Elections as a new coalition coming together. He was given up as dead politically, and we are looking called 2. 0. Eing taylor the one mdb scandal sends a malaysian leader back to court. The Opioid Crisis hits the bottom line for a toptier company. A lot of questions remain and no opioid maker is out of the woods. Taylor a longtime Federal Reserve leader claims the banks should play a political role. This is going to give ammunition to trump. Taylor in San Francisco fed daly with mary thoughts on policy for a fed leader. I supported the change to put the economy back in a good position. Taylor it is all straight ahead on bloomberg best. Taylor hello and welcome. I am taylor riggs. This is bloomberg best, your weekly review of the most important news, analysis, and interviews from Bloomberg Television around the world. Lets start with the day by day look at the top headlines. Ater last week closed with flurry of tariff threats between the u. S. And china, President Trump delivered positive news in a press conference at the g7 summit. S p futures have turned positive after President Trump said that china wants to restart trade talks. Pres. Trump china called last night our top trade people and said, lets get back to the table, so we will be getting back to the table. And i think they want to do something. The president s earlier comments that he has the power to force American Companies to leave china roiled u. S. Companies, sending yields sinking into a three year low. Today it is a different world, a different trump. He said it was china that called him. They called twice. Now they are serious about this deal and they want to engage in the negotiations. The key, of course, will be the reaction from the chinese. President trump says china called and asked to restart trade talks. Meanwhile, a Foreign Ministry spokesperson says he was unaware of these calls, also echoed by the global times. What actually happened . The Foreign Ministry in beijing werent immediately able to confirm the calls President Trump referred to. Then we had the signal from the editor of the global times, which is an important mouthpiece here for the communist party. He made the point that whatever calls did make place were not at the level of significance President Trump thought they were. Pres. Trump i think they want to make a deal. I do not think they have a choice, and im not saying that as a threat. It was very clear his leaders were whispering in his ear all weekend. Someone showed President Trump a speech the vice premier made last night in china. Trump saw the word calm and thought that was some sort of concession from the chinese, that they would not escalate further. He is taking that as a positive and he is running with it and sending out some more hopeful messages to markets today. York fed president bill dudley called President Trumps trade war with china a manufactured disaster in the making. In a Bloomberg Opinion piece, saying the accommodation encourages the president will escalate the trade war further, increasing the risk of recession. Officials could say explicitly the central bank wont bailout and administration that keeps making bad choices on trade. Bill dudley has an understandable position, most of the people at jackson hole this past weekend argued the World Economy is going into a slump. Many countries close to recession. In the u. S. May be slowing down as well because of the president s trade policies, but the fed is not going to get involved in the politics of making trade decisions. The fed said today that they rejected the dudley doctrine, that they are not going along with dudley. Noting ishat is worth this column is going to give ammunition to trump and critics of the fed who say, here is evidence there is a deep state. This is going to be a real distraction that powell does not need or want to deal with. Boris johnson asking the queen to suspend u. K. Parliament from the week of september 9 until october 14. Politicians are due to return from recess next week. This would significantly squeeze the amount of time lawmakers have to make a brexit happen. Nots johnson says he is seeking reelection. Mr. Johnson has thrown this spanner into the plans to prevent his idea of taking britain out, do or die, by the end of october. Now, it is not unusual to suspend parliament before a new agenda is announced. Normally, two or three days, it is announced, so five weeks, fairly extraordinary. What is it going to end in . Maybe we are more likely to get this vote of noconfidence. Then we are in the grounds of a new general election. Prime minister Boris Johnson sparking a controversy with plans to suspend parliament for nearly five weeks. The queen has approved this suspension. Labour Party Leader Jeremy Corbyn is vowing to fight. , aspeaker is calling this constitutional outrage. What is the likelihood this gets stopped . There are people calling this a constitutional outrage, but the real question is what is anyone going to do about it . Jeremy corbyn and some other mps who have opposed a nodeal have talked about setting up their own parliament in another building and holding it outside, to the extent that they see this to be an antidemocratic move. Vicente conte is set to return as italys Prime Minister after a mandate to form a coalition government. It is striking. He was given up as dead politically just a week ago, and all of a sudden we are be looking at 2. 0. He will have a week to put together a program to name ministers and to iron out a deal over difficulties between the parliament. They are going to back this coalition. He is Still Holding out on his desire to remain deputy premier , which may be a dealbreaker for coalition,ide of a the democrats. China now indicating it will not immediately retaliate against the latest round of tariffs. The ministry of commerce spokesman told reporters in beijing that the means for retaliation, but thanks the question is now about removing the new tariffs to prevent escalation of the trade war. With the Commerce Ministry said was they would not retaliate against americas retaliation against chinas retaliation of last week. It can be spinning, but that is where we are. He also rolled out a request that existing tariffs be rolled back. That sounds like a tall order given the trajectory of these trade negotiations. He said also those talks may still go ahead in september. He did not confirm they would , but he said there is some background work going on in terms of trying to keep that on track. You could take it as a conciliatory message. On the other hand, he is making it clear china does have the option to strike back if it wants to. President trump says the u. S. And china are going to renew trade calls, although he offered no timeline or other details. What can you tell us about these talks . Then we havent heard anything more today than trump saying there was a call planned between chinese and u. S. Officials. He did not indicate the level of the officials involved, whether it was top negotiators he said there was a talk, a conversation planned. The fact of the matter is that if they did speak, it was only two days before the u. S. Was expected to increase 15 tariffs on about 110 billion of chinese goods additional. It is just hard to imagine where they are going to find some Common Ground 48 hours before these tariffs hit. The euro down half a percent. That alters happen in the last few minutes. 109. 99. It is also a record versus the yen. Very definitely weaker euro. Do we see the euro plunged and equities or the other way around . I think they euro was the driver. The london fix at 4 00 p. M. London, 11 00 a. M. , new york, in that the month, you typically see a lot of hedges readjusted from international investors. You break some Technical Support at the lows of the year, just above 110. It is a perfect storm. Toretty liquid environment break to new lows. Lets get the latest on dorian. The National Hurricane center says it is concerned by dorians slow motion as it approaches floridas coast. That could put the state at risk of a prolonged, drawn out event. Why is it concerning that dorian is slowing . When they slow down, it gives it a lot more time to drop rain. Remember Hurricane Harvey a few years ago, it slowed down over texas and dropped record amounts of rain. And something similar could happen with dorian. As it comes in, you can get 10 maybe 20 inches of rain over two to three days. It could hit between port st. Lucie and fort lauderdale, which is large amounts of expensive real estate in the path of a very destructive storm. Taylor still ahead as we review the week on bloomberg best, much more on the u. S. China trade war with perspective from chinas largest sportswear manufacturer. Plus, an exclusive conversation with San Francisco fed chief mary daly. Explains why he is bullish on the cbsviacom merger. It is a good deal. It is a buy. Cvsviacom. Taylor up next, more of the weeks top business headlines. Indias government has promised fiscal stimulus. And the central bank is helping provide the cash. It has actually cut Interest Rates and given a record amount of dividends to the government. Taylor this is bloomberg. Taylor this is bloomberg best. I am taylor riggs. Lets continue our global tour of the top business stories with more from the g7 summit. Discussion about iran was the top of the agenda. But there was an unexpected twist when a top iranian official came at the invitation of french president emmanuel macron. Irans foreign minister visited france for six hours. Bilateral talks near the g7 summit. We had a brief sit down with the french president emmanuel macron. Officials said they gave the u. S. Delegation a heads up about the surprise arrival. But macron did face allegations he blindsided some of his allies. President rouhani said he was prepared to meet any political leader in the interest of his country. Pres. Trump if the circumstances were correct, were right, i would certainly agree with that. A completely different donald trump we just heard, actually making big news in iran and china. He was asked if he would consider meeting with rouhani, and he said he would. He also appeared to suggest he would be in favor of extending what is known as a letter of credit back by oil to meet their financial obligations. Until now, the strategy of the u. S. Was to apply maximum pressure on iran. President rouhani says he is not interested in just a photo opportunity with president donald trump. And the iranian president insists that sanctions be lifted before any negotiations. The last thing they want politically is some event where pictures are taken, but the iranian economy does not get any relief. I think that is what they are hedging their bets on. President trump has said he is waiting by the phone for them to call, that he wants to strike a deal. One of the issues is he is surrounded by advisers who have built their careers, frankly, on drawing a hard line against iran and opposing these kinds of talks. The protests in hong kong taking an ominous turn. Please drew their guns and fired shots at demonstrators who were turning violent again, and beijing gives, perhaps, the strongest signal that it may have to intervene. It is a standoff right now because we thought that there were no arrests or tear gas last weekend. Saturday, it was a different story, another 29 arrests. Teargas, fire. The police and the protesters, hardline protesters, at least, clashing with with metal poles. Protesters coming at the police with metal poles, and also bricks, throwing bombs. The Police Responding with the most force they have used with Six Police Officers pulling their sidearms. One officer actually discharging a round into the sky, and also, the water cannon trucks were brought out the first time on saturday. The Hong Kong Government putting out a statement saying the violent acts put hong kong in a dangerous edge. Unrest in hong kong continues. Authorities clamping down on demonstrations and have arrested at least three prominent protest leaders. What is the latest with these arrests . What is the tally . It seems that hong kong has arrested seven people. There are quite a few prominent people among them, including joshua wong, who is the subject of a netflix documentary. For weeks police have been banning the right to march, not approving certain rallies that have been happening in the city. There is a big one planned for tomorrow. We have numerous arrests today, so the city is on edge. German Business Confidence falling to its lowest level in almost seven years. The president of the institute that collects the data says this drop in confidence reflects deep problems in the german economy. We see the weakness focused on manufacturing is spreading to other sectors. So far, the argument has been that obviously the fact the situation we are seeing in manufacturing is not affecting the domestic economy, retail sales, low in employment, and domestic demand is holding up. In that sense, the signal this is spreading could be a sign for the ecb to do more. Now the question is, obviously, is whether there is enough support for our action. I would guess at this point, finding consensus might be quite difficult. Argentina is pushing creditors for more time to pay back its debt. The country is hemmed into a worsening crisis. President macri laid out a series of Desperate Measures to try to light the debt load. They will force investors into shortterm loans in the local market into accepting longer maturities. Your take on this . The timing was surprising. Everyone knew things were bad in argentina, that they are burning through reserves very quickly. That they were having increased difficulty rolling over shortterm debt. But i dont think anyone thought it was going to happen quite so soon. Maybe what tipped the scales was the extraordinary low level of their ability to roll over this shortterm debt. They probably thought with the election coming up, macri thought, i better act sooner rather than later. He, i think, is widely considered a lameduck president. It is perhaps a final throw of the dice. The reserve bank of india record payoutck of more than 24 billion of the federal government, boosting the coffers as the economy slows. It comes on top of new measures from the finance ministry to bolster the economy. Finally, it seems, the government is going to ease fiscal policy. That is the expectation, but one never knows. We have this government which has been running a pretty tight fiscal ship, and what heavy lifting it has done. It is actually cut Interest Rates and now given a record amount of dividends to the government. Not only dividend but part of its surplus, which is very controversial. This will add pressure onto the finance minister to ease. Some of the fiscal levers. While this comes at a good time for the reserve bank of india, whether the finance minister will bite the fiscal bullet or not, we will watch for that. The treasury secretary Steven Mnuchin has told bloomberg to the possibility of ultra long bonds is under consideration. In an exclusive interview, he says he anticipates taking advantage of favorable conditions to borrow long term. Now his comments moved the bond market with the spread between the five and 30year treasuries widening. It is not a new idea. It dates back as far as 2009 that the u. S. Has considered doing this. The administration has rekindled the idea. It is hard to know how serious the administration is about this. They said they are very seriously considering it, but at the same time, they have talked about this in the past and got a ten a very tepid response from investors, so the last thing they want to do is make an offering nobody wants to buy. So we will have to see whether they actually follow through. Lets turn to the u. S. Economic data. Growth decelerating in the Second Quarter by more than initially reported. Growth revised gdp growth down to 2 . Consumers remained a bright spot with spending topping off forecasts. I think we are in a slower but steadier footing. A 1 10 downward revision is not particularly consequential, but we can see the primary pillars of Economic Growth look wellpositioned to continue driving the expansion in the back half of the year. So consumer spending, Even Stronger than first reported. Government spending, basically running at the strongest pace in this cycle. Taylor welcome back to bloomberg best. I am taylor riggs. The Federal Reserve was a again a central topic of discussion this week, with the focus not just on the policy path, but also its political role. On wednesday, San Francisco fed president mary daly spoke exclusively with bloomberg. She is not a voting member, but fomc, but she explained why she backed the committees july rate cuts. Global slowing, the headwinds from uncertainty. Those things weigh on the economy. The neutral rate of interest has been coming down a little bit, and so to recalibrate policy, that is why i supported the basis cut, to point recalibrate the economy and put the economy back in a good position. If the ecb recalibrate and decides to enter quantitative easing, what do you take away from that . And what is your reaction to it . All Central Banks are responding to the fact they have Economic Conditions that are changing. In the european union, Economic Conditions have slowed quite a bit. Inflation is under the target. That requires Central Banks to take action and they are doing that. In the un