Respond. Earnings season begins with a bang as the numbers are better than expected. With exclusive interview the fed president giving hints of rate cuts to come. Id like to do more but i dont want to prejudge the meeting. Imfe get perspective at the annual meeting. The Global Economy is in a gradual, synchronized slowdown. Uncertainty is having a major effect. It is all straight ahead on bloomberg best. Rosalind hello and welcome. Im rosalind chin. This is bloomberg best. Weekly review of interviews and analysis from bloomberg television. Lets begin with top headlines. The week began with President Donald Trump touting phase one of a substantial trade deal with china, an agreement that could be signed within weeks and settle a dispute between the two nations. But it became clear monday beijing saw things differently. China wants more talks before assigning before signing the trade deal. Secretary Steven Mnuchin says more talks and negotiations are on the calendar. The plan is deputy level calls this week, principal level calls next week, ambassador lighthizer and myself and the vice premier. Room for lots to go wrong in the process. The language from the chinese site has been subdued compared to the u. S. Reaction. They have yet to refer to a deal, and a spokesman for the Commerce Ministry didnt use the word deal. They are talking about meeting halfway and more work to do. That doesnt suggest there isnt a deal. We have had upbeat commentary from prominent Chinese Media types. So clearly there is something on the table, but work to be done. People are digesting the fact that uncertainty is scaled, no guarantee of a deal to sign in november, a moment for people to heard friday, businesses thinking, can we plan for this, is this something we can put into our Business Plans . Not yet. Earnings season in the u. S. Kicking off, banks leading the way, numbers from wall street. We have four major banks, jp morgan the clear out lighter clear outlier, expectations holding steady, the cfo saying she believes the outlook is better than where it was in september. You has citigroup here with a different story, even as they beat both Investment Banking and trading, they cant do what jp morgan does, they cant say we are going to keep expenses in line. People arees looking at citigroup to keep expenses in order and jp morgan is saying, we will spend what we need to spend. , wellsan is shining fargo negative news, surprise legal expense, bringing their Expense Ratio out of line with what investors want. A potential breakthrough between british and eu negotiators, said to be closing in on a draft deal. There is optimism there could be a brexit rake through. We will wait and see. What are you hearing . Every major stakeholder in those negotiations, the irish, the french, all were saying this was a serious proposal they would consider and there is still time to get this deal. A first day kind of that, when we got the headlines this morning about the potential breakthrough on brexit, there was a meaningful move right then in u. S. Treasuries. I think it ended with rates going higher and people going amuck, and it added to the idea that some of the tail risks in terms of geopolitics that created the safe haven bid are starting to come off. Bank of america posted the biggest jump in Investment Banking this quarter from lower headwinds of lower Interest Rates. What happened . Why did bank of america get so involved so popular with Investment Banking . I think they had an easy comparison to one year ago quarter, i think that is why they look better compared to peers, but the numbers were better than expected. A positive area was m and a, an area where they trailed and where investors wanted them to do better and theyre showing they are making progress. Y are executing on toothy on two key things, cost and market share. We have a deal, Jeanclaude Juncker says the eu reaches a brexit deal that is fair and balanced. Is a moment to get brexit done and then together to work on building our future partnership. This does mean the u. K. Will leave the e. U. October 31, and that this deal will deliver a real brexit and will decide how they will end up running the u. K. On their own. The way it was presented really feels like this is a goldilocks perfect deal. Do otherson will be, see it that way . Yes we have a deal, there is optimism in brussels, but now the action moves to saturday and the vote and whether it can be made to get through there. The only change in the Withdrawal Agreement has been around the Northern Ireland situation and there have been changes there that have not pleased the Democratic Unionist Party that has propped up to some extent oris johnson, although there are only 10 mps in the house of commons and he lost his majority, but their view does matter and they are not on board so whatever concessions, the dup is not happy. Among big banks, good earnings for the most part, but morning stanley led them all, gains in the vix helping out particularly. Bank revenue surging 21 compared to the 5 drop analysts predicted. The stand out from this Morgan Stanley report was vix income trading, your last column to the right shows you your revenue surprise, 20 8 surprise for Morgan Stanley. Take a look at Equities Trading units as well, Morgan Stanley, when you look at the dollar amount, coming in on top, near 2 billion in revenues. But i want to zero in on Morgan Stanley as their shares compare to goldman sachs, because these banks have been underperforming the snp Financial Sector over the last year the snp 500 Financial Sector over the last year, both in negative territory, Morgan Stanley eking out to take the lead as you see on this chart here. The chinese economy grew at the slowest pace since 1992 the Third Quarter as weak domestic demand sunday trade war took a toll. Gdp rose 6 from a year earlier, missing the 6. 1 consensus. They came in below forecast for the Third Quarter, but not quite as bad as some including bloomberg analysts and house expected. Bloomberg intelligence thought they might drop below 6 to 5. 9 , which would have been the weakest on record. Nonetheless, one of the weakest in almost three decades, more than three decades, so for the overall gdp, we have a retail sales number that came in at 7. 8 , a little above the previous month, suggesting the consumer here is just holding up. In terms of industrial production, you saw that number in august falling to a 17 year low, september it ticked up 5. 4 , so a question in terms of the overall economy is, can they hit their target of between 6 and 6. 5 growth in 2019 . And our policymakers here willing to let that happen, or are they going to step up with additional stimulus, and what form will that take . Continuedmists expect targeted measures to put a floor under this economy. Boris johnson has a brexit deal with the eu and is asking his own parliament to accept it. What do we expect the outcome to be . London as wen prepare for a showdown between the government and mps. Parliament has 24 hours to hear about this new improved deal and make sure Boris Johnson can get it over the finish line saturday. It is not clear he has the votes. If he is not able to get it through, he faces a tricky and politically toxic decision. He always said he would never ask for more time. Is he willing to take the u. K. Out of the European Union without a deal on october 31 . That raises all kinds of political and legal questions. Europeans are saying they just want to wait and see. The conversation next week will probably move into granting an extension if the Prime Minister fails. Both sides are hoping he is able to get the deal done. Sterling a little weaker off the headline coming out of leader saysfrance the u. K. Must not get a new delay if the Parliament Vote fails. No no extension, no deal, hard brexit. The e. U. Does not want to be blamed for a hard brexit. If Boris Johnson was forced into asking for an extension, it would be hard for the eu to deny this. The french and various others, basically trying to persuade british mps that they should vote for this deal. The big news is that tomorrow to borist even get johnsons meaningful vote on his deal. The amendment put down by a former tory minister, and the effect of that amendment will be to Say Parliament does not going to make a decision on your deal until you pass the legislation. If that amendment is passed, we will never get to vote on the Boris Johnson deal, we go straight to voting on the motion as amended. So at that point, johnson is obliged by law to seek an exemption. Whips are counting the votes. What is the most critical set of votes the Prime Minister needs to get . Need town brexiters fall in line. He hasnt got support from the dup, they came out firmly saying they are not supporting the bill. He needs to get all his mps on his side, including those who havent supported them so far. To winof that, he needs over labor waivers, they are looking at, what happens if i vote this bill down . They will come under intense pressure from the labour party not to back johnson. That is the key group to watch tomorrow. Rosalind still ahead as we review the week on bloomberg growthnetflix subscriber dont, but investors seem to mind. To newullard open rate cuts, and headlines. Jerky and they nodded states have agreed to a ceasefire in turkey in syria. Turkey is getting away with a slap on the wrist here. Rosalind this is bloomberg best. Im rosalind chin. Up topo to the round up business stories. The imf report tuesday gave it sobering picture of Global Economic growth. Rosalind trade tech trade tensions continue to weigh on the Global Economy according to the imf. Economyays the world will grow 3 this year, down from 3. 2 from their forecast in july. 20 20 estimate is lowered to three point 4 from 3. 5 . The 2020 estimate is lowered lowered to 3. 4 from 3. 5 . To get to a position where we have more countries and a recession like environment is when Global Growth glows Global Growth goes below 2. 5 . We dont have that in our projection. The hong kong executive solutions to structural problems in her address, interrupted by prodemocracy demonstrators. This was a chance by the Hong Kong Government and carrie lam to stop these protests that have escalated of late and this was all about the economy, and particularly when it comes to housing, which some say is the source of discontent and why people hit the streets. She didnt mention the politics of what we have been talking reform areention of universal suffrage, so still a lot of questions about whether these measures of stimulus are enough to ease and rake down the political stalemate in the city. China threatening unspecified u. S. Ermeasures if the Congress Enacts legislation supporting hong kong protesters. The Chinese Foreign ministry issued the warning, saying china urges certain people in the u. S. Congress stop advancing the bill interfering in Hong Kong Affairs to avoid further damaging u. S. China relations. It underscores how many fronts there are now two tensions in the u. S. China relations, not just merchandise goods, technology, it is human what wea culture war in saw in the nba last week. The big question is, we dont know how china will respond to the passing of the humans rights act in the house, and will it spillover to trade talks in any way . Thats a critical question in the coming weeks. The Trump Administration turkey to declare an immediate ceasefire in syria and launched sanctions on three senior turkish officials and raised steel tariffs to 50 . People are feeling this is quite light, given what is happening. If you are looking at markets, the lira at the moment is strengthening, so no major reaction, which normally you would have expected if the u. S. Is putting sanctions on a major ally like turkey. It is noticeable the americans did not ask for a withdrawal back to the border for Turkish Forces, they are asking for a ceasefire and for talks. And at the same time, the americans have not stopped the withdrawal of their own troops from the area. A week after Turkish Forces crossed into syria, turkey and the United States have agreed to a ceasefire in syria. It will be a pause and military operations for 120 hours, and operation piece rang will be halted entirely on completion of the withdrawal. Was,e thing that struck me one, you did not have a call for the Vice President to turkey to withdraw troops from the safe zone in syria. There appears to be no mandate for turkey to do so. The end result is a pause in the fighting but turkey is allowed to keep the military gains it has made over the last several days, and exchange for a halt on sanctions, and after five days, possibly getting those sanctions lifted. Turkey seems like it is getting away with a little bit of a slap on the wrist here. Thend south korea, president moon jaein has made a public apology after his Justice Minister and close confidant bowed to pressure and resigned five weeks into the job. Why was there such strong opposition to the justice chief . There was strong opposition to the justice Chiefs Appointment before he was even nominated because of ongoing investigations surrounding not only his family but himself as well. He was facing allegations of having abused power to help his son and daughter get into prestigious universities in south korea, including medical school and law school. Hadoes against what moon gone against, corruption and people using authority to favor family members. He also faces questionable investments in a private equity fund as well, which does not help the investigation nor his reputation. Major lenders face a new investigation into why they havent passed on rate cuts in full. What are the details of the inquiry . This is coming from the government, who want to put more pressure on the banks to pass Interest Rate cuts we are getting from the reserve bank. The reserve bank has cut rates three times, 75 basis points, have passed banks 57 basis points of that, so there is criticism why the banks are passing those savings to borrowers, and the treasury wants competition regulated. We are looking into that now. Democratic president ial candidates sparred in a debate last night in ohio. The impeachment of president donald one thing all the candidates agreed on. Elizabeth warren taking heat from her political rivals now that she is leading and is a top contender. The second point i would make, look at south bend mayor Pete Buttigieg. He is trying to position himself as a centrist alternative to joe biden. He did not class directly with joe biden clashed directly with joe biden and instead vowed to contrast with Elizabeth Biden to show he could take her on should biden dip in the polls. This is still a threeway, topto erase between biden, worn and sanders, look for Pete Buttigieg to seize and draw contest draw contrast as an alternative to biden. The target Boris Johnson needs to get to his 320. This is going to be a very very difficult target for him to get to. You are watching bloomberg best. Im rosalind chin. Rates by 25 cut basis point, a dissenting vote was cast in favor of a 50 basis point cut. Caseullard is making the for additional cuts citing the trade war and other downside risk. He explained an exclusive that he explained in an exclusive conversation with bloomberg. We have moved a lot in the last year. A year ago we would have been talking about the fed raising rates in 2019, not lowering rates. Andinstead during january february, we said we were taking Interest Rate hikes off the table, and getting into june, july, august, september, we started talking about reducing rates. The shift in Monetary Policy in the u. S. Has been dramatic over the last year. I would say 125, 130 five basis points, not just the 50 basis we have had. So one part of what we need to do is take stock of where we are, but i think also we have to consider additional insurance in the meetings ahead. Should the fed be more aggressive given risks to the economy . I if you buy the argument just made, we have been aggressive. Normally you would think with long and variable lags and policy, it would take a while for those things to impact actual hard data in the u. S. And i would expect those effects to come online in the second half of 2019, first half of 2020, and you are seeing some of that in housing markets, for instance, where refinancing activities and other things have picked up. You favored half a rate point cut instead of a quarter point rate cut. Do you still think next time we need a half point cut . Generally speaking, i would like to do more. But i dont want to prejudge the meeting. Lets get to the meeting and make a decision there. Should Monetary Poli