Recess with plenty of things on the agenda. How volatile will september be . A key question for investors. What does this mean for the European Aerospace industry . It is a big deal. We are going to take a look at the supply chain and check out what it means for not only airbus but boeing as well. Lets look a gmm. What is interesting is that equities have sold up a little bit. The yen as well bid. You can see the relationship there. The rba was interesting. The aussie dollar up. 2 . The swiss franc is continuing to climb as well. What is interesting, remember the yen and swiss franc theres something missing . Gold. Gold looks like it is running out of steam a little bit relative to the other safe havens. While the yen and swiss franc have bid, gold doesnt seem to be catching the same level of attention. 8 . Ore is up by lets took about what is happening with the equity markets. Lets take a look at the fair value on your bloomberg. Where the u. S. Is going to open a little later on. 50, is the picture of stoxx fair value, 1. 2 to the good. That is what we are seeing, sort of i point sort of. 1. 3 may be. 1,. 3 may be. U. S. Fair values 2 10 of 1 . We will see how long that lasts once the u. S. Traders get in. Lets get a catch on every thing else you need to know. Heres a juliette saly. Juliette theresa may is planning a speech to jump start sluggish brexit talks and move the discussion towards britains future relationship with the eu. Yesterday the parliament appear to tilt lawmakers the adjustable, symptom 21st although the date was refuted by u. K. Official. Mays plans for trade deals will begin with switzerland and south korea because how much they contribute to the u. K. Economy. The u. S. House of representatives will vote wednesday on a Hurricane Harvey relief bill that will not contain link which and it staving off a default on government debt. Good luck ands are bowing to the most conservative republicans are bowing to the most conservative members. The harvey bill would provide a most 8 billion in aid. The australian centralbank has held Interest Rates. The rba has left rates unchanged since last august refraining from joining global peers and signaling plans to withdraw stimulus amid concerns about weak wages and tepid inflation. Indians will vote in a fresh deskion on october 17 kenyans will vote in a fresh election on october 17. The date has been set by the Electoral Commission after the Supreme Court decision last week to annul the previous vote. Engage in chinas economy sans uptick in august with pmi heading a sixmonth high. A reading above 50 shows an expansion. Growth in the Services Sector also accelerated to a threemonth high. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. Indeed. Nk you very much u. S. President donald trump threatened to halt trade with any country that does business with kim jong owns regime. Supplies to the country called that acceptable. Mark, that was yesterday story. Im acting i am watching markets react. What im wondering is does that reflect the fact that the Financial Markets believe that a military option is no more likely today than it was before the sixth nuclear test over the weekend . Mark in the shortterm, investors are more concerned about a trade war than a military war. They are taking fairly seriously the threat that there could be some sanctions on trade, although the market is not moving a lot. You can see there is white a bit of cautiousness, volumes are down. Theyre waiting to see what wall street is going to guess what is going to happen on wall street what is going to happen on wall street. Equities have been subdued. Some of the currency havens demands. Theres a feeling we are not sure what to take this, but when thattheres a chance is a pretty big deal for Financial Markets. They need to be cautious. Guy im looking at volatility that isnt running away with itself. You look at what is on the agenda for september and you have gotten not only the north korea issue and what is good happen with the u. S. Security council midmonth but you have the political stuff to factor in, particularly stateside. The market doesnt seem to work it out yet. That is partly because theres been a lot of disappointment this year. People have jumped into volatility early have not gotten paid for it. Yet have to be very quick to make money you have to be very quick to make money. Doesif a major event occur, i still have time to jump on it and by my options and i could still do something about it. Why is gold not trading with the swiss franc and yen . Mark i dont think you can read too much into one days performance. Gold is had a very good year considering a lot of people wretched off as it not be writes it off as not being very important. If that willering continue or whether or not it is chatting a few days back, treasury yields on the floor, copper is on a tear. Is there something in that . Is it the fact that china is back in gear . Look at the chinese currency, it is doing relatively well. Theres so much liquidity floating around the system. Yes. All of the above, [laughter] issue. T is a confounding a lot of people are having trouble understanding. If you look across the commodity complex, theyre all trading very strong and yet you see no sign of treasuries being worried about inflation. It is a peculiar set up. Even the Federal Reserve admitted the old inflation models are not working but i dont know what the new models should be. I guess people are saying, i am a bit confused but i will hang onto the treasures that i have because the fed is going to move rates very slowly. Guy thank you very much. Smart analysis throughout the day and it is going to be required during the month of september. I open it up on your launchpad that you have sitting there on your screen. Thanks mark. If you headlines coming through a few headlines coming through from the russian khmer. Russian premier. The motivation for the acceleration in the Nuclear Program and testing the muscles that we have seen. Lomacy is the only part north korea needs security guarantees. This is what effectively with the regime in pyongyang is looking for. It is what other dictatorships failed because of the lack of Nuclear Capabilities and it is basically letting that muscle. It is looking for attention and recognition but Vladimir Putin pointing toward the former of those two options. We are going to talk the latest with u. K. Homebuilder. This is bloomberg. Guy 17 minutes until the cash open here in europe. Lets get to Bloomberg Business flash with juliette saly. Juliette United Technologies is to buy aviation equipment maker for about 23 billion. Shareholders will get 120 per share in cash and stock. It is funding the cash portion through debt issuance is an cash on hand. The deal is one of the biggest in aviation history and will create a better positioned to withstand the squeeze from boeing and airbus. Effectively beld a reverse takeover of aveva which will issue shares to schneider. The agreement brings together two units. Smartphone game angry birds is released on helsinki. It will target a dividend payout ratio of about 3 net profit about 30 net profit. Indeed. Nk you very much i want to take your attention to the screen, the anr. You see this incredible price run that the stock has had. That is the white line. That is where the price is that is in the same place right now. 626. Target, 6 26 has reported a profit on revenues of 1. 60 6 billion pounds. That has meant the company has been at the top and at the bottom in terms of the numbers that it has posted. The middle of the p l is an interesting place to focus. Joining us now is the ceo of redrow, john tutte. Congratulations on the numbers. The company has come back really strongly, or at least the shares of quebec really strongly over the last year. You havent seen any real impact from the political turbulence that the markets priced in postbrexit. Has that surprised you . John not really. Im a great believer in what we have seen. I think that has now been recognized that a great strategy. We have grown the business dramatically and now we are adapting to moderating the growth and combining that with a bit more increasing the dividend and we have set some targets for 2020. To get we expect to get up to 2. 2 billion and expect profits to come in at around 430 million. Manus guy 2020 is a you interesting day just 2020 is an interesting date. I am pretty confused about what the dates look like and how it is going to work. How would you phase that out . What would you replace it with . Do you give us any visibility on what you are hearing . I am sure you have your is on the ground on how this process is going to evolve. John i think everybody realizes that it has been a huge success. Think we have had some discussions. The government is keen to talk to the industry and discuss what happens post 2021 which everybody agrees that you just dont cut this off. The sensible thing is to go back and look at why it was introduced in the first place, what created that. Very difficult to get a mortgage of 70 loan to value. That has eased. For me, the simple way to deal with it we have a formula that works. Instead of sit 20 to buy, gets taken down to 15 . That could come a little bit lower which would be a sensible transition. Guy how long would that take . John i suppose that is up for discussion. You would expect a clearly to come in when the Current System finishes in 2021 p q might run for three years 2021. You might run for the years. Depending on the Market Conditions are, what is happening with mortgages, you might bring that down to 10 three years later. Guy what else is affecting the business right now . We talked a little bit about labor costs could what is happening in the middle of the p l in terms of the margin . Documented. Well there is a Skills Shortage in the u. K. There are some concerns with the brexit. We might find ourselves losing some very confident eu workers. There are concerns in that area. We are seeing an Underlying Trust around 4 . That has been the case for a while. Im expecting that to continue. The industry is trying to adjust the Skills Shortage peers certainly redrow is trying to address the Skills Shortage. The industry is trying to shortage. E skills it certainly redrow is trying to address the Skills Shortage. Guy i am sure you are paying a close deal of attention. Longer do, how much you think the current scenario is good to be there . Do you think you think youll be up to Sell Properties leasehold . John i think there are two parts. Theres not really an alternative that has been tried and tested. I expect the leaseholds on apartments will continue could leaseholds on houses, redrow we have been selling leaseholds in the northwest for years it our terms and conditions have been fine. We have to accept there has been some practices that have concerned consumers which we for have seen sentiment leasehold houses have been dented. Where in the transition of changing from leasehold to freehold. Weve got a suitable transition. Guy your business is going to be affected by sterling. What is the sterling affect . John there really isnt any. I think there are two parts of our business if you look at exchange rates. An element of our business in london which is buyers. We have not seen any advance in that demand at all. Youve got to look at our material suppliers and which ones are affected. Most of what we put into the house is manufactured in the u. K. There are some materials that have been affected by exchange rates, but it is not a huge impact. Guy thank you very much indeed, john. The redrow ceo, congratulations. Up next, Schneider Electric has recent agreement with aveva. The stocks to watch. The market open moments away. Guy minutes away from the market open here in europe. Lets talk about some of the stocks we are going to be watching. Another cambridge technology. Arling is being taken over interesting to see how the political reaction works but ave buts taking over schnieeider, company that has done very well and snyder has been eide has been doing very wellr. The big story overnight comes in the aerospace sector. Companies just the two big companies, airbus and boeing are wrapping up to Aircraft Programs two Aircraft Programs. It is the 77, the dreamliner and the a350. They both need these ramps to go well. They both need the supply chain to be able to deliver. They have had problems. Airbus had problems with zodiac. That is a big chunk of the supply chain in one company. That is good to make for boeing in bigger difference but it is wanted be a chip to see how this works and how the supply chain story is good to fit together. You can map this on your bloomberg. Here and ifbus up you take a look on the lefthand side, you go. And theres United Technologies on the top left and corner. This is a very big deal. It is a very big deal for boeing over in the United States because it could end up changing the relationship with their supply chain in a meaningful way. It is going to be interesting to see other markets react. The other company and want to a storyis, there is that could be looking at a confectionery business. Chinas new strategy of taking this company of market and taken it more into the health sector. 1e valuation could be between billion and 3 billion. The stock over one year earning up to 1. 45 . European stocks look better this morning. Well keep an eye on what effect north korea is having as well. This is bloomberg. Guy minutes until the cash open in europe. Guilt trading, what are we anticipating . Aachers have softened up little bit. We wont see a riproaring start of the day. Dax,tse 100, the cac, the called up. 2 . Ways, that is a fairly quiet market against a backdrop that should be providing a little more volatility. The other thing to mention is where the volatility is. You are seeing the yen bid this morning. Franc, you the swiss can see are both bid. We have a Rate Decision coming up, the aussies have had a Rate Decision. It is coming. Little more into the currency market than what we are seeing. You cant part you would equities be higher . Lets look at the monitor and figure out where the markets are going. Ftse 100, maybe will direct a 74. 13 atwn, trading at the getgo. Markets a little higher, a were 1 10, what we were expect. Theres the cac up. 1 . The fair value the bloomberg was putting out, we are expect and markets to drift a little bit, wait for a sense of direction when wall street returns later this morning. Gilts are opening. Here is manus cranny. Manus im pretty sure the futures are indicated lower on futures pricing. Many gainers in yen and the swiss franc were volatility is higher in the swiss franc. Given the yen is geographically to rising risk premium. European stocks with a mixed opening. Schneider collect rick, aviva story playing out in terms of cash. 1 . North koreans rigging for war versus the data. August, doing everything to make sure the chinese deliver a resplendent version of growth to the world before the 19th congress. That is the important thing. But the data is perhaps the underbelly of what is going on in the equities market. Spoke this morning about the risks to the Global Economy and opposing protectionism. Zerosum mindset doesnt benefit the global growth. Has donean investor fine this year. Money is coming in, the economy is getting better. If you are a dollar investor, this is the dollar return versus the normalized version on the stoxx 600. The more important story is about the flow of money. , basically 8. 7 billion has come back into the thelargest funds, recouping money that exited and bled in 2016. Why are you looking at the dollar investors . Because it is the flow of money. Does that gap begin to grow close. I say we look at the gilts. Pips, 120 6. 93, equities open a little higher, gilts, a little lower. Is preparingark for the partial sale of its Consumer Health operation. They have three divisions, interesting to see how they restructure the business. Something to Pay Attention to when it comes to seeing how some of these truck stocks will trade. Congress returns for its august recess, americas politicians have a few weeks to fund the government. Meanwhile, donald trump will meet with congressional leaders at the white house today. Talking tax and other things. Joining us, the deputy fixed income at blackrock and kathleen hunter, Bloomberg News reporter. The debt ceiling is one of the big events coming up in september. Ryan and mcconnell look like they want to pass a clean bill with no spending cuts attached to it. From figuring out whether he is on board with that as a concept. Is a critical factor the president and his thinking on this . When will they get an understanding of where he stands . The president is certainly important, he will need to go along with whatever congress decides. Thrill thing to watch in the coming days as Congress Returns is where the conservative lawmakers are. There have been some calling for spending cuts to be prepared with the debt limit increase and i think while their position is clear the key question will be how far they will take those demands and whether they will be appeased by having what they a voted in the past where they a protest vote, whether that will appease them or they will push this . In both theis that house and senate, while this contingent of conservative republicans is influential, they dont constitute enough votes to get something through, so if you do pair the spending cuts to the debt increase, you are losing support of democrats across the board. The math just doesnt work. Harvey into the mix, does that make it even more complicated . Im judging by the look on your face it is a yes. Wei i think the conventional thinking is that Hurri