We bring that to you live. Welcome to bloomberg surveillance. The markets. N on the hs is closing shortly and hang seng index sores soars. Carrie lam is going to withdraw her controversial extradition bill. That is the bill that kicked off the last 15 weeks of protests. Some of them with more than an estimated 2 Million People which is an incredibly impressive figure. They got that, hong kong has a total of 7 million citizens. From babies to the elderly. That would be like if you had a protest in america and 100 Million People showed up. Reportthe stock moves on the chief executive carrie lam is going to formally withdraw the controversial extradition bill. We saw moves around europe as well and we even see futures moving higher. Is South China Morning Post reporting the news after months of protests in the city. You can see here, these luxury stocks are getting the biggest boost. Swatch is up, lvmh is up 4 . This is such an important hub for luxury sales, for the chinese, with tons of cash to come and buy all of this stuff. By the way, swatch owns a lot of luxury brands, including harry winston. Others, a time of luxury watches. Its not just those plastic cup colorful watches we all wore in the 80s. Lets get down to hong kong. Joining us from the island is Stephen Engle. He has been covering this from the beginning. Whats the latest . We arerightfully said getting reports from the South China Morning Post, the main chinese english language newspaper. Be meetingosed to with carrie lams cabinet as well as proestablishment lawmakers and probation lawmakers. Her plan toeil officially withdraw this bill. Keep in mind she simply suspended it and was the real catalyst for the camping up of the protests since june 9. It has lasted longer than the umbrella movement. And she has been quite the vilified individual for staying steadfast. So if that is demand number one, take that box. But we are also hearing from the oriental, another local language newspaper, that perhaps they will also suggest setting up some sort of truth commission. Some sort of investigative commission. Command number to a protesters is to have an independent inquiry. Carrie lam has also rejected calls saying there is already a mechanism in place. The protesters say wait a minute , our complaints are about the police and you will have the Police Investigate those . Reports,se local media that is significant. Matt well this be enough . , but willt, for sure this be enough for protesters to stop gathering in the millions . To stop these violent riots and to stop holding up traffic and commerce . I dont know the answer to that appeared we are getting indication from the likes of claudia among from the likes of a prodemocracy legislator who has been quite an outspoken supporter. Said that the concession came a little too little, too late. But they still need to get this confirmed that this report is true. Protesters,at the they need to digest this information and decide where to go next. Of thehearing from one protest leaders on our website. She was arrested, by the way, on august 31 ahead of last weekends rallies along with other figureheads of the movement. A saying saying five demands who have left us. If we give up, hong kong will die. There is still lots of dissatisfaction here in the hong kong economy. That was left over from five years ago, but still, the distrust is tell that is quite strong the distrust is quite strong. Matt Stephen Engle, thank you. We will keep you updated. Speaking of developments, Boris Johnson has moved to a snap after suffering a humiliating defeat for his Brexit Strategy with 21 lawmakers from his own party, well, they were, voting to take control of parliamentary agenda in an effort to block a no deal brexit. He threw them out after that. Jeremy corbyn says that his party would only vote for an election after a no deal has been blocked. I dont want an election, the public does not want an election. I dont believe the honorable gentleman once an election. If the house votes this bill tomorrow, the public will have to choose who goes to brussels to talk this out. And so he wants to table a motion for a general election. Fine. Get the bill through first in in order tot take no deal off the table. Matt i have to wonder what Boris Johnson was mouthing their. There. He certainly smart, maybe because he does not really care. He certainly smart smirked, maybe because he does not care. Corbyn said to pass the bill before elections, but isnt it true that Boris Johnson wins those elections, he can throw out that bill . That,i miss the end of but i think you are saying he could throw out this bill, and yes, that seems to be true. Seenhings that stand, we the defeat of Boris Johnson six weeks into his premiership. And are losing his majority we saw 21 mps rebelled against him and have subsequently been thrown out of the party, so big moves and big implications. Boris johnson is now running a minority government. When it does not mean we are headed the polls in a great. Urry it is approaching, but not so fast. Labor party wants to see this Rebel Alliance bill voted through before they will go to talk about an election. We will see if they will have an election later on but that wont get the approval. They call it a trap and preferred Jeremy Corbyn talking about it. So we lived closer to a general election. Somebody somewhere has to unlock the impasse we see in you can politics. Matt who would win that kind of general election . We did not know who would win dont wantand then i say landslide, but certainly Boris Johnson lost by a lot. Does that not mean he would have a chance in a general election or could he still cobble together a brexiteers majority . Anna well, he would not be able to roll out white rule out right. What kind of alliances could he built . Build . Party has often rolled out deal because what is the point if they are allied with the conservatives . Thet has to deal with Coalition Building proposals on the right. But equally, it depends on those on the remains side and who would be prepared to work with whom. They might split the remain vote and could they cobble something and as we know from looking at polls and what they told us, they dont tell us a great deal. And in a world where we now see politics flip on a different axis fractured into many more parties, it is very difficult to give us numbers that mean much. But they do suggest that the that he is ahead of Jeremy Corbyn, but that was the case in 2015 when theresa may shattered her own majority. Matt thank you for joining us. Anna edwards in westminster, covering all of the developments of brexit with 57 days to go. Lets go to bloomberg first word news. President trump is telling china to do a trade deal for the president ial election or faced. Ven tougher negotiations his comments come as washington and beijing struggle to deal with the timing. Downgradingts are the forecast for growth in china. They have all cut gdp forecasts for 2022 below 6 . And it is the result of increasing risks from the trade war and below the level beijing sees as necessary to meet its goals. France is looking to rescue the iran nuclear deal, planning to offer iran a 15 billion economic package to keep the deal alive. The Trump Administration says. Hat would be a nonstarter conte is set to form italys next government after five some ministers back to the liberal democratic party, bring it to the president today. This island in the bahamas is 70 underwater after being battered by Hurricane Dorian. The deputy Prime Ministers says it is not looking good and we expect catastrophic damage. They haveim a declared emergency in North Carolina has dorian heads to the coast. Declaredile, they have a state of emergency in North Carolina as Hurricane Dorian heads to the coast. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt we are looking at breaking closes in hong kong. Finishes the kong day with a rally of 5. 4 , the best again on the Msci Hong Kong since 2011. The hang seng index closed at 3. 9 , the most it has arisen since november it has risen since november. So on the back of carrie lam withdrawing the controversial extradition will, at least according to the South China Morning Post, we see big rallies in asset prices around the world. This is bloomberg. Matt economics, finance, politics, this is bloomberg surveillance. Leverageds in on finance. More than 75 issuing companies at a leverage and financing conference. So far, it has been a lackluster deal year. They are down more than 23 billion euros compared to 2018. So what does the rest of the year hold for this sector for that and more, joining us from the conference is the head of european Leveraged Finance at black rock. Thank you for your time. What do you think about the second half of 2019 . Are we going to see a bit of a pickup . James thanks for having. Having me, i dont think we will necessarily see a step change in terms of issuance. I think we will see a pickup in leveraged loans and towards the end of the year. Well start to see a real as the summer comes to a lull. But that is not take away from what has been a Strong Performance in asset classes. But what we are seeing is a mentality shift in the way people look at credit. Returns we see strong but all vessels are lifted by the rising tide. But thats not what we are seeing. We see some sectors that are andrgoing structural shifts people are looking for quality, especially when we see slowing growth around the world and the geopolitical tensions people are looking for. Matt are people looking for quality or value over growth . Or do you expect tech and health care to still be a big gainers in the second half be big g ainers in the second half . James health care is an increasingly large part and we have seen good, selective opportunities. What people are looking for at the moment is strong cash flow. Asare seeing sectors such the cable sector, packaging doing particularly well. Looking at an uncertain environment terms of moderating Global Growth and all the geopolitical tensions. How interlinked are the highyield and leverage markets . Increasingly, they are converging. This has been over a number of years. In the past, they have typically see a leverage loan and bonds issued in the same structure. Particularly, with the following of conference of leveraged loans, they become more bond like. There is often now a choice between a bond or a loan. They will make that relative value decision between them and it is perhaps a difference between 10 years ago. What has the effect of extremely low negative rates been on the industry . Particularly for high yields, and to a lesser extent, rates, it has caused a massive inflow into the asset press. 50 you have more than trading at negative yields and they need to find yield somewhere, high yields are not the place to go. It is liquid, showing resilient characteristics. It is a very attractive place. Indeed quite a positive yield compared to the last elections. Matt thanks so much, james turner, head of european Leveraged Finance at blackrock. Ecb sounds a note of caution on more quantitative easing, joining a big group. We discuss that and look ahead to Christine Lagardes q a for from parliament. Thats next, this is bloomberg. Matt lets focus in on the European Central bank policy. A member of the ecb has signaled a vote of caution on restarting quantitative easing, telling a french magazine the central bank does not have to use all of the policy tools at once. Rollcall of others making hawkish, or at least not as dovish, noises. You can see them here. Lets get to frankfurt and see what our ecb editor and speak with our ecb editor. How significant are his comments . It is important we hear what he had to say. Those names you just mentioned those opposed to the last qe. Nations andortant carry weight on the governing council. Has already said to thinks all tools should be kept on the table. One would assume italy is pretty comfortable with more stimulus. His comments were pretty technical in nature and he clearly remains potentially open to be convinced that qe should be restarted. Thingscern is that the they are after changing our Inflation Expectations at the shortterm market yield and they are best dealt with by Forward Guidance and official rates. Matt what do you expect from lagarde today . She has already given a questionnaire to European Parliament, suggesting she is more in the draghi camp. The ecb has a broad toolkit to use in case of a downturn. Something along those lines. Matt paul, thanks so much. Our ecb editor from frankfurt, paul gordon, ahead of Christine Lagardes q a session. This is bloomberg. Matt killing the bill. Surges, as hong kongs embattled leader reportedly scraps her china extradition plan. Johnson loses control. The u. K. Prime minister is stripped of his majority and defeated in a key boat as Parliament Vote as parliament prevent a no go brexit. Less than two meant no deal brexit. Less than two months away from taking over Christine Lagarde faces questions. We will bring you that question and answer session the. Right now we are getting a very important piece of data. That is the august services pmi to 50. 6 from 51. 4. That is less than the estimate. U. K. Services pmi dropped not to a contraction, but to lower than they previously lower than the number previously was a than the expectation. Was andld show some lower than expectation. Forerday it drop below 120 the First Time Since the beginning of 2017. It then bounced back. It is Still Holding above 21. The u. K. August services pmi 51. 4 in the6 from previous reading. Lets get to the big news out of hong kong that is really moving the markets. We have gains across the board after the ceo or the chief executive of a hong kong, carrie lam, reportedly will withdraw her controversial extradition bill. Lets look at the individual movers. For that, we go to Annmarie Hordern in london. All morning we have been watching the luxuries of space and financials that are vulnerable to hong kong and very exposed. I want to start with swatch, up nearly 4 . They are getting such a booster this morning, as well as kering and lvmh both up more than 3 . Kering is the Parent Company behind gucci. Lvmh getting such a boost. We have hsbc and Standard Chartered both very exposed to the Hong Kong Market and prudential. That is really the stand uptodate, up nearly 6. 5 . The u. K. Ensure he gets nearly half of its revenue from asia gets. K. Ensure insurer nearly half of its revenue from asia. Matt Annmarie Hordern looking at her will house. Lets get to the bloomberg first word news. For that we go to Sebastian Salek in london. Hong kong stocks stored sword on reports that soared thatortsn on reports carrie lam would withdraw the extradition bill. The u. K. Is heading towards a snap election after the government was defeated on a key vote over brexit. Boris johnson lost his majority early in the day. Hours later, the house of commons voted to take the first step in forcing johnson to delay brexit and avoid a no deal vote. President trump is telling china to do a trade deal before next years president ial election or face even tough negotiations tougher negotiations if he wins econd economists are downgrading their forecast for growth in china. Gdp forecast have been cut for 2020 below 6 . It is below a level that beijing sees as necessary to meet its goals. Prime minister Giuseppe Conte set to form italys next government. Conte is now do to bring a list of ministers and a Government Program to the president today. A island a 50,000 people is 70 underwater after being battered by Hurricane Dorian. The deputy Prime Minister says it is not looking good. We expect catastrophic damage. The u. S. Has declared an emergency in North Carolina as dorian heads to the coast. Global news 24 hours a day and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am Sebastian Salek and this is bloomberg. Matt . Matt thanks very much, Sebastian Salek with your first word news. Lets get the latest from westminster. Prime minister Boris Johnson has begun moves to trigger a snap general election after suffering a humiliating defeat for his Brexit Strategy, with 21 lawmakers from his own party voting with the other side. Opposition leader Jeremy Corbyn said his labour party would only vote for an election after no deal has been blocked. Lets go for more live to westminster and speak to bloombergs anchor, anna edwards, on the ground. How much closer are we to a general election now that we have seen this defeat for johnson in