to a deal or got the initial stages of a deal on trade with japan. It doesnt seem to have captured the markets imagination in all the gloom around the china trade deal and geopolitical consent but i guess it goes to show deals are possible. There are a lot of details even still to fall into place even on this one. What is your expectation on a trade deal . Do you look at the political calendar and draw a conclusion about when a deal will be done . Andrew any deal with japan would be irrelevant to the market compared to the important issue, which is obviously the china negotiations. Weve seen for so long the Trump Administration has gone near to a deal and a blonde hot and cold, and now we take that with a pinch of salt. Our judgment it is likely the u. S. Will want to continue having a trade war right up until the next election. It is highly unlikely there will be a substantial or lasting there is aont think political imperative for President Trump to do a deal before voters go to the polls . Andrew i dont think so. As far as i can tell, it plays quite well to be tough on china and to be still insisting that china does more, and all that rhetoric would have to fall away for them to resolve everything. Plus, there are a lot of genuine issues in terms of trade investment with china which are not easy to resolve. Anna andrew kenningham, chief european economist at capical economics stays with us and we will get to our conversation on europe, which and or will be least about. Lets look at markets pleased about. Lets look at the markets. The European Equity story, markets down. 2 so not the negativity in europe but it is broadbased. Banks and insurance, basic resources also weaker. Oil and gas at the top once again, so we see those names lending support to the market along with health care, food, and utilities. This glimpse of the market. We will have plenty more in a moment. This is bloomberg. Anna welcome back to the european open. 21 minutes into the trading day and we see a flattening picture for European Equity markets. 600 started in negative territory and has been clawing its way back a little. The ftse 100, up slightly and the cac bulk slightly. Up slightly. 1. 10 we have carried the pound is down. 2 . We saw Boris Johnson on tour yesterday trying to get a deal on brexit and the deal remains elusive. Lets talk about the eurozone economy. The latest Economic Sentiment survey this morning. Signs of how the economy could fair in the last quarter. Andrew kenningham, chief european economist at Capital Economics is still with us. Lets start with germany. Do you expect a recession in germany . Andrew were halfway there because the economy did contracting q2. There is a 5050 chance we have a recession in the next 50 few months or so. The manufacturing recession with such a big share of the german economy, so whether it is a recession or not is neither here nor there. Anna the reliance on exports, we know that well. Will there be other parts of the eurozone also in recession or will it be a standout loser in the european context . Economieso main weak in europe, one is italy which is chronically weak and will not grow at all over the next decade. The other is germany, where it is primarily a cyclical downturn. France and spain have held up much better and that is not just because theyre Manufacturing Sectors or smaller are smaller but germanys has been harder hit. There seem to be specific issues around its auto sector. Anna that punched in the Manufacturing Sector is felt by a investors. Weve got the latest data from the early and it has looked weak. Us back to levels we havent seen since 2011. Interesting to do the comparison with france becomes because some say that has been the case up till now, but the recent wto rulings, maybe france and the reliance on luxury and the wealthy chinese consumer, maybe that model comes under threat some point. Andrew that is possible, but there are other factors in frances favor. They have less exposure outside the eurozone in general than germany, and a lot of the industrial sector is less cyclical. It is true that luxury and a cyclical but they have a Big Aerospace sector, some of that should hold up relatively well. Take had more fiscal stimulus which will probably help. Anna the Yellow Vests Movement and the polite. What do you expect in terms of trade tensions . The market is focused on the u. S. And china, and if that were cleared up, and you dont think it is likely, if it were to clear up, the spotlight more directly falls on europe. It is worth reminding ourselves that spotlight hasnt fallen directly on europe yet, even though in the german data, it appears it has. Andrew that is one of the puzzles. How deep the downturn has been in trade were there havent been tariffs and so on. Much of the cyclical ecb, imf is likely to say the weakness in trade is due to trade tensions and tariffs. Duehink it is only partly to that, maybe less than half of it is due to at. There seems to be a cyclical downturn the reverse of 2017. Anna and the auto sector. Christine lagarde arriving at the ecb, one of my colleagues writing she has been left to heal the divisions created by the reintroduction of quantitative easing. Andrew good luck with that, id say. It seems the ecb, which used to pride itself on being unanimous and keeping the details secret, all of that is beginning to they are washing their dirty linen in public and i dont think that will change very weekly, quickly, so as the lagarde will inherit some of the same problems draghi has. Anna andrew kenningham, Capital Economics will continue the conversation on bloomberg radio. Hes the man who took the Prime Minister to court. By a lawyer is due to be heard in the Supreme Court today. Him next. Eak to protesters are gathering outside the Supreme Court in london as we build up to that hearing. This is bloomberg. Anna 30 minutes into the trading day. Welcome back to Bloomberg Markets the european open. No quick fix. We await details from saudi arabia, the timeline to reach full output again could be weeks or months away. President trump talks down a military response to the weekend attacks. Ab inbev they said to be looking for a valuation of half what it originally soft for its asia work delays and ipo until october. Live pictures of protesters gathering outside of the Supreme Court in westminster. Welcome to Bloomberg Markets the european open. Im and edwards at bloombergs european i am anna edwards in london. Bias the wewnside are fairly range bound. The stoxx 600 down. 1 and we have expected worse losses in asia when we look at asia, things seemed more gloomy. Dwelling on the geopolitical tensions around saudi arabia and the rest, lack of progress on trade. We have a downside bias to the stocks going down to those going up but we dont see big moves on the stoxx 600. Novo nordisk, up 2 . A rotation into drug stocks but also an upgrade from brokers on the novo nordisk. Oil majors, making gains like total and bp. Despite the drop in oil prices in the last 24 hours, substantial gains we made yesterday more than compensating for todays drop. We see Oil Companies moving higher this morning. To the downside, what is moving there . Zalando, german retail down 3. 2 . A big shareholder selling state. Stake. Essentially, these markets are preoccupied with the geopolitics, awaiting clues around trade. Its get a first word news update with Juliette Saly in singapore. Months is thes or timeline saudi aramco is facing before the majority of its oil supply is restored. Exclusively report the energy giant is growing less rapid recovery in production following the weekends attack that knocked out half of saudi arabias oil production, roughly 5 of global output. President trump risks a political backlash if he retaliates against iran over this weeks how the oil strike. The president says he doesnt want a war but that the military is ready if necessary. The u. S. Says iran is behind the attacks but tehran denies involvement. Any action would be divisive in washington. s popularity is low after the war in yemen. s heads to the polls for its section election economic and of the year. Netanyahu will retain power or lose to his opponent. Prolonged Coalition Horse trading. The election comes at an uncertain time for israels leader. Netanyahu failed to form a coalition after aprils vote. The worlds second richest man says he wouldnt oppose the introduction of a wealth tax. Microsoft cofounder bill gates, who is worth more than 106 billion spoke to bloombergs erik schatzker. I doubt the u. S. Will do a wealth tax but i wouldnt be against it. To closest thing we have to it is the estate tax and i have been a proponent that should go of 55 that itel was a few decades ago. Global news 24 hours a day, onair and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna Juliette Saly in singapore. Boris Johnsons Brexit plan will be tested in court today. 11 of the you ks most senior judges will rule on his suspension of parliament, reconciling rulings from a lower court in england and scotland. At the heart of the debate, whether suspending parliament is a matter for the judiciary. The prime against minister could throw a brick and deeper into a constitutional crisis as talks with the eu suggested the sides are no closer to reaching a brexit deal. On set in london, jolyon maugham , a barrister at devereux chambers who won the legal challenge on september the 11th. His case is now part of what is being heard at the Supreme Court today. Good to see you this morning. Give us your thoughts on the prospects of success today as your case will now be heard at the Supreme Court. Inyon everyone who believes democracy has to hope that i succeeded because the governments proposition is a stark one. The government says the Prime Minister can suspend parliament in effect on the first day after a general election. T10 suspended until the very last day before the next general election, i. E. For five years with the explosive explicit about intention of putting parliament out of the way so it can supervise his actions, and parliament cant stop that and the governments case in the Supreme Court is the court can stop that either. Proposition. Kable anna you think there is a role for the judiciary in keeping a check and balance on the executive and this use. If you challenge succeeds and parliament i returns, is Parliament Going to use any levers to force the government to comply with the ban act saying he has to go to brussels and ask for an extension . The role of parliament to push him to do it parliament instructs . Jolyon parliament has done its work. Save for one narrow circumstance, obliges a Prime Minister hasnt got a Withdrawal Agreement through or parliament explicitly to approve no deal, to ask the eu for an extension. Our parliament cant control the Prime Minister or either whether the eu grant that extension, but the obligation is there and the obligation is clear. Anna is there anything mps will be able to do if Boris Johnson doesnt comply with the act . As parliament meets at the end of october . Jolyon have had discussions with senior politicians. sknow that the Prime Minister rather start observation is he will not comply with the clear have obligations upon him engendered a revival of interest in the idea of an emergency government and i would not be goes, oneto see two led by Jeremy Corbyn and if that failed, another led by a more unifying cross party figure. That is there time to do before october or is the time to do that . Jolyon there is time to do it before the middle of october. It is a process that need only take a day. I have been urging on politicians is while parliament while you are removed from the need to manage the daytoday demands of being in parliament, use this time to what happens next, for cross Party Alliances and work out what your plan is. Anna Boris Johnson has said i will obey the law, uphold the constitution but perhaps he is hoping for a deal. You have been bringing a court case to the Prime Minister personally, to make them comply. What is the way you think the Prime Minister would not have to comply . What is the wiggle room the act gives him at this point . Jolyon the Prime Minister has made contradictory statements. Butas said he will comply has been adamant you will leave on the 31st of october and those statements cant be reconciled. The action in scotland has ultimately, as its desired exercising the court which entitles the court in scotland to sign the Letter Parliament has required the Prime Minister to sign asking the eu for an extension so if he wont do with a lot requires, the court will do it for him. Sanctionltimately the that will force even a recalcitrant Prime Minister bent on breaching the rule of law to fulfill his legal obligation. Obviously you hope you win today or in the coming days in the Supreme Court. Moreu win, will we see front page headlines, any man of the people enemy of the people . While the government has been careful not to criticize the judiciary, there would be a lot of scrutiny of the Supreme Courts scrutiny . Jolyon fits of the government have been careful not to but some of the government have been less careful. It is fair to say this. Where constitutional law issues are highlighted on even highbrow brexit Television Like yours is not a healthy moment for democracy. Constitutional law should be in the background with their dusty terms. No one should be paying attention to them. Everything should be taking over nicely. This is all really worrying stuff. A month ago, viewers were told parliament would be suspended because it was inconvenient to the Prime Minister, we would have been appalled but the pace at which all of this stuff is happening is so rapid that we have no time to respond. Anna he says it is because he wants to get a new agenda through parliament but it was a long prorogation by historic standards. Good to get your thoughts on this important news. Jolyon maugham, a barrister at devereux chambers bringing the that brought the case was successful in scotland and goes to the spring court this week. Apples tax showdown with the eu begins today as the iphone maker worked around a trillion dollar fights a tax bill of 14 billion. To both sides will make their case in the Eu General Court in luxembourg over todays. Two days. Can we expect from todays hearing because this will be a fascinating case where the company doesnt want to pay tax on the government doesnt want to receive tax, but there is a tax in question . Maria thats right, and it is the worlds biggest. It hits the European Commission against the Irish Government and apple. s goes back to a decision in 2016 in which the European Commission claimed the Irish Government had given apples special tax treatment which not the violated rules in European Union but allow the company to pay very little tax in an artificial matter. Apple was forced to pay back 13 billion euros but what is striking is the fact that the Irish Government said they didnt want this compensation and help the European Commission had made a mistake. They appealed the decision and claimed the reasons for the rule were flawed, a lot of errors were made and the calculation of the amount when you speak to lawyers for apple, they will tell you they paid taxes the right way and never asked for special treatment when it came to the Irish Government. The Irish Government is desperate to protect its Corporate Reputation when it ands to big american tech, lawyers tell us this will be a very long legal battle. Here is an army of lawyers and they expect this will be the final word we hear today. Is could probably go all the way to the European Court of justice. The ramifications are huge when it comes to American Companies and the way they pay tax in europe. Anna limited talk about the broad ramifications. American tech, watching this carefully. Europe have been wanting for years and have successfully attracted american tech wings. What will the ramifications more broadly be of this . Maria the focus is on the European Commission. The reasoning behind it is if the court finds their arguments were valid, that could really embolden the commission when it comes to the tough approach on american tech companies. They have been very vocal about the idea they need to pay more tax in europe and in particular, embolden the administer who has made it clear she wants america multinationals to pay more in the European Union. She will be the commissioner for the next five years and has gained more powers when it comes to digital matters. You also have to look at the context of the trade war tensions over taxation have been a Sticking Point between the United States and europe. President trump said the only reason this is happening because she hates the u. S. That is something she denies. Anna and she is still in the commission within a renewed role. Maria tadeo with the latest on apple and its Corporate Court proceedings in europe. Next, some stock movers including ecuador, on the rise after a gas discovery in the Norwegian Sea. This is bloomberg. Anna welcome back to the european open. For the European Equity market, we are pretty flat after a negative start of the trading session, picking up from a negative day in the asian markets. The ftse 100 and cac made gains. The dax hey little more muted. Now, bill gates has invested billions into clean energy and tackling Climate Change but his latest strategy is not to prevent it. Speaking to erik schatzker, gates said he wants to help those hit hardest by Climate Change adapt to it. Are not going to have a year where the world is cooler than it is today. The averageure, global temperature is going to go up a lot and in the next 50 years, it wont go down. Much it goes up, does it go up by two degrees or three degrees or four degrees . That is in our hands. If we ignore the problem, you will head to Something Like a fourdegree scenario which in terms of natural ecosystems, days humans cant go outside if you live near the equator. It is pretty extreme a case. Knowing how seriously people will take it and the innovations the come along will determine where that in that two to four degree range we are at the end of that century and i hope we dont run the experiment of being higher than two degrees, but it will take a lot of commitment and a bit of luck on the innovative breakthroughs to be able to get there. Erik there are a number of ways of fighting Climate Change. Renewable energy is clearly one of them. Do you think governments should shoves it eyes renault subsidize them or be dictated by markets . The cost of wind and solar has gone down dramatically and some of that has driven volume. Now, they are not going to come down much more so the tax benefits should be shifted into things that are more limiting like energy storage, offshore wind which still has a huge premium price, lots of places we need the market to get going. The progress on solar and wind is very helpful, but the sun doesnt shine 24 hours a day if you far away from the equator in the winter, you cant get as much. That is just for the electricity piece. That is only 25 of emissions. We need a lot of efforts but yes, the subsidization that has accelerated rollout, that is one of the advances we had. It is less than 10 of all Energy Generation. The Global Economy has a lot of erate Energy GenerationEnergy Generation, but it is one of the good things that has been developed. Anna that was bill gates speaking to bloomberg at the bill and Melinda GatesFoundation Headquarters in seattle, part of a weeklong focus on Climate Change we have brought on bloomberg tv. And other bloomberg out lets this week. Lets get the top stock stories. Annmarie hordern has been. Annmarie we see oil and gas stocks rise, equinor up more than 1 . Infound a new gas discovery the Norwegian Sea and another project coming in ahead of time and under budget. Husqvarna is down 6 , out with new growth target that are weighing on shares. Ocado with a bit of again as sales grew 11 . Anna next, another round of whatever it takes. Mlivll speak with strategist Richard Jones about why he thinks there will be downward pressure on bond yields. We will talk the legacy of mario draghi, i suppose, if it is not too early for that conversation as he gets ready to hand it over to christine lagarde. This is bloomberg. Anna welcome back to the european open, 54 minutes into your trading day. This is the look across equity markets. After the session in asia where we were down. 4 if you include like we were down more. 7 without japan. Despite more positive headlines from President Trump around the trade story with japan, at least. Despite that, the market focused on geopolitical tensions between the u. S. And iran. In asia in europe, we dont see much negativity. U. S. Futures, a little weaker this morning but not extremely so. That is European Equity markets. Richard jones, fx and rate strategist in berlin. You have been keenly watching the latest commentary out of the ecb. Philip lane and what he had to say about the room the ecb has to maneuver in. Thought the comments yesterday from philip lane at bloomberg in london were very interesting. Is heswhat he has done taken a little twist on draghis whatever it takes and laid out an as long as it takes approach from the ecb. It strikes me philip lane was keen to downplay any restrictions the ecb has on tv. They are there for the lot qe. They are there for the longterm. If you maintain that stock in addition to the new purchases the ecb will embark on, they will be in the bond market for a long time and as a result of that, they will leaders are exerts downward pressure on negative yield. I dont think we will see negative gilt spikes for some time because the ecb will be around for a long time. Anna the repo market, the big spike up in repo rates, lack of control for the fed at the frontend. What are the responses you have gotten from this question of the day . Richard it is more of an idiosyncratic risk what we have seen over the past day or two. I dont think it has been systematic, but it has been striking over the past couple of days. Very idiosyncratic, though. Anna thanks for the update. Richard jones, fx and rate strategist in berlin. And is it for the European Market open. Surveillance and today, we will monitor the developments at the Supreme Court in london because the decision is not due imminently. 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