Transcripts For BLOOMBERG Bloomberg Markets European Open 20240713

Hong kong Police Surround protesters at a university standoff. Chief executive carrie lam calls for a peaceful resolution. We are live in the city. Powell goes to the white house. President trump says he protested against high Interest Rates in a meeting with the fed chairman. Boston fed president tells bloomberg the central bank might already have gone too far. And emirates exclusive. President tim clark tells bloomberg he is still interested 737boeing seven dreamliner but does not see the 737 max 8 getting back in the skies this year. We are talking about maybe the First Quarter calendar next year, possibly even a bit longer. In the end, i will repeat the question. The only entities which will sanction the flying of this aircraft are the regulators. It is not boeing. Matt we are less than a halfhour from the european open this morning. I just wanted to quickly point out that we are getting a little bit of a comeback in gold. This is the u. S. Dollar price over the last three days. You can see all the the futures you will look at in a moment are positive, investors have put money back into gold at the end of yesterday. That could be because of a drop in the price of the dollar as well. In termsok at futures, of what we are looking at in europe, we have seen pretty decent green errors across the futures picture. 0. 3 , so are the ftse futures. Take a look at u. S. Futures. We saw earlier this morning some very slight gains, still see. 1 gains on s p nasdaq and dow jones futures. It could be a risk on session. Anna we are sort of edging higher in those futures that you brought us. We are also edging higher on asian equities during the session. You can see the hong kong markets set ongoing lowered, it would seem. Some investors asking whether it is time to start buying, such as the discount for hong kong to other parts of asia. A little mixed in the Asian Session. S p in the u. S. Hit another alltime high in yesterdays session. That is very much at the forefront. As is the latest and conflicting headlines around trade. On the one hand, risk on assets perhaps get a boost from some of the headlines around huawei. On the other hand, risk off assets may be get a boost on some of the reporting around the chinese governments may be skepticism around a broader trade deal. That kind of conflicted reporting for investors to consider when it comes to trade. Lets talk about what is going on in fx markets. The dollar has been fairly flat, mixed. President trump talking about the dollar with fed chair manpower. We see a bit fed chairman powell. We see a bit of weakness lets talk to our markets live team and get into these markets with the mark cudmore in singapore for us. I want to come to you first on where we go from here in terms of the equities story. Alltime highs once again, yesterday s p, another record. Where do you see things heading from here . I still think it is the same picture we have been talking about the last couple of weeks. I think that will continue to grind higher until year end. Unless u. S. China trade talks collapse completely, then we will continue to see this risk on alley risk on rally. Nine powerful one. In the u. S. , not a powerful one. In the you sets in the u. S. , equities are excessively expensive. We might see this phase one deal signing kind of pushed later into the new year while they kind of go on with the negotiations. We might not see any substantial process progress on a phase plan. I still think that a less toxic collapse completely, we will see equities growing higher. Matt i know a lot of us journalists here are excited to watch the debate. Looking forward to some extent to johnson versus Jeremy Corbyn tonight. What about markets . Are Global Markets focused on this debate . People wantk that to know whats going on but they have just gotten so confused by the u. K. Political situation recently. People are unsure if conservatives get a clean majority, a good thing, because you remove the uncertainty. Wait a second, that clear plan will be quite a hard brexit compared to what people were hoping for only six months ago. Is it really that positive . Outside of the u. K. , people have got an increasingly confused about how you play this. A level of uncertainty means a lack of interest and thats the case. Certainly a lot to play for in the u. K. Election. Unless you are a u. K. Political expert, we are all struggling. Anna we are all struggling. David blum from hsbc struggling on the direction of the pound and who can blame him. Lets talk about what is going on in hong kong. We see of course continued violence there. I was looking at the discount for hong kong stocks versus other parts of asia. I guess many investors will be asking, at what point does this turnaround . At what point do we draw a line in the sand and decide this does not get any worse and therefore jump back in. I think the discount you see in hong kong stocks, not just on a nominal level of comparing to other indices, but comparing it to its own fiveyear average, it is just extraordinary at the moment. To have uninversion to the hang seng an aversion to the hang seng index at this level means eat think the situation will escalate politically. Theres too much value. Especially since some of the heavyweight names in the hang seng index a lot of revenues domestically anyway. It is not necessarily a pure domestic. The hong kong economy is in severe trouble at the moment. It will not have great growth next year either. There is still a massive discount here unless you think there will be a drastic escalation from here. Matt we are going to talk to the imf md and little bit later. Later. Little bit what do you think is most important for me to ask her . What do you think she could say that may move markets . I am not sure exactly what she could say that would move markets. I think she could say a lot of things that will be interpreted in the long way. These people are normally skilled about not communicating the wrong message. How worried is the imf about a more systemic emergingmarket debt price . We see a lot of the smaller emerging Market Countries blow up recently across the world in all different regions. Latin america is kind of the focal point, but it is everywhere. There are some big heavyweights, places like brazil, india that have a very worrying debt situations that are not getting resolved. Is there a chance this extends to the smaller em countries . 2020 may be the year of aem debt crisis an em debt crisis. We are certainly due. Anna mark cudmore joining us from singapore. You can join in with the question of the day. How far can the u. K. Election move the pound . Reach out to us and the markets live team. Lets get the blumberg first word news update. Bloomberg first word news update. Kong, protesters continue to clash with police around the university campus. Carrie lam is calling on a peaceful e to the siege end to the siege. Some 600 protesters escaped or were evacuated overnight, including several hundred who are under the age of 18. The u. S. Is reversing its stance that Israels West Bank settlements arent illegal. It is a big are indeed illegal. It is a big policy shift for the u. S. It could give a boost to Prime Minister Benjamin Netanyahu but it is likely a further setback to the Palestinian Peace process. In sight tothe end the political deadlock in spain. s separatist party looking into a deal that would put Andro Sanchez back in power Pedro Sanchez back in power. It is preparing supporters for the possibility. In return, they want direct talks in the future of catalonia. The cost cutting move is the latest blow to the regions industry. About 2 3 of the reductions would be office space stuff. Chartered has Steelmaking Facilities in the u. K. And netherlands. It did not give a detailed breakdown of where the cuts would be made. Wework will start cutting the jobs in the u. S. This week in a the struggling Office Sharing company amid staggering losses. About 16 of jobs may go, about 2000 positions. Mourners could come on friday, when the chairman of the company is expected more news could come on friday, when the chairman of the company is expected to global news 24 hours a day, onair and on tictoc on twitter, powered by more than 2700 journalists in 120 countries. Anna, matt . Matt thanks very much. Leighann gerrans with your first word news out of london. Siege mentality. About 100 protesters are still surrounded by Hong Kong Police at the polytechnic university. We are live in the city next. Remember, Bloomberg Radio is live on your mobile device or dab digital if youre in the london area. Tune in. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 16 minutes to go until the start of cash Equities Trading this tuesday morning. European equities point little bit higher in conjunction with u. S. Futures that point higher. Industry, about the the heavy industry in europe. Tartar steel plans to cut as many as 3000 jobs across its european operations. The company, which has facilities in the u. K. And the netherlands, says about 2 3 of the reductions will be office space stuff. Will kennedy joins us. Very good morning to you. Haveuropean steelmakers been having a tough time for a long time. We know this. What is the background for todays decision . They are being squeezed both on the supplyside and demandside. On the supply side, there are a from lower cost areas and that is being exacerbated by tariffs in the u. S. That is not a market for a lot of those exporters. On the demandside, they are the victims of a slow down we have seen in the european economy, especially on the manufacturing side. By one estimate, still demand in the u. K. Will shrink by about 3 demand in theteel u. K. Will shrink by about 3 this year. Matt they have not said exactly where the job losses will be. An will that play out in uncertainty stricken u. K. Theyre concentrated in the netherlands, where they have a big plant, and the u. K. , where they have slimmed down operations. They still have a steel plant in south wales. An iconic piece of u. K. Industrial infrastructure. Job cuts like this dont play well during election campaign. These are wellpaying industrial it follows on by the crisis at british steel, which owns the other steel plant in the u. K. , which recently had to be rescued by a chinese dealmaker. Anna will kennedy, bloombergs managing editor for energy and commodities. Matt two hung the Hong Kong Government says schools will reopen on wednesday as about 100 protesters remain surrounded by police in a siege on the citys polytechnic university. Some 600 people escaped or were evacuated overnight. Chief executive carrie lam called for a peaceful resolution to the standoff. Protesters are coming out in a peaceful manner, in other words, they stop violence, they give up their weapons, they take the advice of the policeman, then there is no situation that that sort of violence will happen. Matt joining us now from hong kong is jody snyder. What is the latest . I know this story is a developing story, changing by the minute. Whats the latest on this standoff . The latest is that they are still there are still people on the campus. There still are protesters there. We do not know how many. We have heard various numbers. Carrie lam this morning said there were about 100. Fcmp said there were only 60. There are still people there. There are reports of hypothermia and some injuries. At this point, the police have not kind of tried to take them out of there by storm or anything like that. We have just been in this kind of stand situation all day today. Hadie lam, as you noted, her regular tuesday press briefing this morning, in which she called for a peaceful and peaceful end to the situation. She said she hoped people would voluntary agree to leave the campus. She could not agree guarantee that it would be a peaceful ending because the police were in a reactive situation. Anna that was carrie lams message about a peaceful end to the hong kong siege. What did she have to say about the plas cleanup activities over the weekend . Chinese the site of personnel in uniform . Is that the backstory here that sort of unnerved people . Thats right. People were concerned at the site of any Chinese Army Personnel on the streets in hong kong is unusual and something that, in the tense atmosphere that is here now, leads people to speculate that maybe there could be Something Else that would be a foot. Carrie lam sought to dismiss that in an answer to a question at her press briefing. She said for now, right now she said, there is no need for any assistance to hong kong authorities, that they can handle the situation. By thecribed the efforts members of the hong kong garrison, the pla, as being voluntary and charitable. She said they have done this in the past with storm cleanup. She said in her view this was welcomed by citizens. She sought to dismiss any speculation. Anin, that right now was interesting point. Matt thanks very much. She is bloombergs Senior International editor joining us live from hong kong. We are minutes away from the open of stop trading across europe and in the u. K. When we come back, we will look at the issues that you want to focus on. Julius baer is one. The bank has launched a Share Buyback program we will tell you all about. This is bloomberg. Anna welcome back. Seven minutes to go, just over seven minutes to go until the start of the equity trading day. Lets find the stories that the team are watching for reaction to today. Annmarie hordern is looking at smiths group. We are covering the banking business of julius baer and sarah patel focused on the automakers afternoon numbers are out. Lets come to you first on smiths group. Many have talked about this as a potential take out target for many years. We are talking about the spinoff of part of their business. It is a medical unit that they might be kicking off this potential sale of. People say it could fetch that unit itself more than 3 billion u. S. Dollars. They expect to receive bids before the end of the year so possibly in time for christmas. The attention from this coming from the private equity space. Smith has called higher, some of the calls as high as 2 this morning. Matt what about julius baer . Yes. A mixed bag the results from the swiss bank. Francs ion swiss buyback, which is good news. The results are not so good. We will see what the Market Reaction is today. Anna ok, thanks very much for that. Lets get to sarah on the automakers. New numbers out in europe. Sarah good morning. The numbers are just out. October, butump in that really is masking an underlying negative. The numbers are down from the start of the year. The car sector is quite depressed. Demand is low in europe. It is even worse in china, which is the worlds biggest market. Even though october jumped, i think analysts will be expecting shares probably to go down because for the rest of the year, nobody is expecting sales to really pick up. Matt all right. Thanks very much for joining us and getting us the latest stock stories from our equities team. Go to first go on your bloomberg and via the mobile app. I know you will speak with the head of the green party, the coleader of the green party later. We have had a number of airline easyjet, theym have all been really focused on climate change. Their message has been to a point, they are reducing their carbon footprint. Anna i spoke to the whiz airbus ss lastek whiz air box week. Easyjet reported numbers today. City world, around town, plg also newsworthy stories to keep your eyes on. This is bloomberg. Anna one minute until the start of cash equity trading this tuesday morning. Through the Asian Session and the u. S. Session, we saw u. S. Equity markets, the s p at least, at new alltime highs at the end of yesterdays session, but still we see Higher Ground ahead. Futures point higher. Msci asiapacific with mixed headlines around the latest on trade. Reporting around huawei, what could happen there, and reports about sentiment from the chinese delegation in terms of a broader trade deal. All that pretty mixed in fluid when it comes to the trade conversation. The pound, a little volatility coming through. We continue to build toward that election date on december 12. Oil prices, retreating a little from where they were. This is the picture on european futures. Expecting to see Gentle Movement to the upside we saw in the Asian Session. Expect that to come through into the european session. Up about 0. 3 on ftse, dax futures at this point. Lets get the equity markets opened up, and see where we are on the markets. The headlines around trade have been a little difficult to pin down, in terms of getting up clear message or any kind of sentiment gauge, where we are in the trade narrative. Still in the phase one of the deal. We talk about where the phase one will, whether it will lead to phase two and beyond with trade. This is where we are this morning, ftse 100 up 0. 25 , 0. 3 percent. Up interesting sector stories to keep an eye on. Flat, dollar index a little higher. President trump says he talked to chair powell at the fed about the strength of the dollar, but that is an old theme, we know the market knows President Trump doesnt like the strength of the dollar. Auto sector also in focus. New numbers from european markets in terms of auto sales, and keeping an eye on the aviation sector. We had our emirates interview, and speaking to easyjet today. Plenty going on in the aviation space. Keeping an eye on airbus as the dubai air show concludes. Broadly green across the sectors. A few areas of red, staples and health care, so looks fairly risk on in terms of the sectors we are seeing today. Matt absolutely. One of those airlines, manuf acturers, airbus, one of the leading gainers. 445 stocks up, so 130 down. 1 ,us up a little less than addingarge weighting, so the secondmost points of all Companies Currently trading to the broader european index. A gainer,again with allianz, prudential, banker sent in their. Banks and insurers and financials gaining this morning. A look at the losers. Knowtt benckiser, i never how you actually pronounce it, i have been saying it for 20 years and cannot get the british pronunciation right, but a consumer stable rising. Nestle, a consumer stable falling. Some other Consumer Staples dropping. Lever down, danone falling, smith and nephews. A lot of stocks that make stuff people nedd, can need, cannot really decide not to buy dropping this morning. Not a bad sign necessarily. Anheuserbusch taking the most from the stoxx 600. Broadly, european markets are higher. That is as President Trump says he protested about u. S. Interest rates to fed chairman Jerome Powell, in their second facetoface meeting this year. The president complained rates are high compared to other developed countries. It is, i dont know how important it is, but interesting dimension he also said the meeting was cordial. His view is not shared by bostons fed president Eric Rosengren, who dissented against this years cut. In an exclusive interview, he told bloomberg hes concerned about a negative shock in the current environment. I am a little worried we have less room than we would, if we were to have a big negative shock. And not just the short end of the markets are the long end of the market has been fluctuating between 1. 5 and 2 , a lot lower than prior to the last recession, meaning even quantitative easing will have limited effect, given that it could easily get down to more quickly than expected. Matt joining us now is melanie baker, senior economist at Royal London Asset management. It is not so important what you think the fed should do next, but what the fed is going to do next. Do you think they are holding pat7 every holding pat . Have we passed peak dovishness for the fed in the u. S. . Melanie i think the fed are on hold. A strong message from powell, and we will see if thats in the minutes this week area generally speaking, the u. S. Economy is in a better place than it was. We hadbeen slowing, but significant stimulus from the fed that should serve it well going into next year. Anna good morning, melanie. A good place, the fed keeps telling us, their new phrase. We heard from President Trump once again criticizing where u. S. Interest rates are in relation to other countries. Giving ourselves the context, a chart to show, the uptick in u. S. Rates, but the extent to which they have also been cut. Melanie it is important to note that the turnaround has been bigger than it appears, looking at what has happened. Anna because of the balance sheets. Melanie and also, this time last year we went through a position when the fed was signaling they would continue raising rates. Since then, they have cut rates several times. Quite a turnaround. You can see it in the housing market, helping to boost activity, so it is already having an effect, as you can see. At thehen you look impact of negative rates on economies, melanie, what conclusions can we draw . We are fairly early i guess, in the experiment that the ecb has taken on. Mario draghi said at his last press conference that it has been a good experience for him. But of course, we have a lot of negative comments from bank very and it is not a popular policy in terms of the populist outlook. Melanie the jury is still very much out. Broadly speaking, the experience has been positive on the whole, but clearly there is a limit in terms of how negative you go. Things get very complicated for the financial sector, for banks, the further into negative territory you go. I think the verdict is still out. On the margin, it has been helpful. Anna so you dont think, if we are looking at recession indicators, where does that leave us in the ongoing debate about when we may start to see recession in the United States . Melanie i dont think we will see recession in the United States next year. I think there will be some slowing, though. Something innt, the background important in that story, related to fiscal stimulus. When we had the big trouble trump fiscal stimulus, that is going to wear off, and we should expect slowing in u. S. Gdp growth. Assuming that the trade war doesnt escalate further, we are in a good place for next year. Matt so given those views, where do you see rates going . Right now, looking at 1. 8 on the 10year yield. In the u. K. , looking at far less, less than half of that on gilts. Melanie as i said, that is it in terms of policy rates. But the market will be looking for more confidence that this is now, they will be looking for more bottomingout in global data generally, looking for more signs of global recovery. Better news on the trade war front will be helpful there as well, and that could take us to a higher level of bond yields. Anna thank you so much. Melanie baker, senior economist at Royal London Asset management, stays with us on the program. Up next, stocks on the move, including smiths, the company said to have kicked off a formal sale of the medical equipment business, boosting the stock a little this morning, up 1. 5 , shares opening higher. This is bloomberg. One of the advantages of voting conservative in this election is that we can and will get it done, and get it done in a matter of weeks. We have a deal thats ready to go. Just add hot water, stir in pot, it is there. What we are offering this country is to negotiate a trade deal with the European Union that gives a credible leave option that we can put to a referendum. Liberal democrats are absolutely going to try to stop brexit and to use our greater strength, and we are being very ambitious in this election, to bring much more reason to british politics. If we get a working majority, we can get Parliament Working for you, and we can then unleash the potential of the whole country. A Public Sector that provides health care, social care, education so essential to all of our lives. Areas we will be campaigning very strongly on. We arent in the position the business of putting into number 10 somebody so obviously unfit to do the job as Jeremy Corbyn or Boris Johnson. The speaking from confederation of british industry conference in london this week. Impressaders failed to Business Leaders caught between brexit and labour nationalization plans. Now, other parties in u. K. Politics, the green of england and wales pledges to reach net zero Carbon Emissions in the u. K. By 2030, and will include a socalled Green New Deal in its manifesto later today. It says it would invest 100 billion pounds a year by 2030 to tackle climate change, mainly paid by borrowing. The greens will also hold a second brexit referendum, they pledge. Greeng us is the u. K. Party coleader. Good to join you today. I wonder if youre are a victim of your own success, in that other parties compete with each other to be or seem more green, and that perhaps squeezes you . Jonathan we have certainly been setting the agenda, putting this climate up as the climate election. Where greens lead, others follow. Our platform is very different from the other parties. We dont think any of the other targets are measuring up, in terms of meeting the Climate Emergency, and the action we need to take in the timeframe that we have. Of course, our offer on remaining in the European Union as well, with the peoples vote, campaigning to remain. Labour. Ive from anna the labour are not a remain party, you say, not part of the alliance for remain grouping, which did a deal to standdown in certain seats and i know you have done so, but some of your candidates have decided to standdown, to allow the labour party to do better in certain seats to prevent tories getting in. Are you ok with that happening, ok with your potential mps deciding to do that . Jonathan we are a democratic party, and these decisions are made at the local level. Andts done democratically, they have made that call in their specific local area. They are best placed to make those calls. But we are fielding many more candidates than in 2017, 500 candidates around the u. K. Seats, we reached an arrangement with the liberal democrats. But we share the same goal of remaining in the European Union. We think we have a good chance of getting more green representation in parliament, which will make a huge difference, particularly if we have a Hung Parliament after the election as many predict. Anna let me ask you about what would happen in that circumstance,t hen. The labour party not part of the unite to remain grouping. Would you be part of a grouping that would put Jeremy Corbyn in number 10 . Not setting red lines, not giving anybody a fair pass. The Climate Emergency would have to be the top of any governments agenda, and a Voting System. We know that the key of our future is shifting power from westminster to local authorities, unleashing power from the bottom up, part of the Green New Deal. We want investment in public services. The austerity consensus has broken, and we want to make sure we are pushing back austerity. Of course, a commitment to remaining in the European Union is absolutely fundamental for dealing with the Climate Emergency, working with our partners and neighbors and securing our environmental protections in our own country. Anna we spoke to jo swenson yesterday, swinson the liberal democrats leader, who says she doesnt think Jeremy Corbyn is fit to lead the country. Do you agree or disagree . Jonathan we are where we are. It isnt a great option, isnt it, between Boris Johnson and Jeremy Corbyn. But the reality is, one of those parties will have a significant bloc of mps in the house of commons, and we will have to put aside tribalism. Parties work together, negotiate, find a way forward. They often do great good by working together where there is Common Ground, and we have been looking for Common Ground with all the parties. We are the least tribal of any party. We think it is too important, the Climate Emergency, to be bickering and fighting the way we have seen the last three years, so we are looking to build consensus and move forward, get the transformation of the economy, improve lifestyles, living standards. Measures like a universal basic income, to give everyone the security to start up a business, and care for a sick relative, whatever it might be. As we transition to the low carbon economy, which we think should also be able to cut the cost of living, decent public transport, home insulation Cutting Energy costs,. Anna it does sound as if you would support Jeremy Corbyn in number 10. Would that be in a coalition or confidence in supply . Jonathan we have said we wouldnt go into coalition. We would much prefer a confidence in supply arrangement if the terms were right, on a casebycase basis. We feel that is a more effective way of holding a governments feet to the fire and make sure they take urgent action. We have shifted labour in a number of areas for the last few years, and want to continue to do that in the event of a labour minority government. Jonathan you have seven anna you have seven meps, but only one mp. You talked about the Voting System and how that would be one of the redlines for supporting Jeremy Corbyn. What is the strategy this time for turning the seven meps into more than one mp . Jonathan the european elections, we more than doubled the number of meps, got 2 million votes and were first and second in seats around the country, particularly where we want to make gains in those seats. Its a very hard election to predict. A a lot of the seats will be determined on local factors. In remain supportive areas of the country, there is a big groundswell of support for remain parties like ourselves, so we would want a significant green bloc in the next parliament that can deliver what needs to be delivered at this important time in the country. Matt thank you very much. Anna the u. K. Green party coleader. Lets get you some of the top stories. Annmarie hordern has a breakdown. Annmarie i want to start with julius baer, at 1. 9 . Mixed bag of results. A writedown at the struggling italian unit, but the market is focusing on their Share Buyback program, first time in eight years, lifting the stock more than 2 . Off the sale of the medical equipment business, attracting a lot of attention from private equity firms. Downside this morning, scf, more than 18 , after the fcc is opting for a public auction rather than a private sale, which many Satellite Companies were hoping for. This could cut their take by billions due to the nowpublic auction. Matt . Matt thanks very much for that. Annmarie hordern, looking at the stocks on the move this morning. Up next, trade fade . Goldman sachs sees the drag from u. S. And chinese tariffs couldning in 2020, but tensions escalate instead . We will discuss. This is bloomberg. To bloombergback markets the european open. About 23 minutes into the trading day. Taking a look at the indexes, we see green arrows across the board. Most stocks on the stoxx 600 gaining, and as a result the ftse up 0. 5 , dax up 0. 3 . Still, the trade war has been a huge drag on the economy. That will fade, that drag, in 2020, at least according to goldman sachs. The bank says tariffs in china have probably peaked, and expectations of a truce will lessen the impact of the fallout. Melanie baker, senior economist at Royal London Asset management, is still with us. Again, to me this is another indicator that peak pessimism has kind of passed for the Global Economy. What do you think . Melanie i have my fingers crossed. I think it also feels a little fragile. Every morning, i coming, in terms of the trade war and the news is mixed. It feels like theres underlying progress towards a phase one trade deal, but i would like to see it. Anna and to that point, i have this chart that shows copper rallying a little bit on optimism around trade deals, the basis for a deal, but not by much, and not as much as market stock markets have rallied. The circles indicate the tariffs on various products. Maybe this is along with other o thes, a story closer t core han some of the excitement in equity markets. This suggests some in the market are waiting for the signature on the line. Melanie there are also other things going on. Tariffs, thatauto has been hanging over the Global Economy. That will hopefully be delayed, but it is still a threat. Even if we get a phase one trade deal, it is not clear the threat of the imposition of tariffs in the future if things break down, they will probably still be there. So its not just about tariffs. There are issues around export controls. Matt when you look at the global trade situation, even if we get a phase one deal, or a phase two, phase three, has the paradigm shifted . Whats the new world of trade look like . Melanie not quite where we were 10 years ago, to put it that way. [laughter] it does look like there are going to be, we will be left with more barriers to trade than we used to have. A big repair job would be needed to reinforce the kind of global architecture around trade, to get us anywhere near back to where we were. Matt all right. Melanie, you will stay with us. Melanie baker, senior economist at Royal London Asset management, our guest cohost for the hour. Up next, the pound touches a sixmonth high against the euro, ashley tories back Boris Johnsons brexit plan. But how much volatility can we expect in the coming weeks . We will discuss. This is bloomberg. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. Matt 30 minutes into the trading day. Lets get the top headlines for you off the bloomberg terminal. Siege mentality. Hong kong police around protesters in a university standoff. The chief executive, carrie lam, calls for a peaceful resolution. We are live in hong kong. Powell goes to the white house. President trump says he protested high Interest Rates in a meeting with the fed chair. Boston fed president Eric Rosengren tells bloomberg the central bank might have already cut too far. The emirates exclusive, Company President tells bloomberg he is still interested in the boeing 787 dreamliner, but doesnt see the 737 max getting back in the skies this year. My view is that we are talking about, maybe the First Quarter, calendar next year, possibly even a bit longer. But in the end, the only people, only entities that will sanction the flying of this aircraft are the regulators, not boeing. Matt good mornin and welcome to Bloomberg Markets the european open. Matt miller in berlin, alongside anna edwards at our European Headquarters in london. Anna 30 minutes into the trading, and a broadbased rally on equity markets. 440 stocks higher. Lets look at whats moving higher this morning. Corporate reporting felt across the markets. U. K. Listed measurements business up 8 with numbers out. The u. S. , a change what businesses can own movie theaters, and they own one of the movie theaters in the u. S. A host of different factors moving things around. Easyjet also with numbers out, up 3. 2 . Telecomownside, scs, a satellite business listed in paris. It has had a real drubbing in the runup to a decision from u. S. Regulators around the auctioning of capacity in the u. S. In that secto losses,ult, further another 20 lower. It does seem to the upside on the balance for european equities. Here is leighann gerrans in london. Protesterspeaceful and Police Continue to clash on a university campus. Carrie lam is calling for a peaceful end as 100 demonstrators remain i inside. 600 protesters escaped or were calculate evacuated overnight. The public hearings start again today in the impeachment inquiry. From eightill hear witnesses this week, and is looking into whether the president lied to special counsel robert mueller. This comes as the president says he strongly is considering testifying. The u. S. Is reversing its stance that israeli west Bank Settlements are indeed illegal. The move is a big policy shift for the u. S. , the latest political offering to israel since President Trump took office. It could bring a boost to Prime Minister Benjamin Netanyahu, but likely a further setback to the Palestinian Peace process. Forfornia is suing juul allegedly marketing ecigarettes to teenagers, as deaths and illnesses linked to vaping grow across the u. S. Failed toalleges juul include required warnings and delivered to customers without verifying their age. Juul says that there Customer Base is adult smokers, not underage users. The largest holder of u. S. Treasuries is still japan, despite reducing by the most in nearly 20 years. As thevertook china biggest nonu. S. Holder back in june. Both have over 1 trillion of treasuries. Global news, 24 hours a day, on dare and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Anna thank you very much. Leighann gerrans, in london. The pound rallied to a sixmonth high against the euro, as conservatives throw themselves behind the Prime Ministers brexit plan, raising hopes for a smoother departure from the European Union, perhaps premature. Opinion polls show conservatives in the lead. Economistker, senior at Royal London Asset management, is still with us. We know we dont take the polls at face value when it comes to u. K. Politics. We do see a widening lead for the conservative party in the weekend polling. What is your base case as to how things develop on december 12, and what it means for brexit . Melanie my base case has to be to take the polls at face value, and if i do that it has to be a conservative majority victory, which does mean we probably get a e. U. Brexit deal through. But from an economists perspective, it is how quickly do we start worrying, and we are already worrying about 2020. Will have a deadline in the middle of the year, when the government will have to decide whether to extend the negotiation deadline on the final trade deal. If they do not extend, you have a december 2020 deadline to agree to a final deal, so you have a potential for a recurring risk event cliff edge, and for business that can be a problem. Matt putting politics aside, and assuming you get the brexit likely,t looks most what does the u. K. Economy need right now . What would your biggest policy prescriptions be . Melanie like most economies, certainty. There has been uncertainty hanging over the u. K. Economy for so long, dampening business investment. Im not sure thats going to lift completely anytime soon. More fiscal stimulus is welcome at this point, and thats what we see no matter who wins the election, more fiscal stimulus. If you get through some of this uncertainty, with a little bit of fiscal stimulus, the u. K. Is in a reasonable place to continue kind of trudging along here. We still have a resilient consumer, for example, helping things along. Anna i have a chart that shows the labor market story at the moment. There are a lot of positives around the labor market. Low unemployment. This measure of the u. K. Labor force employment change, and i wonder whether this raises some warning signs for us. This is, this is around brexit, but theres also the Global Economy and whether thats having a downward impact on the u. K. Economy at this point. We are vulnerable, i guess. Melanie it is clearly not just about brexit. And you are right, there are some signs of fraying at the edges in the u. K. Labor market, but the Unemployment Rate is very low. Thats usually helpful. But you are right, theres slowing in employment growth. Redundancies up a bit. Some warning signs. I do think real pay growth is a good, solid support for the consumer year on year. Matt i am in the middle of season three of the crown and theres a terrifying scene where one of the royal advisors explains to Princess Margaret the danger of devaluation. [laughter] is hsbcs important david bloom, who was on earlier talking about sterling. Heres what he had to say. The rules have changed. You dont have a view. You cant have Boris Johnson and Jeremy Corbyn winning, and Hung Parliament, and we dont know which one it is. We have three different views that could have dramatic impacts on sterling, and on 13th of december whatever sterling is trading at now, it will not be trading at at that time. Matt how dramatic could it be, melanie . I have seen this currency tragic along in a range. Trudge along in a range. I cant imagine it moving that far. What are your expectations . Baseie it could, in the case it could move further, but you are right. If you look at it, theres an element of ranginess in it, but it is also very sensitive to brexit developments. We have seen that in the past. We have had sterling move very strongly. Matt melanie anna melanie, thank you very much. Economistker, senior at london asset management, joining us on bloomberg. Coming up, stocks reporting including easyjet, after the airline bought more boeing airlinere. And we bring you the exclusive interview with emirates president tim clark. This is bloomberg. And now that the demand has been more challenged, looking at the yield environment, most governments are trying to mature growth and focus on delivering and optimizing results. Anna that was the ceo of easyjet talking about the airlines growth, and about a new tour operator, an Interesting Development from a low cost airline. Sticking with the aviation theme. It could be a tough 2020 for the aviation industry, according to the emirates president tim clark. Speaking exclusively to bloombergs yousef gamal eldin, is stillis Company Interested in the boeing 787 dreamliner and a decision on the order could be months away. It would be helpful if we knew exactly when it was going to be delivered to us, and that shapes when and if we take the 787s. Its important that boeing get this aircraft out of the door, but importantly, to my point earlier, to the high level of Quality Control and standards we expect when it comes to them. We have to wait and see when that is. Hopefully we will know that in a few months. And how big an order would that be, in terms of the number of planes . Were working on it. Ok. To take intong consideration. Last spoke, you said you didnt see green shoots ahead, that the industry was in a turbulent phase. A few months on, how has the picture possibly shifted . I am not sure it has shifted. We did enter a turbulent phase. And if you look at the number of airlines failing over the last two years, since the air show in 2017, there have been over 15 of them. Some were quite large, jet airways in india, thomas cook more recently in europe. The industry entered a phase of consolidation. We knew, on the margins, the periphery of the main operations, that there would be failures, and thats exactly what has happened. You see the industry going through now a consolidation phase. The Global Economy hasnt helped, of course. But where do ics going forward, in the next couple years . Probably 2020 will be tough. Theres a lot of things going on. Thee some resolution of chineseUnited States tariff issues, and hopefully the trade war will then dissipate, finally, and that will get the economy going. Because every country is affected by this, particularly the europeans, who are finding their economy suffering as a result of this. In 2021, i think we will start seeing a more consolidated industry, as far as airlines are concerned. Perhaps moret, efficient usage of their infantry to the cities they serve. I am quite optimistic in 21 and 2022, but 2020 will be difficult. Matt that was Emirates Airlines president tim clark speaking exclusively to bloombergs yousef gamal eldin out of dubai. Lets get the top stock stories, to london and annmarie hordern. Annmarie city world up more than 3 , after the u. S. Department of justice will ask a cord to stop the 70 court stop the 70yearold antitrust law stopping studios from purchasing movie theaters. They own regal, a really popular chain in the United States. Easyjet up 3 even after announcing trimming expansion plans, less capacity on the market, chances to raise some fares, looking decent for easyjet. To the downside, one of the biggest decliners on the a hearing care solution company. Even though they boosted their saidngs forecast, they strong First Half Results might be a peak. Matt thanks very much for that. U. K. How far can the election move the pound . That is our mliv question of the day. Mlivxt, are mliv our strategist Richard Jones out of berlin. Stay tuned. This is bloomberg. Anna welcome back to the european open. 50 minutes into the trading day. 0. 4 . 600 as a whole up decent gains in london, up 0. 6 . Dax up 0. 5 . The hiring firing of the mcdonald ceo for having a relationship with a colleague is an example of how executive behavior is under the microscope era. Metoo we spoke with a professor at cornell university. The me too movement has created an opening for companies to do what they have been doing, reviewing policies that are in place, but also whether the policies are actually being enforced. Its really given us an opening to explore relationships we might have otherwise dismissed as consensual and ok, and kind of look at the underlying problematic dynamics, even if they on the surface appear consensual. Lets talk about those relationships that appear to be consensual, the impact of those. We want to differentiate between sexual harassment, as in the executives, and mr. Easterbrook, whose relationship we understand was consensual. What you say that even if individuals consent, it can distract employees and fuel suspicions of nepotism . Absolutely. When bosses sleep with their employees, it is not just the people in that relationship who are impacted. It is also the coworkers and surrounding organizational climate. There are concerns about favoritism, concerns you get ahead if you sleep with the boss, and that can create a toxic organizational climate. It can also undermine the professional relationship reputation of the subordinate sleeping with the boss. As my research and other peoples have shown, even in these consensual relationships there can be problematic Power Dynamics the call into question how consensual they really are. Matt fascinating segment. You can watch more on bloomberg. Com. Lets shift gears now, and go from gender relations in the business place to fx and rates around the globe, and for that bring in Richard Jones from our mliv blog. Your question of the day, how much can the u. K. Election affect the pound . We heard earlier from hsbc, that there are so many different scenarios, its difficult to tell. But whats the range you could see is moving in . I think you have to strip out the shortterm versus longterm. Richard in the shortterm, the pound was trading 1. 2750 versus the dollar couple weeks ago, and now is 1. 2950. A lot of good news has been priced in. The smoothest election result is now in the price of the pound. Poll after poll shows the conservatives with a substantial lead. They will probably be able to form a government, and thats where we were last month when there was optimism about the Withdrawal Agreement. Theres decent news priced in the shortterm, but even if the Withdrawal Agreement passes, that starts the transition phase ending at the end of next year, so the clock is still taking. Anna the polls are the polls we have got, and we have to use them to some extent. Whenever i am tempted to rely on is hard toold it turn those percentages into seats. We believe that around the u. K. What about the dollar . We heard the president had been meeting with Jerome Powell at the fed, once again complaining about the strength of the u. S. Currency. Is this likely to mean anything, for the direction of the dollar . Richard well, this is nothing new from President Trump. He has been bemoaning what he sees as an overly strong dollar. A lot will depend next year on what the fed does, and i think that given the way that yields have sort of shot up over the past couple months, and have now started coming off a little, it comes down to what happens with trade, and how that impacts the feds decisionmaking. Now, the markets are saying we will probably get additional fed easing next year, but not at the levels we were at a couple months ago. If we get back to those levels, we could see that feeding into where we can go. Matt i will talk to kris and a littleeva while from the imf. One thing i hear from people, they want to know from her, have peakssed peak pessimism, dovishness . Going by the fed, ecb, germany, didnt post a Second Quarter in a row of contraction. What do you think . Richard even though germany did avoid recession, it is, the economy is still not performing at the level everyone things that should be at. As a result, i would say we arent out of the woods. It would be interesting to hear what the imf head set about Global Growth and what stage we are at. There is indecision in the market now. It is too soon to sound. Anna the specifics about hong kong, also fascinating. I know the team has been writing a little bit about that. The discount on hong kong stocks no doubt looks tempting to some investors. We seem to have days where the hong kong assets sell off as a result of tensions, and other days were markets dive back in. Richard i think that the one thing that is the mantra for equity traders, you always buy the dip, it seems, and any dips this year have been bought. Maybe thats the playbook as well for hong kong. Matt still a lot of liquidity. Richard Central Banks are accommodative and remain so. Balance are expanding. Under those circumstances you get pullbacks, and they will probably be bought. Matt Richard Jones, thank you for joining us. Are mliv fx and rates strategist here in berlin. Join the question of the day, how far can the u. K. Election move the pound . Reach out to us on the mliv team, on your terminal. Anna european confidence climbing in october, helping the auto sector. That sector is up just over 1 today. Laggards are media, food and beverage and telecom, but generally we are up across europe. This is bloomberg. Francine all goes to the white house. President trump says he protester high Interest Rates in a meeting with the fed chairman. Siegemund howdy. Hong kong police siege mentality. Hong kong Police Surround protesters in a standoff. Boris johnson and Jeremy Corbyn go head2head in the first election today. With the conservative will the conservatives doubledigit lead be narrowed . Welcome to Bloomberg Markets european open. We are seeing some Risk Appetite come through in equity markets, despite the lack of