Lower. G seng 8 10 of 1 to what we are going to get out of this Earnings Report coming out that we were alluding to. Composites recovering a little bit, a little bit flat. The aussie market is one of the few that is moving to the upside. Lets have a look at the majors here as well. Of the noises coming out white house as well. Larry kudlow saying the u. S. Would not intervene in the currency market. Donald trump saying im not so sure. That has a bit of uncertainty. Lets go back and look at policy decisions by the bank of japan. The yen depreciating a tad. Momentxit stands at the is causing further weakness for sterling. Possibility that bulgaria might join the euro zone. That is what we have at the moment. Get more from what is going on elsewhere and get to the first word news with su keenan. The u. K. Is deploying another warship to the gulf to escort commercial vessels. Alongsideerate another naval shift amid tensions with iran. The move comes as iran and european powers met to discuss the 2015 nuclear deal. Both sides have complaints about each other today. The atmosphere was constructive and the cussions were good. I can say there are lots of commitments to the jcpoa and its survival. Su reports from london to say the u. K. Is stepping up preparation for a no deal brexit. This will come at the end of october with a Senior Advisor saying it will happen unless the European Union reopens negotiation. The advisor says the government hopes vessels will change its view on neit. Johnson has formed a panel to oversee the brexit process. Australia and singapore are among the five countries that could lose Market Access to the European Union. The Financial Times says russells is now targeting countries that it says do not regulate Credit Rating agencies as rigorously as the eu. The other three on the hit list are brazil, argentina, and canada. Any move would be the first time that european Market Access rights have been withdrawn. The u. S. And china trade negotiators will fly to china later monday as talks resume after a two month timeout. They will travel to shanghai with little expectation of a breakthrough. We have seen mixed signals coming from both sides with neither showing much inclination of compromise. Said it will buy u. S. Farm products but soybean purchases have fallen to the lowest in decades. Global news 24 hours a day on air and on tictoc on twitter. Journalists and analysts in 120 countries, this is bloomberg. Chinas top Hong Kong Policy office will give its First Response to two months of unrest in the city. We saw clashes between riot police and protesters in multiple locations. Rishaad our Senior Reporter is on the ground. Containy struggling to the unpredictable tactics. We saw the scenes turn east in part of hong kong island, that is a new one, isnt it . David they are unpredictable and we dont know where the next break will occur. That startedally in central hong kong, some of it ended up in the causeway about two kilometers at the Liaison Office of the chinese government. Once again, for the second week in a row tear gas was used to disperse the crowd. There was a lot of tear gas. We could still feel it on our skin and in our eyes as we are down here filming. This is the Main Police Office in the western part of hong kong. You could say these huge see these huge barricades that you cannot get beyond. The police expecting more protests in this area. There is going to be a whole lot placeer protests taking until october 1. That is the national day. They have the Civil Servants rally, they want more leadership coming from the government. They dont think the government is doing enough. That is coming up on friday. It general strike is being called for on monday. There will be some protests taking place to complain about allowedpened when they whereo come in last week protesters are actually at. That is the essence of what is happening. It is the unpredictability of it all as police try to manage the unprinted debility. They dont know when the next protest will take place. We were speaking with james from the pro establishment voiced saying the issue has gone beyond hong kongs handle. They cant do anything to control the situation. It may be up to beijing. What is likely to happen in this press briefing . Im extremely curious to find out what they are going to say. What we get normally from beijing, we havent from the Liaison Office. We have that condemnation of the protest. That the protesters themselves are undermining the one country, two systems that they claim they are trying to protest. Yesterday, not even on the island, she was attending an event. It was quite an unusual press saying they are looking for more leadership from carrie lam to reassure the public this will never come back. Thanks david. We will be back with him a bit later on. Tensions are culpable on the streets of hong kong. The leadership unpredictability and also all of this widespread more on the hong kong protests proving to be more of a challenge for the authorities. Not so great here, expectations, we talk about why ines for breakthrough shanghai. This is bloomberg. Is going to be a busy week for the Global Economy getting underway today. They await the Federal Reserve policy decision on tuesday and the bank of japan announcement on wednesday. Kathleen hays is in tokyo for us this week. Lets start with the fed. Gdp strongerthanexpected number we got this week offset any impact from the Global Economy and the weakness we have seen. Behleen the answer seems to that it is determined to keep the economic expansion going. That is what jay powell said over and over. Signs of overlook some the domestic economy and look at what is going on with the Global Economy. In december and january it started on the big pivot. This is the thing they emphasize. The domestic is holding up ok but not the global. Gdp is up to. 1 . That is slower than 3. 1 in the first quarter. Lets look deeper into the report. There is two sides to the story. The consumer, very strong in the Second Quarter. You will see that Consumer Spending was up 4. 3 . Theid line is the white line is what i should be pointing you to. That shows a 4. 3 . The forecast was only 3. 35 annually. The blue line is important, investment. It is down in annualized rate of 0. 65 . What are we going to be looking at . We are waiting for the 25 point basis rate cut. Will the hawks put their feathers into this mitt by arguing the feds it should not overdo it . Will we hear that in jay powells remarks . People want to know is this insurance rate cut more wait and see . Or is it the beginning of a cycle . I think more people are looking for the first part. Just because of the fact that growth seems to be holding up and a big worry is how the global trade war feeds through more investment and manufacturing. We have seen some weakening numbers around the world. The fedsow does moves look at what is going on with the bank of japan . We expect . The boj knows and knowe around the world the yen hasnt had a big spike. Maybe you dont have to worry about it. Some people think with the ecb already signaling more stimulus boj might be well served to have its own dovish signal. Maybe tweaking the Forward Guidance to say they will keep the stimulus going for longer than spring of next year. The Bloomberg Economics team saying they wont change 2021ing until at least because the japanese economy is still growing. Even though exports are getting weaker as it drags on. Industrialchinas progress. 947 economists surveyed in tokyo do think there will be some small tweak. That means three quarters dont see anything at all. They had a story a few days ago oft they found out members the bojs policy board are reluctant to do that. They dont think it will change the economy or inflation picture. The boj probably doesnt do anything but i think people are holding out the chance that maybe you get some dovish signal to keep up with the ecb and fed. Thank you so much. Kathleen hays out of tokyo. Ust an update we are starting to hit session lows. The hang sengross index. The worst week since may. To be the case this week ahead of all the events. Lets have a look at the other movers. Samsunging the likes of. What is interesting is analysts were saying foreigners are intensively buying the likes of samsung and betting on a rebound in prices. They are saying when it comes to this japan export curve leading pricesrallies, the chip might be petering out. The likes of samsung is weighing on the company. That is the equity story. Bloomberg dollar index is about one point. Comes off the best day for the bloomberg dollar index. The bbdxy. Nth for the big decision this week from the fed. Guest toined by our talk about the big event this week. The fed seems to be baked in. Most of thend market are expecting 25 basis points. The key is the kind of guidance we get from the fed. We expect to see this followed up by another rate cut in december. We are expecting not to see the number of rate cuts that money markets are pricing in. We see these moves being preemptive and we continue to point to the ongoing strength within the u. S. Economy. Relatively strong albeit down from q1 levels. We are expecting 180,000 jobs to be announced on friday. That suggests that the household continues to do pretty well. End of the day, this is an insurance cut. The fed reacts to offshore global developments. That probably suggests that we continue to see strength from the u. S. Dollar. You are calling for further dollar strength, do we get that insurance cut, where do yields go. Are we vulnerable for some kind of corrective backup in yields . There is a lot to be said for the guidance that the fed chair gives us. That will be critical. My sense is the u. S. Equity markets certainly have priced in further monetary stimulus. Clearly there is the case when you look at the level of curve and that you level of yields, there is some risks of disappointment. Jay powellsching press conference for guidance, the language that he is using. I think that is very important for bond markets and Global Equity markets as well. We have been asking our online question, lets load up for our audience as well. Do these low yields stop supporting stocks . Robert when you look at the earnings season we are in, it feels like markets did a good job discounting the lower price of increase in earnings. Is that if thegh fed does start to let the market down, i think there is risk in the situation where we have multiple rate cuts. Some talking about 50 basis points this week. It is not obvious that Interest Rates are particularly supportive. It is a fair question to ask. The answer to that question will be a little bit more obvious as powell delivers his press conference. We see how the markets react to that. Rishaad you didnt answer the question. At exactlya look what we are looking for. Signalsar here, mixed talking about the u. S. Mr. Trump says it is up to me really. Robert absolutely. There has been some . Said about the guidance that we might get from u. S. Officials. I find it very unlikely and think it will be opportunistic were we to see any intervening given the size of global markets. Remembering of course the ecb paved the way for what could be multiple Monetary Policy actions. Ultimately, Foreign Exchange markets will be driven by fundamentals. The outlook certainly much better at the moment. Were we to see any attempts to intervene in Foreign Exchange markets. Im not particularly convinced we have the significant fit right now. We can expect to see further modest strength in the u. S. Dollar through the end of this year. Certainly for currencies, i think it is a matter of time before we break that. We are seeing signs of weakness in the british pound this morning. World, thet of the Australian Dollar and new Zealand Dollar underperformed. They were the weakest currencies within the g10 last week. Lows for the euro and sterling. Preservation,t of these next 24 months, where should i leave my savings rate, and what currency . It has not been particularly favorable from a market point of view but we have continued to argue for u. S. Dollar strength. If we are correct and it is only thefurther rate cuts if u. S. Economy continues to grow above levels through the end of this year, we expect to see further strength in the u. S. Dollar going forward. My money would be in the u. S. Dollar. Viewad how much of that is predicated on what happens with regards to this trade war . Good question. I was interested in these current talks going on this week being held in shanghai rather than beijing. They have much to do with the political cycle. Probably what it suggests is the body language we are seeing coming off officials on both to see anynt expect nearterm settling of these trade talks. Im not sure at the end of the day whether it is in either sides interest to settle right here, right now. This is probably a risk the chinese dont necessarily meet those high levels of requirements. A chinese point of view there is probably a good argument for them waiting to see what the u. S. President ial election looks like. To get a better understanding of who they may be negotiating with next year as well. I dont think there is too much expected. Certainly i would be very surprised if there is any significant agreements. Thank you. Coming up, u. S. China trade talks resume this week. Neither side seems eager for a deal. The views of our guest on the shanghai discussions later. This is bloomberg. Welcome back. Have a look at what is happening in the philippines. The big news was the president ordering police and military to stop all lottery and gaming activities. Accusing the Government Agency of corruption. Followthrough a across these gaming related shares. This is bloomberg. Kong,29 a. M. In hong 10 29 p. M. In new york. Im su keenan would first word headlines. Pushing ahead with the tax on big cap, this despite President Trump threatening retaliatory tariffs. He has planned what he has the ghoulish and as of the levy that the french government says will be opened anyway. Bruno le maire insists the measure is not deliberately targeting American Companies, and says fair taxation and intellect of any is a universal interest. Friends should understand the decision of france to have its own digital as any willingness of targeting the other companies, but thats not the case. We are not willing to target the American Companies. Meanwhile, chinas top Hong Kong Policy office will give its First Response later to the continued escalation of protests in the city. The weekend some mass demonstrations across the city and violent clashes with police. The American Chamber of commerce in hong kong is calling on the government to show more leadership. The sad story in the philippines. At least eight people have been killed in a series of earthquakes in the northern section of the philippines. The tremors struck the province with seismologists recording almost 200 aftershocks. The government has promised about three quarters of a Million Dollars of aid to the withess to the province translators describing it as one of the most treasured destinations in the country. Two spacex. The company has successfully completed its 18th resupply mission to the International Space station, installing the dragon cargo capsule over the weekend. It docked at the space station carrying more than 2000 kilos of research, as well as supplies for the crew. The experiments include a 3d organ printer, which will create nerve cells and let scientists see how they hold their shape in zero gravity. Global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. Thanks. The United States and china heading back to the tray table this week for the first time in three months and theres little expectations on either side that there will be a breakthrough. Looming over the talks issues, andical signs that beijing and washington dont have the willingness to budge on key demands. Lets set the stage. Tom mackenzie is in beijing. It sounds like tuesdays talks could be a little what, fraught . It does, indeed. Theres been a lot of jockeying from both sides leading up to these talks, that will run from tuesday through wednesday in shanghai. You have the Trump Administration suggesting they might be concerned about huawei, which is seen as positive. On the others either the others either u. S. Is also said they will investigate chinas developing nation states at the wto, which opens a whole new front in terms of challenges to china and its economic model because it could add additional pressure. And there are discussions in china about allowing private and state owned companies to buy more Agricultural Products, but from the chinese perspective theyve continued this investigation into fedex, outlining what they see as their three key demands for getting a trade deal, which is the removal of tariffs, the twosided deal, and less onerous demands. On the trade front, both sides seem as far apart as ever. The usi downplaying expectations, insisting they want a proper deal. Thats wilbur ross. And tom, china has suggested it will start buying u. S. Soybeans. How good could that be for u. S. Farmers . It is maybe only going to benefit u. S. Farmers at the margin, at least in the short to mediumterm. The data for the first half shows very clearly the drop off, the significant drop of