Live from bloombergs european headquarters. I am Francine Lacqua. We have a great panel on banking coming up. This is a picture for the markets. The pound dropping by the most in weeks after the prime starter announced it will rolling the u. K. Out of the eu. We are getting manufacturing pi pmi coming in inline. Brexitldve had if any impact, 52. 6 is the figure for eurozone manufacturing. Overall european stocks unchanged. The pound on the pound weakening. About Deutsche Bank will be played out in the states. We do seem closer to a resolution on the doj number. , 2. 4 higher. Lets get to the bloomberg first word news with nejra cehic. Nejra the pound fell after the british Prime Ministers says she will pull the trigger on exit on brexit by the end of march. A twoyear process of taking the nation out of the european union. The confederation of british industry has called guidance on how u. K. Business will trade. Meanwhile the u. K. Chancellor Philip Hammond will use his first majors beach to reiterate that britain has first major speech to read rate that britain has while he is due to underline the deficit remains unsustainable, he will use the speech to stress the need for a new plan to manage the nations finances in a pragmatic way. 5800 jobsto cut about in belgian in belgium to reduce costs. It expects to save 900 Million Euros annually. Speaking to bloombergs child chief Financial Officer says the firms impact will impact jobs. We continue to invest in Digital Transformation, another 800 million to our digital strategy. It does involve less jobs. The important point we have very strong commercial we are going profitability growing profitability. Nejra japanese policymakers will take from the poorly survey released this morning. The manufacturing Sentiment Index came in six, unchanged from the previous period. Spending across all Large Companies is expected to rise 6. 3 this fiscal year. That is slightly below forecast. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. I am nejra cehic, this is bloomberg. Francine we start a week will be left off. It is all about europes Banking Sector. Deutsche bank is poised to reach an agreement with labor representatives that will pave the way for 1000 job cuts. It is to shed 5800 jobs over the next five years. Lets bring in more, he leads the u. K. Financial team for bloomberg news. Here forhaigneau is the first half of the hour. He has to talk banks. Michael, lets kick it off. What have we learned in the last 72 hours . Deutsche bank regrouping. They are cutting jobs. Michael they are trying to show some progress toward things that have set up in the past. Job cuts have been a part of the plan. Now it is getting to the finish line on those and the finish line on the doj settlement. The markets have been inpatient on getting a number for that, so client would like to get that done. So cryan would like to get that done. Francine you wrote a piece about what Deutsche Bank needs is a number. Michael you have the longterm challenge which are costs. The shortterm challenge is cost. I think someone will have to Say Something and the number will be a huge step in the right direction. Francine the fears we have seen the market really go back to the doj number. Are we thinking and analyst had gotten this thinking that analysts had gotten this wrong . Michael right. That is the negotiating point point. Negotiating people expected it to come down from their. Were in the four to six range. Deutsche bank has 6 billion of litigation, how much is the pleated by this deal because it Deutsche Bank has more stuff on the right. Whether it is russia, italy, the Foreign Exchange issues. There are other legal cases to be wrapped up. Francine what kind of bank will receive from Deutsche Bank in 12 months from now . Lionel they are trying to be smaller. I do think a Capital Increase is needed does mean showing some signs of change, or a more aggressive panel, something different. I dont think investors will hand over money. Something a bit more aggressive maybe in the future. Francine how much does this translate into your world . It could be the angst of people in germany. You are so interlinked with the Banking Sector, it must be connected to psychology. They have been very correlated. Definitely that matter that matters. Since midaugust, we had correlation between stocks and bonds. Over the past week, that is a change ofit environment. Has theelieve the boj bank of japan the bank of japan has been important. The votelly depend on of bank story. Francine we are getting some headlines from governor kuroda. Well get to that. Lionel, what can Angela Merkel do . We heard from one of her spokespeople today. Andbank is speculating telling the speculators that they need help. This kind of talk does not really help. Lionel the speculators line did not really help. The politics makes it complicated. It is german elections next year. We hope well get the u. S. Numbers up. That will take pressure off of merkel. German lawmakers, this could be quite political. Francine michael, does it put a lot of pressure on some of the rivals of Deutsche Bank . Some of the swiss banks as well to make sure their house is in order . Michael you have a couple of aspects. The Market Sentiment aspect, the sentiment toward banks has been negative. You also have the banks that have not settled with the doj depending on how aggressive the doj is with Deutsche Bank, it sets the tone, because credit squeeze, barclays, there tried to get settlements desk credit suisse, credit squeeze, barclays, they are trying to get settlements done. Francine this is a profitability problem. That doesnt seem to be anything else at the moment. Thisat worries me is that is a specific story. Really can align the fragility in europe. We are seeing fragility at the discovery level. Were talking right now about portuguese political discussion. We talk about italian Banking Sector, but also the problem in italy. The banke fragility of nexus in europe. Not enough has been done during boughte the ecb really francine thank you very much. They stay with us. Plenty coming up including mays march toward brexit. U. K. Says it will start the process of leaving the eu are eu by the end of First Quarter. And imf reserve currency will focus in on the Worlds Largest economy. With five weeks until america goes to the poll, what does the row over Donald Trumps taxes really mean . This is bloomberg. Francine welcome back to the pulse. Lets get straight to the Bloomberg Business flash with nejra cehic. Nejra Janus Capital is recommending a merger with Henderson Global as it seeks to boost assets. It would be called janice Henderson Global assets in the firm will be have more than 320 billion in assets. Henderson group plans to relocate shares in london. Pimco is warning about asian debt. Issuance surged 66 from a year earlier to 152 billion. Falls near theld lowest since 2007. Pimco says asias credit is rising faster than Economic Growth and it doesnt expected to leverage. It doesnt expect it to leverage. Aipac ceo says consolidation is good for the industry. Juliette saly spoke to him in hong kong. In general, we have said that if theres an interest, we are open to acquisition. I cannot speculate on specifics. Nejra that is the bloombergs is flash. Francine the pound falling after the british Prime Minister says she will pull the trigger on brexit by the end of march. Theresa may will invoke article 50 during a twoyear process of taking the nation out of the european union. Drop against all of its peers, the british index has lost 14 since the referendum. This get the thoughts of Vincent Chaigneau let us get the thoughts of vincent chenault. Vincent chaigneau. british referendum. June 23, it is lower per pound. We down to trade in a new range . Vincent we have seen some stabilization. We learned three things. One is that it is not going to be any procrastination from people who were hoping that maybe that it would not have happened. The second thing we learned is she is going for the hard brexit, negotiating bilateral trade deal. Clearly something quite hard. Francine what does it mean for the economy . Is a recession avoidable if we have to renegotiate trade interests . Vincent the negotiations will start in spring next year. They are going to go forward for two years. That creates a lot of uncertainty that would hurt the economy. It doesnt show early. Eventually that will be bad news. Right now it is not bad enough for the government to deliver strong stimulant to deliver a strong stimulus plan. We should not expect much on the fiscal side. Chancellor hammond . It will confirm that there is not a huge need right now. Eventually suffers from that big shock. For now, the news is bearish sterling. Francine how much slower can it go . Vincent we already thought that ande could go between 120 125. I think we are going there quickly. There is a chance we see the lower end of that target or lower. Francine you were telling me that governor kuroda was saying the boj is a changing Market Sentiment. We dont understand what governor kuroda is trying to do, is that fair . Vincent this is a change of strategy. It is a risky strategy. For to work, you need expectations to go up. Eventually the end will go down and there will be a weak strategy. Japan on international conditions. If excitations go down, the rates go up because the real rates are stuck. The and gets stronger. That strategy can backfire very quickly. The Market Impact both transfer volatility from fx from rates to rates. It is a killer but he could create. Francine you are exciting much more volatility . ,incent yes on the rates side continued jgbs are going to be stuck around 10 . That is going to play the role of the global anchor of bond yields. Francine Vincent Chaigneau, thank you so much. Joined theuan has ranks of an official currency. This is bloomberg. Francine welcome back to the posts. I am Francine Lacqua. Its debut as it will reserve currency has become a part of the imf special this is a highly anticipated model for challenge just for china for china. The you want barely moved in overseas markets but Chinese Markets are closed this week for holidays. Vincent, thank you so much for sticking around. How significant is this, the fight the fact they have reserve status . Do we need to see a china that is more brave to give up to the markets . Vincent eventually there will be something very significant and probably in time we will see some reallocation toward china. That is the slow moving boat. Nearterm, it is not going to have impact. Seen why is very stable. Cny is very stable. It is performing better than most people expected. Francine is it justified . It is eerily quiet but china does tend to surprise. Vincent they offer a lot of support to the economy. That is a concern longerterm. We see something very hanging out there. In the near term, it seems to be supporting that. They are willing to use the fiscal tool to provide support for the economy. The nearterm will have less concerned about china and that stability for the currency. With supported the stability is ift the you want itself you were to see a big strengthening in the u. S. Dollar, like we had in 2014, then i think the bearish pressure on see and why would come back cny would come back. Francine the debt levels remain extremely worrying. Are you confident that the authorities have a handle on this . Does this turn ugly quite quickly . Victor go vincent that was a concern when the method outsource was creating a lot of sliced stress in the Global Market. Had couple of months, we substantial outflows. The Global Market reaction was not the same. Was not thecny same. That appears to be under control for now. We need not only those outflows but the economy. Those concerns francine we have the Imf World Bank annual meetings in d. C. Their assessment will be what . The economy is long gone overall but emerging markets are in better shape than they were 12 months ago . Vincent the news is not a bad just not as bad in countries like china, russia. Not as bad in countries like china, russia. Develop market economies is going to remain growth in developed market economies is going to remain disappointing. If you look at the polls, the survey about global growth, it has cumulated over the past several months. That breaks trend that we had. At least we are seeing some stabilization. Francine what are you expecting from the jobs report on friday . Is a strong jobs report mean the fed will hike in december . That that depends on market conditions. This friday we are looking for 200,000 new jobs which is a bold consensus. Supporting, it would the idea of a hike in december. Francine Vincent Chaigneau, thank you so much for joining us. Brexit is theard case says it will start the process of leaving the eu by next quarter. By the end of next quarter. If we look at the Foreign Exchange, clearly theres a lot of movement on pound. Deutsche bank, there is a Public Holiday in germany still Deutsche Bank is not trading in germany. It is flat in the u. S. Deutsche bank supposed to reach an agreement with this is bloomberg. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Francine welcome to the pulse. Am Francine Lacqua we are getting some breaking news other the u. K. Economy. Pmi manufacturing for the month of september a lot better than expected, 55. 4 is the figure that we have. We werent expecting 52. 1 we were expecting 52. 1. Impact of brexit, this is the 128. 59 1. 2869. Theresa may, the Prime Minister saying she will invoke article 50 by march at the latest when the u. K. Is ready. Lets get to number first word news. Nejra the pound fell after the british Prime Ministers says she will pull the trigger on brexit by the end of march. Theresa may will invoke article a roughly twoyear process of taking the nation out of the european union. They call for urgent guidance on how the u. K. Business will trade. The u. K. Chancellor will use his first major speech to reiterate that britain has dropped its goal to achieve a fiscal surplus by the end of the decade. The deficit remains sustainable, hammond will use the speech to stress the need for a new plan to manage the nations finances in a pragmatic way. Ing plans to cut 5800 jobs in belgium and the netherlands over five years to reduce costs could reduce costs. Speaking to bloomberg, the chief Financial Officer said the firms investment in tech will impact jobs. As we invest in the Digital Transformation and continue to invest another 800 million we are committing, it does mean less jobs. Havemportant point is we very strong commercial momentum. We are growing profitability on the back of increasing capital ratios. Francine nejra japanese policymakers will take no comfort from the released this morning. The index came in at six unchanged from the previous peel previous period. Although that is also slightly below forecast. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. I am nejra cehic. This is bloomberg. Francine thank you so much. Business groups are concerned there could be a part of brexit after the Prime Minister said article 50 would be triggered by the end of march. It follows comments that were raised during the conservative party conference. Anna, great to have you on the program. What can we expect . Morning. Ncine, good the focus shifts to the economy. Philip hammond will be speaking. He has been speaking a little bit this morning. We expect him to step away from some of his goals of his predecessor. Been called for an urgent need for answers for business pit we have to wait a little longer to get those. The chancellor about two years of us of uncertainty at least. We will see if we get any clues today. We might have to wait longer. Francine lets not wait longer. Did we getike any clues on how hard or soft brexit will be . Anna hard or soft. Saying it is not the way she sees things. A phrase they are using full dichotomy. They donty much recognize the tradeoff between the two. Theresa may said yesterday we will do what sovereign nations do. In terms of how much priority theyre giving toward the immigration side, here is david davis, the minister in charge of exiting the european union. The clear message from the referendum is this, we must control immigration. Did you hear mr. Corbyn last week telling us there is no need for any limit on numbers . Have you ever heard a Political Party so out of touch with his own voters . Lets be clear, we will control our borders and we will bring the numbers down. That was david davis, theresa may sounded the brexiteer yesterday as she set out her thoughts yesterday on the matter. Us the parliament will not get a vote on this. This is something the u. K. Government will take forward. The parliament would be to subvert democracy. Francine what have you been hearing about independence . Anna the debate around independence for scotland rages on. Yesterday we heard theresa may saying this would be something the u. K. Would negotiate and we caught up with the secretary state of scotland to ask him if he thought that start for r referendum echo referendum . What we are not going to accept is brexit is a real take thatal projects decision has been made. A stronger United Kingdom, we are going to have this dialogue and the United Kingdom is going to leave the eu. The focus on the economy. We will hear from the chancellor later this morning, francine at how much emphasis are spending will they commit to . Later this morning, francine. How much emphasis are spending on spending will they commit to . To mujtabaets speak rahman. Im confused, we are not calling it brexit. It all goes to the fact that there are red lines if this country wants immigration to be freeflowing, then they will not have access. And of story. Mujtaba i dont think theres anything surprising about theresa mays speech yesterday. She has confirmed the speculation that the internal is going to push the u. K. Government to prioritize immigration. If we do that, they will limit access to the single markets and services as well. That is going to be the frame in which the negotiation will take place for the rest of europe. Francine when you think article 50 will be triggered . She says by march. Is it better to do a january . Mujtaba the government will need to give itself as much time as possible to come up with a coherent position, number 10 in working y are number 10 is thinking more about the problem that robin from the perspective of immigration. Say we are telling our clients january or february, but some point in q1. Francine is it too early . We dont know if nationals will be able to stay here. Mujtaba the endpoint is a bilateral deal on trade with the component on services. If you look at the internal political conversation in the u. K. , that has been clear. The conversation is focused on the transition transitional arrangement. Once we exit the eu in the final framework is not quite clear, to limit the impact on the k and the european economy. The politics of those arrangements are going to be complex and problematic. That is where the conversation is focused. Francine it is significant they had a referendum and said they want to curb integration curb immigration. They have overturned their own referendum. Is it different for the u. K. Echo u. K. . Or should u. K. Politicians look at switzerland and say this could happen to us if we are not softer . Mujtaba the swiss doesnt like their relation to europe. I dont think the u. K. Is looking to converge on that as a template. It is a the spoke agreement, limiting immigration while still getting access to the single market. That is where the medical conversation will focus. Ncine wished Obama States Mujtaba rob munn stays with us. Next, after five weeks five weeks until america goes to the polls, what will Donald Trumps tax returns mean for the white house . Will bring you the latest from europes Banking Sector we will bring you the latest from europes Banking Sector. This is bloomberg. Francine welcome back to the pulse. Markets a little bit flat. Lets head to the bloomberg with nejra cehic. Nejra if we look at the stoxx 600, where up. 2 . The german markets are we are up. 2 . The german markets are closed today. That brought a little relief to asian markets. In europe, where up. 2 . We are up. 2 . Using the imap on the bloomberg, Energy Stocks leading the game at 1. 4 . Not a surprise Given Crude Oil leading the rise today. Perhaps a little bit less concern over Deutsche Bank and we have had a mix of news over the weekend. Reports about thousand planned job cuts. One of the biggest gainers on the stoxx 600 today is henderson group. This is the chart over two days, up over 50 at the moment. To fter it agreed agreed to buy Janus Capital creating a money manager. Both Companies Looking to revive asset growth and profits in an environment where Asset Managers have been losing out to lower indexes. This is henderson group, biggest gainer on the stoxx 600. Focusing on sterling. Down almost 8 . We are at 128. 75. It is approaching that level it hit on july 6, the day it hit a 31 day 31 year low. Theresa may, the british Prime Minister is going to trigger article 50 by the end of march, starting that Brexit Process could this is sterling poorly change going all the way back to the 1980s. It was down for a fifth straight quarter, the first time that is happened since the 1980s. Francine thank you so much good hungarys think its a much. Hungarys referendum thank you so much. Hungarys referendum. Over 98 voted to protect the eus plan. The place into the wider discussion. Less get thoughts of mujtaba ramin. This is a setback for iran. A pace forward for democracy in a certain sense. Mujtaba i dont think it really moves the needle that much. Hungary is awkward. The polls will remain awkward. Are unhappy about the deals that are getting done at the european level. It is about refugees, the euro and bailout politics. I dont think it referendum is going to change the nature. Undamentally francine i look at Angela Merkel, she is really the only one making decisions because she is strong. Were looking at elections next year. Does she change her policy . To make sure she wins the election next year . Issue Strong Enough to power ahead is she Strong Enough to power ahead . Mujtaba she is not strong. There is a discussion going on whether she will run next year. We put the odds that 60 . The point there is to say theres a chance she chooses not to run because she believes at this point 40 . Francine that is huge. Mujtaba that has huge imprecations for germany. Huge implications for germany. Francine if she doesnt run, who will run . Who will become chancellor . Isntgo mujtaba if it merkel, it has to be sure the it has to be short blood to make a credible shock and running. We think it would be schaub a. Is thee problematic understatement of the year. I am not sure where he stands of the refugees this would be a very different europe if we had chancellor shepler. Fiscal leg, he would move europe in a negative direction. Also on immigration and security, i think he is more of a hawk. That would raise alarm bells in the capitals of europe. The lining in this scenario is he would have formal Political Capital and merkel. He is popular within his party and the population. He will be able to do more with merkel more than merkel. Would brexit look like under him . He might go hard. Statusgerman political and once a deal with the u. K. Sign the french and german are totally aligned on the question , meaning ifsibility the u. K. Wants to limit migration, they cannot have access to the single market. Theyre concerned about the institutional coherence of the eu if you start messing around with those freedoms. I dont see that much daylight and charla schauble. Problem, not only domestically given the nation the nature of politics, but also in the rest of europe that are looking at the rest of berlin and what it chooses to do with Deutsche Bank. That means bail and is necessary and that is the case with which a bank as well. If there are exceptions for deutsche and public money is able to flow without balian, that would create a huge. Olitical blowback francine thank you so much for now. He stays with us. We will be talking about politics more globally. Next, five weeks until america goes to the polls. What does the row over Donald Trumps tax returns mean for the white house . This is bloomberg. Francine welcome to the pulse. Donald trump is resisting pressure to release new Tax Information only blockbuster revelations about his finances. The New York Times says the candidate posted a 916 billion loss on his 1995 tax return. That may have led trump illuminate his federal tax bill for two decades. Trump will not make any Tax Information public. For more on all of this, Michael Mckee joins us from new york. Mujtaba rahman is still with us. Mike, thank you for coming on. The new york is times says there is something dodgy out here. The Trump Campaign intimate that he is more clever than anyone else. He may not have paid taxes. Michael the times retained pages of tax returns from 1995. They can be used to offset income in the following year. If you lose 1 billion, you can offset taxes for 18 years the times figured. This was one years taxes. Trump could continue to lose money in spectacular amounts of money. After all, he filed for an cropsey six times and paid no taxes filed for bankruptcy six times and pay no taxes for decades. At this point, trump has refused to release his taxes. ,is campaign telling the times the only news here is more than a 20yearold alleged text document that was illegally tax document that was illegally obtained. Francine what kind of impact is this the worst week the republicans have ever had in the runup to an election . Michael whether or not this 11 impact on the race remains to be seen, because the idea that donald trump it was not paying taxes and living the high life has been in the campaign for some time. He seems to confirm it in the debate. He also has run into opposition from conservative editorial boards. He rented to criticism over his plans to bring up bill clintons infidelity. It up. He it came up that he appeared in a softcore porno film. It is tough for him to claim he has the temperament to the presidency right now. That may be more damaging than the taxes. The polls pulse have it pretty close to think Hillary Clinton will win this. Since 1992, the democrats have held 16 states including the district of columbia. That is the baseline number of votes in the electoral college. That is a large structural advantage for the democrats. Demographic also heavily favor clinton and the democrats. Hispanic voters, africanamerican voters they heavily lean democratic. As the population is increasing, the campaign in the structure, clinton has been running for president ever since she was born in terms of the amount of money they have been in the race. If far surpasses the recalled can can do. Francine why are the polls so close . Mujtaba it is difficult to say. What is more interesting is the scenario where clinton wins by much larger advantage than most people expect because the polls are incapable of predicting dynamics that are very close. Francine Michael Mckee. Coming up next, it is surveillance with tom mckeen with tom keene. Francine Deutsche Bank on the defense. The lender says it plans 1000 job cuts as they head to the u. S. For talks with the doj. Pulling the brexit trigger. The british Prime Ministers says she will invoke article 50 during the First Quarter of 2016. The megamerger. Henderson Global Investors and Janus Capital will merge to create an investment giant. Surveillance. Erg im Francine Lacqua in london. Tom keene a