Treasuries and the dollar gain as donald trump valves to disentangle the u. S. From china. The president also suggests heavy taxes for American Companies that create jobs overseas. Of realism. The pound slides as Boris Johnson says he is prepared to walk away from the eu without a brexit deal. The you the u. K. Top negotiator meets Michel Barnier today. And Angela Merkels team refuses to rule out linking the state of novalnyeam 2 to the investigation. An hour away from the start of cash trading. At what futures are showing in europe. Gains of about 0. 4 across the board this morning on the euro stock my widely traded contracts as well as ftse and dax futures. We see u. S. Futures showing a mixed picture with nasdaq futures lower and dow futures higher. You can see nasdaq insurers have leapt up. It looks like we may not have the tech the continuation of the tech slump we saw thursday and friday. Remember, the u. S. Yesterday was lows for labor day closed for labor day. What do you see . Anna it is almost as if the u. S. Slept through. Weretime yesterday we talking about nasdaq futures down 1 . Also concern around the tech selloff going into a third day. Changed maybe was yesterday session in europe where we saw gains. A lack of tech exposure. Perhaps investors piling into europe with that in mind. Let us look at the gmm. The asian session, flat to positive. Up half a percent on the msci asiapacific. Face ofresilient in the the rhetoric of President Trump around china. Economy, something he wants to legislate around. The returning of jobs to the United States. He continues to push those themes and asian markets do not respond that much to the downside. Interesting in itself. In terms of the gmm, the pound for a second day on those top six movers. We see ongoing losses. It is down just 0. 1 . Nothing compared to yesterday. We will see where that will had. No deal brexit if required. A first word news update. Promised toump has cut americas economic ties with china. The president has threatened to punish companies that create jobs overseas. Serve in stark contrast with joe biden who has used trump think soft on china to secure the phase one trade deal. Germanys spending may become the new norm. The finance minister said the economy should not return to a balanced budget anytime soon. And that normality does not mean Angela Merkel abandoned its policy, set to borrow to counter the virus and modernizes economy. Modernize its economy. Californias power crisis is getting worse. Pg e is expected to cut power to prevent live wildfires parking sparking. A record heat wave triggered californias first rotating blackout since the 2001 energy crisis. Now windstorms threaten to trigger more blazes. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt next very much. We are getting some headlines across right now on experian raising its organic Revenue Growth forecast after strong trading. Experian now sees Second Quarter organic Revenue Growth between three and 5 to the upside. Keep an eye on that stock. I want to mention, keep an eye on the euro. ,fter we got german figures out well, let us see. 1 . Ne point the forecast had been 3. 5 , so missing. Exports up 4. 7 . Missing. The current account balance is 20 billion. We were looking for 17. 3. Numbers itn these looks like we got a little bit of a spike in the euro on that german ecodata. Right now we saw the euro jump up from loftin against the dollar to just over the line. You can see the spike on your screen nicely illustrated. On the other hand it could be a drop in the dollar for some reason. The bloomberg dollar index has come down drastically. We will see a spike in the dollar against a lot of currencies which is why you see the pound gaining and the japanese yen also gaining. Keep an eye on whats going on with currencies right now. Now. Asian stocks, what kind of they were kind of mixed this morning with equity slipping after President Trump said he intends to curb americas economic relationship with china. The pound held losses. Concern the u. K. Is inching closer to a no deal brexit. Mark cudmore on the bloomberg mliv managing editor out of singapore. Let me start with this dollar move. The dollar has just come down. We see currency spiking against it. Increasedbe expecting volatility in fx . Those are different issues. We should be seeing increased volatility, particularly sterling with the brexit risk and the ongoing tensions between the u. S. And china. The dip we saw in the last 10 minutes i cannot yet explain. Does lead to it dollar focus. Im not quite sure the reason. Isis a bizarre move, but it continuing, which does suggest that. Anna especially after a holiday in the United States. You mentioned the pound in passing. It is not all about brexit. There are plenty of other reasons to be negative on the u. K. Currency. Absolutely. It is not like many of them are new. Trading market has got along sterling. The longest in two years. Is sufferinge u. K. One of the largest economic contractions in the world. The forecast is for a 9. 87 contraction. It is not set to regain those losses in the next two years either. It has a current account deficit. It has deeply negative yields. The curve must suffer as a result. You have a bad state already. Is we have a tail risk that negative. Negotiations dont seem to be going well. Another kicker, we are seeing virus numbers start to spike. The outlook for sterling is extremely negative. Now the market is suddenly long again. With brexit negotiations, now is the time for that sterling. It is not sterling versus cable. It can be versus the euro, it can be versus other currencies. Is havingybody else issues. The brits are dealing with brexit. The u. S. Is getting into a bigger fight with china right now. European stocks kind of looking for a momentum. Our european stocks going to get the benefit of anyone else being sort of entangled with their individual problems . I think what might happen is they outperform in a risk off scenario. They dont tend to have an exciting story. They are short on the tech space. Tends risk on environment to lag and we are stuck in an in that environment, european stocks are already discounted. They are not directly in the firing line. In a risk off world european stocks are at the four. In a risk on world, there could be general excitement to buy assets. Anna thanks for joining us this morning. Stunning gains in european stocks. Note, 10 minutes past 8 00 in paris or berlin. Next, brexit is back. Sterling slumps as Boris Johnson escalates threats to leave the eu without a trade deal. Anna welcome back to the European Market open. 45 minutes to go into the start of tuesdays equity session. U. S. Trade will be back. We have one eye on whats going on with european futures and one eye on u. S. Futures. The u. K. s chief brexit negotiator has called for realism from an eu counterpart. The next round of trade talks beginning in london. He said there was still time for the sides to agree on a postbrexit trade deal for next year. A threat fromow Boris Johnson to walk away from talks. Sterling extended its drop for a fifth day. Recent moves around the dollar. We are still down. To an fx strategist at mccoury. Brexitrs are looking at negotiations and trying to work out what happens when. Boris johnson is talking about the middle of october. Michel barnier talks about the end of october. You have a date in mind in november. These things often go to the wire. What should we be looking for . Johnson has said the 15th of october. It is a cyclical basis. To have a deal by november 27. The timing needed will be important. It has not been priced in by markets yet. Of our opinion columnist suggested a no deal farit at this point is not away from the best deal johnson could get from the eu anyway. I dont know if she is just being cynical. We think we are going to see the pound work its way lower. What is the best deal the u. K. Could get . Realistically. They want a freetrade agreement. I think what has increased emphasis is the issue of aid. U. K. Companies have been blocked from receiving a during the pandemic because of eu rules. This is something that has been continuously reinforced i the eu. When it comes to a crisis time, it is that flexibility, very critical. There is increased reason why Boris Johnson will be very stringent on this. Anna it seems quite amazing that we are talking about a contested party that seems to be on this question of safe aid. For the purest it is all about having sovereignty to make any decision. Let me ask you about what the bank does. Could we get a cut in rates . I say that because that is what remains to take us down to zero. Would that do anything . Is negative Interest Rates totally off the table for the u. K. . At the last meeting they were very clear. I do think we are very nervous about negative policy rates because of the implications. Something like a micro cut could lead to gains. Any kind of economic damage in the bank of england is an outlier. Why not cut that rate back to zero . Certainly something increasing the pace of qe again. Is something that could be on the horizon. We are going to keep you with us. Coming up we are going to talk about decoupling or tariffs. Moves to curbp economic ties with china. Matt 40 minutes away from the start of cash equity trading. We had a big rally yesterday. U. S. Futures have turned higher. Stocks,as you are long there is reason to be happy. Donald trump has taken another shot at china has election rhetoric rises. He has vowed to scale back economic ties sharply with the worlds secondlargest economy, threatening to punish American Companies that do business there. Our reliance on china once and for all, whether it is decoupling or putting on the on massive tariffs like i have been doing already. We will impose tariffs on companies that deserve america to create jobs in other countries. , we cannot do it here will prohibit federal contracts for companies that outsource to china. U. S. Is also weighing a ban on products from china from over human rights concerns. What do you think about the ramped up rhetoric . How much of a problem is this for risk assets . Be increased rhetoric ahead of the u. S. President ial election. I dont see it having too much of a negative impact that this moment in terms of high data fx. Probablyconcern is whether we will have a certain election or whether it will be contested. Ofcould face the prospect not knowing who the next president will be. You see that us dollar negative. I know you have in your mind a number of reasons to be dollar negative right now. How does the trajectory of the virus and the bureaucracy of that play into your thinking . We are seeing a bullish move ahead of the u. S. Election. Where the central if you the lower bound, look at the economic supplies u. S. Data is outperforming market expectations. Ofhave dealt with the brunt the impact from coronavirus. We have had a very pure labor market shot. We see recovery in the u. S. Gaining momentum. The same time coronavirus cases are accelerating. Matt lets talk about em. Maybe one currency that has escaped dollar weakness. What do you think about that . It was kind of the biggest move in the emfx complex. That are going to see catchup in terms of the brand the South African rand we do think the next stage of recovery will be a lot harder to sustain. There will be also increased focus on the fundamentals. T will be interesting is there are very attractive yields. Basically it trades back in line with market fundamentals. Thanks very much for your time. Very good to speak to you. Just to qualify her dollar bullish position. Lets have a look at futures. European equity market futures to the upside. The frenzy was not around tech, and if anything, there was little fear around tech, but today looks different in terms of u. S. Futures. Matt absolutely. You have seen nasdaq futures turn higher. They were lower minutes before the show started. , i seest thing i checked a slight red arrow. The first thing i checked was to see if nasdaq futures would still be off. The risk on mood everywhere else seems pervasive. It is very interesting. Ask about the nasdaq wheel theory later. Bloombergome back to markets. This is the european open. Lets take a look at todays key events that could shape the day. The latest round of brexit negotiations get underway in london later. We will get our final reading on euro area gdp for the Second Quarter at 10 00 this morning. Get0 30 in london, we will an idea of how the South African economy is faring after one of the toughest lockdowns in the world. It is expected to contract by an annualized 31. 9 . Olaf shonance minister lz will discuss in a bloomberg webinar. The u. S. Senate returns from recess. Nancy pelosi joins bloomberg after 5 00 p. M. London time to discuss issues surrounding the second stimulus package. At six but 6 00 p. M. London time Jeff Gundlach speaks on the total return bond fund. That is your day ahead. Lets get your Bloomberg Business flash. Is doubling up from 25 previously. Trading staff are already coming into the london office. A tech giant has been in talks to leave 200,000 square feet of space in what wouldve been one of the biggest real estate deals in years. As decision will be watched investors weigh the impact of coronavirus on the city. An unusual online releases helping drive demand. The release was friday after the pandemic delayed the u. S. Theatrical really. Customers were required to pay an additional 30 to see the film, an approach the company has not attempted before. Anna thanks very much. The german chancellor is considering action against the nord stream 2 gas pipeline after the poisoning of alexey navalny. Angela merkel supported comments by the foreign minister who warned berlin could change its backing, underscoring the escalating tensions with moscow. Polands Prime Minister described the decision as a nybrainer and says the naval case should be a final wakeup call for germany. Seexpects his country will the softest recession in the eu and is not concerned about the level of the currency. I place which is good for the economy, we dont intervene in , eitherke this unexpected developments, are central bank does not exclude intervention. Franc is an important issue in the polish economy. Having said that, we are not concerned. It is good for the stability of our economy for our export industry and at the same time, it does have the possible the potential for strength. Across the board or in germany there is increasing pressure on chancellor Angela Merkel to abandon the nord stream 2 project. What has been the polish government stands for years. Convince you try to germany to drop this project . I think it should be a nobrainer. Is a very sad example of how russia is treating its citizens and opposition leaders. Condemned not only condemned, but it should be very strong sanctions and interventions following suit. And here i believe that hearing what german leaders are saying, i think the decisionmakers will change their decisions. They already by the same token finally admitted this is a political project. I mean the nord stream 2 project. With the recent development in mr. Where mr. Pruden navalnwhat he did to mr. Y, this should be a final wakeup call for germany in terms of the eu and german attitude towards nord stream 2. Do you think germany would be able to what would be the consequences if they did cut off work on nord stream 2 . We have lots of connectivity. In particular the nord stream 2 project is dangerous for ukraine. They are going to become fitly cut off from their transit capacities. A gas Pipeline System was built for to transit gas to western europe. Obsolete, they will experience huge growth. There will beme for the first time a situation where Russian Troops and russia will be able to march into a territory in the east because they will no longer be dependent on the gas Pipeline System. With its 552 billion cubic meters of gas is threat, itpolitical is a geopolitical threat to this part of the world. It should be stopped as quickly as possible. That was the polish Prime Minister speaking exclusively to bloomberg. Let us continue the conversation on nord stream 2. Joining us now is an Energy Analyst at the German Institute for International Social affairs. My first question really is about the Energy Security in germany. How important is this pipeline to keep powering germany . Can it be done without nord stream 2 . It can be done without nord stream 2. Re are other pipe liens pipelines like nord stream 2 and. The assessment is it can do, but the pipeline would have positively affect in economic terms with regard to gas prices. The way ahead for the German Government is not an easy one. Anna i read some analysis that suggests one way here is to build the nord stream 2 pipeline but not to use it, not to buy gas through it. What kind of geopolitical signal is that sending . Would that result in just buying gas through the existing pipelines in which case, what difference would it make . Yes, indeed. Putting a moratorium on it would not mean they buy less gas. The kremlin mean gets less euros for natural gas. The is the point, stopping nord stream 2 pipeline would be politicallygh loaded signal. That would be the message. U. S. Has been pushing for this long before Angela Merkel felt the weight of the poisoning. How much lng could be sold into germany out of oklahoma . Is that part of the play . I think it is part of the play but on the u. S. Side. A lot of motivations coming together. With regard to the sanctions and the secondary effect on the nord been a plays always of prices. We see more lng coming into the European Markets. This was also the major message out of berlin. L