Walk back of Single Player singlepayer, now planning to do it in two stages. And Pete Buttigieg is doing very well in iowa. Down 2. 4 . Guy the dollar has been dropping in relation to these comments we have been getting, both from the fed and from the president. You can see that when you look at what is happening in the cable rates. I am also looking up the bloomberg dollar index. The cable rate now up by around 0. 5 . Some of that has come in the last 10 minutes. With stocks actually reasonably soft in the session, we are moving down toward session lows. Volume is very light. What is interesting is we have not seen much reaction in the bond markets this afternoon. A little bit on the bond market, to much, 34 when it comes the german tenyear. Vonnie the president s meeting with the fed chair, jay powell, the president tweeting out that they discussed Interest Rates and negative interests. Joining us now is bloomberg our gences demeans as Damian Sassower. We hear jay powell specifically did not talk Monetary Policy other than saying we look at the data incoming gave the president then tweets how much are investors taking this seriously as a signal anything may happen with Interest Rates . Damian definitely volumes are down, but the reaction in the dollar tells you everything you need to know. In a world of negative yields, it means investors need to reach for more, because they are bringing it forward here. They need to save for more, because return expectations come down over time. All of these things are weighing on the white house and on the fed. From what i understand, chair powell did not coopt group and repeated a lot of things he made in his testimony recently to congress. Guy the fact that the market has reacted the way it has must indicate that the market, at least, believes that, to a certain extent, this pressure is having an effect. Damian what the market probably thinks is trump is applying as much pressure as possible for the fed to continue to cut rates to stimulate u. S. Economy. That is why the dollars probably coming off, because lower yields means a weaker dollar. Vonnie we are talking the basis. 73nt off the 10 year at 19 off the dollar index. Let me ask about hong kong. In hong kong, things are getting much more serious, day by day. At what point does a start embroiling couple markets globally . Damian that is the question. We see significant this locations in the interbank market. We have seen rates for three months for to highs we havent seen since 1999. Economy real perspective, what does this mean for hong kong . 26 ism is down yearoveryear. Smallss sentiment business intimate falling off a cliff. This. E seeing all of most recently, unemployment now above the 3 threshold. Restaurants, hotels they are laying people off or scaling back in wages. Guy youre looking at live pictures coming from hong kong as we, where it is currently four minutes past midnight. How much of the damage is permanent . Not to the buildings but to the economy. Damian it is all very serious. If you read some of the most recent rhetoric out of the peoples daily and some of the more conservative chinese periodicals, they are digging their heels into they think there is no room for compromise. What does it mean for the future of china as asias leading Financial Hub remains to be seen. From where we sit, you can expect a lot more uncertainty. What we have been looking at is the shape of that credit default swap curve. You basically see that curve flattening one year, five years, flattened in the last one basis point to five basis points in the last few weeks alone. Vonnie Damian Sassower of bloomberg intelligence, thank you. The we are now joined by uho european head of what do you make of this meeting between trump and powell . It is interesting that it even is happening. It is right that the president can have a chat with the chair of the fed, but the problem for the market and the reason it has reacted the way it has is because of the fed made a big about turn that the fed were very focused on domestic events last year, then they may this be changed to focus on global events, and that shift coincided with rhetoric that, from the president , which was attempting guy it means that the fed is not impervious to the president s comments . Coal here is some correlation. Unfortunately, that has been borne out in recent history. I think the market has a tendency to react to it i am not sure if i agree solely on this. What the fed has made a point of is that they will be datadependent. Really, the data trajectory over the next one to three months, i think, is in the president s hands. Does he do a phase one deal with china . Ifllar would go up not, does this mean there is some uncertainty and trouble on the negotiations . Vonnie the fed definitely making sure it got its statement up before the president put out his tweet. Would you sell dollars on that tweet . Peter no. [laughter] ishink, globally, there still too much value associated with the dollar. The relative real Interest Rates that are available within u. S. Fixed income is probably too great for the dollar to be able to sustain a downside from here. The way that the dollar would be able to sustain the selloff would actually be if the trade war were to suddenly vanish. Then you could get easing of the dollar. But from here, we have far too much uncertainty globally. We have just been talking about hong kong this is one reason to be Holding Dollar assets. Vonnie briefly on the trade war before we get to hong kong, if your base case is that something will happen eventually, are there marginal trades that might make waiting for that base case to materialize more interesting . Or is it there is one trade you put on and you stay with it . Peter there are actually many trades. We would expect there is going to be another cycle of optimism as we go into q1. The u. S. Treasury curve is vulnerable to being sold off. What we like is a 5 30 flattener. Hitting the belly of the u. S. Rates curve but still not being vulnerable to the big duration selloff, because the longer term picture is still quite bleak late cycle in the u. S. Guy the 15th of November December is the next big date for tariffs. If we do not have phase one then, will the market put that back in in terms of cuts . Peter unfortunately. If we thing about another round of tariffs being implement it, not only is phase one not being done, but sentiment was green the two parties is going to sour. In that scenario, there is a potential of the full steepen of the curves 2 10s is potent. Guy what would the implication before the markets off of that . You look at what is happening with german data at the moment, some assessment that it is starting to bottom out, but you get a leg up in the trade, maybe that trade needs to be reassessed as well. Peter exactly. If december 15 tariffs were implemented, we should think of the curves going all the way back down to where they were during the summer. About ecbso thinking rate policy. I think four basis point of cuts are priced in over the next 18 months. Sounds completely wrong to us, but the catalyst would cause this. Guy we will hear from Christine Lagarde later this week. Peter chatwell of Mizuho International will stay with us. Vonnie lets check level markets. We have kailey leinz. Kailey we are still looking at a risk off day. S p 500 off by 1 10 of 1 . The nasdaq down by 2 10, as are stocks in europe. Seeing some by income into the defensive treasury market with 10 year yield down by three basis points. What is overhanging the markets pessimism on trade with reports beijing is not optimistic about the prospects of a trade deal with the u. S. If we look at a chart of s p 500 futures, we can see the direct impact that had. We have seen some recovery on reports of trump meeting with powell in the last 20 minutes. The biggest laggard today are oil companies. If you take a look, part of that is due to the fact that crude is lower by 1. 5 . You also have the aramco ipos lower valuation. Still questions about appetite. As a result, you have a number , down, including chevron by 1. 5 . When we look at energy, it has been a persistent laggard. It has been losing weight within the s p 500. Its market capitalization is that a historic low. The entire pocket cap of the rgy center that sector is theentire market cap of Energy Sector is lower than apples. Vonnie you can catch up on key analysis and save your favorites for future reference. That is gtv. This is bloomberg. Live from new york, i am vonnie quinn. Guy from london, i am guy johnson. This is the european close on bloomberg markets. Lets check on the bloomberg first word news. The president says he discussed negative Interest Rates and the economy with the Federal Reserve chairman today. The president tweeted it was a very good and cordial meeting. He has criticized powell for not cutting Interest Rates far enough. A surprising offer from the president on twitter today the president said he would strongly consider testifying in the impeachment investigation that after House Speaker nancy pelosi said that president could testify in writing. The aramco ipo will be a local event. The Worlds Largest oil company says it will not market shares to american, canadian, european, or japanese investors. Instead, aramco plans to rely on ultrarich saudis. Listenings are regulations allowing locals to buy more stock. Global news 24 hours a day on air, and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. His is Bloomberg Vonnie thank you. Back to brexit. Jeremy corbyn confirming the party plan to nationalize rail, male, and the national grid. Anna edwards asked how he plans to close the pulling gap with conservatives. Campaign. Get our manifesto across. Point out that what we are offering this country is to negotiate a trade deal with the european union, which gives a credible leave option, alongside remain, and bring that to a referendum. Aboutall, it is empowering young people for the future with better training, apprenticeships, and an equal status between apprenticeships and education. Vonnie johnson had a different to attract voters. I hope you will not mind if i also announced today that we are postponing further cuts in corporation tax. Before you storm the stage and protest [laughter] before you storm the stage, let me remind you this saves 6 billion pounds that we could put to the priority of the british people, including the nhs. Guy thats lets get insight. Chatwell, Mizuho International head of european rates strategy. Jeremy corbyn is talking about nationalizing a lot. It was interesting to hear that Jeremy Corbyn would say he would as you look at what is coming out of the politicians mouths, how much of it is priced and how much more is there to price in . Peter what is priced, to a degree, is an exit rotation they are able to spur the economy. Unfortunately, you also have to a flightd that this is to quality intimate, so they are tail risks associated. Conservatives have a lot of. Aylor risk tail risk that is difficult to disentangle and fully see the fiscal impact on the gilt curve. It is probably fair to see that, because we are going through a period where we have lots of rhetoric coming out, and it is probably easier to factor that gilts,t as a bid for thinking that the bank of england will probably be easing in the future, and there will be a flight to quality. Guy lets talk about u. K. Breakevens. They have come down recently. The fiveyear has come down sharply as of late. This is down to the fact that there is an expectation brexit will get done, the pound will rise, and that will put a dampening effect when it comes to u. K. Inflation. We expect that to go lower . Is that a straightforward trade at this stage . Peter i believe it is. If you look at that chart, what we are doing is exiting the regime of the massive sterling depreciation since the 2016 referendum. This is an economy which is going back to some semblance of stability on the fx front, probably going back to a regime of relatively low growth, because of all of the exit uncertainty brexit uncertainty. It is a breakeven curve, which is pricing that the economy is softening up and that the currency has probably bottomed, hence why breakevens are still going lower. That means that nominal gilt rates are probably capped for the time being. Vonnie when do we start to get positive Interest Rates in those countries in europe where we have had negative Interest Rates a long time . , in europe,nk probably not within the next five years. Probably longer, i would say. The evidence is the euro area is for early firmly in a liquidity trap and, for many reasons, cannot get out. The main reason is there is no single physical body in the euro area, meaning they cannot have a cohesive fiscal policy. If there were to be massive fiscal easing in northern europe, it would cause a crisis in southern europe. There is a number of reasons why europe is stuck in a liquidity trap. I do not see exits there. Other economies tied to europe will therefore probably suffer the same fate. Noneuroeurothe economies are likely to be tied closely to the ecb policy rate just a minute for mitigate the effects they would suffer if the ecb yields were to go lower. I expect the ecb policy rate will be going lower over the term. Vonnie lets take greece, for example. It is a euro country, but the 10 year yield is under 150 basis point increase right now, which in greece right now, which is fascinating to during a few years ago. Should greeces 10 year yields be below 1. 5 . Peter it is difficult to suggest that is a stable, longterm investment, given the probable political risks you would have over that 10 year horizon of holding that security. But i think, for now, while the ecb policy rate is negative and, as i said, i think it is likely to go lower. What would for many, be perceived as weak credit with financing rates low is to mitigate the underlying credit risk. As long as low rates are in place, the weaker credits are still able to refinance at favorable levels. This is what i say that if there were to be fiscal easing from northern europe, if that were to push riskfree Interest Rates up, that would actually pose a risk for the weaker economies, because they would not be able to refinance at such low rates. That would mean spreads would widen. Those that are saying europe needs fiscal easing, i think they need think about not putting the cart before the horse. First, europe needs a method of fiscal transfer. It needs to fundamentally change itself first. Vonnie thank you. That is peter chatwell, Mizuho International head of european rates strategy pay lets have a quick look at hong kong. Live pictures coming out of the city. Of course, we are in the second day of a two Day University siege which continues and has been transfixing hong kong battles between police and protesters, raging fires, tear gas, flaming vehicles. Tens of thousands of people marched towards the Hong Kong Polytechnic University on monday evening to eight those still stuck on the campus. Those are live pictures out of hong kong tonight. This is bloomberg. Vonnie seeing a little improvement here in markets, but really, we are flat on the s p 500 and have crawled up to six points on the dow jones. The nasdaq still the worst performer, just about 1 10 of 1 . That is a reflection of what is going on today from the president tweeting about the fed, more earnings, to expectations for any kind of resolution on trade. Then you have things like nvidia moving up 4 , the best performance in the s p 500 right now. Guy the ftse 100 flatlining right now. Lets take a look at what numbers look like. We are seeing some stocks counterbalancing some of the mining stocks. The dax being dragged lower, so volkswagen and daimler are the worst performing sector in europe today. This is bloomberg. Guy 30 seconds to go in till the end of regular training in europe. A lowvolume day out of europe. Trying to deduce anything from the pricing we are getting today. Maybe a little bit more hazy. Signaltonoise may be lower. What youre looking at in terms of the session looks like this. Intraday higher first thing. Sideways in a tight range. Then there is cold water poured on the idea we get a trade deal coming out of china. We go lower. Then sideways again. Down less than. 1 . Lowvolume. It feels like a negative session. That is confirmed by all we are seeing in the sector breakdown. At the bottom of the market the autos, at the top of the market the bond proxy. Lets show you what is happening with the individual markets and then the individual stock sectors. The ftse 100 flat today. Absolutely flat. You have some of the big pharmaceutical names at one end, on the other end some of the big mining stocks in the big oil stocks. The ftse 100 is reasonably well balanced around the 7300 level. The dax is down, the auto sector doing the damage. Volkswagen is dragging down. The cac 40 down. 3 . Lets show you the sector story. A mild risk off you. Some of the stories coming out of the sector stories are idiosyncratic to individual names. On the top end of the market, real estate, utilities, health care, household good. The bond proxies. The market is rotating to that safety. Market, i go the back to the fact that the miners and the autos and the oils are seeing weakness. Minors, oils, autos. Auto sector down to. 25 . There are some individual names dragging the sector lower. Volkswagen lowering its forecast and as a result that stop has dried the sector down. Some of the names are also lower. Lets show you some of the individual names to give you would have idea of where the big movement has taken place. There is vw, down 4 . I want to talk about what is happening at the madrid stock exchange. Have the Swiss Exchange the stock rocketing. Up nearly 40 . 37. 95 percent in terms of the percentage gain. The consolidation we continue to see in european exchanges, another one getting swallowed up. This is certainly a factor for the london market, down 5 . The market not wild about its strategy, to particularly when it comes to holding onto his asian assets. The market today driven by lowvolume