Awaits me tomorrow into next week. It will be interesting. We are dealing with it here on surveillance. Day monday in america, and its a very late labor day. Maybe the calendar year starts september 14 for the business year. We start strong with our first word news in new york city. Ritika the timing may raise some eyebrows. The cdc is saying that a Coronavirus Vaccine could be ready by november 1, two days before the president ial election and an aggressive goal that would require reviews by then. The virus has killed the most 100 85 thousand americans. Polls show biden leading trump in three swing states that President Trump won four years ago. Ayden has the edge in wisconsin, North Carolina, and arizona. In all three biden shows strength in women and minority voters. Visits to college campuses, meetings with local officials, and cultural events. The u. S. Matching chinese limits on american diplomats. The u. S. Economy is showing progress according to the federal reserve. The federal Bank Facebook report says a major roadblock has emerged for workers worried about loan defaults in the financial sector. Global news, 24 hours a day onair and on quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Tom thanks so much. Bonds, currencies, the turkish lira. Lets get right to it. Spx down 4, the s p futures. The vix, 26 point 15 on the vix. The yield market, i dont want to say much on yields. The dollar flat. After this bout of dollar strength, the euro to 1. 20. 1. 1830. The leader of breaking decisively rounded up to 7. 3 is a weaker lire for mr. Erdogan. Anna im glad you brought up the turkish lira check. Lets get to the data board showing european stocks moving higher catching up with the united states. I put in the banks stocks for you. This speaking to a broadening in the rally. New alltime highs. It wasnt just tech stocks for wants. I have this bank sector to reflect we are seeing a pickup in not just travel and letters stocks and tech stocks, but some sects. Beaten up nasdaq futures do look a little gloomy down. 4 . We will keep that in mind. In. T the pound we will talk to jordan rochester, and the pound is down. 3 . You mentioned the euro weaker, down. 2 . Lets go to jordan rochester. Good morning to you. What is happening with the euro and the pound . They are both weaker today. What was a stronger dollar, now a fairly flat dollar. Upthis european banks waking to the need to talk about the currency . Morning. Ood welcome live from my quarantine in the kitchen after our france trip. To answer your question, the currency has driven the currency, jawboning very lightly. The currency does matter and its moved a lot. We have had a few other comments. Off the record some of them, some of them on the record. For ecb Monetary Policy one thing thats more important is domestic consumption thanks to whats going on with covid19. Trade will impact their inflation and growth forecast, and thats what theyre talking about. It is not hypothetical, but it academic. The smaller hit the growth you will get to the currency aspect is more marginal than what would happen if we had a second wave. My thoughts are that massive run higher in the euro, and we are having profit facing because we 1. 50 to 1. 20. We had a lot of positioning. You look at the real money coming down extremely long, historically high. Move hi, a bitig of profit taking comments from the ecb. Next week we have their meeting where there is perhaps a dovish turn. Some may be looking for qe2 be expanded. Not next week. Rate cuts priced in over the next 12 months. Toa we do like the backdrop your shot. We have my living room and your kitchen. We take all sorts on this program. Have been moved to speak, philip lane was moved to speak it1. 18, 1. 19, 1. 20, but is one point 30 where things get messy for european exporters . Jordan that is a level where the ecb should be talking about it more. They dont have the luxury of doing much about this. 2017. Look back to mario draghi was starting to be concerned about the rise in the currency. The currency was rising for good reasons, which it is now. You have german fiscal stimulus, and big size for the first time in a long time. Many reasons to be optimistic on the euro area. In 2017 they were trying to raise rates. They were looking to normalize policy at the end of qe. They dont have the ability this time to go from hawkish to a dovish stance. Right now they are dovish. They have cut rates. The whole shebang. They cant do a hawkish to dovish privet to move the currency lower. All they can do is talk about it. They are in the same position as the s p, extreme qe and the ability to do more qe, but if they try to do anything less, be dovish, they cant add much to the fire is the point im trying to make. They dont have the benefit of a hawkish to dovish pivot, they can only be more dovish than they are now. Tom you mentioned quarantine and i have been looking at the trade balance folks for the united states, which has deteriorated off of the little rebound. Quarantine due to the decline of world trade . You have restrictive process, if you will, within the united kingdom, and around the world. What you think world trade will do, and what will it mean for the dollar . Jordan we have had essentially a big change in globalization under Donald Trumps stance towards china. The growth in globalization has slowed. The question is, does it reverse . The data using the last couple of months, it is very noisy. We wont know the true outcome. You are in quarantine, you are at home, and there are still retail sales doing well, just online shopping. It doesnt seem clear globalization is over, its growth has just slowed away from china towards different asian economies. Tom there has to be an opportunity now into september and october within the noise. What is the jordan rochester call within the noise . Ardan we have essentially second wave coming up. The u. K. Is probably going to be one that stands out over the two. Theth or u. K. Has been trading well. The pound versus the dollar, its amazing how high we are given the risks ahead. We have the furlough scheme ending in october. Most European Countries have carried on their scheme to 2021. The u. K. Will stand out with a big unemployment spike in november. Yesterday Michel Barnier rhetoric that no progress has been made and the stalemate is getting worse with no talks being made. At the end of this month we will start to get legislation from the eu after what i know deal brexit will mean. Short pounds in the months or two ahead will be one of the trades that eventually works. Tom one of the headlines is maximum yen stasis. Reaffirm your yen call. Jordan tom, we are looking to essentially yen weakness. That stands out. You can see the contenders for abes position talking about continuing abenomics. When it comes to the end the balance of pigments is significantly changed since the Global Financial crash. You wont see big inflows. Can expect underperformance versus the likes of euro. 1 or 2 ing a appreciation over the next month or so. It could go further if we say abenomics with whoever we se e secede abe. Anna the stimulus programs from various parts of europe, that made quite a lot of headlines in this part of the world. The french stimulus making waves today. Does this add to your what does this do to your expectations around the euro, particularly versus the pound when you draw attention to the fact we see the end of the furlough in october. Jordan the french headlines, one hundred billion euros or so. The german numbers earlier this year were fantastic. The question is will we see a similar round if we see a bad second wave of the virus . The question i have is do politicians start to say weve done as much as we can . Its up to the markets to handle it . That is the big question for this winter. If they talk like that we have seen some of that in u. S. Fiscal debate, hence nothing has an agreed yet we could see moves in equities. Maybe a bit more questionable. The u. K. Has had a big fiscal stimulus. Reform has been fantastic to sting the housing market. That has encouraged the housing sector. Other sectors are struggling. We have the cliff edge with the further scheme coming to an end, and the budget. When the budget happens around november we are talking about tax rises perhaps for corporations. The u. K. Acid class they suffered asset class may suffer further. The french cuttingank you. Jordan rochester stays with us a little longer. Pershing Square Capital ceo after that headlines inund airbnb at 1 00 p. M. New york and 6 00 p. M. In london. This is bloomberg. Tom good morning. Anna edwards in for Francine Lacqua, and tom keene in new york. With us is jordan rochester. To of the themes going in come is at tomorrow decline in aggregate demand. What is the history of what the u. S. Dollar does if you see a decline in global aggregate demand . Jordan thats a tough question because its relative to foreign exchange. The u. S. Is seeing a decline in Global Demand come the u. S. Is outperforming, the dollar strengthens. It tends to happen in recessions when the u. S. Bounces back relatively quickly to its european peers. This is a little different. You have seen a falling Global Demand, but not so much in europe versus the u. S. Where it is suffering from the higher case count of covid. In this case it is why the dollar is weakening, and i think that plays out. Plays out in the months ahead. Odd the word im using is is well. Wheres the odd that in foreignexchange . Theres always a oneway bet somewhere. Is it stronger in rmb . In the what happened u. S. And china is we have the in negotiation earlier this year, the covid19 crisis happened, there was a lot of talk from donald trump about how he would make china pay for that, then we had the phase one evaluation two to three weeks ago, and essentially everything , keep going. Boo we can expect very little from the u. S. Administration from china on trade into the election, perhaps the administration not wanting to ruin the rise in the s p. The story, part of china outperforming as well, domestic consumption looking healthier than elsewhere. Ive already mentioned this sterling is performing so well. We actually have currency spaces like australia. The aussie dollar is not rising as much as other currencies, like the euro for example. We have to get used to that new world. Anna let me ask you about other currencies that have done well this year so far. It has been a topsyturvy year of downs and ups, and ups and downs. This scandinavian currencies are doing well. The swedish and dana krone. Do you expect a continuation, or do something change . A continuation. The norwegian krone was one of the biggest sells during the Coronavirus Crisis in march and april. You had the oil price crash, negative oil prices, which we have never seen before. Payments really got hit. Since then we have seen a massive swing higher against a more relative normal price for oil, and norways physical stimulus helped the pension fund. Norway is one of the currencies that when good times are good it does well. The same with the Swedish Krona, but to a lesser extent. Marks is what happens if the Swedish Krona moves more. Different. Ranc is if youre asking for a short, selling the swiss franc and buying the euro works well, given that the swiss franc remains relatively strong. Tom what is not range bound is the turkish lira. It is waiting on seven point 40 this morning. Significant weakness do to. 43. At what level significant 7. 43. Ss at at what level does it unravel for mr. Erdogan . Jordan the central bank is looking pretty weak. Some measures are negative after contract settle in a few months. I am not a turkish expert, that it is something i wouldnt be looking for in mike ross trade. In my cross trade. Tom thank you. Across many foreignexchange pairs. Onto jobs day. One of the areas of the American Economy really improved, strategic and tactical change is retail. We are thrilled to bring you the gentleman who made that modern saks fifth avenue. Us. With worldwide from london, from new york, this is bloomberg. Ritika lets get your Bloomberg Business flash. Steps to counter restrictions on semi conductors planning a sweeping set of policies to build up the domestic chip industry over five years. The Chinese Government is putting the same priority on the effort it gave to building its economics capability. The fcc is investigating robinhood markets. The question is if the online brokerage informed clients they sold their stock orders to highfrequency traders. It is related to disclosures prior to 2018, when it made the information easier to find on how it made its money. A group of buyouts made a takeover offer for kansas city southern. Baxter group and Global Infrastructure partners made the wason a previous offer that turned down. Kansas city southern has a market you of more than 17 billion. That is your Bloomberg Business flash. Anna thank you. See European Equity markets up by just shy of 1 off session highs. We see that on nasdaq futures. They take down. 6 . The Banking Sector in europe is fairly resilient. The pound is on the back foot as we approach the end of the year and a trio of issues in the u. K. Economy. Tom very interesting with jordan rochester. The data right now, and im hesitant to give you direction on the red and green on the screen. ,ields up a little bit fractionally, but i dont want to oversell that. I would point out it is the turkish lira in retreat. Per dollar. On politics in america, lsc, next. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. Tom good morning, everyone. Bloomberg etf iq Europe Bloomberg surveillance. Tom keene in new york, anna edwards in for Francine Lacqua london. We do this within the jumble of the markets and of course the labor economy in america, we will get some good snapshots on that over the next two days. Jacob parakilas is at the london theirl of economics and is associate as well. In preparation for this, i love the phrase you said, know what we dont know. What dont we know right now about this campaign, about these two candidates . Jacob well, we know almost everything there is to know about the candidates. What we dont know is what the impact of the pandemic will be, if this will be an election that t will be carried out largely by mail, which is unique among american elections. We have seen donald trump cast doubt, without foundation, i should say, on the integrity of mailin ballots. Cuts, which may impact the Timely Delivery of mail ballots. We dont know about the circumstantial issues surrounding the election. We also dont know what issue is going to be prominent in the couple of weeks leading up to the election. Covid has really dominated most of the year, but has taken backseats at various points behind particularly issues around police, racism, and the intersection of those two in american society. Tom what is your study of the history of this in terms of the issue that matters on the first tuesday of november . Mattersa news item that october 29, 30, 31 and into the month . Or is it something framed up weeks before . Ob i think its something except on the margins i think its something thats framed up well before the actual election. I think something that has been fairly well studied about the 2016 election, and we have to be careful to draw parallels to 2016, because every election is unique, but that was a close election. What was potentially focused on in the last 10 days was james comeys reopening of the fbi investigation and the announcement publicly of reopening the investigation and that really framed the last part of the election. It led to undecided and voters who did not like either of the candidates working more for trump. What we have seen in this election is a much more stable set . Of pllling polling. Leading basically the entire time since last year. It will take a very significant issue in the final weeks of the campaign. I think the basic structural factor, that both of these candidates are well known and most of the electorate has made up their mind. How many of those people actually end up turning up to vote . How many will have their ballots counted . And of course, where in the Electoral College will those counts happen . Anna i wonder if a vaccine is a significant enough issue to change things. We have seen moves by the u. S. To prepare various parts of machinery for a vaccine coming before or at the very start of november. If that were to happen, would that be something that would stick to either one or what it boost trump in his potential . Is it something that will be associated in the mind of voters with his campaign . Be a i mean, i would little hesitant to make a prediction about how a perspective prospective vaccine we dont know what the amount is going to be, we dont know if its going to be given with the whole heart of approval of the fda or rushed out to meet that deadline for political purposes. We dont know what the framing of that is going to be. There is already a lot of vaccines. Tion of a significant portion of the American Public already says that they wont take a vaccine, which is frightening from a Public Health and political perspective. We cant even agree on the basics of Public Health measures, that makes person hard times that makes for some hard times ahead in terms of controlling this and future pandemics. The question about vaccines is, since its going to fall into such an openly politicized era, are voters who are genuinely undecided, of which i think there are relatively few, are they going to actually be swayed by this . Are they going to be convinced that this is fundamentally something that was done on this timing for political reasons and or that the vaccine is not necessarily as effective . Even if it is effective, having a vaccine and actually distributing it are two very different things. Anna what about on the economy, something President Trump often polls well on . His their time for him to do something to change things on that front . Jacob you are right, the economy tends to be the brightest spot of his polling. If he can convince the democrats, who have generally been willing, arguably against their political interests, to pass another stimulus package, another bailout for particularly individuals and Small Businesses, then i think you might see some more encouraging economic numbers. You might see movement for him on that basis. The negotiations have been stalled for weeks. There seems to be a serious disagreement, not only in terms of the scope of a bailout, but also what it would be directed to, what it would include. As the election gets closer, its hard to imagine the democrats in the house and the republicans in the senate actually being able to agree to something that would land on the president s desk. Tom thats true as we get towards november. Jacob parakilas, thank you so much. Shes at the London School of economics. Shouldcdc says states prepare for a Coronavirus Vaccine to be ready just a couple of days before the u. S. Election. President trump previously said he thinks a vaccine will be ready by election day. That claim has raised questions about political interference in vaccine reviews. President trump is once again denouncing voting by mail. He told a crowd in North Carolina that if they vote by mail, they should also go to the polls and try to vote a second time. He says thats a way to determine whether mail ballots are actually counted. That can lead to voters violating the law if they try to cast second ballots. President trump has ordered a review of federal funding for what he called anarchist cities. It is aimed at new york, seattle, washington, d. C. , and portland, oregon. Democratic run cities and have had protests demanding real justice. In baseball, hall of fame pitcher tom seaver has died. He turned the new york mets from lovable losers to world series 1969. Ons in pitc only one of two wins. O record 311 he was 75 years old. Global news 24 hours a day, onair and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Knowing that the giant was Walter Johnson of another time and place, what was amazing about tom seaver was he did not throw the ball, he pitched the ball. This is so different. It was absolutely extraordinary. They are all different, all these giant pitchers different. Tom seaver was so strong and got so low to the mound. His right knee would touch the mound as he pitched. To trade to fake tried fake that and you could not do it because you are not as strong as mr. Seaver. Tom bloomberg surveillance. Good morning, everyone. I am tom keene in new york. It is jobs day and that will be tomorrow. Days claims daytoday today. Odd, odd, odd. It is a most unusual economy in a most unusual pandemic. And we need perspective. One of the assays of the summers from one of our best, andres velasco, the former chile finance minister but that barely describes his academic as students excellent. Wonderful to have you. Congratulations on really going back and looking i mean, you must have read up. You looked at the myths. What did we get wrong about the linkage of an ancient theory with modern fiscal policy . Tom. S thank you, it is a very important thing. I think governments around the world are doing the right thing ynesian, when there ke because in bad times, we have to spend. Wet does not mean that should carry on doing the same thing when the crisis ends. Kinds of two countries, those that did their homework before the crisis and were in position to borrow and spend today and those that did not and have no fiscal space today and they cannot spend more to help Small Businesses and families. The consequences of that are terrible, not just in economic terms but in human and social terms. We see many countries in the world who got that wrong and are not being able to follow through with the right policies today. Tom part of this, and i give joe stiglitz great credit for emphasizing the gu. Do you have a confidence that the greater developed world or less developed world can generate the growth down the world to pay off this fiscal expansion . Andres thats a very big question. The relationship you are mentioning is one between the speed of growth of the economy on the rate of interest on debt. You can see it is pretty intuitive that if the economy is going very quickly and the Interest Rate is not very high, then debt does not pile up and you can spend more without necessarily having to raise taxes in the future. That is a situation today, because Interest Rates are as low around the world as they have ever been. But we cannot be entirely sure that this will be the situation forever. It is clearly not the situation in every country today. As long as the Interest Rate is very low, you know, you can spend, you can borrow, the that debt is of relatively small and everything is fine. It is pretty likely that that will be the situation for the next year or two or three. Will that be the situation five years from now . Who is to say. That is why we have to be careful, not necessarily in holding back today but in making plans today to undo some of the spending a couple years from now. Some countries have the Political Institutions that will allow them to do that and some countries dont. Thats where we can see some trouble in the future. Anna professor, good morning to you. With that said, what do you think keynes and has a general theory of employment, interest, and money, what would he have made of the u. K. Context right now . The plan to end of the furlough furlough end the scheme at the end of october. What do you think his recipe would be or what is yours . Andres i think his recipe would have been, and i share that view, that youve got to keep the Government Support as long as the economy needs it. It is pretty clear that the crisis in the u. K. , in the u. S. And in much of the world is far from over. Yes, businesses are continuing beginning to open up. We dont know how quick that reopening will be. It is pretty clear that many businesses will not be viable in the future. Many families have gone through their savings and today, are cash poor. As a result, withdrawing support for families, for for load workers causes furloughed workers causes a very big risk that not only may we have a second wave of infection, we may also have a second wave of unemployment, job losses. The two things are related. If people have to go out and work because they run out of cash, it is much more difficult to stay home, much more difficult to keep social distancing. The risk of a spiral is very high. We have seen in other countries in the world. Lets hope the same thing does not happen in the u. K. Anna if the government is trying to work out how it wants to pay for all the assistance that it has given already and will have to give to families in the u. K. , professor, what limits should they keep in mind in terms of the ability of an economy like they u. K. To borrow . Do we know what does them is anymore . What the limit is anymore . Andres we dont know. It is clear today that the limit is higher than it used to be. The Interest Rate is so low that you dont have to spend a lot of money paying interest every year and you can spend that money on social support, infrastructure, and what have you. That is the good news. The bad news is that there is a limit. Economies around the world are testing that limit. For countries like the u. S. And u. K. , we are not quite there yet. Public debt is not 100 of gdp. It is much higher than that in japan. We are not there yet. As a result, i dont think this is the right time to go back when it comes to spending and support for families. But we should be mindful that there is a limit. And just as governments are spending more today, at some point in the future, they will have to spend less or raise taxes. Thats a conversation the u. K. Will have to have at some point. Tom thank you so much, greatly appreciated. Francevelasco, former finance minister, from the London School of economics. Dow futures 15. Here getting up to 8 30 this morning in new york and in washington and the claims report. An update on the pandemic. Challenges in the midwest. Jason farley of john hopkins university. Stay with us. This is bloomberg. I am anna edwards in london with tom keene in new york. Lets talk about what is happening in latin america now. In brazil, specifically. 47,000 new confirmed coronavirus cases has pushed the countrys total to almost 4 million after social distancing measures saw the biggest economic drop on record in the second quarter. The Central Bank President says that he sees the economy shrinking 5 this year. He spoke exclusively with bloombergs Erik Schatzker. The Fourth Quarter will be better than what the market is forecasting. For next year, we also think that our growth is better than the forecast. And obviously all depends on a lot of external factors and general factors related to the way the economic sees our program, the credit we can generate and the way these variables interact. Erik based on what you just said, based on what you can see now and based on your expectation that the Fourth Quarter is going to be, as you said, slightly better than what the market expects, what would you anticipate at this moment year decline for 2020 will be for gdp . Yearound 5 with the next growing a little bit more than 4 . Cases, that is better than as he pointed out, some private economists see gdp dropping by less than 5 , but growth in excess of 4 would be substantial for 2021, particularly considering where the economy was in the second quarter. You have two groups of people. One group is revising down the shaving theyear and growth of next year because they think the stimulus is stronger next year but there will be this headwind when the stimulus faces out. Another group of people say, what i am seeing is a strong recovery. I think that the assumptions that i had in terms of the economy styling did the due to the pandemic, the reaction has been better, so they are betting this year better without changing next year. Erik like many countries, brazil has been handing out cash during the pandemic to support the economy and help families. Earlier this week, the monthly aboutd was cut in half to 55 from 600. What impact is that going to have on the pace of the recovery . I think it is important to ofntify the Overall Group measures that we are taking to face the pandemic. When you look at what the other countries are doing, you can basically divide in five parts. Monetary policy, which brazil did aggressively. Liquidity and capital measures, which we also did aggressively. Liquidity measures amount to 60. 7 of gdp. Capital measures amount to 17. 5 of gdp. So those are the two groups. Then, you have taxes, which is either delaying or canceling taxes. Have direct transfers and then you have credit lines. There is a huge program of direct transfers based on the lower part of the population, the poorer population, the people who needed the most. We had a branch of credit programs in place right now. Some of them took longer than expected, but all of them are in place right now. We actually had some that started this week. When i look at the amount of money that was transferred directly, plus all the credit that as Strong Enough to take us between january and february of next year. There is a time when we will phase out and we need to phase out. To anothering dimension, which would be a lack of credibility in the fiscal front. I think brazil did what it could. Tom Erik Schatzker with the gentleman from brazil. We are going to move forward to the jobs report. We have claims coming up, and then a real mystery about the friday jobs report. We are thrilled that chris rupkey will join us from mufg. We are going to really dive into the report right here and try to glean the many crosscurrents of the American Labor economy. We do that with futures at 10, yields fractionally higher as well, some dollar strength. This is bloomberg. Stay without. With us. The big events are back. Xfinity is your home for the return of live sports. Tom this morning, the blizzard of stories that make up this most odd end summer of summer. Today, claims, tomorrow, an un forecastable jobs report. The vix doing odd and strange things. They are driving the doubt back over 29,000. President trump says vote early, vote often. Vice President Biden says vote once and as early as your permitted. Good morning, everyone. Bloomberg surveillance. Tom keene in new york, anna edwards in london for Francine Lacqua. I have to get three seconds in on brexit. I dont understand the british response, if any, to mr. Barn ier, who seems to be the only one not taking the month of august off. Anna i dont know. Are we running down the clock . I am sure that is not the official position but there is a sense of that. Brexit happens