We are seeing a little bit of a lift. 0. 8 . G some a lot of that has to do with a little bit of optimism when it comes to trade news. We know the conversations are ongoing. I am looking at the u. S. 10year yield. 1. 6 after a big week. Lower negative rates in europe. We will have a look at 10year yields. We will ask ourselves what the inversion meant. Oil, 55. 52. Oil rising after we had this drone attack at Oil Gas Facilities once again underscoring some of the fragility of that region. Coming up, we have an interview with the boston fed president. Dont miss that chat after 6 30 p. M. London time today. This goes back to the conversation as jackson hole starts on thursday. Lets get to the first word news with viviana hurtado. Viviana the iranian tanker looks to be heading for greece. That is according to a vessel tracking data compiled by bloomberg. It was released by the british territory after being detained on suspicion on sending oil to syria. Rain for an 11th straight weekend. 1. 7 Million People are tested in hong kong. Estimatedwhere police 130,000 gathered. The demonstration was largely peaceful. This is in contrast in in contrast to the increased violence. It is according to a times report citing government documents. The dossier prepared also warned that job losses and disruption to the u. K. Ports for as long as three months. Oil is rising for a second day after a drone attack on a saturday oil tanker. Rebels from yemen attacking the facilities in the southeastern parts of the kingdom. No disruption to production. 50 billion euros of extra spending. That is what german finance minister says the country could muster in an economic crisis. It is the first number berlin puts on possible physical meatless. Fiscal stimulus. Getting tougher for argentinian president , his economy minister quit this weekend saying the country needs economic renewal. That coming a day after the Credit Ratings were cut to junk by s p both citing the possibility of a sovereign debt. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. Im vivian hurtado. This is bloomberg. Francine thank you so much. Lets get the latest on the trade story. Donald trump sang the u. S. Is doing very well in talks with china. He said he is not ready to close a deal. The appletrump said chief executive has voiced concerns about the main competitor samsung gaining an edge. Because their products will not be subject to tariffs. Derek. Us, how significant are these comments from President Trump on apple . I think they are quite significant. I think they are significant because it seems that tim cook has found an argument that the president finds persuasive. This is a big deal because u. S. Industry has been trying for really long time to get the residence in or on a lot of this and a lot of the ideas they have had have fallen on deaf ears. Havent unable to move the needle. Tim cooks central argument seems to have landed. The argument he is making is, look, if we are asked to compete against another really good company, in their view talking about samsung, we are going to have a 10 differential that we have to now deal with that they do not have to deal with because we are at the supply lines are based versus samsungs which are more diversified and in places that apple is not that seems to be a persuasive argument. Will that matter . Hard to say. Apple is facing 10 levees going on some of its products on september 1. On a whole bunch of others december 15. Know abouthat do we President Trump in his and his executives at the market was plunging last week . It was really interesting. The white house is taken great pains to say the timing of this phone call, visavis the market dive was entirely coincidental. I will let you be the judge. Healthy dose of skepticism. The thing that i would say is the white house has taken great pains to say after that call that there is no recession on the table. The white house has been clear about that. Says franklina roosevelt channeling franklin roosevelt, the only fear recession is the fear recession. This is so critical to this president. He is a 401k president meaning he is asking his voters to look at their 401 k s and judge the economy. You are talking about a dagger at this president s central reelection argument. That is going to be a really big thing to keep a hold of as we go through the next couple of months here to november of next year. Central argument is the economy. If there is a recession, it really hurts President Trumps chances. Francine derek, thank you so much. What does this mean for markets and investment . Iannelli. Andrea thank you so much for coming in. Yesterday was a big market move. We saw a lot more yields an inverted. We saw markets in turmoil. Was it because it is august . Is it more systematic . Lookingust is not at the last couple of years. What is going on, you are seeing data that is mixed. You are seeing trade numbers, macro data that is slowing. Markets are interpreting that and thinking about what does this mean for the fed, for Monetary Policy and for yields. What markets are not telling the fed now, whilst we may see the occasional improvement on the trade front, this is not something that is going to disappear tomorrow. Something that is going to last into next year. You are seeing the Manufacturing Sectors struggling. It will be interesting to see what powell says this week. Francine does it mean if they do not do more, we risk a recession . Andrea we dont see a recession at the baseline. The curve hasnt had an impact is because investors associate it with an end with a recession down the line. Our best case is this is not going to happen. The consumer is still very strong growth that continues to go ahead and doesnt seem to blink. Francine have they looked at what President Trump doesnt say. Listened, do we think he is going to be more mindful of these Consumer Products and tariffs . Andrea the white house is looking at. As derek mentioned, he is the 401k president. On thelth impact electorate does matter. Not going to move in the way it did by postponing some of the tariffs on a more consumer decemberoods to because it gives a more of a feelgood factor. Francine going back to what you said from jay powell, it is a most indirect the first time we will hear him directly say it will come in september or will it be more nuanced . Andrea it is going to have to be dovish if he doesnt want to disappoint the market. It is going to be difficult for the fed, depending on what we have in the price already. Over 110 basis points i the end of next year rate cut. Dubbing the market is going to be challenging. He can do better when he tried to juggle. Will get back to some of these yields. Come, live in hong kong for the latest and the 11th week of protest. Will there be a change in tone among demonstrators . Weall streets mania discuss more on that next. This is bloomberg. Francine economics, finance, politics. I am francine lacqua. Lets get straight to the bloomberg first word flash. Viviana concerns from tim cook about competitor samsung according to President Donald Trump. The chief of apple is worried that south Korean Company will get an edge because its products will not be subject to tariffs when they are imported to the u. S. On septembert, 1, apple products will be hit by tariffs. It is tough for apple to pay tariffs when they are competing with a very good company that is not. He said how good of a competitor . He said a very good competitor. Paying tariffs because they are based in a different location. I thought he made a very compelling arguments so am thinking about it. Iana tesla has a plan to the company is offering no contract packages as part of the relaunch. Elon musk tweeting with a new lower pricing, it is like having a new money printer on your roof. It comes less than a month after tesla reported its third consecutive quarterly decline in solar installation. Dont be some boost dont be seduced by negative Interest Rates. He says his company is shying away from cheap credit as others take advantage of the borrowing to pay for expansion. The brewers chief says companies that issue debt because it is cheap may end up with Balance Sheets they cannot afford. That is the Bloomberg Business flash. Francine much was made last week of the yield curve inversion. Mohamed elerian things it may have been thinks it may have been they could cut spending. President Trumps NationalEconomic Advisor has been trying to allay recession fears. I sure dont see a recession. Numbersome block buster towards the back end of last week, really blockbuster numbers. In fact, despite a lot of focus on wall street has been marking up their forecast for the third and Fourth Quarter. That echoes our view. Francine still with us is andrea iannelli. Trying to get some charts up for you which i will get. It is like a monday morning. The yield curve inversion, you say it is nothing. Jay powell have to press the markets he wants to get something done. Will have to price the markets if he wants to get something done. It does feel like a race to the bottom. We have had cutting rates. 15 Central Banks and emerging markets cutting rates year to date. In the last 12 months. Competitiveness if competitiveness is achieved today, if the fed stands still with ecb, that is giving guidance of more ease and more easing to come. The Monetary Policy backdrop in the u. S. There to keep grinding they have to keep grinding. In terms of yields, what does it mean . Yields will stay in check but continue to go nowhere. Also because you are not getting anything outside of the u. S. You are getting zero based on negative yields. Francine my charts i am just able to get charts up. Bonds hasielding stopped 60 trillion. Is there a cycle to cap this . Capea there is no obvious or limit considering how much easing is still expected to come. Buying byor income and just a lack of options. To investmenting grade credit. To done if the fed needs more than everyone, what are the chances that yields in the u. S. Will go negative what does that mean . What happens . Andrea compared to other jurisdictions, lets say a lot more legroom to cut rates compared to the ecb, the boe and so on. Arguably for u. S. Yields to go negative, you need a pretty back economic backdrop pretty bad economic backdrop. If you see a recession, you could see yields going in that direction. Never say never. Francine i have a chart. I am on a roll. Andrea, this is another one of my favorites. Yield curves in japan. Overall, what is more surprising when you look at yield . Is it that germany compared to japan . Are now getting used to negative yields in europe. The entire german curve is trading up. Surprising, the speed of the move. Shores up the ecb. It will be interesting to see next, whether governments who are not getting paid tomorrow will decide to go ahead and pull the trigger and start issuing more. Francine andrea, thank you so much. He stays with us. Protesters rally for an 11th straight weekend and hong kong but this time it is peaceful. President trump meanwhiles truck warns the situation could threaten any deal. This is bloomberg. Francine this is bloomberg surveillance. Protesters are rallying for 11th straight weekend in hong kong pick organizers claim 1. 7 Million People took to the streets and what was a large and peaceful rally. Stephen engle joins us. What is the situation after what appeared to be peaceful . Stephen it was a pretty peaceful weekend. No teargas was fired. We are listening in to the regular Police Press Conference and getting the latest news. Keep in mind there were vastly difference on the sides of protest when there was heavy rain. It was quite large. Organizers say it was upwards of 1. 7 Million People. That is tremendously large given the city has a population of 7 million. The police are saying it is 128,000. Most people i am talking to says it is much larger. There is a discrepancy. The police are saying there were zero arrests over this weekend. There was no teargas fired. However, protesters are saying they are going to test the limits again coming up in five days, on saturday. They are calling for a civil disobedience on the way to the airport. Last week there was the injunction from the courts disallowing protesters or anybody who didnt have an airplane ticket to get into the airport terminal after six Straight Days of demonstrations. Now protesters are saying they want to call for disruption for people to make it difficult to get to the airport on saturday. Police have just responded saying, if the demonstrations are peaceful, orderly and rational, there should be no reason for any crackdown or violence. Police are warning they will treat any illegal activity at the airport quite seriously. Francine thank you for the update. We will have much more from stephen engle. Up next, the government documents predict postbrexit shortages. We will discuss Boris Johnson next. This is bloomberg. Calm. Ne keeping the white house pushes back on the idea the u. S. Is heading toward a recession. Derek ludlow says trade talks have been positive. German finance minister says the country could spend an extra 50 Million Euros to sustain the downturn. Marching in the rain. Organizers say nearly 2 Million People take to the streets in peaceful protest in hong kong. Good morning, everyone. This is bloomberg surveillance. I am francine lacqua. The Iranian Oil Tanker detained last month has left gibraltar and is heading toward greece. Swan has been released by the it is territory after gibraltar rejected. What do we know about the vessel . We know the vessel has left gibraltar and is headed greece headed toward greece. You can see the vessel is off the coast and at the moment it is headed toward greece. The destination can change multiple times in any single journey. What happens to more than 2 Million Barrels of crude to brokers . It could be in international waters. It could be shipped to ship cargo transfer. The big question is how does it get back to iran . Francine what does this mean for the relationship between the u. S. And u. K. . We spend a lot of time trying to figure out where Boris Johnson would be next . The u. S. Has made it clear, they are not happy with the British Government about the swan from grey gibraltar. What u. S. Officials are saying the u. K. Should look at the broader picture and the fact that Boris Johnson is trying to negotiate a trade agreement with the United States looking to leave the european union. Said do theicials british want to do business with the u. S. . Or iran . It is a very tense topic and it is going to take center stage with Boris Johnson and President Trump. Francine some of the latest on the oil tanker. Lets get to bloomberg first word news. Viviana doing very well. That is how donald trump is categorizing trade talks between the u. S. And china. He suggests white house is not ready to sign a deal. The president touted big state offter the weak the economy, china needs an agreement after more than the u. S. Ofna is denouncing it stem Interest Rates. Must be priced with reference to a revamped benchmarks. That rate is linked to the price of pboc charging lenders for cash over one year. Oil is rising for a second day after a drone attack on a saturday oil field. On a saudi oil field. Says are in says are in it was only a small fire. That is what german finance minister a lot schultz says the company could muster in an economic crisis. Its the first number berlin is putting on fiscal stimulus while action is imminent. Warning signs are increasing signs on Angela Merkels government. Confirmed anis interest in buying it. Denmark says it rules out selling the island. The president called a move a large real estate deal. President trump is said to meet with danish officials. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Francine the u. K. Prime minister Boris Johnson will travel to france this week to make clear that leaving eu with or without a deal. U. K. The u. K. Faces shortages in fuel in the case of a no deal brexit according to a times report citing leaked government documents. The dossier prepared the office the times says the report sets out the most likely aftershocks of a no deal divorce, not worstcase scenarios. Still with us, andrea iannelli. Around,u for sitting andrea. First of all these leaked guess in a lot of peoples interest, if you are Boris Johnson, you can have a way out of saying i had to postpone because we were not ready. If you are Jeremy Corbyn and you say, going to be a nightmare, we need to stop this. Sending a signal that we are unprepared for might for what might come. We are getting close to october 31. Needed tohemicals keep the british oil surprised oil supply safe. The report says this is the likely scenario. The government says this is the worst case scenario. Gas is an understanding between. Where are the preparations at. The business is trying to bring goods in and out. How do they change. Theres is talk of the Free Movement of people stops. There is no clarity. The absence of that clarity, what youre getting is this report that sounds like fighting. Week we spent a lot of time thinking Boris Johnson could somehow go for no deal brexit and call for an election in one or two weeks afterwards . Is that likely . It is difficult to read. Boris it is hard to johnson is sticking to his language. H