That is what ive been hearing. Lets look at the risk off tone in europe that is being hit the hardest. We are now at eight straight down days and have not seen that kind of streak since 2014, the dax hit particularly hard. A bit of a safe haven bid as far as bund yields. That does not feel like a risk off move in bunds. The dollaryen down 6 10 of 1 . The bloomberg Commodity Index down 3 10 of 1 . Not just oil and copper, the base metals across the board hurt. David now we turn to emma chandra. Emma Senate Republican leaders may have made tax reform a little more complicated. They decided to add repeal of the obamacare individual mandate to their tax package to help them meet the fiscal target but will change the vote calculations in the senate and house. Twice the senate tried and failed this year. The russians have agreed to restructure more than in venezuelan debt. The Credit Rating firm declared venezuela and its state oil company to be in default after missing payments. In zimbabwe, the military has seized power and is threatening the role of Robert Mugabe a. Mugabe. He and his wife are now in custody. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am emma chandra. This is bloomberg. A new the senate has version of its tax reform package with two important additions, doing away from the with the obamacare individual mandate and doing away with to take us through the state to play in washington we welcome Kevin Cirilli. The individual mandate is back in play. Congress has not had enough to do . Just ast is back President Trump arrives back in the United States. I am told this is to preempt the reconciliation conference process by realigning the house version of the bill with the Senate Version, making permanent the senate the version also would not phase that in until 2019. I have been told by several sources that while there is that one year delay or when that Corporate Tax rate comes, we all know that Business Leaders are planning for that well ahead of that oneyear implementation period. The signal that this would send would be strong in the business sense, at least that is what my sources are telling me on the republican side. Procedurally, tomorrow is when the house of representatives will likely vote on their version of the house bill. That sets it up for the senate to do the same if not next week before thanksgiving, shortly after. They are still on pace to get this done. David they were on pace to get the Health Care Revisions done as well. I want to come back to the individual mandate because it sounded good in the abstract, but once they moved forward they have a lot of constituents say, wait a second, i will lose my health care. Health will this play how will this play with the middle class . Absolutelyare correct in the way this will severely impact their chances of getting centrist democrats on board with this, because we have noted that democrats were completely united against altering the health care, Affordable Care act when it came out this year. So people like the treasury secretary and gary like to get some centrist democrats on board, this throws a wrench in that. From the republican perspective, they do feel that they have to get something done on obamacare because they have failed so significantly to get a Major Health Care legislative win through this year. In their perspective it is a major legislative promise they have to fulfill, but from the democratic perspective it is a nonstarter. Risk off toneld taking over markets today, u. S. Stocks joined a global selloff in equities yesterday. A new survey shows investors are riding a wave of irrational exuberance as they extend bullish positions with 16 taking on above normal levels of risk with less Downside Protection and less cash. Joining us is robert sinche. The story of the market today, a , a cracks across asset little bit of fragility. What do you think . Robert i think the uncertainties of washington are not helping anything. Our view has been that much of this rally and risk this year has been about growth and Global Growth, and that is where we are beginning to see some cracks. I think there will be a lot of talk about what is going on in washington. We had very weak data out of china for october yesterday. I think the uncertainty there comes from the fact that a lot of people believe they frontloaded a lot of their spending in front of their Party Congress this year. That is over, and the question is, is there a sag in growth in the Fourth Quarter . The economic surprise index for china is significantly negative, so i think what is going on is an extended market, as we saw a lot of Risk Appetite was taken on, and there is a hint about uncertainty of where Global Growth will be in 2018. Jonathan is this a global story or a temporary fall back . Robert in the eurozone and the u. S. , the momentum is still good. What i worry about on the tax package, it is great to say businesses will discount a tax cut in 2019. History suggests, if you tell somebody i will tax your earning less in 2019 than 2018, you will push off a lot of decisions from 2018 to 2000 19, and that could give us a shortterm depressant on the business sector for 2018 if in fact they say, yes, we will give you a tax cut a year out. Alix we are also seeing that weigh heavily on the Treasury Curve. This is the 210 spread, six basis points. There are varying degrees. Robert we like to think of the famous book the inside the yield curve as one continuum, but i think there are two different forces operating on the yield curve. One at the long end, is this continued absorption of government on debt bond debt around the world by the ecb and boj. If they keep depressing their longterm yields it has a spillover effect here. Needed is signaling they to normalize the short end of the yield curve and bring shortterm Interest Rates close to zero, which is perfectly reasonable, which gives you a federal funds rate between 1. 75 and 2 . Global markets operating on the long end of the curve, i do not think it is that problematic that it is really telling us there are different players in different parts of the yield curve. Alix if you take a look at europe, something similar is playing out. The yield market got hit and there has been somewhat of a ly in boones b unds bunds. Is the same distortion playing out . So, but in terms of the bund curve is still have the ecb staying around for nine months to a year so that keeps an artificial bed which did which permeates the world. Central banks are continuing to depress the long end of the curve with the fed moving toward some sense of normalization. Jonathan can i get a sense from you on what kind of curve flattening we might be . Bear flattening has been where the big selloff has been an this morning has been different. It is a bull flattening story where the heavy lifting is coming from the 30 year, the 10year, etc. Is that something you see developing further in the coming months . Robert something we are looking at and what we have been seeing is a range trade at the long end of the curve. We think that may pick up a little bit, but clearly the opportunity will be next year and you could look at a fed funds rate moving in on 2 . Where we are really seeing that is into year yields, that have been in two year yields. Alix coming up, oil and base metal selling off overnight after concerns about economic slowdown in china, yields jumping as well. How the president s strategy to glow the economy is affecting the market. Target up by 5 , the negative in the early Earnings Report is that guidance missed the average annual estimates. The average move is about 3 after earnings, so the 5 to 6 move is significant. Jonathan bad news for target, good news for Deutsche Bank and the Ceo John Cryan. The stock is down 2 , down thing off of session lows after we learned Deutsche Bank is set to attract a new top investor amid an overhaul to stage a bit of a turnaround. We can confirm that cerebrums is said to emerge cerebrus is set to emerge as the new stockholder. From new york, this is bloomberg. Emma this is bloomberg daybreak, i am emma chandra. Target reported quarterly revenue sales and profit that beat estimates. They posted strong sales of new, exclusive brands and raised its earnings forecast for the full year. Company says it is confident in its plans for the holiday season. It is the biggest commercial plane sale in ebbers airbus history. 430 planes from its a320 family, valued at more than 300 billion. 737s, sale valued at 27 billion. There is a new big investor in Deutsche Bank itches struggling to stage a turnaround. It is said to be a private equity. Billion bank raised 9. 5 dollars from shareholders this year after concerns about its financial strength. That is your Bloomberg Business flash. Alix is this a good thing or a bad thing . Do you want a distressed Investor Associated with you but you want the money . Jonathan it is more money coming in. What do you think . Robert from the movement of the stock, they are not paying tubing much. Paying too much. Muche is still very economies that are driven by the Banking Sector, not necessarily the Financial Sector but the Banking Sector. That is a view, their view there is some opportunity to develop something as we go forward. Mifid, you are potentially at the bottom of the cycle. U. S. Cycle, we are seeing some reduction of the Regulatory Burden on the Financial Sector. Given the lags in the process in europe, there is a view that maybe you will see constraints on the european Financial Sector coming off in the next few years. Jonathan the ultimate proxy for any economy is the performance of the banks, and we have established the view in 2017 that everyone is bullish europe. So iare not getting a bit want to know why the economists are so berlin bullish . Robert what has to give is at some point you will normalize Interest Rates. You have an extremely low Interest Rate structure in europe and that is hurting the banks. Why do we have that low Interest Rate structure . The ecb buying up debt. You could say the thought process is the economy is good, the yield curve is extremely depressed by ecb action if that will change by the end of next year and we normalize curves, where would you get the potential biggest bang for your buck . Bankshares off the lows of their session in germany, but elsewhere it is a risk off move and part of that came from china. The biggest two a decline in about three months. You have the bloomberg Commodity Index down 2 . Joining us from london is stuart wallace. Still with us is robert sinche. Stewart, what is going on . Stewart it has been somewhat anticipated. If you think about what happened in the futures market in soticular, it got so long fast and there was no doubt it was too much too soon. We are not at the capitulation stayed yet but it is somewhat alarming in that it has been thedily upwards and then sudden sharp drop, but i challenge anyone to be surprised. Currenciesingmarket are holding up pretty well considering. What do you make of that . Robert with u. S. Rates coming down, the dollar is softer and that is helping emergingmarket currencies hold their value. There is still relatively there is ans, but unsettled tone to markets and that is coming at a time when Risk Appetite is fairly extended. From a technical point of view, for those who follow that, we had a key day reversal a week ago in crude oil off the absolute high of the move. That would tell you there is a reversal taking place and it looks like that is starting to happen. We are sitting with wti crude still at 55. It is really down just below 50 a barrel. I think we could have another significant correction in crude oil over the next month or two as we go into the winter season when prices are seasonally weak anyway, and we are finally beginning to see u. S. Producers increase the rate count. Production is picking up, demand is slowing down, markets overextended. We could be looking at a pretty significant correction. Be all too oil or will it be the base metals that have to do with supply a not be in china that as big as we once thought . Stuart i think it is oil, will probably always be oil and if nothing else because of its waiting in the indexes, but metals are important as well. The share ofabout the market in metals, it is a much bigger deal. What we are expecting on the china front, the consensus is for Slower Growth and the argument is does the Central Government intervene if the growth gets tubing slow, and to what extent do they roll back . Alix we have seen fixed Asset Investment fall but investment continues to pick up, which shows it will be the government supporting growth again. What is your take . Robert that is what the data tell us but the data is looking behind rather than ahead. Are we going to see a rollover of this stimulus in the Public Sector as we go forward as the Party Congress is over . I would agree, i think oil will be the leader partly because oil has become much more flexible on the supply side than ever before. It used to take a fair amount of time to change supply and demand unless it was something the saudis were doing. Amountoes up and within of weeks we see u. S. Producers put rigs back into play, see production pickup so the oil market has become much more but shortterm supplydemand market and the balance is starting to shift. Alix it is all about oil, i keep telling everyone about that. , as u. K. Coming up Prime Minister theresa may answers questions in parliament, we will bring you the latest on brexit and what writtens weaker britains weaker job numbers mean. This is bloomberg. U. K. Prime minister theresa may facing questions from parliament ahead of the second day on her brexit legislation. That debate continues, the u. K. Labor market is showing signs of a slowdown, employment dropped in september for the first time in almost a year, signaling modest Economic Growth could be putting pressure on their workforce. Robert sinche still with us. One and done at the bank of england . Beneath the headline numbers, not great. Robert the Unemployment Rate held at a 40 plus year low but the labor market data in the u. K. Is a threemonth average thing they have going on. That was the three months ended in september and what was interesting to me is for the three months ended september versus the prior three months, the level of employment was actually down. We have not actually seen the movement yet. We have heard a lot of talk about Companies Potentially leaving the u. K. , but i think 2018 is the time when you are likely to see some of that happening. We have seen asking prices for real estate in london now turned negative on a yearoveryear basis. We are seeing employment numbers coming off. Well wages are up 2. 2 year over year that is meaningfully behind headline inflation at 3 , so you have employment flattening out, slightly negative real wage growth. Does not paint a particularly right picture. Bright picture. Jonathan there is a fascinating case study in the u k. Unemployment is incredibly low and unlike in the United States the Participation Rate has held up quite well, yet wage growth is nowhere to be seen. What is going on and what can we learn from it . Robert it is a global story, and i think what we have seen over the last decade is the inclusion in the Global Economy of many economies that have a much lower wage structure. I think that has been a permanently depressing impact as you bring in lower wage workers whether in china, vietnam, parts of africa, those are competition for global labor. But we have seen is that employees are much more concerned about maintaining a job the necessarily getting and asked her 1 or 2 wage increase. Jonathan has carney made a mistake . Robert no. Jonathan he can stick with us and tell us what he really thinks on a commercial break. Coming up, we will check out Deutsche Bank. Andas a new top investor some good news for john cryan, that is next. Jonathan two hours away from the opening bell in new york city. Futures down by. 4 percent, dell futures off by 100 , and that continues in europe. The loss in frankfurt, germany and the dax, impacted by what happened on the fx market. A sixth straight day of gains, the longest streak so and in thear, treasury market, very well bid. Yields lower by two basis points. Those commodities continue to appear. Down by 1 , crude, 55. At around 10 for wti. You up to speed on some headlines outside the Business World with emma chandra. Emma thank you. Republican leaders are hoping the third time will be the charm for repealing obama care. The move could complicate calculations in both chambers of congress. Twice already th this year, tried and failed to repeal obamacare cared in the u. K. , Prime Minister theresa