And is expected to carve a similar path to irma. How this affect the caribbean . How will this affect the caribbean . Dalia dishes. The billionaire tells bloomberg what he thinks of trump and the u. S. Economy. Matt i want to point out, dont forget the devastation that we so to the u. S. And British Virgin islands. Those caribbean islands, they are getting hit with maria almost as we speak. That has really been as they try and recover from that, an issue. Nd it is want to hurt those we have futures of strong right now. The equity Index Futures gaining big. Euro stoxx futures up. 5 . Compared to the moves we have seen in the futures as of late, these are pretty substantial moves. Daxthirds ava percent for two thirds of a percent for dax futures. Sellers investors selling off bundds. There goes my screen. That is a strong signs. Guy . Is respect japan, it for the aged day. 100 was hit friday, that is a pound story. The nikkei is closed today the yen is trading softer. Dont Pay Attention to that. On. Hang seng is a risk the aussie is trading up a little bit. Elsewhere, lets show you some of the risk off assets and what you can see clearly, gold trading softer. That trade on this morning. Equities look like they are going to be well bid. You are seeing the traditional haven story rolling over this morning with the yen and gold softer. Lets get the bloombergs word news update. Here is juliette saly. Juliette he was secretary of state has said he is seeking a peaceful resolution to end the Nuclear Standoff with north korea. Rex tillerson says rick says he is prepared to use military force. He made a rare appearance on the sunday talk show as trump prepares to ask allies at the annual u. N. General assembly to confront the regimes threats. In a tweet, trump marked kim jong un as rocket man. Our military option will be the only one left so all of this is backed up by a very Strong Military option, but be clear, we think a peaceful we seek a peaceful solution. Juliette Rex Tillerson has said the u. S. Hasnt changed its position on the paris climate accord. During that appearance, the secretary state reiterated that america will stay if they can reach an approach that is fair and balanced. Sinces home prices rose january. Signs of a real estate slowdown. Prices gained in 46 of 70 cities in august compared to 56 in july. Prices fell in 18 cities and were unchanged in six. The International Energy agency says the lack of new investment in Oil Production is stoking tighter supply and unstable prices. The agency told an even as demand growth has been shrinking over the next five years. Brent crude so is third considered a weekly increase last week. U. K. Lawmakers have called for Boris Johnson to be fired after he threw himself into the brexit debate, after he wrote an article that was seen as undercutting the Prime Minister days before she is set to refresh your own strategy. The piece outlined what johnson called a glorious vision. Jpmorgan International Chairman has told bloomberg that it is important that u. S. Federal reserve is charting the way to normalization. Cooks all the conditions that has to be in place for the normalization have been fulfilled. We have a very healthy labor markets, unemployment is very low, the duration of unemployment has declined. Nomic activity in terms of even inflation is under direction. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. Reservesederal twoday meeting starts tomorrow could announcing its tomorrow. Announcing its Balance Sheet. This according to a Bloomberg Survey. Lets get more now from mark cranfield. The take on where the dollar goes next . Im looking at the data and i am neting at a 4. 5 year max, short position for the dollar. Im wondering of the potential for squeeze coming into this fed meeting. The markets such extreme positioning right now. Mark definitely. Theres a good chance for squeeze. Positioning is very skewed in one direction. If you look that preview, there is a real split between where economists see the rates going and where the market currently prices it. In that survey, it says surveys economists still see a survey rate hike this year. If you look at the pricing for the futures curve, the futures curve has really only got one hike priced in. There is a big divergence between where the market is and where economists so if economists are closer to the somewherethey are like what the fed is thinking, in the market has a lot of readjusting to do and that may start next month straight after the fed meeting. If all of the things come together, then the dollar has a chance of going up a bit. Guy matt i want to point out that we have a great chart on the bloomberg. You can access this if you are a client. It shows the fed Balance Sheet and the rise through qe in the blue, yellow and green shaded and three. E1, two one in three, the biggest boost. One and three, the biggest boost. How do expect a taper, is it going to be a much slower unwinding than it was ramp up . Us tothe fed would like believe it will be a gradual process. It is going to take years to get it done. The speed of it may be is not so important as the psychology of the fact that they are doing it. Some of us was saying someone will sing last week the fed is telling the market it is like watching the paint dry. When the texans are cut, when the taxes are cut, you give the benefit when taxes are raised, you see nothing. The fed cannot control every. Ingle lever in the market even though they said it is coming, you really dont know how the market is going to react until the day they do it which is later this week. Theres still a lot of volatility to come. Uy let me pick up again, mark we got another spike higher coming into the pound. We are trading through 136. 136. 11 the handle. The data which is working with the lack. It is an capture the move that we saw last week. The positioning data doesnt really tell us anything pit we have a big speech coming up from theresa may on friday. How is the pound likely to trade this week . By monday morning we are seeing the london book getting a little longer off the pound. What does that boat for the british currency . For thedoes that bode british currency . Mark if mark carney doesnt walk back somebody hawkish statements which have been made in the last week, the pound could be having a really strong week. The catchup is really huge. The canadian rate curve, canada has already started their rate moves. They help they started talking hawkish lien june. In june. H lee on that base it is the pound that is really currency that a lot of people are thinking it is underweight. They do something about it. Matt definitely a fascinating move. Im looking at the pound index and we can see although cable is up to the highest level since postbrexit, the pound index is just climbing up to the level that we saw in may of this year. Very interesting moves, nonetheless. The strength of the british pound against the u. S. Dollar. Mark cranfield, thanks for joining us. You can follow his live in sets live insights on your bloomberg terminal. Up next, ray dalio says it is 1937 all over again again. He said this before. We have more from the bloomberg said down. Bloomberg sit down dont miss our 30 minute germany decides show. Well bring you the latest analysis in the runup to the election. This is bloomberg. Guy 15 minutes until the market open. Lets get the Bloomberg Business flash with the details. Juliette saly. Juliette Northrop Grumman is reaching agreement to buy a company for more than 17 million. An announcement may come as soon as today. A spokesman for nothing declined to comment and a representative could not be reached. Bya funding round led softbank vision fund. Almostion fund raised 100 billion this year and it is blanketing venture capital. We will be speaking exclusively to select ceo. Ryanair grabbed 82 flags yesterday as it started a six week program of cancellations to reduce a backlog. The Budget Airline said the cancellations which amount to 2 of its net worth not have an impact on earnings in september and october. That is your Bloomberg Business flash. Matt thank you very much, juliette. Dalio says the role of Bridgewater Associates is one of the few heads funds to make few hedge funds to make money doing the brexit crisis. Bally a has laid out his story and ideas any book called principles pretty spoke to erik schatzkers printable. He spoke to erik schatzker. Policy. Is monetary if i take Monetary Policy, think they have done a remarkable job significant,had a beautiful deleveraging. What i mean is that our debt burdens have gone down while the economy has grown, and we havent had an inflation problem. They did that by understanding the mechanics and the engineering. I think i was able to be of some help but i think they have done a bit of a job. If you look at the economy, right now for the shorter term, here we are it we have too much inflation and too little inflation. We dont have a debt bubble and someone. We have something that is reasonable come in terms of those types of conditions. This is very different in 2008 at we have a political situation which is difficult and we have a wealth cap and an opportunity gap which is a difficult situation. We have very big obligations pensionorward obligations, healthcare obligations that are going to be a burden. That is going to be a gradual problem. The way that those monetary policies have done have handled that well. Reasonably well. It is a more politicized area. Much more favorable characterization that a lot of people would give fiscal policy. Was people would give it two thumbs down. Most people would give it two thumbs down. The clinical environment itself is such a difficult environment, and so politics itself is dysfunctional. We have to talk about how to deal with meritocratic decisionmaking. Nonetheless, if you take the individuals can you put them in their jobs and you are asking how do they do in those jobs, all Things Considered . That is the problem, those are the things we have to consider that they have done a fiscal have a i think we political system that is a very challenging situation. If you were advising the president , what would you advise him to do . The most important thing is to make sure that we understand what the countrys principles are that bind us together rather than those that divide us. To have idea meritocratic decisionmaking, to try to come up with the best collective decisions. To bring the country together in an idea meritocratic way. I think the period that we are 1937, if i wasf to pick an analogous the alltime. It was after the financial can financial crisis. Money comed a lot of asset prices went up, inches rates went to 0 , and we had a large wealth cap with greater populism. Analogous. The central bank against to tighten Monetary Policy, and then we had a populism, and we a fall and we had we are going to get at the precipice . We cannot have a tightening of Monetary Policy that is material. We have a very large wealth gap a very large gap that the top. 2 of the population possible population wealth equals the s wealth. You cannot have an economic downturn because socially and politically we cannot stand an economic downturn. We would be at each others throats. It is a threat to our system. It is in many ways analogous to ,hose tensions, those conflicts so that is fearful. When you ask me what i would recommend to the president is to with conflict well, to bring people together, not to make people in battle with the other side. To get at the best decisions. Guy that was ray dalio speaking to bloomberg. We are 8. 5 minutes away from the european cash market open. We are good to take a look at the movers today. Thats movers today including ryanair. Movers today including ryanair. This is bloomberg. The market open, eight minutes away. Guy if you have problems dealing with your scheduling, ryanair does as well. It has had issues with canceling it was a flights. It doesnt look good for an airline trying to find favor. 82 Flights Canceled over the weekend. Defenseeye on the today. Keep an eye on the oil sector. I am watching hurricane maria. There are a couple of hurricanes threatening the u. S. Bloomberg function, you can follow the track of the storms. Maria has been upgraded to a hurricane so you can see here, battering the caribbean islands, come across the Leeward Islands that of been hit so hard by irma and are in the process of trying to rebuild. This is the least ideal time for them to get hit. The devastation is already amazing. 95 of the homes on some of those islands have been destroyed, big ones like st. Thomas, st. John. You see hurricane jose coming up around the coast of new york so expect big waves off the coast ,f new jersey, virginia pennsylvania, north carolina, south carolina. A lot going on in regard to the hurricane. Coming up, the market open in just four minutes. This is bloomberg. Guy is hit again coming and softer and the dollar coming in soccer. The pound is on the move. Matt will show you the chart. The government will be speaking in washington. If he does not walk back what has been a hawkish tone coming from the institution and a decent market move, maybe that will give what we saw this morning even more legs. Matt what ive got is a couple different lines on a chart as is typical. Its interesting because the magenta line here is the cable rates. The pound price in dollars. The white line is the bloomberg against the basket of currencies in trade weighted. ,e hit a new high for cable hasnt been this height since the brexit vote. The pound has been up three or four times since then. Guy we will wait and see how the Market Makers get going. We traded with a 74 handle on the ftse 100. Whether it might those can keep going is one of the big questions. The pound has been taking a shine off the ftse 100. We are opening around 4 10 of 1 . A more Risk Assessment in the European Space this morning. Dominatedit is a week by Central Banks once again. Politics in britain are as interesting as ever. Lets find out some of these details with manus cranny. Manus you go away for a week and come back and five geopolitics in the world is something the markets are consistently looking through and Rex Tillerson is correct that there will be a diplomatic solution. Ryanair at the bottom of your screen, those flights being canceled trying to deal with the , the fed, bank of japan are the key focus. Will abe go for a snap election . U. K. s equities are cut to underweight, and they are underweight on the minoring mining sector. Something to bear in mind as you look at iron ore. Come with me and let me tell you about the bullish outlook. This is the 12 month forward. Analysts are remaining bush on the earnings story within bullish on the earnings story within it. They are expected to go higher and that is the underbelly of european markets. When it comes to gilt markets, will mark carney stick with his momentum that the market has gotten itself a hold off in terms of the propensity of rate hikes . They now perceive a 100 probability of a rate hike. Will it be a merit. Moment . This is a nice big spike higher than your Government Bond yields. An irrational exuberance . They want to take emergency supply of liquidity and the emergency cut they delivered, twoyear yields are spiking higher. They promise, promise, promise, and the market gets ahead of itself they better delivered in terms of their intention or these markets are right for retracement. Guy i need to read this to find hand of god. T this i will take a look at what is happening on the stocks euro bid out of nordics. The aa systems are trading higher this morning i suspect on the back of the northruporbital deal we are watching. Other end of the spectrum, bottom and come up market hires this morning, but there are losers. Ryanair trading down 4 on the back of the fact it had to cancel flights and will continue to cancel flights over a six week. To deal with this holiday scheduling issue. Techshas very, play softer. Eni is tradingng soccer that we will keep an eye on that and work our way through in more detail as we go through the first hour of trading this morning. Matt less than one week away from the election, three of the four most likely german governing coalitions will produce suboptimal economic results in according to a Bloomberg Survey of economists. Is seen as death for the economy, rakes third in voter support and pulling ahead of the vote on sunday. That is Angela Merkels christian democrats if they join with the free democrats instead of sticking with the spd and a grand coalition. Multiasset Portfolio Manager at j. P. Morgan. He manages the income fund and the 4 billion euro macro opportunities fund. Issues the most important that we face here in the german election . What do you think is the most important thing a new coalition will have to decide on . Guest all the coalitions are marginally different. The main thing we are focusing on across europe is the Economic Data is going to surprise to the upside. A coordinated expansion to the northeast region and to underline earnings to literally buy corporate spirit we so no reason corporates. We see no reason for that changing. Portfolios,or our we have issues across the european region and i dont see all caps derailing that. We see political warriors in europe step back and oppose the french election. That is the reality of the environment we are in. Opportunity to take risk in our portfolio. Matt one of the interesting things i thought over the weekend was the macron quote something to the effect of, if Angela Merkel goes with the stp, i am dead, meaning the deeper union of europe and the reform that macron wants when not come to fruition if the coalition is chosen. Do you have concer