Im yousef gamal eldin in dubai. Quite the risk on session. Lets get you the state of play. The signals were getting between the u. S. And china are encouraging. S p 500 many futures are higher. Quite a few gains in the european stocks story, as well. Tech and cyclical sectors, including autos, are leading those gains. Fund managers are overweight on 2018, according to the latest bank of america survey. Telling bonds standing out, paring middle of the gains. Treasury study in the United States. Eurodollar at 118. 16. Little upside, weaker dollar story weighing on broader g10 space. At a net long position, the least bullish in three weeks according to the latest data. Lets check in on your bloomberg first word news, will be get you some of the other stories were watching, starting off with president donald trump. He says a coronavirus treatment that involves blood plasma from recovered patients will be expanded to more sick americans. It adds to therapy even before researchers fully understand how it works. The Financial Times is reporting the white is considering fast tracking the astrazeneca vaccine. One of president Donald Trumps longestserving aides is leaving the white house at the and of the month. Kellyanne conway says shes quitting to focus on her family. Her husband is leaving a Campaign Group committed to defeating the Campaign Group. She says the two may disagree, but they are united on what matters most, and thats their kids. Boris johnson is urging parents to send their children back to school next week. Thats as concerns grow among teachers and Union Officials that it isnt safe to do so. The government is arguing the risk to a childs development is the risk is greater than the risk tof the coronavirus. That is your first word update. Lets get to your future story. They are at a record to begin the week. Investors are waiting for the fed chairman Jerome Powell to deliver the jackson hole speech. And the National Convention republican National Convention is to get underway, as well. All that despite a warning from cullman sex, saying a quarter goldman sachs, sing a quarter of saying a quarter of will become permanent. Much for coming on the program. So, what do you expect to materialize out of the jackson hole deliberations . Are we going to get the kind of inflation targeting signals that many in the market are penciling in . Markets think we in the are already expecting some clearer indications by the fed chair on thursday that the feds will be indeed pivoting towards inflation targeting and the fed will be committing to tolerating inflation overshoot in the coming months and quarters as it tries to bring inflation back on target, which is now average. It will be average inflation. And i have to say that you , at leaste stocks part of that is already baked in the cake. I think investors are already looking for indications that the fed will be shifting to an inherently more dovish policy stance from here. Ausef were just getting out chart for our clients, gtv , for additional perspective on what the fed is grappling with and the targets its working with or might have to work with, rather. If youre saying the expectation of the market is for some kind of signaling in this jackson hole discussion, than if we dont get that, is that going to translate into a bit of a repricing in the dollar on that change of outlook . Valentin in terms of impact, clearly some negatives in the price. I do think there will be some headlines to point in that direction. Fed speakers, not necessarily Jerome Powell, but other members, have been passively tolerating over issuance, 2. 5 , not necessarily higher. Its a shelf softer version, likely to be adopted as a result of the fed strategy review process. But as you said, in terms of market expectations, there is still some uncertainty regarding the details. They also said theres some negatives already in the price of the dollar. We did see, really, u. S. Yields and rates respreading, but generally remaining rather low, historically. My point also being that if indeed the feds chair fails to price the existing market expectation of averaging targeting, signaling aggressive overshoot or overshoot for a longer periods of time, you can honor the dollar may recoup some lost ground in the way you think the price actually surrounding this by fed chair powell on thursday could be seen as a by the remember rumor fact as the dollar could consolidate across the board. Yousef youre saying thats going to be the shorterterm driver. Im looking a little further out, not that further out, but to the u. S. Election. Weve got two candidates here, mr. Trump and mr. Biden. Which scenario would result in what kind of Price Movement in the greenback would you, at this point, believe . Valentin at this stage, it thes like discussions, clearer eclipse in the sense that a Democratic Congress and presidency are stained as a potentially likely to adopt a less business friendly policy, meaning by implication positively to the dollar. Equally, a reelection of president trump, second term of president trump, could be tantamount of more aggressive protectionism, plus some fiscal expansion, not necessarily as aggressive as weve seen, really from 2018, but nevertheless aggressive. That package could see more positive for the dollar. Given the current polls, obviously, you could certainly make a direct connection between the current dollar underperformance and deposit our suggestion that the democrats, which will be in control of the congress, and indeed the presidency come january next year, that could be one of the explanations. And maybe just to come back to the inflation targeting, looking is weak. He actual event we inflation targeting is likely to remain negative for the dollar, the fact being yousef if i could just if i could just interject here, just to flesh your point out on the greenback, that might have an impact. The road to the white house from this point onward is frothed with all kinds of tensions and heated rhetoric that means youve got quite a bit of a risk that some investors are going to seek haven place. Does the dollar get back into this picture again . Does it get supported by potential haven flows again even though at the moment it looks far from it . Valentin it depends on the outcome and the uncertainty. You could argue that a fairly could weigh on sentiment. Given the dollar is the safe haven, that could play in the hands of the dollar equally, if indeed, as were saying, trump is reelected, and that leads to a new bout of uncertainty. Its actually biden, trading partners with the u. S. , that could translate into more dollar trends. A Democratic Congress and president could, at the margin, be negative for second for sentiment. They worry about how it will impact the economy. Negatives the dollar will continue to outweigh the dollar positives coming from the market uncertainty. Our conclusion is affects orativity volatility, heightened security around the election, are actually interesting. We think the australian dollar, canadian dollar, new zealand dollar, look like interesting Investment Opportunity just because we expect a very contestant vote contested vote. Were going to get into some of your other calls shortly. Valentin stays with us. Get you a bit of a snapshot of whats coming up this week. As the jackson hole goes a virtual, investors are bracing for signals from Jerome Powells speech on the feds next crucial policy move. W ere going to bring you the latest next week on the lineup of special voices. This is bloomberg. Yousef economics, finance, politics, this is bloomberg surveillance. Im yousef gamal eldin in dubai. Lets get your Bloomberg Business flash story. Goldman sachs expects a quarter of temporary layoffs to become permanent. It says to million could remain unemployed well into 2021. While the tradition rate from the temporary to permanent layoffs remain historically low, the figure doubled from june to july. Saudi aramco reshuffled its senior management. Its putting a Top Executive in charge of folio portfolio optimization, is the Biggest Oil Producer loyal Bloomberg Oil prices lowered oil prices. Lawsuitlans to file a against the trump administration. Thats the challenge of the executive order to ban it in the United States. It strongly disagrees with concerns raised by the u. S. President , donald trump. Its given an ultimatum, either leave the u. S. Or celebrations in another country. That your Bloomberg Business flash. Lets talk about beijing because china is pledging strength in hong kongs role as an International Finance center. Banking regulars say it will provide support for Financial Institutions doing business in hong kong while supplying regulation. Weve got more with valentin. What is your latest read on these tensions . If i look at the last 48 hours, the signals have been very mixed, very conflicting. Valentin well, indeed. So the tensions between u. S. And china likely to be with us for the for siebel future. As foreseeable future. Foreseeable future. We figure them to be featured quite prominently for the president ial campaign. Both candidates, both joe biden and donald trump, president trump, will try to portray themselves as the top guy, the person likely to defend the u. S. Interests against china. An equally, on the chinese site, with think that side, we think they are trying to protect their own interests with respect to trade and geopolitical influence. Those tensions will be abating anytime soon. What is important for markets and white, at the moment at least why, at the moment at least, the markets, those tensions have not escalated to apoint where the trade point where the trade relationship in china but the markets will be blissfully ignorant about whats happening, and instead preferring to focus on balance drivers. Hasef the chinese yuan broken out of the bermuda triangle. Thats how the markets lifting is markets life team is to describing it. Markets life team is describing it markets live team is discovering it. Can you subscribe to that kind of you . Of view . Valentin chinese fundamentals are among the more resilient fundamentals weve had at the moment anywhere in the world. Quitee authorities were successful in dealing with the covid19 pandemic and they are reaping the fruit of that particular strategy. An equally, in the u. S. , the pandemic still rages on and that makes a lot of people quite concerned about the u. S. Economy outlooks. In terms of a policy outlook, outlook seems to be continuing to grow. Thats affected currency appreciation in the recent weeks and months. Guided officials have some of that appreciation by fixing the u. N. Stronger and stronger against the dollar. To us, thats another indication chinese officials are trying to be seeing seen as very constructive throughout the trade debate in the u. S. Competitive devaluation, so on and so forth. The trade conflict doesnt escalate from here, you would think that he would be describing two of the of tension resilience in the u. N. Against the dollar. Clearly, the risk is if indeed those risks were to escalate, the process could go into reverse. Yousef its been great catching up. Appreciate your views. Thats valentin, the head of g10 fx research and strategy. Coming up, the biggest challenge to president lukashenkos he rule rule. 100,000 people came together in the Independence Square in minsk. Well get the latest on belarus. This is bloomberg. Yousef youre watching blue butcher valence. Im yousef gamal eldin bloomberg surveillance. Im yousef gamal eldin in dubai. Lukashenko, president of belarus for 26 years, is facing pressure to resign and chose defiance after local media showed video of him arriving at his residence carrying an automatic rifle. The European Union says it stands with the people of belarus. What exactly can they do next . Thats right. And i think the images we saw yesterday, which was so powerful to see people out on the street in huge numbers in such a climate of hostility to take to the streets, to say lukashenko has to go. Theyve said it repeatedly now, that they do believe the election was not fair, that the election was not transparent, and that they do not buy that he won the election with almost 80 of the vote. When you look at the European Union, they are going to go for sanctions. They dont know who will be targeted and which sectors perhaps the economy will be targeted. But that is something that European Union has said they will do quick if there is violence against people in the street and people who are protesting because of an election that they believe was rigged. Now going forward, the eu has repeatedly said also they dont want to see something that has looked like a foreign intervention. The solution here will have to come from the people of belarus, whether that is a new election, a copper mise candidate that is something that compromise candidate, that is something they have to arrive to. But the belarusian people have not agreed to. Yousef tell me about russia. We know theyve been playing a key role in supporting the incumbent government over the years. Have they taken a clear position on how far they are willing to do that . Theresxactly, and look two reasons here. One is geography and geopolitics. Pressure is close to belarus and theres a sea of influence on the russia is close to belarus and theres a sea of influence on the country. There was fear from the European Union we could see a rerun of crimea, whether Russian Military enters the country and that turned into a fullblown civil war like almost happened in the ukraine. At this point, russia is not doing that. Theyve also said the diplomatic option, perhaps constitutional reform that has been pushed forward by lukashenko, could work for them. The question is, would that be good enough for the opposition when it comes to lukashenko . What kind of candidates could come out of that . Its clear someone thats too pro European Union, too pro nato could not go down well in russia. Yousef thank you for running us through those key points. Bloombergs maria tadeo there. Heres whats coming up. Trump travels to North Carolina to attend the rnc. Up next, we discuss what to expect in the meeting. We look at stocks across the board, trading quite a bit higher on optimism when it comes to the ongoing battle against keeping the coronavirus in check, but also the relations between the u. S. And china, or at least the initial signals around that. 1. 4 ,oxx 600 there up some of the auto names leading the game. 3084. At 1 u. S. 10 year yields pretty much unchanged. Shortly. To key themes from dubai and the rest of the world, viviana this is bloomberg. Economics, finance, politics. This is limber surveillance. Lets get first word news, this is bloomberg surveillance. Lets get first word news. After concerns that changes could hit mailin voting in the november election, lawmakers have allocated an additional 25 billion dollars, but the Postal Service is concerned by some of the requirements that a they say constrain its ability to improve efficiency and reduce costs. Phil hogan is fighting to keep his job after attending a golf during event in ireland the coronavirus pandemic. That comes a day after the government says no events would be organized after cafes at cafes and restaurants. An explosion has hit a natural gas pipeline near the syrian capital of damascus. According to state media, it has been triggered by Power Outages across the nation. No fatalities have been reported. The incident is being treated as a terrorist attack. That is your first word news. Lets get to the story around president trump. While hit is traveling to north dolonc to attend the first day of the republican National Convention, North Carolina to attend the first day of the republican National Convention, delegates are meeting in charlotte to formally nominate him and by commenced for a second term. Joining us to discuss this is julie norman, Teaching Fellow at theversity of developing agenda out of belarus over the last few hours i have done quite a bit of reading around this symbolic kind of action that has been taken by some of the European Union leaders, and what is clear is that europe has limited leverage over mr. Lukashenko, and the bigger question is one where, whether in this process, youre getting closer and closer to risking a ukraine style confrontation with russia. What is your assessment . Julie that is exactly the situation right now, where we see belarus stuck in this trying to have a balancing act between russia and the west. We had the opposition challenging this contested election, you are trying to displace lukashenko, who has been in office over 26 years, known for censorship, crackdowns from police, what have you. But it is a situation where the opposition needs to show they are not too western leaning because that might invite a response from russia and escalate the situation even more. You leaders are trying to show support, but as you said, trying to walk carefully so as not to push things over the edge to prompt a response from russia and make it harder for the opposition. Lets cross to the rnc agenda. What would you point to specifically that could perhaps come as a bit of her surprise as we try and speculate as to what we might see . The republicans have been keeping the convention somewhat under wraps, saying there is going to be a number of surprises coming. We know it is going to be a hybrid model more so than the both trump and pentz will be present in charlotte. Trump will be making the convention as much about himself as possible. He is expected to speak every night of the event, culminating of course with the acceptance speech from the white house rose garden on thursday night, followed by fireworks from the national mall. We are expecting a lot of trump focusing on himself come on his personality, and on the brand that he has built up. The challenge for trump is going to be that he expands beyond his base. He has this loyal following that has stuck with him due to ups and downs at the polling, but the challenge for trump and the party more broadly is to see if that could be expanded further out. Yousef to what extent are the u. S. China situation going to be featured in the speeches . Julie it will probably not be as prominent as it was. Chinas stance has been pretty consistency consistent throughout his presidency. With other crises currently basing the u. S. Facing the u. S. And the world, the Economic Situation, protests, that is more where we will see trumps emphasis. We saw in his press conference yesterday he is going to be trying to show that he is out and front out in front and aggressive on corona treatments and potential vaccines. He is going to position himself as a law and order president , and he is going to try to contrast himself to biden, suggesting he is the one to lead the u. S. Out of the crisis and to knock biden tryin tryingements that he is to knock the economy. He is going to double down on the Economic Situation before corona and that he came get the country yousef perhaps in closing thoughts during a busy week, one more key point you would like to make about the rnc. Julie just that, again, the polls right now have biden ahead by double digits going into today, but we can expect a bump for trump after the convention, and really just the narrowing as it gets closer to the election. So i think for democrats coming out of what was the very successful Virtual Convention is just the fact that biden will as trumptay on message Gains Momentum as we get closer to november to make sure there is turnout for democrats as well as republicans as we get closer to the election. Julie, it has been great having discussion. That is julie norman from ucl. Lets talk about some other key trends because Nouriel Roubini is warning of a sluggish recovery for the economy. As equities hit record highs, he says companies and households continue to struggle, highlighting the disconnect between markets and the real economy. Nouriel we are in a world where public and private debt are rising and will become even bigger given the response to the crisis. We have the risk of global pandemics becoming recurring, is gettingate change worse, geopolitical risks are rising. Political uncertainties about the u. S. Election, about the shape, in a freefall, and then see that the v is becoming a u, and then the you is becoming a w. Tom i want to look forward given the assumptions and certitudes that institutions have right now. The great model we have is that there is a bridge out there and we should invest or act according to that bridge. You believe in the bridge, and cat and get us and can it get us to 2022 . Nouriel i worry before the because beforery the crisis there was a massive sector including the United States and emerging markets, that given the covid chuck, most have to deleverage. More. Spend less, save how you spend less, your main labor costs, but your labor costs and my liver income a deleveraging of the corporate sector will be much more sluggish labor income. First the workers got fired, and if and when they start to be with again, fulltime jobs full wages and benefits, it will be parttime workers, contractors, freelancers, so a amount of uncertainty and risk aversion by the sector. So there will beat the leveraging by the housing sector, that has to spend less, save more, and do less president ial investment, and that deleveraging of the private sector implies at best a sluggish, ushaped recovery, and at worst, not doing the right things to end up controlling the virus, and we dont find a vaccine, then it could even deepe a w, a double recession. Francine if you look at the markets, they are going up, so you have basically, you are saying we are going through 10 years of misery. The market keeps on going up because of Central Banks. Who is right . Does the economy catch up with the market, or does the market catch up with the economy . You pointed out, we have zero policy rates if not negative. We have longterm Interest Rates at 60 basis points in parts of the world, zero if not negative, Central Banks are even buying highyield and high trade bonds, so those threads or treat for are squeezed and you dont get much in credit or fixed income, and therefore people are going into stocks but not because there is a very strong recovery of earnings. Five companies within the s p are doing well, the rest of them are not doing well. So it is all driven by further multiple expansion rather than a real recovery, and what is good for wall street is bad for main street because wall street represents, what, big firms, big tex, and big banks. Main street workers, households, and small and mediumsize enterprises. We know that hundreds of thousands are small shops, retailers and others, they will go out of business while the market share of big business is on the rise, and that is driving making the bign, front even bigger than the market shares, and as i said, the firms that are going to survive and thrive by slashing liver costs, your labor costs in my liver income, my consumption and eventually the lack of consumption is going to weaken earnings and profit down the line. I think the market does not afflict the real economy. Main street is struggling, struggling severely. Roubinithat was nouriel speaking earlier. Coming up, aramco, the biggest oil company, faces up to a world of low crude prices. The latest on that next. This is bloomberg. Yousef you are watching. Imberg surveillance yousef got malad. Some of im yousef gamal eldin. Potential u. S. D sanctions on the delisting of Major Chinese tech companies. It is a sign that rhetoric from the white house is bumping investors to give measures from the followup. A chinese banking regular has pledged reiterating its commitment to opening up the chinese finance sector. A deepeninging standoff with the u. S. , forcing global banks to walk a tight rope between the two world powers and competing rules as well. Goldman sachs expects almost a quarter of temporary layoffs in the United States to become permanent. It says to him to meet it says some 2 million could remain unemployed through 2021. Bigger the figure is nearly doubled from june to july. That is the Bloomberg Business flash. Saudi aramco has reshuffled it senior management, putting a Top Executive in charge of folio optimization, of portfolio optimization. Oft is during the reality 40 crude prices. Again, martin aggressive recalibration within the business at saudi aramco tells the story of a lot of headwinds that are expected to come from the oil industry. Right, andyou are this is a sign that i think aramco is adjusting to the reality and the risk outlook of oil prices that look lower for longer, and the very uncertain demand recovery picture, and it is starting to think about what that is going to mean for the business and obviously for this huge 75 billion dividend that it made, the bulk of which obviously goes to the saudi state, and provides a huge bulk of government revenue. So in a month that environment, aramco it is a side that it is increasingly going to be looking at its portfolio of assets, looking at things that it can monetize, looking at the investment commitments it has acquisitions, new avestments, and taking a much tougher look at some of those things than perhaps it would have done compared to where oil prices were 12 months ago. Shares inudi aramco the trade at the moment slightly positive. What will this new Corporate Development mean, what will he be tasked to do first . We have an idea of what is at the top of the agenda . Matthew i think if you look at some of the things the company has announced over the past few years, the big capital commitments, there is investment in china and india, there is big domestic projects that are on the cards, so this new unit is going to be looking at all of that m a, but i think one of the first things they will probably be focusing on is going to be the sale of a stake in the Oil Pipelines business which aramco has. That is going to be a way that will bring many billions of dollars into the company and how it looks at trying to fight new sources of cash while oil sort of sticks in this 40 barrel range. We may see the Company Start to push fairly aggressively on getting that deal done, and then the question will be what are the next assets that can come after that to try and raise some money from. Yousef matt, thank you for that update. That is bloomberg middle east reporter matthew martin. Coming up, turkey says the natural gas find in the black sea is just a beginning. An erdoganew with spokesperson next. This is bloomberg. Yousef economics, finance, politics. This is bloomberg surveillance. Quite the risk on rally across assets, but especially so by some of the world equity markets here. The stoxx 600 in europe, we are up 1. 7 , technical sectors are leading. What is helping our signs of easing u. S. China tensions, that is helping to put a floor under all of this. You have your italian bond yields on performing some of the euro area peers. Have italys Health Minister ruling out a lockdown. In the effect space, youre the 1. 1824. Lar at that is a weaker dollar story. When crude up as well, getting a firm lift, up. 7 . The net loss position, when it comes to money managers, according to the cftc data. I will flip the board and go to this powerful story about u. S. Equity futures that are called substantially higher due to 7. 7 would apply an open that would build on record gains, so that is where we are at the moment. Lets get to turkey now because the country says it is natural the the black sea will natural gas find in the black sea will likely be followed by further discoveries. A spokesperson f talked about hw that could affect energy trade in the region. This is a major discovery, the largest discovery of any Natural Gas Resources in our Continental Shelf in the black sea or mediterranean region. It is a result of years of work foreveloping our capacities not only energy but for our economic abilities to explore, partner with other countries, develop this technical capability, and it has also resulted in a different approach to our own geography. For a long time, the famous statement that geography is your destiny has been using used in a rather negative sense, but here it has a positive significance. Turkey is surrounded by three major seas, and we have found a natural gas in the black sea. That is really important for turkeys economy. Turkey has been a Transit Company country in the energy sector, now turkey will be an Energy Producing country. That is a new dimension. A very significant one that makes turkey more than just a producer of energy, but it puts turkey at a different level in terms of strategic location relations, regional and global fx. Turkeylikely is it for to find more energy in the black sea . Based on what our experts are telling us, there is a much greater potential. It is just a beginning of what they disc yesterday of what they discovered yesterday. It is likely that as they continue drilling over the next few months, they will be able to assessment of what is available there, but the chances are that it will lead to other fields. Drilling,terms of after the one that is not complete yet, they are going to be there are going to be new exploratory wells in the same region that is going to be drilled. That is true. Work will continue for exploration as well as for drilling at the same time. Because we are very hopeful that it will lead to other fields in to otherarea, perhaps areas as well. And of course we will continue to explore in other parts of the black sea, as well as in the Eastern Mediterranean and other parts of the mediterranean around other sectors and other places as well. So we are very much hopeful. Yousef that was our conversation with president erdogans spokesperson, eva rahim kalin. Lira at the moment depreciating for a third day, a Third Straight day at 7 35 at the moment, up by about. 6 . It is broadly a weaker dollar story. As we look toward the remainder of the week, the big question is going to be not just what happens with u. S. China tensions in the ongoing u. S. Election variables, but also the jackson hole summit and the speech by the fed chair. How is inflation targeting going to ripple through some of key assets . Across it throughout the day and the hour. This is bloomberg. Experience the ultimate sports hub. Where you can find games, news and highlights. All in one place, right on your tv. The xfinity sports zone. Use your voice to search every stat and score. Follow the teams you love. And, even get notifications with breaking news alerts and more. With the xfinity sports zone everybody wins. Now thats simple, easy, awesome. Say xfinity sports zone into your voice remote today. Tom this morning, the ftse up 500of the bottom, the s p up 51 off the bottom. The difference is american digital dominance. There are sure signs of inflation. Lumbar in america a moonshot. Iron ore in china, a moonshot. To get to the incomplete recovery, look for sustained unemployment. And virtual trump will be different from virtual biden. Pham, trump junior tonight, then the first lady, then mrs. Eric trump, then mrs. Kushner interviewing introducing her father. This is bloomberg surveillance. Anna edwards is in london, in for francine lacqua. I looked at the death statistics of the pandemic, and the success of the United Kingdom is absolutely extraordinary. The way they have brought down deaths from the