U. S. Treasury secretary Steven Mnuchin said additional fiscal stimulus is needed urgently. The dollar steady after Strong Manufacturing data. Above 1. 20 for the first time in over two years. It does not last long. Does mattere level for monetary policy. It is 6 00 a. M. In london, 7 00 a. M. In frankfurt where they are watching the eurodollar trade. Good to see you. So, volatility. Is the equity market to greedy and the rates market under assuming vol in the u. S. President ial election . Good morning. Annmarie that is certainly what the Options Market is signaling, that this is the biggest event risk to date on record and that is of course the u. S. Election. It signals investors basically maybe being in wait and see mode until november. They want a bullish spread and a bearish spread. Have two exclusive massive interviews coming up this hour im really looking over to. Manus there are a couple of things. We have had a huge month of property deals go through. These are the two leaders of those businesses. We just heard from them on the side of the deal. A 5 billion property deal. We will also hear about the view of the oil market. Apollo is part of a league of investors putting money into the uae oil property portfolio. That is a deal theyve done. You will hear in terms of the credit market. Two cracking, exclusives. Annmarie apollo oversees more than 400 billion dollars. Im looking forward to what he has to say. Reallyave stocks grinding a bit higher after up. Her s p 500 futures apple again pushed that index higher at the close yesterday. We are all tracking the eurodollar. We are now below that key threshold. Alley ins says that is a redline and philip lane, ecb is clearly starting to get worried. They say the eurodollar rate does matter. In. Manufacturing expanded august at the fastest pace since late 2018. A gauge of factory activity july,sed from 54. 2 in suggesting the fledgling u. S. Recovery is beginning to strengthen. Beovid19 vaccine could available earlier than expected of Clinical Trials produced overwhelming positive results. Dr. Anthony fauci made those comments to Kaiser Health news, pushing stock futures higher. On a relieftions package, treasury secretary Steven Mnuchin testified about the administrations response to the pandemic. Take a listen. I do think the economy is recovering very strongly, but let me say there are still areas of the economy, nofault to Small Businesses or workers that need more help to recover. More physical response is needed. The president and i want to move forward with more fiscal response and let me just say the expiration of enhanced Unemployment Insurance is something we are concerned about. I want to emphasize the president and i do support additional fiscal response and we have been working hard to try to get a negotiated agreement on a bipartisan basis. We would like to extend enhanced unemployment and send out more Economic Impact payments. Those have been critical to the economic recovery. From those are the voices medicine and capitol hill. Jim mccormick is the global head of strategy. Good to have you with us this morning. The risk is we get a skinny deal and we get a vaccine. Both of those are out there. What is the most difficult thing to do when markets are record highs on the equity market . How do you invest around these record highs . Jim yes, listen, i think as we head into the end of the year, the reality is that it is going to be very difficult. I see an environment of pretty low returns. You have stocks that record highs on many indices, the u. S. In particular. You have a lot of event risk from the election. You have growth i think beginning to slow into the end of the year. It is going to be a low environment. On growth, they say investors should stay overweight on Growth Stocks. No strategist is starting to price in rising Interest Rates. Do you agree and if you are looking at Growth Stocks, what area . They are clearly the ones pushing ahead on record rallies every day. Jim listen, i think the part i would push back on is the idea that Interest Rates cant rise. They certainly are not going to rise in the short end of the curve, but we see the taste for some fairly significant curve steepening across Global Markets over the next year or so. It is basically a combination of a lot of things. It is an enormous amount of bond supply coming into the market. To me, the biggest risk on this equity rally is that eventually bond markets have to react. We think the next three or four months is a real risk here. Manus in the context, i want to talk a little bit more about the fed. You have taken us on that route, so im on it with you. Have got this divergence ive trod that many times. We have the divergence between real rates and then we have these breakevens, so two roads diverged in a snow we would. Does that divergence continue and how do i trade around that . Or does it write itself . Right itself . Jim i think real yields stay the same for quite some time. To me, at the long end of the curve, there are many risks. Central banks that want inflation are one of them. If there is going to be an increase, it is going to happen for the longer end of the curve. I think real yields in the short end of the curve are anchored by what Central Banks are doing. Annmarie you are also short the dollar, now talking about yield. The technicals on the dollar are signaling that we are overdone. It has room to rise. Are you still going to maintn your short position for the second half of the year . We have been short dollar quite some time. The early stage dollar story was focused mainly on the euro and we see the euro was one of the biggest movers. Think this shift in the fed framework last week probably opens up a broadening outlook of dollar weakness, so we see a bigger case for dollar weakness against emerging markets. We see a bigger case against currencies. May the euro part of it needs to take a breather. This jim, the debate is overnight, it did not pack the strength. There is a lovely line here. 2020, cold war currency playbook. This is what we are really launching into. This comes from over at global strategic strategists. 2020 currency cold war played with active Forward Guidance policy to be the new way to keep currencies artificially low. From is a lovely quote john steinbeck. A product a mans of mans failure as a thinking animal. The dollar is driven by rates, but that is fine, but eventually that has to be a kickback. How bad could these currency wars get . Jim one thing in the middle of the biggest Global Pandemic in a century, the largest fiscal expansion globally probably ever , this idea that Central Banks can control the short end of the curve, the currency seems fanciful to me. I think if you look at the empirical evidence on currency rates dont months, matter that much. It is really growth differential. I think it is going to create an enormous amount amount of growth differentiation over the next couple of years. To me, Central Banks are going to control the short end of the curve and they are going to have a hard time controlling what happens in currency. It is hard to imagine Central Banks confirming at just control everything. Annmarie hold those thoughts, jim. Jim mccormick stays with us. Lets get to the first word news. Thanks. A week after two protesters were fatally shot in kenosha, wisconsin, President Donald Trump has visited the city. The trip came despite the objections of the citys mayor and governor, both democrats. The president did not meet the family of jacob blake, the black man shot in the back by police. President trump you could take the people of kenosha that arent here and that are not protesting, but they want change also. They want law and they want to want a great police force. They want people that are going to keep them safe, where there houses are not broken into. Where they are not raped and murdered. That is what they want. Ofthe pentagon this morning the chinese increased nuclear capabilities. According to an annual defense itort, chinas program puts on the cusp of achieving the socalled triad of delivery systems. In japan, Prime Minister shinzo abes righthand man is the leading candidate to replace him. He is not ahead in the polls, but he has been supported by key factions in the party that will decide the succession. The contest will be held on september 14. Global news and a Bloomberg Quicktake powered by more than 2700 journalists and analysts in more than 120 countries. Bloomberg. Annmarie thank you. We had some breaking news just over the last 10 minutes to bring you. The Swiss Financial Market Supervisory Authority has officiated enforcement proceedings against Credit Suisse in the content of its they say this in a statement. Credit suisse says they willfully continue to cooperate with the regulator. Manus yes. This all goes back to a series of stories around allegations involving spying on an employee headed to ups ubs. Later in 2019, there was also monitoring of the head of Human Resources chief, he had been monitored, as well. It must be said that Credit Suisse is saying they will continue to fully cooperate. Complete an expeditious conclusion. We will certainly track that story, a new development. Annmarie certainly we will be watching the stock as we head closer to the open. Days left until the u. S. Election and it is now priced in as the worst event risk on record. How should investors be positioned . That is next. This is bloomberg. Manus this is bloomberg daybreak europe. Joe biden supporters are beginning to show signs of anxiety. Recent polls show a narrowing in the race between the democratic nominee and President Donald Trump. For more, lets bring in our Senior Editor. A good to have you with us. Concern . Primary i think biden folks, democrats are worried in general. A lot of them thought Hillary Clinton could not possibly lose in 2016 and then she won the popular vote and then she lost the electoral college. So, there is concern that even though joe biden still is up in the popular vote, surveys that by see around, he is not up an unrecoverable margin. Swingou look at key states, it is a little bit closer. A little bitare in of a constant panic over the last multiple months that they could once again when the popular vote and lose the electoral college. What they are pushing for as they want biden to be more aggressive in the way he is campaigning. Go out a little more because donald trump certainly will. Annmarie good morning. Become a defining contrast. President trump has been in kenosha. What did he say . It was very much as we talked about before his trip when we said he would probably stick to his law and order message. That is exactly what he wound up doing. He was effusive with his praise for Law Enforcement officials. He said looked like riot damage in kenosha. Now, joe biden is going to hit back, we understand, the New York Times has reported that he will run an ad based on his monday, so you can expect that some of this is going to continue going forward. That donaldssue trump feels like he might have an advantage on. It is a real touchstone issue i think for people across the united states, whether you are worried about unrest in the worried that are your child or your childs friends could come into interaction with a Police Officer and not make it out alive or both. There is a lot of concern around a lot of issues here. Forward, thisoing is going to be a really salient issue this fall and it certainly is not going away. Annmarie bloomberg Senior Editor in singapore, though he spent years in d. C. Thank you for that insight. In the u. S. , the stock market continues to rally to record highs, but novembers election is a dark cloud. Hedging against volatility is currently the most expensive event risk on record a student of the common way to that volatility known as a butterfly trade. Jim mccormick is still with us. Heading into the u. S. Election, does anything else matter when you look at this type of volatility . Jim listen, i think lots of things matter, we saw even there covid that the end of year was going to be about the election. Starkestbly have the differences in economic policies in modern history. We now have an election that is going to be a pretty close race. There is going to be a lot of anxiety headed in. Into november. Manus thank you. We will pick up that conversation. Coming up, we hear from our exclusive interview. The cuts the oil producer is making to comply with the opecplus deal. That is next. This is bloomberg. Manus this is bloomberg daybreak europe. Im manus cranny in dubai. In reordering is in london. Adnoc has done a property deal with apollo. We had an exclusive conversation and we got his thoughts on the oil markets and what it takes to support the current prices. Take a listen. Oil marketsber have truly tightened in recent months. Are actually moving in the right direction. That, it is my view that i find it too early to make any longterm predictions. On the demand side, i know love. Ve shown some tellis the latest you can me on the demand side that you are seeing . Seeing is that there are multiple variables in marketght now that make predictions somewhat difficult. , markets have clearly tightened in the last few months and as we see economies open back up around the world and in particular we have seen demand strengthen in asia. Having said that, the Energy Sector must remain cautious and flexible as we navigate complex and evolving map of economic developments. Ground, weding our are staying the course, we are being positive, and we are cautiously optimistic. Narrative isf the that this is about opecplus deliveringd job in compliance. How important is overall compliance over a reasonable period of time to the market. Opec you have mentioned, played a very Important Role during this challenging period and it continues to help build confidence back into the market. Veryve continued to work closely with opec and its members and we are very committed to ensure the compliance. Anus i know you dont have crystal ball and you have used the word caution, but every trader wants to get a sense of what you do think when we can really realistically get back to 100 Million Barrels per day. Best reasonable estimate . No one can really predict how the future will unfold as far as the market is concerned, but we around 75 fall to Million Barrels a day. It is starting to head back in the right direction. Looking ahead, we expend expect demand to hit 90 Million Barrels per day by the yearend. We are being very flexible and dynamic and maneuvering through these market cautiouslyd we are optimistic that the markets will pick up. The ceo of was adnoc. When we get back to that magical 100 Million Barrels per day in terms of demand, what is ironic is that compliance, it is critical for the market and that they have done a very good job, but some of the data for us here in the uae in the past 24 hours, we have been slightly overproducing, havent we . Annmarie they have slightly been overproducing, but part of it is what we saw, they are going to need to produce more to make up for the overwhelming need domestically. Toq and nigeria are starting come in line. Manus this comes back to the whole point. It is about what has the prince managed to achieve in terms of compliance . Many have tried this before, but others have not unsuccessful. What do we have in store . Annmarie the pinocchio problem. The euro falters after breaking the key threshold of 1. 20. What is next for the shared currency . That is next. This is bloomberg. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. Annmarie good morning from bloombergs European Headquarters in the city of london. Im Annmarie Hordern with manus cranny in dubai. This is bloomberg daybreak europe. The s p closes at an alltime high. The u. S. Election is shaping up to be the most expensive event risk ever. U. S. Treasury secretary Steven Mnuchin says additional fiscal stimulus was needed early. He places a call to nancy pelosi. A redline for the euro. The currency breaks below the dollar 20 for the first time in two years. T clearly has the ecb worried manus, good morning. We just had some breaking news this hour we really should recap and this has to do with Credit Suisse. This Swiss Financial Market Supervisory Authority is initiated enforcement proceedings against the bank in the context of its observation activities. Credit suisse says they are of course going to comply with the regulators, but we are going to be watching all the lines coming out of zurich this morning. Manus absolutely. Part of this investigation in particular will be and how these activities were documented and controlled. Those are critical words within that press release to Credit Suisse. And they areponded in the observation matter. No further details on t