1 ,s p up by nine tens of tech leading the charge. European markets underperforming but the ftse 100 pushing on gains over the last hour. Most european markets gained early than flatlining into the afternoon. We are seeing a bit of a return to the dollar this afternoon, still trading at the 118. 119 earlier on and security markets continue to be in focus as the ecb suggests there may be rates that could be cut further. Lets start off our conversation on the u. K. Labor market which took a turn for the worse in july. Total job losses climbed to nearly 700,000 since the start of the pandemic. Tois considering plans support jobs as per the government cost Furlough Program ending next month. Businesses need support which is why many of the intervention we have put in place lasts the last through the next year. I have not hesitated to act and create effective ways to support jobs and employment and we will continue to do so. From brusselsg us is Vincent Juvyns from jp morgan. Sunak may be supporting jobs after the furlough extension program, should he be supporting it or is it prolonging the inevitable . Vincent it is the case everywhere in Continental Europe at the moment. We have seen the degradation in the stock market in july. The job market in the u. K. Still need some support so we should maintain the furlough scheme beyond the october limit. In europe, we are not confronted with that issue. Most systems remain in place for the foreseeable future well into 2021 which will allow people to be able to continue to maintain a decent level of income. The politics playing a role in what is happening in the u. K. The last few weeks dominated by brexit. We all thought it was done. Believes that ultimately there will be a deal that Boris Johnson is engaged with right now some highstakes negotiating tactics. What if the market is wrong . I hear it from everybody. Are we underpricing the risk of a no deal brexit . The best case, you see that common sense will prevail over time but looking at the most recent development the risk of a no deal or alternative scenario is we hope for the best but be prepared for the worst. This is not positive for u. K. Assets in the short term. Does not change our view longterm for the u. K. In both scenarios. Its a dangerous game. You see a no deal especially getting back on a previously made agreement would be a very negative precedent which would definitely damage confidence in the u. K. It ultimately would hurt europe as well. Clearly this is not a very positive situation for both the u. K. And europe. Kailey how does the boe think about this thursday . They said no deal brexit would prompt them to cut rates to 50 basis points. Is that a realistic possibility . Vincent i am not sure in the Central Bank Community there is much appetite for negative Interest Rates these days. Clearly, negative Interest Rates e proven they have an effect on the currency that would not be so much a problem for the u. K. In the occurrence of a no deal xit, but clearly maintain low financing for the economy. Rates are an exercise that was warped and europe but has shown its limits. The Central Bank Community has much more of an appetite for yield curve control instead of looking at negative rates. Which have a negative side effect in the Banking Industry and insurance community. This is kind of emblematic of what is happening around the world. We had a conversation about Central Banks. We talk about the politics and that seems to be an increasingly dominant arc it theme. Between now and yearend are we going to see a shift from markets focusing on the liquidity in the central bank story to the political risks that are presented . Brexit is one and the u. S. Election is another. Will we see markets repricing around this movie . We need to be vigilant about very binarye is a outcome looking at the u. S. Election. Looking at the most recent polls i am not sure that at the moment we need to be that concerned about it. We should add to your list quite often this used to be a reason to worry for a Global Investor which is quite stable from that perspective. Inhave demonstrated this july around this initiative of refunds. Part ofl instability is everyday life in Financial Markets and there are also places where we have more stability than usual. Kailey talking of europe, lets talk about the ecb and the euro. Downde tried to talk it and said there is a bigger issue. At what point does the ecb have to look at the euro and figure out if they want to do anything about it . Always a bit surprising when we look at the euro. The rise of the euro recently has to do with the enthusiasm generated by the ricoh refund. The euro as a reason for positive reasons the investor has come back to europe. We have seen that in the equity and Bond Fund Flows in july and the summer. Its a european asset. There is a good reason. I am not so concerned about the level of the euro, definitely on environment where global trade is much weaker. Clearly europe can count on its domestic consumption in the shortterm to recover from the covid crisis. Or 190 11880 or 119 is easier to judge just for the european economy. Universe, the euro seeing some dollar weakness given that the interestrate differential between the u. S. And europe has been reduced. The euro has strengthened dollar weakness explains these developments. See a strengthening of the euro versus the dollar in the coming weeks and months even though the dollar remains on a downward path globally. Lets talk about china. Breaking news, the wto is going to push back on tariffs that the u. S. Imposed on china. We are getting commentary coming out of the ustr, the wto is completely inadequate to stop the chinese practices. It clearly has issues with. We saw some chinese data early on that is pretty strong. Is that chinese economy now accelerating out of the covid crisis, and if so what are the implications geopolitically and from an investor perspective of that move . Vincent thanks for the question and i believe it is important. Strategy hasour been very positive on china and chinese economy and chinese assets for quite some time. Proven itschina has resilience and its are ability to deal with any type of crisis. The Global Financial crisis going through the em crisis and their own for an exchange reserve and always managed to rebound quite strongly afterwards. We have seen that china did very well even though we had the issue of trade tensions but beneath the surface the decision that china had taken this on a daytoday basis forongoing opening of china investors is really key also the Success China is seeing at the moment. We had tradere tensions to start the year and a covid crisis which started in China Companies like jp morgan and others have been loath to acquiring their entity locally to be more present in china which saw a commitment to the country. The opening of the Capital Markets of china is key to chinese success. We are seeing a lot of appetite for chinese assets on the equity side and more and more on the fixed income side. Our outlook on china is quite positive each year. With a longterm Capital Market assumption one thing i heard you speak about we look at the increase the shortterm victory we have seen this year is something that we see structurally in the coming year. Kailey Vincent Juvyns jp morgan Global Markets assets analyst. Coming up we will discuss President TrumpInternational Policy with Richard Grenell, former u. S. Ambassador to germany. This is bloomberg. Live from london i am guy johnson. This is the european close on Bloomberg Markets. TheUnited Arab Emirates and ball rain will sign accords formally recognizing israel at the white house today. ,or more on u. S. Foreign policy kevin cirilli, our chief washington correspondent is standing by along with Richard Grenell, former u. S. Ambassador to germany. We are joined by the former acting director of national intelligence, serving as the ambassador to germany and a special envoy for kosovo. I want to start with russian relations. Right now there is a russian offshore supply vessel making its way from st. Petersburg to a port in germany and it could have severe implications for the construction of nord stream 2. Angela merkel has said within the last several days that she is open to rethinking the nord stream 2 pipeline. I want to get your reaction to these developments. This is a serious issue for america and american policy. I want to make clear that we have always told the germans and our European Partners that nord goodm 2 a is a part of a diversification for the German Energy market European Energy market. Nord stream 2s goes goes too far and that is what the European Parliament has said. America joins with the rest of europe in saying to the germans, nord stream 2 two goes too far. In light of the issues we see from russia this is the reason why america has very strong sanctions on russia. Open toeeping the door talks to try to change the behavior of the russians. The latest development is very concerning to the United States and we also have noted and are trying to work with the germans as much as possible. In Angela Merkels own party the christian democrats are having angst. We see individuals in they saying to the chancellor now is not the time where we should put this project on ice. The u. S. Senate in washington dc he thinks thats a good idea. European parliament has think this is a good idea. We hope the european government will be multilateral and listen to multilateral partners. Ivin so many conversations have with democrats in geopolitical circles makes the argument that a Democratic Administration would take a much more multilateral approach. What i hear from you is that there have been instances where the Trump Administration has fought to use with an aggressive rhetorical tone multilateralism. Richard such a great question. Ae reality is we have fundamentally different worldview than joe biden. Joe biden has the idea that america comes up with one policy position and we put it into the u. N. Security council mixer or the european government mixer and it all gets blended up and water down and it becomes of the lowest common denominator of a policy. We dont view multilateralism like that. We fight for american policy and what is best for American National security. Then we look for partners. We look for regional alliances. That does not mean you have to go to the u. N. Security council and allow them to water down your policy or go to the eu and brussels and cut the policy in half, america versus the eu and we somehow meet in a watereddown version where nobody agreed to. Way of looking at consensus. Feel that america responsibility to the American People first. America first does not mean america alone. Takeca first means that we the American Peoples the safety and prosperity first and we try to form alliances around that. We are going to remake regional alliances. The perfect example is a nord stream 2. Our nord stream 2 two policy rejected by the German Government is celebrated by the European Parliament. We are going to work very hard to be multilateral with a strong u. S. Foreign policy. Kevin i want to talk about china. The wto, something President Trump been critical of, has declared that some of the tariffs that have been imposed by the United States on china dont fall in line with wto guidelines. How does the Trump Administration deal with global institutions like the wto while also trying to take a more aggressive stance with beijing . Richard i would say a couple of points there. Look at the example that Trump Administration has tried to use with the united nations. Some programs at the u. N. Are good and some are not. When you reform organizations there is an argument to be made that you believe in those organizations, rather than ignore them and let them become adrift. It has been 20 years since china has been put into the wto. Envisionse are china going into the wto we thought in a couple of years china would begin to act like a westernstyle capitalistic country and they would at least move in that direction. We did not think overnight the chinese would start pushing capitalism. We did not think that 20 years later we would have the problems that we have in hong kong. That we would still have the chinese stealing intellectual property. That we would still have the chinese having an economy that ideased on taking other and replicating them and ignoring the rule of law and human rights. Much to its not too say that having the chinese in the wto has been a disaster. I dont think they should be a part of the wto. They have demonstrated over 20 years they are not willing to move in the direction that the wto wants to which is capitalism. I think we are going to create organizations like the new usmca trade agreement where there are provisions of problemsolving outside of the wto because we are admitting to the world the wto is failing. Kevin middle east front and center, we have seen the role israel has played in normalizing relations with two gulf arab states. The recent developments, you were front and center for with regards to kosovo and serbia, israel playing up key role in that. Has iran factored into in terms of bringing these traditionally very combative areas and regions to work together. Americans and europeans have had the same goal with iran, to deny them a nuclear weapon. We have had fundamentally different tactics. Europeans want the water down consensus and status quo of dealing with iran. Americans and the Trump Administration have said this does not work and we need to try Something Different. The historic signing of peace deals today shows that a more aggressive Trump Administration approach is working. This statusll be in quo Foreign Policy establishment if it was not for donald trump. He has challenged us to think differently. The europeans have not been supportive of our strategy in the middle east and we have seen today at the white house historic signing because we ignored those tactics in dealing with iran. We played a very tough diplomatic game when it comes to iran, and look what has happened. You have sunni nations and arab governments coming forward to say lets do Something Different these historic peace agreements. Its the same issue with kosovo and serbia. We have economic normalization that has been signed. Its this old way of thinking, the u. N. Way of thinking was to continue pushing on the political front on kosovo and serbia and we have been banging our head against the wall for 20 years there. Now we have economic normalization and we are quite pleased. Then Richard Grenell former ambassador to germany and the special envoy on serbia and kosovo. More coming up next. This is bloomberg. Guy european equities heading higher into the close, retail leading the charge. This is bloomberg. Guy 30 seconds until the end of regular trading in europe. The auction process to get through. This is what the shape of the day has looked like. Early gains. Very similar chart to yesterday. Very tight range. European equities similar to longerterm chart. It seems hard to get european equities to gain much traction. We are up. 8 . Lets talk about what is happening in other asset classes. They are affecting what is going on. A significant selloff in eurodollar, a bit of Dollar Strength coming through the afternoon session as we saw the u. S. Markets open higher, tech takes leadership story, they were trading 1. 1848. More comment from the ecb. In terms of markets, the ftse 100 pushing on. Near session highs. Continental markets a little more lackluster. , huge upper former, an interesting story today. We saw good china data. We will talk about that with tom orlik. The dax very exposed to the china story. The cac 40 up. 3 . It has been the retailers that have delivered today for europe. In the case of a couple of companies, good numbers being posted. H m,alking about accardo, but as you can see, retail up 2. 4 percent today. The basic resources another reason we are seeing outperformance from london. The bottom end of the market, the bank the under the only underperforming sector in negative territory. Lets talk about the retailers and show you what is going on. Lets talk about the leader in europe along with intertext. The numbers and the rebound we are seeing much stronger than anticipated. Also cost control quite strong. It will be interesting to see how we compare and contrast when we get the numbers and see how they are performing. Different structure in terms of the supply chain these two companies have. There does seem to be more full priced selling and it speaks to better inventory management. Accardo we were talking with the kroger ceo, he was talking about accardo. Accardo has made the shift in the u. K. From operating that seems of gone relatively smoothly. This is basically a play and has been one that has benefited in terms of the lockdown story as people of had to shop from home. Accardo up 10. 32 . In