The ballot. Hurricane laura is on the verge of becoming the most powerful hurricane to ever strike louisiana. Towards the u. S. Gulf. The eus trade chief steps down after criticism he broke virus regulations. It comes amid a rise in european cases. Rejectspain, and france the possibility of fresh lockdowns. It has gone 6 00 in london. 9 00 in downtown dubai. Good to see you this morning. We were trying to wrap it up with the rrrs. Risk, the rncly over the dnc. Political risk. The trifecta coalescing today. Lovely blog this morning. That upset the market week ago. Good morning. Annmarie good morning. Its not just a rome powell we are waiting on. We will hear from Andrew Bailey and philip lane. Will inflation become a moving target . For me, that will be the focus of jackson hole. Theres a number of other risks out there including the political, mike pence saying joe biden is a trojan horse for the radical left. Also, this hurricane. This is expected to really batter across the u. S. Gulf coast. Lets take a look at how this risk is doing this morning. Msci asiapacific, relatively soft. S p 500 futures under a little bit of pressure. Down 2 10 of 1 . The yuan this morning, 6. 87. We are breaking out of that bermuda triangle. 1 . T crude up 3 10 of this comes down to hurricane fear. Updates on the u. S. Crude stockpile, showing a bit of a demand recovery. Thats the price action this morning. Now to politics. The third night of the rnc. Mike pence took the stage to accept his Vice President of mom and nation. Nomination. He defended president trumps record on the economy and combating the coronavirus outbreak. , moreadowing his speech dramatic events across the United States. That includes hurricane laura, the arrest of a teenager for shooting protesters in wisconsin, and u. S. Athletes refusing to play in solidarity with demonstrators. Those are the events that are unfolding. This years jackson hole event will be held virtually. The public will be able to view the entire event via a webcast. Global stocks are touching alltime highs ahead of the fed chair Jerome Powells speech. That is much anticipated. They are expecting details on the feds new policy framework. Seen holdinging shortterm Interest Rates for five years or more. The event will look into the challenges facing policymakers in the World Economy during the pandemic. We spoke to the Kansas City Fed president on the Central Banks inflation target. Ive never thought of 2 as a ceiling. To stay focused on what anchors Inflation Expectations in the economy. From a communications standpoint, i think we will be talking about the kinds of things that help us do a better job of achieving our objectives. Now, head ofg Us Investment grade credit for europe at wells fargo asset management. Thank you very much for joining us this morning. The target, the elusive 2 scarlet pimpernel. They never quite catch it. Targetinginflation imbue a sense of confidence that the fed can and will breach the 2 level . What is so different about inflation averaged targeting . Henrietta i think it is something they are doing at the moment. Im not sure that this will bring much change. 2 has been an average for them already. In the previous years, during the financial crisis, they were willing anyway to let inflation go higher than 2 . They will see it as an average. Thats what were expecting. Its not a huge difference to what they have done before. 2 , is it achievable . Thats a different question given the current circumstances. As we know from other countries, you may have a target but you may not reach it. Annmarie if i could take the contrarian view for a moment, i get what youre saying. We have not been able to get close to the target for years. If we were to have this upper end headroom on the inflation target, what does that imply from the fed to the market, in terms of their policy toolbox Going Forward . Henrietta i will answer this one differently. The picture for inflation at this point, given the extraordinary circumstances that we are in, theres a fair amount of uncertainty as to what path it will take. Given the impact on demand, given impact on supply, given the virus at the moment. There is funnel of opportunity in terms of inflation, maybe not immediately. It had a deflationary effect at this point. 2001. L be quite wide come it will be interesting to see how that plays on the inflation side. And then we can see how the central bank reacts. Manus lets take it. Busted and left in the dust. Mark hazel says, we will see this new narrative from the fed. The fiveeinvigorate 30s. You say it will not be a huge breaking news event. Where they a context react celery . Reaccelerate . Henrietta from my perspective, is driven by uncertainty in the markets at the moment. Rather than the communication on the fed side. I agree, the communication might be trickier given the format. Remember that in the background, from an economic perspective, we have a very unusual situation. Annmarie as we approach jackson hole, what will we get more clarity from . The fed and powell . Interest rates going below zero from Andrew Bailey . Or philip lane about the ecb Bond Buying Program . Which out of the 3d you expect the most clarity . Henrietta in terms of the zero more aits possibly question for the u. K. I think the hurdle is quite high for a country like the u. K. Or the u. S. To across the zero bound. I think they are in a different situation from eurozone in that respect. I think the stigma of doing negative in that case is very high. Our expectations for the u. S. And for the u. K. Is that that zero bound will stay. In terms of the ecb, they have a lot of ammunition from the perspective. We will see how they move forward. For now, they have a lot on the table. Annmarie go on. Manus go ahead. Go. Annmarie we will carry on. Henrietta will be staying with us. We want to get an update on the first word news. For that come we have laura. Laura a 17yearold was arrested yesterday after two people were fatally shot in kenosha. It came during violent clashes between protesters and counterprotesters and the police. The fourth night of unrest, days after a black man was shot seven times in the back by police. The wisconsin governor has doubled the National Guard members available. The white house is defending guidance from the cdc. It says people who came into close contact but do not have symptoms may not need tests. That has alarmed Many Public Health experts who say it could limit how many tests are performed. The new york governor says the move is political propaganda. The white house denies the change will influence them. The European Union trade for chief has set down. He broke virus regulations. He attended a golf dinner in ireland last week, an event that is under police investigation. The eu will have to move quickly to fill the post. It has a key role in trade discussions. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you very much for that. Coming up, tensions rise as beijing files missiles into the south china sea. He u. S. Imposes sanctions we discussed the risk. This is bloomberg. Manus daybreak europe. Im manus cranny. Tensions between china and the u. S. Are escalating over the south china sea. Beijing fired mediumrange listing missiles into the waters as trump and the administration are imposing sanctions against Chinese Companies that set up outposts in the disputed region. The action comes a day after china protested a flyover by a u. S. Spy plane. China says it has made concessions to let the u. S. Regulators order some of it sensitive companies. Beijing chairman says wants to resolve the standoff over accounting issues. He also underlined that more chinese Financial Markets would benefit, both on the mainland and Foreign Investors. Up has always been a key strategy of chinas growth over the last 40 years. That is also true for the financial sector. Tensions, theese talks of decoupling, the opening up pace of our Financial Markets has actually accelerated in the last year or two. Since the beginning of this year, in terms of lifting the equity cap of foreign financial this operating in china, made a huge stride. Do you think that pace will accelerate . Do you think about the pace of that opening . Its a good question. I think it would accelerate. The chinese economy, despite the challenge of covid19, has actually recovered quite nicely. Over the last three weeks or so, i went to four cities over the last three weeks. Just based on my own observation, the economy seems to have quite fully recovered. When i was there having a vacation, the old hotels were full. It was incredible. The Consumer Power of the chinese economy is just amazing. I have a sense that in six months or so, the chinese economy will again be the locomotive of world growth. The Capital Markets in china will continue to be continue to expand. That provides a basis for foreign participation in our market. Thats one reason. For a capital market, highquality economic growth. We need participation in our markets. We need Higher Quality financial services. That is something that foreign films can provide. In terms of the stock market, china is a very high saving economy. There are a lot of Retail Investors in our economy. Trading behind act of this year. Investors are not very good at determining the value of a stock. We need a lot more Institution Investors in our market. The money is usually coming from institutional investors. That they have a much better sense of what a stock is worth. The presence of Foreign Investors in our market has in thed an anchor valuation of the market. To can it continues promote the quality of our stock markets. We welcome more participation. Both from a demand and a supply point of view. I do expect that foreign participation in our markets, whether in providing services are capital, will accelerate. Annmarie that was the vice chairman of the China Security Regulatory Commission speaking exclusively to bloomberg. Our guest is still with us. Very quickly, we have trade tensions escalating this morning. The yuan holds firm, breaking out of its bermuda triangle. Do you think this strengths will strength will last . Henrietta [laughter] i like its hard to tell. We are entering a very interesting time from a political perspective. You mentioned that at the start. The u. S. Election is really going to enter its campaigning phase in september. As a result, china is going to be one of the topics that gets discussed. The u. S. Attitude to china will be one of the key topics from my perspective. As a result, it will be interesting to see how trump in particular, given hes more vocal on that relationship, reacts over that time and how much under pressure he is. I think that that will determine the course of the relationship with china over the next few months. As we just talked about, there are a number of points of tension, be it the south china sea, on the corporate side, the relationship between chinese corporate and u. S. Corporate, the trade war. I expect that that is going to ebb and flow as the Campaign Heats up. Just a finish off, do you get a sense of the pboc is in a more neutral position annmarie that might put neutral position . New zealand is reckoning for negative. Just a brief comparative. Henrietta yeah. They are in a different situation. Where they are in terms of recovery post fire us is in a different location. They are a little ahead of other countries worldwide. As a result, yes. More of a positive this point pause at this point makes sense. The Northern Hemisphere heading into automated winter. We need to see how that plays out. We are in a different situation to the pboc at this point. Manus that will play out in the covid situation as well. Thank you very much. We will stay tuned for those numbers. Thank you for being with us this morning. It could be the most powerful hurricane ever district louisiana. The details, the impact, the cost, and the market incomes outcomes here on bloomberg. Manus it is daybreak europe from dubai. Annmarie, contracting the hsbc story. Saying basically, the bank is helping deny freedom, attacking the bank over its handling of next media executives. This is another swipe against the management there in terms of their position with the chinese authorities. Free nations must ensure that their corporate interests are not suborned by the ccp. Stock is down nearly 2 . A lot of annmarie risk this morning. Hurricane laura will be the most powerful hurricane to ever strike louisiana. Areas could be uninhabitable for months. The region basis for bradley deadly storm surges. We will look out on how the market reacts. We will bring our guest in for her take on this. What does this mean for refining margins across the gulf coast . Perspective,om our this is an event we have seen it in hurricane seasons before. It will be supportive for the oil price and for refining margins as well. Thats what we are expecting. However, we will have to see how the hurricane passes and the degree of damage and how long the various areas will close subsequent to its passage. Impact that wee will be watching out for. Time wherening at a there are Stocks Available and have been made available. There is less pressure from a demand perspective. That will help put a lid off of prices. We will see how that plays out. It will be the length and duration of the impact that will be key to prices and their path at this point. Manus its interesting. They turn on the taps ever so slightly. Their compliance is really quite stellar. Thats probably part of the floor for this market as well. In terms of a 95 overall compliance. That is key. Henrietta that is key. Again, given the extraordinary circumstances we are in, it is helping on that front and making sure, given the volatility that we saw earlier in the air, countries have an incentive to comply at this point. Prince, certainly, the the Saudi Oil Minister really took on that the nokia problem for the cartel and doubling down on the cheaters. Thank you so much for your time this morning. Coming up, having gone to unprecedented lengths to combat the covid prices, Monetary Policy makers kickoff a virtual jackson hole conference. I will miss the beautiful landscape and mountains we usually get from jackson hole. Its all online. You could be a fly on the wall. We discuss it all, next. Bloomberg. Annmarie good morning from bloombergs European Headquarters in the city of london. Manus cranny live from dubai. This is bloomberg daybreak europe. These are todays top stories. U. S. Equity rally pauses ahead of jackson hole. Jay powell will update on the feds framework review. , thepence tell the rnc economic recovery is on the ballot. Hurricane laura is on the verge of becoming the most powerful hurricane ever strike louisiana. Oil is near a fivemonth high. Eus trade chief steps down after criticism he broke virus regulations. Arising european cases. Italy, spain, and france reject the possibility of fresh lock downs. Good morning. It is just a storm of risk this morning, isnt it . A trifecta of the top three. Jackson hole, jay powell, inflation debate, the rnc in the middle of geopolitical tensions with beijing, and of course hurricane laura really about to batter the gulf coast. Thats what the market is focused on. We have other things like rising coronavirus cases. The tiktok ceo stepping down. Hsbc this morning. A flurry of risk. A lot for the market to digest. Its almost manus as if we set off on this virtual journey with the fed, navigating the decade ahead. Bouncearkets literally from one fed headline to the next. I think what we have to ask ourselves is, what is the risk . Many people said they were bland. They had this narrative that moved the bond market. Unseat thewant to equity juggernaut that has taken off. Lets whiz through the markets. S p pausing. Jackson hole. Prefers europe over the United States of america. Have a look at the yield curve. Rise in looking for a curves as a result of this jackson hole. It reaffirms curve steepeners for them. What will the narrative of action inflation targeting do for the dollar . We are on a role on the back of the hurricane and supplyside. 43 38 is where we are, back to flat. Dead as a dodo. Weve gone to unprecedented lengths to combat the covid crisis. Aretary policy makers kicking off that virtual jackson hole conference. Jerome powell scheduled to speak today on the longawaited fed framework review. Lets look back at what the policymakers were saying this time last year. I think we have to act as appropriate when we see the economy having a shock. I dont see that right now. I dont think we need to act right now. As i look at where the economy is, its not yet time. Im not ready to begin to provide more accommodation to the economy without seeing in outlook that suggests the economy is getting weaker. You see the data coming in solidly. Tumors are confident. Consumer spending is solid. Business investment is slowing. Weighed down by uncertainty. It is still not negative. We still have growth. The center of gravity in u. S. Economic policy today is not Monetary Policy. Its trade uncertainty. Its immigration policy in some places. Interest rates will be lower Going Forward than they were in the past. That was the understatement of 2019. Lets discuss more with senior a sure economy reporter. Good to have you with us. Nobody expected a global pandemic. What is the big message we will hear from Jerome Powell . Why is inflation averaging so materially different . Our guest says there is nothing new in it. What do you say . Michelle a very different world than yesteryear. We are set t