Good morning, from berlin i am pretty impressed that allany, france, and u. K. Band together with such an explicit statement blaming iran for the attacks on saudi arabia. Absolutely, the geopolitics is something we will focus on in this hour. A really interesting story on the bloomberg today talking about how central bankers are getting more concerned about the impacts on growth or Climate Change, another theme with the yuan General Assembly getting underway. Speaking of growth, what a painful set of pmi did yesterday impacting markets. Absolutely, especially here in germany we have a rating of 41. 1 on the manufacturing pmi, the lowest level in at least one decade and we are going to get the Business Confidence numbers out in just a few hours from now, throughout from now. Definitely something to Pay Attention to appear lets take a look at what stocks are doing now. We do not have real red arrows across asia. In fact for the most part you can see the msci here is up. 1 for asian stocks. We do have bigger gains concentrated in china than we do anywhere else in europe. Japan opening up today for the first day the week after holiday yesterday. S p futures are trading higher see a3 so you could positive start for trade this morning in the u. S. When that market gets underway and eight and a half hours. The dollar index is gaining a little bit of strength, after losing some yesterday. 12 as11 is 11211 investors slowly walking to the greenback. And that headline breaking about china giving new waivers for terror free u. S. Soybean purchases you wonder if that is going to affect the Risk Appetite per looking at the 10 year treasury yield yesterday we moved around down and up, in the end we ended up steady and we move down to basis points today, 171 handle print is more and bond markets rather than could market you are seeing that concern around Global Growth reflected. You sought reflected in the euro yesterday following data out of germany and france. We stay below 110 steady after two days of decline. 1. 0990 and saudi ronco saying it is restoring most refineries to full capacity. Saudi aramco. Lets get to the Federal Reserve, near president John Williams says last weeks turmoil in money markets raises questions about the appropriate level of vanke reserves. Theank reserves in financial system. He says it is important we examine these recent martin die Market Dynamics and the indications for liquidity in relation to the overall amount of reserves at the fed. Implications for liquidity. , williamn he replaced dudley say says fed officials will probably consider a new tool to contain shortterm rates. He also touched on his converse oped last month where he suggested the fed reject rate cuts that would help President Trumps prospects for reelection in 2020. What i said to be precise, one could, if you accept the notion that the feds goals are to maximal maximum sustainable profit builder of the longterm and one accept the premise that this trade war it might not be good for the economic outlook, then logic would say theres a question about show the fed take this into consideration . At the end of the day, i made clear in the second piece i wrote that i do not think fed should take this into consideration in setting policy. If the fed were to do that, they would become politicized and people would react by reducing independence of the fed. You think the fed has already become politicized . It has because of the president s attacks on the fed. Those in academic piece that came out of the last 72 hours i saw this morning. Ofy lead to the study the effect the president. The effect of the president s tweets on the federal funds markets. The tweets were causing people to reduce their expectation about the federal funds market. It is already politicized in the sense that people are not sure now, if the fed is easing because that is the appropriate policy path or because of pressure from the president. Station islitical to not coming from the fed it is coming for the president. Politicization is not coming from the fed but the president. Saying the fedso may need to ease Monetary Policy further to reduce risk. Amid concerns in the Manufacturing Center with activity jumping to a fivemonth high in september according to reading from ihs market. Running is now the head of global Asset Allocation, great to have you with us. That ihs data was light in a gloomy day in terms of global pmi. Of bond are bond markets still to aggressively priced in terms of expectation for fed rate cuts . There are two ways to read your question. One is the totality, the total amount of rate cuts by the end of next year. On this, not necessarily. What we are talking really about is the second wave reading is how do you split 2019 and 2020. For the rest of the air, if you have lets say from july, you had some stabilization then u. S. Economy after slowdown, we were to confirm that we are stabilizing are better as you are mentioning, in september, then will be more 2020 unless 2019. So we are more working on the split between how much of the rate cut we expect quite a big number of rate cuts by the end of next year. But it is more moving toward 2020 than this year. Without a lot of fed official coming out talking about the repo issues last week, assuring markets that everything is ok. Really even with the size of liquidity that is the concentration they worry about job and think about the repo rates to 10 last week . This is a separate problem and one of how do you loosen the Monetary Policy, do you have the supported to avoid to earlier recession . Here we are talking money Market Conditions and the lack, the obvious lack of liquidity in u. S. Money markets. For this, the fed has reacted quite late. But the responded when they understood there was a lack of liquidity supporting u. S. Dollar. If you raise the level of ust which he did in the last week or so, it is supporting the usda against all types of currency temporarily. But this opens the door for earlier than previously []ipated so his lack of liquidity that the fed should qe, we pumping into the economy, we do not of the speed but should be earlier than excitations. It is interesting you call it the restart of qe. Other strategists have said whatever you do, do not call it qe. That this is an organic growth to the Balance Sheet and that is the distinctive. The way the fed could make the distinctness by buying shortterm bills. Is that what it should do or is a better to come out and say this qe are qe like echo the two. Zero or the three. Zero, we are talking extremely technical matters relative to u. S. And the Balance Sheet is stress and the short term. We all of backed that at the end of this year more stress than at the end of q3. So we are preparing in the central bank were prepared to avoid further disruptions in the money market rate on this, there will be technicalities, probably more light than fullblown qe. Which could or will have had happen whenever the u. S. Economy finally enters recession. Although even without that happening, even if you do not want to come talk call it quantitative easing, wells fargo estimates the fed is going to out another 2 trillion to its Balance Sheet of the next decade and has got to anyway, replace mortgage Bond Holdings as they mature. You expect us to weigh on 10 year yield . If we are looking at 10 year view, whenever the u. S. Goes into recession, it will happen, we have already delayed three times i think in the last two aars, what was to be recession by few features, when we go into this we will need to highlight the speed between the Monetary Policy in between going respond ofo rate and qe and the fiscal policy. This is the mix of the two, which will give us the total quantity of qe. In other words, if we were to use intensively the fiscal policy to come after the recession, theres less of a need for Monetary Policy. So that is obviously in between the Federal Reserve which is the and if anybody, and the people in washington coming thick of fosco policy and the presidency, and we will be dealing with the policy mix. So on here for now it is too early to say what is the mix we are going to have because we do not know yet the nature and the amplitude of the recession. He recently recommended reducing exposure to bonds in the u. S. Can you talk more about that recordation. The power of the curve and how much would you recommend reducing . I do not regret because we printed three weeks ago. The heart of the proposal we had of not the tightening Monetary Policy anticipation was much too aggressive for the next quarter or so in a fiveyear view. And that deserved a reduction in duration. Reducing the duration not to saly the exposure. Definitely too aggressive in monetary anticipation for the fed and ecb. Deserved that reduction. It is mainly on the treasury. As we have divided by two the level of Interest Rates at the tenure for example in the last six month or so. At the 10year for example in the last six months or so. We are living that now. Right now were going to get to the bloomberg first word news and hong kong. And the u. K. The Prime Minister is urging european leaders to recognize that he has compromised on brexit. Boris johnson is peeling for them to meet him halfway on a divorce to print both sides say break fors are make a securing of an agreement by the brexit deadline for the Prime Ministers also icing for the spring Court Decision on his suspension of parliament. That is due at 10 30 a. M. U. K. Time. Notident trump says he did ask that ukraine leader to investigate joe biden in exchange for military aid. But weve learned that trump delayed former under Million Dollars in aid to the nation. That at least a week before he spoke to the countrys president print that phone call is a subject of a congressional investigation. The whistle lowers who flagged concerned has remained unidentified. China must avoid massive stimulus and keep debt levels sustainable. That is according to Central Bank Governor egon. Speaking at a News Conference in beijing, the pboc chief said overall Financial Risks are contained. Chinas growth is on pace for the slowest expansion in 30 year spread Industrial Production august rising at the slowest thing a month pace since 2002. And President Trump made a short unexpected appearance at the u. N. Climate change summit in york. Where leaders and business chiefs are discussing how to tackle Climate Change. That is as public anger grows is lack of action. Teenage activists greta bloomberg telling the summit that ignored the issue for fall two long. That they have ignored the issue for far too long. You have stolen my childhood with your empty words. Yes, im one of the lucky ones. People are suffering people are dying. Entire ecosystems are collapsing. We are in the beginning of a mess extinction. And all you can talk about is the money. And fairytales of eternal economic growth. How dare you. [applause] global news 24 hours a day and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Thank. Coming up, the main event, President Trump will address the u. N. Assembly today as europe joins the United States and blaming iran for last weeks saudi attack. Inplus the biggest names business and government will gather this week for the annual Bloomberg Global business farm in york. We will hear from the likes of teddy diamond, David Solomon and christina lagarde. This is bloomberg. Matt this is bloomberg daybreak europe. Im matt miller in berlin. Nejra im in london. And in singapore. Afterte resuming trade the long weekend but in japan. His higher by 1 . Is zone been the red once during 12 sessions. We did have weak a little week data out of japan with soft pno pmi data for september. And the boj intending by units 15 years on after cutting its longer dated purchases friday. We also have the commentary from the pboc saying risks are contained. Hong kongs market in the black for the first time in seven sessions. Also watching the aussie ahead of a speech from a governor philip lowe in northern New South Wales later today. That could put Downside Pressure on the aussie u. S. Dollar if he starts talking about potential for further rate cuts from the rpm. At what we heard from the pbocs speaker that chinas about to embark on an aggressive easing cycle. This chart shows since the Global Financial crisis we have seen that youre on return for global stocks track the credit impulse you see from china. Dashing those hopes could be a little bit of bad news for Global Investors, because that suggest the path forward may not continue on the same path. It could be less encouraging for Global Investors. Thank you for that look at asian markets. The Bloomberg Business flash now and hong kong. Ab invev raising 5 billion in its asian units after pricing the offering a 27 hong kong dollars. The ipo was a major boost to hong kong at a time when the citys beast set by ongoing protests. Joining in budweiser bring is expected to starts some temer 30. Deutsche bank top investors are approaching up a trust perspective chairman. Stakeholders and qatar are taking a step as patient runs out with the current chairman per theyre also debating if they should try to force him out before his term ends in 2022. No comment from Deutsche Bank or qatar. Credit suisse moving to contain a scandal of the former executive being followed. The board starting and inquiringly into the surveillance of its former top private banker. He defected to ubs. The drama spilled into the open when the investigators attempted to grab his mobile phone. Credit suisse chairman and chief executive saying in an internal memo, the truth will emerge. That is your Bloomberg Business flash. So much. Anks now irans k European Partners are fighting with the u. S. , in blaming tehran for the strikes, saudi oil facility. France, germany and the u. K. Have said quote no other excellent nations possible. The european nation also called for an expanded Nuclear Agreement. Details on the gulf tensions. The showdown between the United States and iran moves to manhattan this week. As to how to World Leaders and thousands of diplomats gather in york city for the u. N. General assembly. Today president drama donald trump speaks in his running counterpart behind it may be front and center. Iran has second row seats although rouhani and its about sharif could avoid this emily or leave before trump takes debt just could avoid this, or lay before trump takes to put impaired tomorrow rouhani has a chance to respond. Talk about historic summit between the two has died, but friends of both the administrations will attempt to shuffle back and forth to shuttle back and forth to brokerdeal that at the very least lowers risk of conflict. This has been a key goal for Frances Emmanuel macron who on his way to new york said both protagonists are there. Something may happen. It might be more difficult now given irans key european allies are blaming tehran for the strikes on saudi oil facilities. There also a few highprofile noshows. Probably the second time in a decade, is israeli Prime MinisterBenjamin Netanyahu will. Ot address the assembly known for his colorful and combative speeches, last weeks election has put a dark cloud of risk, a future. He is surprising of the noshows alongside russias president Vladimir Putin at chennais president xi jinping. Much. Thanks very talk about the u. N. Meeting. The head of global Asset Allocation at Societe Generale still with us. Let me ask you first what you think about your cold risk, especially considering the situation we see happening surrounding iran and the attacks on saudi arabia. Is it preston . Is it priced in . When we learn about the big jump in the oil price. This could be something much bigger. At this stage what we know is that u. S. President does not want to launch a formal war against your own. His using more the weapons of economicd cannot diplomacy. A financial boycott against russian against iran go deeper than previous they. That is important. The switch from economic diplomacy into four that would send the oil price probably up over a hundred dollars a barrel. Here the fact that President Trump has at least at this stage formally prevented to launch a four, is something reassuring. Not to destabilize the level economy and the u. S. Economy because the oil price go to the roof. Though here there is a barrier which is due launch a full war economic it is only diplomacy that should be reassuring for the global economy. How should investors get oil exposure or not in a port folio . At this stage we know the o