Preps for more restrictions. Plus microsoft beats estimates on booming cloud demand. Another big earnings day in europe. Numbers fall from Deutsche Bank in just a moment. We speak to the cfo. Saving at Deutsche Bank, swinging around. 182 Million Euros of profit. Fic up 47 . Fic out wall street banks up 25 . Deutsche bank, good volatility for them. Even though you have repressed volatility in the market, beating the United States wall street average of 25 percent, swinging to a profit, confirming fullyear credit losses provision. Let me just to give you some of those details. They are confirming that for the overall year. The cost goal is going to be 17 billion euros. That is what they are telling us. Of 19. 5 target goal billion, the net income, the numbers come so hard and so fast. Let me refresh my screen. They arethe reaffirming. I need to get this number. They are reaffirming positions for credit losses. That is coming through. 2. 6 2 billion, that is interesting. The estimate was for 3. 2 3 billion. A big beat on the trading side of the business. The wholeswung business into profit. That is incredibly important. The ceo confirmed his goals really, his profit goals all about revenue. That was just over a month ago. He says analysts have stopped asking the question on the capital question. They are reaffirming their 2020 provision number for credit losses. We will dig into those with our reporter and we will hear from the cfo. That is at 7 00 am u. K. Time so we will be able to dig into some of those credit losses and the outlook and in terms of the myths on that line the m iss on that net income line. A reappraisal of risk. Mr. Einhorn a green light z tech markets are Green Light Capital says that could be europe is running out of options. U. S. Hospitalizations over 10 . Is the blue sweep dissipating in terms of risk . Mr. Trump and myers as you could get 4 inflation on a blue wave narrative. Take a look at bitcoin three year high. Is that protection trader is that high spec millennial trade . Very little to protect this currency. Day five of the attack, the yuan. The cyclical function has been removed. What does that signal in terms of the proclivity for a weaker yuan from the pboc . And bonds, maybe they are the haven of choice. Traders bailed on their shorts and we are back to sub 0. 8. We are talking about the virus. The outbreak in europe continues to intensify. Cases that records in france. The most deaths since april. Moving very fast to running out of options around europe in terms of momentum for potential lockdowns. Good morning. Thats right, and we could get a big announcement, a real uturn, a big shift in strategy, from Emmanuel Macron today. E will be speaking there has been a lot of speculation, this idea he would go for a weekend locked down, that he would extend that curfew, has now been pushed aside. There are reports suggesting the french government will announce a fourweek lockdown that would go into effect starting friday. That would signal a huge shift in strategy from Emmanuel Macron. It would underline the severity of the crisis. I want to highlight that this is not official yet. That speculation has been gaining momentum. I would point to those figures we got yesterday. Number of infections but also dead people in the space of 24 hours, becoming very concerning for the french government. And in terms of how receptive europeans are to the potential new lockdowns, whatever you want to call them, they are penal arent they . I would say this is the elephant in the room at this point. The measures taken in march worked because people respected them, but the social context has changed looking into those past few weeks we have seen in which people do take to the streets, people show they are angry. A lockdown does have repercussions on mental health, on your personal life, personal finances. A lot of that pain is selfinflicted. For weeks we heard from politicians that europe was ready for the second wave, that hospitals were in good shape, that a lockdown was not needed. Clearly that has changed. We are seeing Economic Impact filter through. Measures will only work if people are willing to respect them. Manus thank you very much. It is all about respecting the rules you are given. Maria tadeo in brussels. Let us take a quick look at the markets. This angsts, we have in regards to covid. A stimulus package before next weeks election fade. The tech rallied in the u. S. Session on positive earnings and m a. Investor David Einhorn believes stocks are in a bubble. He says the tech bubble is defined by lack of regard for and the top may have already occurred. Great to have you with me as always. Lets just stand back for a moment. Everyday i try and ask a new question about politics, covid, and physicals. Fiscals. Do you get the sense markets are at the foothills of a reappraisal of risk . What are we reassessing . Is it politics . Fiscal . Covid . What is the most important narrative . Let me start with what has been least important. The fiscal. Fiscal stimulus is coming after the election. It is more of a timing issue than not getting any at all. The far more important is the covid situation and of course the election next week. Covid you have gone through the news we are getting across europe. It is the pickup in death rates we are focused on. It is going to start changing individual behavior. There has been this perception of the second wave being less dangerous. He data does show that nonetheless, with the death rate picking up, it is going to have a much more Significant Impact on Economic Activity going forward. Politics as well, i think the market over the last 10 days or so has been pricing in the prospect of a new wave. That has been weakening the u. S. Dollar in the hope of large fiscal stimulus numbers with aggressive fed monetary easing. The real clear politics polling which i just looked at this morning in terms of the average gain, the average need for biden, it is down to seven Percentage Points. It was 10. 3 Percentage Points on the 11th of october. Since trump started campaigning, he is making headway. It could be looking a lot tighter than what markets have been anticipating will make it to election day next week. To election day next week. You have said the dollar is not behaving itself as you would expect. It is failing to follow the risk of momentum. Next wednesday after the election result, trump is back as president and they might even take the senate. These risks are all real. What does that do to markets first of all and then dollar . I think fx is where you are getting certainly the pricing of biden more clearly than elsewhere. That is our sense. Models, thattion gives us fair value over shortterm looking at general Financial Market variables. What we have seen across g10 is havea lot of these models started to diverge away from those. In unison. The levels of divergence in 7 . Dollar is about 6 to the dollar is weaker in spot markets than what we would consider fair value over the short term. With that happening in a number of different g10 currencies it does look like the markets are beginning to price in her has been beginning to price in the prospects of a biden victory. A clear trump victory, we see a jump in the u. S. Dollar, the risks of tariffs come back into play. A smaller fiscal stimulus package would be likely, assuming of course republicans come out with a clean sweep. That circumstance, eurodollar contract lower by 2 to 3 pretty much immediately. Manus some pretty big calls there. Up, we speak to the subject ceo. He joins me next. This is bloomberg. Manus lets get the first word headlines. Sales have topped estimates boosted by demand for cloud services. Revenue climbs 12 marking the tech giants 13 straight quarter of doubledigit growth. The ships to working at home has helped internetbased services. Microsoft is number two in cloud behind amazon. Italys government has approved a new relief package to help sectors hit hardest by restrictions. The measures are worth 5 billion euro, including targeted aid amid growing protests of unrest across the country. Hundreds gathered in rome after of violence in milan. Chinas economic recovery is showing mixed signals while broadlyg steadily steady in a tober with the Property Market also weakening as the Worlds Largest exporter, china is exposed to a worsening outlook in the rest of the world. The domestic economy remains robust. More likelykers are to lose their jobs after being furloughed according to a survey. About a fifth of young people off. Been laid a similar percentage of global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you very much. , the brabia this week 20, the official dialogue with the Business Community ahead of next months g20 meeting. Happening at a time of unprecedented challenge for the Global Economy. The president is yousef albenyan, he joins me now. Also of saudi chemical giant sabic. Thank you for taking time to be with us this morning. Risks thisthe morning. I just covered them in terms of covid. Your message from the business a rs to the g20, is it avoid shutdown at all costs and look toward fiscal largess . First of all, good morning. Yes, since we started our presidency, nobody has anticipated covid19. This is why we immediately came response very robust to this crisis, and we have created a platform where we invited more than 600 Global Business leaders to come up with an interim recommendation. One of it of course, we are not in favor of a complete letdown it hassystem because implications economically and socially and it will put pressure on people. We have to have the right balance between what governments need to do in terms of managing this crisis, but at the same time, the responsibility of people to comply with measures authorities. We think we are not in favor of a complete lockdown. Thatwe need to recognize is a challenge that needs to be handled from the government side and as a Business Community we have to do our part as well. The people you are working on in the be 20 or run Major Businesses. B 20 run Major Businesses. Will you encourage g20 to borrow and to be fully engaged fiscally , not to back off in any way . We need to recognize the g20 has been very responsive to this crisis. If you compare the g20 leaders response to the financial crisis in 2008 and 2009, this is completely different. This time they were really proactive. Came up with stimulus packages to reenergize the economy. This is a very very good action from the g20. This is why from the beginning, the b20 Business Community, we have fully engaged with leaders. We have submitted an immediate letter working with the who and assisting. Ist we need from the g20 stimulus packages supporting the economy. Manus give me a sense of what the b 20 nobody knows how next week is going to go, but that relationship, how important is it that that relationship improves for Global Business . I think what i can say from the b20 perspective, we feel it is free trade is very crucial. This is why when we submitted our 25 policy recommendations, we have really focused on reenergizing the Global Economy to make sure we go into a normality. Have much better access to funds for startups and smes. We need to energize the women in Business Community. B20 saudi arabia has higher participation of women, more than 44 on chair and cochairs. I would be remiss if i did not take the couple minutes to ask about the Major Business you run. You have turned back to profitability at sabic. Clearve told us it is not the impact of covid. How confident are you in maintaining profitability in 2021 . To what we need what we need to do is focus on liability. We need to focus on capex disciplines and managing cost. And alsour core focus serving loyal customers. This is what is our focus now. Despite the fact of covid19 implications, the sabic operating model has proven to be one of the best. We have had a very tough year. We were able to increase our protections by 8 . We have a very Strong Customer base globally. We have strong marketing and strong supply chain. What we see also on the remainder of this year and next year, we see there are still some supply more than the demand. This is where we need to be the end of this year and next year as well. Manus can i ask you about leverage for sabic . This is the other big issue for the chemical and oil industry. Be next 12 months would you preferred to borrow more to protect the dividend . I can tell you at this point, we have no plan to borrow, but i think we have a very strong Balance Sheet. Were able to maintain our we have really raised the longest tenor of bonds just two months ago. We have a very strong balance to provide sabic to maintain our policy which is basically to maintain growing dividends. I think we are in a very strong position from Balance Sheet to , serving ourgrowth existing business, and of course combined with our dividend policy. The next time we catch up i can ask you about the bond markets. Good luck and well done with your b20. We wish you well and i look forward to returning to the kingdom as soon as this covid situation improves. Thank you, yousef albenyan. Chief executive officer at sabic. Much more to come. Manus when it comes to fixed income and commodities Deutsche Bank leads the pack and has supreme positioning in the United States. This is the integral point. Are we at the beginning of a new narrative of Deutsche Bank . The same scene comes through on the provisioning for bad debt as we have hsbc yesterday. Bad debt provisions at 276 million, down from 761. That is to do with provisioning. The top lines are that they are raising the fic revenue view. Significantly higher. They now see the full year significantly higher on that side of the business. They are confirming cost cuts for 2022. E have the cfo this is bloomberg. Manus welcome to the middle east headquarters in dubai. It is daybreak europe. On ahite house gives up preelection stimulus deal. With six days to run. Europes covid resurgence accelerates. The u. K. And france report the highest number of deaths in months. Emmanuel macron readies new measures as he faces protests over restrictions. Boomingosoft beats cloud demand in another big earnings day for europe. Deutsche banks debt traders snap a losing streak. We talked to the cfo. Are you assessing the right risk . Fiscal is notsays coming. That is not something we need to preoccupying our minds with. The changing complexion of the percentages of bidens lead over trump, it is diminished from 30 . From 10 point over to seven points over. There you go. Risk in the United States of america. This is global covid risk. This is a reassessment of bubble territory according to einhorn. , a lessperhaps, perhaps blue sweep narrative coming to bear on the equity and the dollar trade. You have european futures down. That is ground zero for covid risk where we are running out of options. France and germany and italy have to ratchet their Covid Response mechanisms. What will that mean . Stoxx 50 down. Where do you go . If you are a millennial, im not a millennial in case nobody has noticed. As abitcoin appeal to me haven . Probably not. Lira, that is no haven for anybody. The dam breaks on defense of the currency. The yuan, the chinese, the pboc, have removed the ccf. The countercyclical smoothing factor introduced in 2007. Lets talk about that. Another attempt to move that drank in the yuan. In the yuan. The central bank has intervened. Past 6. 6. D we put the chinese currency back where it was in june 2018. That is where the trade talks broke out. Halpenny is with me. Now i wont have to work it out. What does it mean . To attempts by the pboc weaken the currency. Do i take it seriously . It is a big step. , it is a message to the markets of the potential increased flexibility of the currency going forward. The countercyclical factor was that component that allowed for whatjustment outside of would be the Dollar Movement variables more generally in the broader Financial Markets. Thisat context, removal of is a message of greater flexibility going forward. That could be quite significant because if you, like us, have a view of the u. S. Dollar weakening in 2021 and you extrapolate that dollar, that brought dollar forecast two to ars the ny, dollarcny, it reinforces the arcny movingoll lower. It is going to allow greater flexibility. 5 drop in the dollar is going to have repercussions all the way around. Lets get to our positioning. Dollaryen sub105. That was a big break for us. We are 104. 24. You have yen on the move higher. Outperform as a haven relative to treasuries . A lot of people decry treasuries that were not behaving themselves. I know you have a view on swiss. If i have to choose my haven in this arena, is it yen over swiss over treasuries . I think what covid has done is it has dramatically changed the flows in relation to outflows from japan to the rest of the world. Which historically, those outflows, the less hedged they are, the greater the impact on weakening the japanese yen. When i look at the crossborder flows, for example, the Life Insurance sector, which people look at quite closely, on a 12 month basis, the Life Insurance have been netn sellers of foreign bonds. That tells you the has been this entrenchment. The collapse in global yields has led to the stalling of outflows. I think those will reemerge and they are starting to. The cost of hedging has gone down as well. In this world of uncertainty which going to continue, the appetite for hedging is going to be a lot greater. On top of that you have the cost of doing that being much cheaper. That, to me, is going to put and continue to put upward pressure on the japanese yen. Levels we should expect below 100 in dollaryen. In that sense, the yen is a steady, reliable source of haven. The swiss franc as well. We are going to get the currency report from the u. S. Treasuries department. It has been parked. Swiss have blown completely the last criteria in relation to its license as a currency manipulator. There is a risk when the report because of the degree of intervention that has taken place which is greater than what the u. S. Treasury hundreds criteria. Switzerland being a currency manipulator could raise speculations on the swiss authorities pulling back. That could put upward pressure on the swiss franc. Those currencies remain the most reliable. I dont think thats going to change. Manus we have to leave it there. We did not get to the rba. You can come back on. On daybreake back europe any day. You dont want to go to those later shows. Come back to us. Penny. Hal lets get your morning calls. She gets up early every day. I would never complain. Looking at these Hedge Fund Manager calls, starting with einhorn, he is warning of a massive bubble in tech stocks. You have been talking about this. He sees a couple of signs. The high valuations, the ipo, some of the volumes in the speculative products. He specifically says in terms of the timing of this bubble that he thinks september 2, 2020, the bubble has popped. If so, Investor Sentiment is shifting from greed to complacency. So what do you do . Einhorn is building a basket of shorts. A reason the is secondtier tech companies, i should point out, David Einhorn has not had a good run. From his main fund in september. Manus he is short netflix and he is short amazon. These are very big, brave trades. We have a viewer that was very they are. Warning. A what is miller saying . Thisl full of doom morning. I wish i had optimistic calls. Saying lowerer equities from here on out. If there is a democrat sweep there is going to be more inflation, higher taxes, and that is that means were equities can go is going to be capped. He says we have borrowed so much im skeptical equities will give us any kind of return. He does say in the short term, should we get a vaccine, should there be stimulus, that will , but otherwise he says the employment rate could be 7 and four years out we could have inflation topping 4 . Maybe that goes back to black rock 24 hours ago. Great to see you. We will do it again tomorrow morning. Dani burger on the markets and the notes this morning. Eli lillys antibody therapy trial will not resume after evidence it is unlikely to help hospitalized covid19 patients. We speak to the drugmakers ceo next. Manus this is bloomberg daybreak europe. The turkish currency breaking 8. 2 against the dollar. The can stop the slide of worst weekly decline since 1999 . We have our managing editor for Global Emerging Markets now. A high spectis attack on the currency. What does it take to get the central bank to react . Other words, what is the pain point . For a lot of people it is saying we are very close to the pain point now. The lire is down 27 . This year it is down, since five days it has had its longest run of weekly losses since 1999. Lower ishows about 35 a time when a central bank might do something. Then again, these are very difficult and different times to previous episodes. But there is a track record of the central bank stepping in and bringing a bazooka. We saw it in previous episodes. We saw a big hike a couple years ago in a similar situation. I think that is where a lot of the expectations lie, or at least the hopes if the central bank is going to get things back on an even keel. It needs to do Something Big and something fast to send a clear, unmistakable message to the market that it wants to protect the currency. The finance ministers delivered a clear message saying , no plans for capital controls. How important was that message . It is significant in that he felt it necessary to say, we are not going to impose capital control. Turkey does not have much of a history of capital control. They have been reluctant to do such things in episodes like this. The very fact he had to say i think was the signal to the market that this is not one of the tools we are looking at. We are going to get the lira find its natural level, which traders tosignal to keep on selling. Then again, you never know. We might get this sudden emergency hike which seems to be what the market thinks is the most logical thing for the turkish for the turks to do. That would send a big shock through markets. It will probably hold up lira for a while. The backdrop is still very negative. We hear about spats with europe, the sanctions, the possibility of sanctions with the u. S. There are a lot of other things going on. Indeed. Lets see if there is one of those shock and all moves from the central bank. The very latest on the lira. First batch on former earnings strode mixed results amid the virus with eli lilly tumbling after flagging a 400 million expense. Not a lot of cheap business to do. The expect key data on vaccine front soon. Our business, we need data. It does not make sense to guess which would be the most effective. The good news is we will know that and we will know that soon. The early ones as you pointed out are the mrna, a new technology that has never produced a vaccine before. It looks promising, the ability to produce our own antibody response. That is a good sign for defeating the virus or preventing infectious spread. We dont know how long that will last. Other approaches have produced vaccines. Modified virus, taking different viruses and mounting elements of the covid virus on them, and those are more proven. They are harder to scale, but they also may produce a good response. Mostly im confident because we have so many shots on goal, really an unprecedented number so quickly. I think science will win in the end. It is hard to pick a winner at this point. John, that is a hockey phrase, not a sock a soccer phrase. That is a hockey phrase. Im going to interpret it as a soccer phrase. You mentioned the word scale. I want to return to antibody. Help me understand how difficult it is to scale something quickly in large amounts as soon as you get the green light. It is difficult. We actually started commercial manufacturing in the first week in july. We had to basically aim at a target that had not arrived at this point. We did not know the dose. We did not know whether the drug could work. Today or yesterday we announced a study we had been conducting with the nih. We are going to pause because it is in a later stage of the disease. These antibodies will not be as effective. Early stage of disease, it looks highly effective. It is about four months from beginning to end, best case, to start manufacturing and have output. On top of all that, the Global Infrastructure to make monoclonal antibodies, some of the most expensive medicines to make, is limited. We harnessed five different sites in our network working with a large contract manufacturer, samsung in korea, to sequester a significant amount of volume. It will not be enough for all the needs based on the current infection rates so we need to work on lower doses and concentrating these important therapies where they can make the biggest impact. For us right now we think that is right as they are diagnosed. There is also the question of profitability. Your latest Earnings Report says you expect to spend 400 million on covid therapies exploring what will potentially work. There is a natural cap to whatever you can charge for these remedies because there is a Public Health need and benefit right now. Therapiesable candice actually be based on the Human Interest here . Today we announced its a good point. Another solid quarter. Revenue and profit amidst this pandemic. It shows the resilience of a company like ours. As with think about pricing and access, our First Priority is that patients pay nothing. If there is outofpocket cost, economics will start to differentiate who gets the drug. We think Health Status should be the only factor considered. We are working with governments to sell our medicines and distribute within their markets. Create a price that creates value not just for us, but for the system, meaning it saves money, direct costs very quickly. We have demonstrated we can reduce hospitalization risk in highrisk patients between 70 and 80 . In the u. S. The hospitalization stay is about 22,000 per person so there is ample room to share that value assuming the drug is approved. We are working on the exact price. It will not be as profitable as other products. We expect a modest return for shareholders based on modeling today. Manus breaking news from angela merkel. Additional measures coming through in germany. There is a new level of lockdown coming through, closing bars, excuse me, not locked down, additional measures, closing bars and restaurants for one month. This is the latest attempt by one of the major countries in europe to try to get control over that. European equities have been under pressure, underperforming u. S. Counterparts on the euro stoxx 50 relative to 0. 5 drop for the american equities. Three times the impact on the equity market here in response. What comes next from spain and italy will be closely watched. Given you thehave numbers from Deutsche Bank. What do they mean . They beat on the headline. We discussed the numbers. This is bloomberg. Manus it is daybreak europe. Lets get straight to our reporter on the case with the numbers. On the phonefer from frankfurt. They put it out of the park when it comes to the fixed income and commodity side of the business. What do you think . To for really managed the first time in a while, they managed to beat the others apart from Goldman Sachs. Saying it has been all the businesses in the Investment Bank that have helped them achieve this. They have even lifted the forecast for the Investment Bank for this year saying they are in expecting higher revenues the full year. Rerates ite stock could make a suitable grab for ubs. We look forward to the interview. Well done. He caught up with the cfo. We will have that interview for you very shortly. He is our bureau chief in germany. Interviewear that very shortly. Just a recap in terms of risk, ye have had derek halpenn talking about the risk for a draw down on the dollar. The swiss face the risk of the currency manipulator tag after the selection. This election. Repricing the blue sweep. There is one red headline. It affects everybody at home in europe. The decision to close bars, restaurants, for one month. This is europe potentially running out of options on how to get ahead of the virus crisis. Annmarie hordern and Jonathan Ferro take you through the European Market open. Jonathan from london, for our audience worldwide, good morning. Alongside annmarie hordern, im Jonathan Ferro. Europe, bracing for lockdown. Market jitters, futures adding to this weeks losses with six weeks days to go in americas election. Bell,ur until the opening equity futures down hard. On the euro stoxx 50, all 53, 1. 73 . S p 500. Futures down. 6 . A proposal from chancellor merkel to closed german bars and restaurants for a month. The report is maybe we have a onemonth lockdown in france. We will hear from Emmanuel Macron. Risk off, treasuries with a little did. Lets get the headline numbers on Deutsche Bank. Annmarie they crushed expectations. 49 47ng jumped . 49 at Goldman Sachs and that helped them offset bad loan provisions. Is the bank clawing back market share or is this a oneoff . Jonathan lets get to the ceo himself. This is what he had to say in an interview. To