We will be live in zurich assessing the credibility of that news. This story has been knocking around for quite some time. At some point hopefully it does go somewhere. Lets talk about where we are with markets. Markets getting attraction on the others of the pond. In europe we are barely making any ground. The british pound has been battered over the past few days. Maybe a pause before we see the fireworks return from the brexit debate. We also have the bank of england on thursday. There was a significant downgraded by moodys of turkey late last week on friday. The payments crisis is what the Payments Company is talking Credit Company is talking about and we are continuing to see stress in the system surrounding turkey. The lira fairly flat. More, kaylee, about the u. K. More insight on the debate over Boris Johnsons plan to rewrite the brexit debord divorce deal. As the market appropriately pricing and or does it need to reprice in the near future the risk of a no deal brexit . Bhanu i think the risk of a no deal brexit is high and that markets will price it as we get closer to october. I dont think anything much will happen not now because i believe the market is directly seeing this as a tackett tactic for boris johnson. Is moveis trying to do away from negotiating with brexit negotiators and go straight to Angela Merkel and to dealn to get a lastminute as happened with ireland. If that is the case the market is a right to wait and hold on to its forces. The Economic Situation in the u. K. Indicates the pound should not end the Market Pricing in a no deal brexit now would be premature very closer to october is when the market will get more worried about that. Guy if it does, what will be the policy reaction . The bank of england on thursday saying if they need to how will policymakers respond . Yet in a are not quite liquidity trap in the u. K. It might be argued that we are in europe. I think there will be further expansion closer to november. We dont expect much going on this week. We think the fiscal caps will remain open for a length of time. Given where rates already are and given that they dont really want to go into negative rates, but they have said they are open to it but its not something they want to do if they can help it. The first reaction is going to be 100 billion more in terms of qe and the debate on negative rates becomes more live. Kailey what about on the fiscal side . What happens when the Furlough Program comes to an end in a few weeks . Bhanu the fiscal side will have to remain in the u. K. ,ket but across europe more broadly. It is actually extremely worrying. This is a very different crisis from a typical recession. Recession we see manufacturing thriving. The Services Sector has been hit the most in terms of the market impact. I expect fiscal numbers that we are seeing in the u. K. And projections for this year and next year will not come to peru it should and we will see wider of revenueth because and expenditures will have to be reasonably ella elevated. Guy we are going to jump around geographically. We will have the Prime Minister in japan. What does he need to do, what can he do to revitalize the Investment Case around his country . Bhanu he has a very tough job. I think abe had the best shot at it. He had the politics behind it and investors behind him. We did not feel expectations picking up. We have to concede that there Global Factors leading to this coming down and its difficult to see how that will change in japan. Even if there is greater pressure on the bank of japan, given that he is a close compatriot of abe if he continues with the three arrows program it will be difficult to see how inflation picks up aggressively. Ofe broadly in terms revitalizing growth in japan, japan has already taken strong movingowards automation its Tech Infrastructure away from china. We have to limit our expectations of how much we can expect the nominal output gap to close. One of the areas that he could help investors with his Corporate Governance in japan. One of the main reasons investors have only gone to japan very occasionally for three or four weeks i year is because there has not been a secular allocation towards japan because of Corporate Governance programs. New is one area where leadership could help revitalize the case for japan. Kailey does that change your investment thesis when it comes to japan, this change of leadership, or is it mostly status quo and you can leave allocations where they are . Bhanu the case for japan made under abe was politically as strong as it could have been. That was the high watermark. Its hard to say if this transition will make a positive difference to japan. We were worried it could have been much more negative. Given that he is a close compatriot of a bite at say this is a status quo. I would say this is a status quo. Guy i am looking ahead at the rest of the year, we have an eu china summit underway. There are tensions there. We have a tiktok story, there is tension there. We have a u. S. Election coming up. Between now and year end as you look at the political landscape, how much of what comes out of politics will Impact Investment decisions and how much of it will come out of what Central Banks do between now and the end of the year . Talking about inflation today, the fed this week, and the bank of england this week. I am curious. A lot of politics today. Talk me through how these factors will interact between now and year end. Bhanu Central Banks i dont think can give you much mores juice. Whether they increase ppp through the end of the year, i dont think Central Banks can give you too much more juice because the riskfree rate and the risk premium have only compressed levels at which they are unlikely to compress further. The valuation that Central Banks will give to you including fed this week its a very important meeting that i would be surprised if we see a big pickup in inflation rate or a decline in real interest rates. Central bank help is almost done. Therefore, politics, which was the second factor, becomes a primary driver of markets between now talking about things that can go right or wrong on the political side, but the u. S. Election is going to be the biggest thing. Combined with what you have seen in u. S. Tech last week and the last couple of weeks, this is a reason for people to temporarily move away from the u. S. If the current holds in the market are representative of what will happen in the future and the election there will be a case for them to move towards north asia despite what is happening between the eu and china. North asia would be one part of iobal the equity markets would be long on right now. These are where investors will pivot from be some in the euro zone as well. In the u. S. , i think temporarily, given the fiscal and the politics i think people would probably take a step down away from the u. S. To the rest of the world. Longer term this is the almost opposite because the u. S. Recovers more quickly. Around, plenty more to discuss. Coming through in the last few minutes. Tiktok to partner with walmart in ecommerce. The story is getting even more complicated. This is bloomberg. From london i am guy johnson. This is the european close. It has been a blockbuster weekend for m a. The busiest so far this year. 69 billion deals were announced. Joining us now is scarlet fu. Scarlett dealmakers are back at it. Yielding three transactions each worth more than 20 billion. Buying arm from softbank. Cle walmart is going to partner with tiktok in ecommerce. We dont know what kind of monetary value is attached to that. Gilead sciences buyingimmunomedics which makes Breast Cancer therapy. You will notice at theme here. These are all tech and health care a middle tech and Health Care Related names. These were the only sectors to post sale growth in the second quarter. Tech and health care are in a position to pursue offense of m a strategies that will transform their business and safeguard the future. They can enter new markets and get a jumpstart on building their market share. That is in contrast to companies that get baker to stay competitive. Verizon is defending its market share and fighting back against a bigger and tmobile and sprint. Verizon is buying tracfone wireless. Tracfone is the biggest u. S. Prepaid wireless service, it is a part of america mobile. If you look at the m a scorecard for 2020 we are at almost 2. 8 trillion a deal. The lockdown grinding things to a halt. Even though we are almost three quarters of the way through the year, thats only half of the full year average. One transaction that could change up the tally in a big way is the on again off again mating dance between ubs and Credit Suisse. It is now said to be back on the table and there are reports that the chairman of each firm are exploring a merger. This would take a long time to get through the regulators and any deal that would come through would likely result in a lot of job losses up to 20 of the workforce. Heard a lot about that over the years. We will see if this is real. Is the ubs chief strategist. Should we be read into what this means or are these all idiosyncratic stories . Bhanu i think you should be reading in, because to the extent that these are signals of pressure towards reducing cost. I dont think this is representing the top of the cycle very much. These are these idiosyncratic stories. There a preelection push to get deals done . Yes, there probably is. After this you dont really know what kind of environment you will have in terms of trade and taxes. In terms of the economy its possible that you see much higher investment next year. It may not come in m a but it may come in investment because of increased spending. The congressp in and white house could see much higher spending. The economy could be much better than expected. The s p those could be companies that could be taxed. You will see companies in the s p going for greater deals. For the euro Economy Investment will be much stronger next year. Kailey that is on the u. S. Side, but what about the china side at least two of these deals will require chinese approval. How are you thinking about this brewing tech war between the u. S. And china . This is not going to end even with the change in regime in the u. S. I think you probably should be looking at two completely different things, one driven by the u. S. And one by china. This is the story that will evolve over a long. Of time over a long period of time. It has real implications. I dont think it has material implications for the u. S. Market. I think it has huge implications for china in terms of the amount of influence it attracts. Has much greater implications for china and Chinese Markets and currency than it does for the u. S. Guy in terms of what it means for is we arecture here increasingly seeing a gap between china and the United States. It will be interesting to see where europe fits into all of this. Nextill inflation over the three years increase the breakdown between these two we continue to see reshore think. How we figure out the corporate futures of these businesses to give the political overlay. This will become more of a feature Going Forward and a lot of companies will withdraw from sign a china. What are the Macro Economic implications of this . Bhanu they have to be quite careful here. I would probably take the over side of this debate. You are going to see supply issues or a break in your value chain will become super inflationary. This is more elastic over the long term and you will see value chains and other areas emerging. There will be shortages particularly for china and that could be shortterm mission inflationary there could be longterm macro implications. Supply issue is also happening on the demand side of the economy. China posting close to 2 and many worry about supply shortages including not just in terms of investment or value across the world, but you look at core inflation in china at 0. 2 . There is a strong disinflationary wind in china which is why the real rates in china are extremely attractive. I dont think if i understand the spirit of your question i dont think the deglobalization which you are talking about, which should be happening, is quick enough to create inflation on a two year or five year horizon. I think the globalization of what the 1990s is what we are experiencing today as disinflationary. Have to think about what happens to technology and they need to normalize for all of that. Kailey we have to leave it there but thank you for giving us so much of your time. This is bloomberg. This is the european close on bloomberg markets. The chairman of ubs and Credit Suisse are exploring a potential merger to create one of europes largest banks. For more on the potential deal our wall street correspondent joins us now. Should we buy this . The stocks of both companies are up after this news. Investors are buying the idea, but we have heard about potential deals when it comes to these two in the past. There were discussions when they came to Deutsche Bank years ago and there were preliminary planning discussions. When you talk about a deal between ubs and Credit Suisse you cannot count out other parties across europe and in the u. S. Guy there has been some talk office thating back way. Clearly there is a strong desire at that level. Is that probably the genesis of this when you start looking at the back office and exploring other ways of doing business as well . Does it make sense to go much further than that, or do you think there is such goodwill between these businesses that it could be quite destructive . In banking there is never goodwill. If you combine the two things you have to think there will be significant cost energies at the top ranks and the lowest ranks. Deep endot just a story, this is an offense story. Two banks that have had very mixed track records when it comes to trading and investment banking. You would assume they would be able to merge these entities and be able to play offense when it comes to their asian and american counterparts. Here, but why cant that be done with a counterparty as well . Kailey what would potential job cuts look like . Well over 10000 and that would be a major concern. Antitrust concerns and labor concerns. A combined entity with 30 of the mortgage market. Suisse regulators said this which the this would send shivers down their spines and you have to ask about other counterparties. Implications culturally, switzerland quite keen on its banks. Latest as we continue to watch this story develop. Lets take a closer look at european markets. Ftse is down and u. S. Markets performing strongly. Termsg a little higher in of the stocks we are keeping an eye on today, keep an eye on that. We have iag going we will be back with all the details in terms of what is moving european markets. Politics a big theme in europe today. The closes next. This is bloomberg. Guy 30 seconds until the end of regular trading in europe. Europe was up last week, the u. S. Was not. The negative week in the United States, positive week in europe. Today european markets absolutely flat on the equity front. Fading early on and and and clatter blake and an incredibly tight range. European Equities Trading in a narrow band. Lets show you what is happening in terms of the individual markets in europe. We will dig into the individual stocks in a moment. That is where the real interest lies. The pound bouncing back. The ftse 100 up less than. 1 . Flat. Dax. Lets call that flat as well. The cac 40 outperforming a little bit. I will show you one of the stocks in just a moment. In terms of the sector point of view, lets deduce ideas about what is happening under the hood from what we are seeing. A little bit of a bounceback. Technology understandably bouncing back what we are seeing in the United States. We are seeing a bounceback and the travel sector. I would argue the news relatively grim from the travel and leisure sector. Banks bouncing back. We just talked about ubs and Credit Suisse, maybe it is happening and maybe it is not. A fairly mixed up story. No clear message coming from the sector story in your. Lets break it down further and talk about individual markets. We have the potential bid on our hands for g4s coming from private equity. The equity doing well but the bonds of g4s doing less well. Iag and the travel sector. Today we are starting to cigs cash rate come into the market iags cash rate come into the market. This is the company that owns iberia, it owns british airways. Tough talk from the travel sector. We are certainly seeing more evidence that we are seeing a fate in terms of demand coming through for air travel in europe. Air travel from a different is aective, sasso aviation French Company that makes corporate jets. It also makes fighter jets. There is a geopolitical angle on this story. Grease announcing it will be buying 18 of these advanced buying announcing it is 18 of these advanced fighter jets. Tensions are rising in turkey and having problems internally. Frome is buying more france and not the United States. We are seeing so being one of the main beneficiaries. Kailey lets look elsewhere in geopolitics. The eu is stepping up demand on china to open its market further. The European Council president said differences between the eu and china still exist. Differences exist and we will not paper over them. Roll up our to sleeves to find solutions. Joining us from berlin is janka oertel. Great to have you. Howd of the eu and china begin to bridge this gap . Janka this is the most difficult part at the moment. You can see the differences in the perception. Or as Angela Merkel was striking a more conciliatory tone in