Sales and ism manufacturing data hits a decade low. We wait on fiat chryslers numbers. A two border solution . Boris johnson will present his brexit plane to the conservative Party Conference today and the eu with provisions for a timelimited irish backstop. Ireland called the deal a nonstarter. A race to the bottom. Shaking of the brokerage world. Good morning. Matt less than half hour away from the european open. Take a look at what happened yesterday. When that ism number came out, it really disappointed markets. Investors bought up treasuries, pushing the yield down. This is a threeday chart. We have recovered a little bit today. Moves a pretty substantial and you saw that in stocks as well. That negativity likely to carry through to european markets today if you look at the futures. You will see equity Index Futures across europe are down. Dax futures are off 0. 4 . Ftse futures are off more than 0. 5 . I will point out we are seeing gains in u. S. Futures still slight, but at least green arrows. You may see a recovery when u. S. Markets open up in seven hours time. What do you see on the gmm . A week picture. Keeping in mind the negativity we are expecting in europe, asia looks weak. Weakness in south korea. There is geopolitical nervousness we need to factor in. The Australian Market not showing up, but very much in negative territory. The Banking Sector very much in focus. It was that ism manufacturing number that added to the other news. Cut the markets imagination and started people thinking once again about the state of Global Growth and how quickly or otherwise we end up getting some kind of recessionary territory, may be the u. S. Or elsewhere. Interesting to see the ism nonmanufacturing number which is due out tomorrow. We will see whether that tells a different story or if it is just lagging behind manufacturing. That is something we are going to explore later. We mentioned the latest news around brexit. It seems Boris Johnson has a proposal he wants to set before conference later today. What will the eu make of it . The early signs for ireland are not positive. The risk down by 0. 3 . Cranfield, Bloomberg Markets life strategist, is with us from singapore. We talked a little bit about whats going on on the Global Growth story. Lets add to that today after this u. S. Ism number, waiting now for services, waiting for the jobs data to see how far plentyivity goes of already. We dont need much more in asia. A gloomy picture. It is a bit of a shock to people because american data on the whole had been holding up reasonably well in relation to the rest of the world. The fact manufacturing is weakening is not a surprise. If you have been following the jp morgan global pmi index, the has been in the ply decline all year even though the september number was a slight improvement. It has been below 50 for several months. What is a surprise as the u. S. Is catching up with the rest of the world. Just as bad. Thats what is really hurting asia. You see the classic markets, korea and singapore, usually right at the forefront of any disruption to global manufacturing, they would feel it quickly. Additionalhe situation where their inflation has gone into contraction as well. Not only is there no growth, they have also got deflation. You mentioned north korean missiles. A tough day over there. Nothing much we can tell you on the positive side. Certainly the data coming up later in the week would be very important for the u. S. In particular. People have been calling for more rate cuts in addition to the ones we have already had. It strikes me that the ism number feels like a turning point for sentiment about the u. S. Economy. What kind of reaction could be get to a very bad number on friday . Would a very good number make the markets feel better . Possibly we get a bit of relief. Could be as ism watershed not just for the United States, but also other major economies. There is another story running on the bloomberg today giving more details about some of the things germany may have in store. I suspect this kind of thing is, when you combine it with the german data, which is worse than the american data, this could be the turning point for fiscal stimulus across the globe. Countries which have been reluctant we have seen japan this week commit to more fiscal stimulus. Germany could be next. The United States may have to reconsider what they do. By the end of this year, we could be thinking Monetary Policy has gone as far as it can go. Anna an interesting story on the bloomberg today about whether the germans are doing fiscal stimulus by stealth, planning bigger measures behind the scenes. What about the question of the day . You have been asking, how worried are investors about a rerun of 2018 equities meltdown . I certainly remember the runup around that period being very nervous. What is the view of those who have responded on the markets live question of the day . A lot of weight is being put talks next week. When you had such a poor piece of data as the ism, so much rests on the trade talks. If we get a small agreement for the u. S. And china, that could make people feel better. If we dont, october could turn out to be a very ugly month for Global Markets. Last year it was probably the second worst month of the year for u. S. Market in general. Even starting very well. We desperately need good news from somewhere, and it could be those trade talks. If we get modest data, no progress on trade, october could turn out to be a very bad month. Matt thanks very much for joining us. Mark cranfield out of singapore. You can join the debate on todays question of the day. How worried are you about a rerun of 20s equities meltdown . Reach out to the team by typing ib tv on your bloomberg terminal. Lets get the Bloomberg News now. Johnson defending his new brexit play into the eu today. The usual warning, he is ready to leave without a deal. We have learneds offer includes a special customs arrangement for the Northern Irish border. The key is that would only last about four years. Ireland is already saying a timelimited backstop is a nonstarter. In the u. S. , more heat on President Trumps closest allies over the ukraine call. House democrats warning mike pompeo about possible charges after he blocked testimony from five state department officials. Lawmakers said pompeo appears to have an obvious conflict of interest because he listened in to the phone call. Hasit suisse chief thiam broken his silence over this buying probe. He praised the outcome, saying fully accountability has been taken. He described recent events as regrettable, adding mistakes have been made. Credit suisses order exonerated him. Dashboard Credit Suisses board exonerated him. Charles schwab slid 10 with some competitors tumbling as much as 26 . The move escalates a long simmering price more as investors move to cheaper products. 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. This is bloomberg. Anna breaking news across the bloomberg. Hill bank founder vernon is to step down as the chairman. This is a business that has been under fire for some time. It really adds to a trend in london this morning. A number of Senior Executives for different sectors stepping down. We also heard earlier from Standard Life aberdeen that Martin Gilbert will retire in 2020. That is looking a little into the future. We heard from Tesco Dave Lewis is going to be going in the summer of 2020. A walgreensnounced executive has been announced as the replacement. They also announced some numbers at tesco. Completing some of that turnaround. Dave lewis has decided to move away from that business. Later this week on bloomberg tv and radio, guy johnson will be speaking with the chicago fed president in madrid. You can catch that conversation after 7 30 a. M. Tomorrow. The oecdwill speak to secretarygeneral fresh out of a meeting with Angela Merkel this week. We will get his take on trade tensions and fiscal stimulus. Matt welcome back to Bloomberg Markets. This is the european open. We are 15 minutes away from the cash equities trade, still looking at red arrows across European Equity indexed interest after a rush day a rough day forecast trade in the u. S. Ray dalio says the Trump Administration may be inching toward bigger moves against china. The Bridgewater Associates cochairman wrote that limiting capital flows to china must be considered among the possibilities. Dalios comments follow a bloomberg scoop on the white an official saying there is no discussion of such measures at this time. Is the oecdow secretarygeneral. Thank you for coming in. Let me first ask you what you think about the possibility of financial decoupling. The u. S. Is not has not done Something Like this since japan in the late 1930s. It would be very bad. Not that it is possible at all. There has been integration of the financial markets. It will continue to advance, inevitably. I would hope this is not happening and that we will find engage and that the engagement will lead to a better outcome. Right now we are paying a very heavy price for the tensions. Already 1 less than a year ago in terms of our latest rejections. Projections of the world economy. We are at 2. 9 only a few days ago. Matt we have seen other economists agree with you. Ubs says now Global Growth is 2. 3 . That is a full percentage point less than i was at the beginning of the Third Quarter. Said theren at fitch can be few president s since the 1930s of Global Growth prospects being affected so significantly by trade policy disruption. The Trump Trade War is the most significant disruption for the Global Economic picture since the 1930s. Do you agree . The logic is impeccable. You invest to produce. You produce to sell. If you do not know if you are going to be able to sell, or at what tariff you are going to be able to sell, whether you are going to have access or not at all in a market, this is what you do. You hold back. Even though as a consumer, you are very cautious. The year after looks a little iffy. You are very conservative. You are very worried. You hold back. Times,y that 5 million 10 million times. Then you see the economy going down very fast. This is exactly what everybody is talking about. It seems to have caught up even with the mood in the United States. The United States was like the right spot before. The numbers you saw about manufacturing and the outlook obviously seemed to suggest it has already caught the contagion. Matt it does seem like a turning point in sentiment. Hasmanufacturing picture not been this bad since 2009 in the u. S. At the same time, it is widely agreed across the aisle in the u. S. That china does seem to change the way it does business need to change the way it does business. The whole purpose of the oecd, we believe there are a lot of issues that have to be dealt with and have to be negotiated, have to be fixed. About howon really is the engagement is organized. How it produces the best result. For example, we created a global forum on excess steel capacity. That is up and down. It was a forum for dialogue. Now we have to see whether we renew it, but that is a very good example. Ut of the g20 meeting how do we engage . How do we organize the conversation . Even the negotiation. How was your conversation with chancellor merkel . A lot of people are calling for fiscal stimulus to stem the manufacturing problem we have. I call that group therapy. This is the 11th time we have done it. She always gathers these International Organizations around her. We are very candid. She asks all the questions in her mind and we tell her what we think. It is a very good giveandtake. It is a very good exercise. The question of the german economy, of course, we hit to negative growth last quarter. In october. Dy we had the Third Quarter happen. We will see in october, november whether it was again a continuation of negative growth and therefore we will have officially a recession. We are forecasting positive growth for the years. We are not projecting negative growth for the german economy. The question is, ok. With the space that germany has built by being prudent, being , is there space to put something more on the table that will stimulate the economy . It is also about the spillover. Why . Germany is the only large economy in europe, certainly, that has that capacity. Therefore it is not just a german issue. It is a systemic issue for europe and to a certain extent, for the world. Matt will Angela Merkel and berlin stand behind europe in brussels . Thank you so much. Really appreciate your time this morning. There minutes away from open. Next, we take a look at your stocks to watch, including the automakers. It has been a problem in the u. S. Real pressure. This is bloomberg. Anna welcome back to Bloomberg Markets the european open. Lets get stocks to watch. Paul jarvis from our Equities Team is covering the gaming space. Dani burger has the latest from tesco. Benedict, on the car sector, bring us uptodate. U. S. Car sales for september late yesterday, it is not a pretty picture. Cars the jetta, the gulf, are not doing very well. Overall, this is not a september volkswagen were hoping for. You probably see it in the stocks this morning. Matt consumers are waiting for the id3 from volkswagen. What have you got on flutter . Morning is that flutter is buying in an all share deal in the latest gaming industry consolidation, which has been a big thing. Going forward, look at the other stocks. Look at gdc. Once these stocks when they are in the u. K. And canada later, consolidation is a big issue in this industry right now. This is one to watch. Anna lets get to dani burger on tesco. What a day for leadership changes. The ceo stepping down next summer. He will be succeeded by ken murphy from walgreens. Cheers were called down 3 . The street really likes the current ceo. He was able to turn around the company when he joined, boosting profit despite brexit concern. Matt thanks very much. Get your latest stories by typing first go under bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Anna a minute to go until the start of the equity trading day. This is what we have in the futures. A minute until we start equity trading. Futures are suggesting we will be weaker at the start of the trading day. No surprises when we see what happened in the asian session. Weakness across many markets. Some are playing catchup from holidays, but add to that geopolitical tension on the korean peninsula. Factors, but also the concern about global slowdown. The growth data in manufacturing we got yesterday. The u. S. Ism number for manufacturing reminding everybody about the weakness. Raising Big Questions about where we go next in services. Whether we will see the same picture coming through. That is not expected. We get the payroll number of course on friday. Plenty of data points to watch as we build toward the end of the week to get a gauge of Global Growth. With that in mind, lets see where we open on the European Equity markets. Futures were pointing us to the downside. Expected to play catchup with what we missed overnight. Bear in mind u. S. Futures point slightly higher. Or willt turnaround, your European Equity markets come back to the flatline as the u. S. Markets get underway . We will see whether that transpires. We are in negative territory on the ftse 100 down by 0. 4 . Euro stoxx fairly flat overall. In the pound. Ves the ftse and the pound are trading weaker today. We have seen a negative correlation between those two. We dont see that this morning. I wonder if that is because the ftse is responding to global news flow. We will get into individual movers and see whether that is the case. Lets take a look at the sector picture. Autos very much in focus. We are looking to see where the sector goes. Financial in the red. Resources and energy in the red. Theth, industrial, some of staples looking mixed. We are slightly biased toward the red here on the map i am standing on. Suggesting we could see a lot of support for the retreat we are seeing in european equities today. Definitelye seeing the biggest downside i have seen in some time. Are down. Only 87 are up. Five to one to the downside. Matt the gators are not big movers. Unilever up 0. 5 after a purchase in japan. Otherwise nestle up 0. 5 . You do not see gainers to the upside. In terms of the losers, more like 1 losses on the big names. Bp, Royal Dutch Shell all falling about 1 . A little less in terms of Oil Companies that are down and big heavyweights that is dragging down the stoxx 600. Texaco down 1. 4 . 1. 4 . Co down big Management Changes in Standard Life, aberdeen to tesco as well