Talking more stimulus. Then you have the cable rate. A lot of extension for benefits and the u. K. The cable rate does not move. It is a consistently stronger dollar. Same thing for the gilt market in the u. K. As well. Crude also going nowhere. The real action is in the equity market. Lets dig into that top story in europe. U. K. Chancellor of the exchequer rishi sunak planning to rescue millions of jobs at the coronavirus threatens to derail the u. K. Economy. I know people are anxious and afraid and exhausted at the prospect of further restrictions on our economic and social freedom. For at least the next six months, the virus and restrictions are going to be a fact of our lives. I cannot save every business. I cannot save every job. No chancellor could. The government will directly support the wages of people in businesses to face depressed demand the option of keeping employees in a job on shorter hours rather than making them redundant these are radical interventions in the u. K. Labor market, policies we have never tried in this country before. We have so often spoken about this virus in terms of lives lost, but the price our country is paying is wider than that. Alix joining us now is fabrice , chief u. K. Economist over at barclays. What was the message you took . Cant help but feeling a little bit disappointed, even though the message was jobs. We feel the scheme fails to provide a strong incentive for employees to keep people on their payroll. Think about this. If an employee reduces its employer will continue to have to pay more than half of fulltime wage, while he could as well put them on parttime or reduced hours. So i think while the chancellor was maybe trying to balance out to balance out too many conflicting interests, trying to reduce the cost of this job support program, it fails to provide a strong incentive to actually keep those people on the payroll. There are a lot of things we like. You mentioned more loans, and we let that the guarantees are extended from six to 10 years, which would allow Interest Payments to be much lower for businesses. Theike another deferral in payment in several installments. That is very powerful. But purely on jobs, we think something got missed here. Alix i feel like a lot of the reaction i read is the same, that this doesnt do enough. Then there is the other side of paying for it. Can you model how expensive this is going to be . The whole point of ending the Furlough Program to begin with was because it was too extensive. Does this help it on some level . Either youabrice have those people on a furlough scheme, or you have them unemployed. Given how sluggish the recovery is in the u. K. , but also elsewhere, there is just not demand for labor at this point to hire all those people. In the u. K. , we are basically targeting Something Like 9 unemployment if people are not in a Job Retention scheme. If you have a Job Retention scheme, those people might not show up as unemployed, but supported by the schemes. So i think the right question cost,s not so much the but rather the effectiveness in providing confidence to the economy. What is needed right now is to unlock those 2 to 3 involuntary or precautionary saving has been built up during the lockdown, and that makes the difference between a strong and weak recovery. Confidence should be at the end of all of the government action. , thick aboutg france and germany announcing 130 billion of investment programs. We are still missing those in the u. K. Alix how do you unlock that additional 2 to 3 . What could be the additional thing in the coming weeks to give it extra juice . Fabrice at the core of it crisis. The we have seen in the u. K. That the lockdown may have been a bit less stringent than elsewhere, but the shock has been bigger because the sanitary crisis was worse. Point number one, get your health together. That should be a priority. Point number two, protecting jobs is essential, but it is also about creating new opportunities because he acknowledged this morning that he will not be able to save everybody. Those people who are losing their jobs in those sectors which might not be viable as we know them, they will have to try new opportunities to rebound in the future. Talkalk about covid, but also about climate change. Talk about technological transition, talk about industrial policy. By canceling the budget, you are just delaying that kind of good news to come to support confidence by maybe six months or so. Alix can we do anything . We heard also that they are going to extend a funding scheme to allow borrowers to extend the duration out to 10 years, but andrew bailey, the head of the doe, says he is still not ready to make a call on negative rates. Fabrice here again, we are trying to preserve and protect on the downside. The bank of england feels that if this recovery goes off track, they will have to do much more. We are not in a position yet to make a decision. We need data to show that the situation is much worse. But it makes no doubt in my mind that if this recovery goes off track, even if it is because of the second wave or because our forecast is too optimistic, the bank of england will have to come out with a new package, with new powerful measures, and those will likely include all three of the preferred measures , which are toolbox Forward Guidance and negative rates. This brings me back to the u. S. As well because i have been struggling with the idea of what stimulus actually means. Is it a short term stopgap to save the economy, or a multiyear invest in process like we saw in the 1930s to restart longerterm growth . What is the stomach for Something Like that . Say it i am tim to do is not like we have a choice. We had issues preexisting the pandemic which already required a multiyear investment plan. Look at germany. Think about the car industry. Look at the u. K. Think about stagnant productivity over the past seven years. A lot of these issues required government to step in. , andovernment felt it already announced earlier this year quite an Ambitious Program of spending in the u. K. , but we dont have any details on that, and to a large extent, we havent heard anything over the past nine months regarding this program. So definitely we need an industrial policy that mixes more resilient to climate change. We need the Health Care Sector to be put back in shape. Alix can you do that in the middle of brexit, when state aid is the hot button topic now . Fabrice state aid is never really an issue in the sense we are just trying to find a common lending zone that is acceptable for both the u. K. And the eu, but when it comes to investing in new technologies, investing in green energy, that has nothing to do with state aid. When it comes to brexit, we are focusing on a very narrow point of the discussion, but there is so much more that is out there and that can be addressed by governments. Alix i really enjoyed the discussion. Coming up, we will continue the conversation from a market perspective. No fireworks for the pound so far. More on the ethics news and the Dollar Strength on the ethics the on the fx news and Dollar Strength with jane foley of rabobank. Ritika lets check in on the bloomberg first word news. Senate Majority Leader Mitch Mcconnell says there will be an orderly transition of power after the november 3 election. He tweeted today that whoever wins will be inaugurated on january 20. President trump said yesterday the Supreme Court will likely have to decide the outcome of the election. He has refused to agree to a peaceful transition if the democratic nominee joe biden wins the white house. President trump was heckled by protesters who chanted vote him to as he paid his respects lake Supreme CourtJustice Ruth Bader ginsburg today. The president and First Lady Melania Trump stood silently at the steps of the court and looks s cloudginsburg s flag drapedurg coffin. Protesters also chanted honor herwish, a reference to dying wish that the next president choose her with placement to the court. Two cops in louisville, kentucky were shot after they were called to an area downtown. Police in louisville have announced a curfew for the next two nights. The officers injuries were not lifethreatening. Police have made nearly 100 arrests in the city. There were also protests in new york city, chicago, seattle, and atlanta. Britains finance minister has laid out his plan to rescue millions of jobs and businesses as the coronavirus pandemic again threatens to derail the nations economy. Chancellor of the exchequer rishi sunak announcing a plan to subsidize wages of people working parttime. The plan but also extend loans to businesses hit by virus restrictions. Than 150,000 more businesses and help protect 2. 4 million jobs through the winter, i am announcing today that we are canceling the planned increase and will keep the lower 5 rate until march 31 next year. Bleak sunak painted a picture, saying, i cannot save every business. I cannot save every job. 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. Im ritika gupta. This is bloomberg. Alix the pound going nowhere on that after the chancellor of the exchequer announced that scaled job support. Going to me from london is jane foley, rabobank head of fx strategy. Jane most of the reaction we have seen in cable is because of Dollar Strength. In terms of the news from the chancellor today, a lot of it had already been in the press. We had known for quite a long time that this furlough scheme was going to end. We also know theres been a lot of opposition to extend it, so we knew that whatever we got wasnt going to be as much of a spender at the furlough scheme. I am sure theres plenty of disappointed for a lot of people, and certainly theres clearly theut concern is not really wanting to create room for more Zombie Companies in the mediumterm. Alix is that a good thing longerterm . Jane it depends on your point of view. Theres a massive social cost, and the likelihood is theres going to be an awful lot of people unemployed as a consequence of this. It is very difficult for anyone to judge what is a Viable Company and what is not a Viable Company. Certainly there are plenty of companies that are very viable, and things have changed so much in the Global Economy in terms of demand that things have really swung around. So it is difficult to make that decision, but unfortunately that is something happening right now and companies will be judged as a consequent of what is happened. Alix what does all of this mean for the dollar . Are we tapped out . Are we going to roll over . I struggle to understand what the dollar is reacting to. Is it d. C. . Is it stimulus . Is it the election . Jane i think it is a mixture of all of these factors, but they want to start on is probably positioning. Perhaps the upside in the euro over the summer had gone too far. That starting point, and then a number of the factors you have just been talking about, for instance, we have seen stock market are volatile, and the market has taken on board this perception that the covid19 crisis and many of the conditions with it are perhaps going to be with us for longer. So this isnt about a vshaped recovery. This is about adjusting to something which is going to be around potentially in some form for the next couple of years. That has a huge economic impact. Then youve got the election. If got the possibility of a contacted of a contested election. That could create some safe haven buying as well. If you look to europe, it is not tot the u. K. That is had adjust fiscal measures. Theres this whole conversation about a second wave in europe, starting really with the emerging market economies in Eastern Europe and pushing through into other parts of europe. That is possibly weighing on the euro, so another test so a number of different factors coming into play. Alix dollaryen has had a bizarre move. At 1. 05 . Laryen jane if we were to go back five or 10 years, i would have said it is the yen that is the most established safe haven currency, but i think the dollar has began to prove itself since the Global Financial crisis. Think that is linked to the development of emerging markets and growth in emerging markets. The real growth of the dollar as a transactional currency. Charactere safe haven of the dollar is not linked in any way to u. S. Fundamentals. I think it is linked to the use of the dollar, the fact that if you look around the world, it is linked to the amount of dollars in Foreign Exchange reserves. Dollars is a need for once people are feeling risk appetite, and this is why i think the dollar has will proven itself. The dollar is in a bit of a battle for the safe haven, so it is going to be interesting to see which way that windows. Which way this windows. Alix i want to get your take on turkey, having that surprising rate hike today. Do you get the sense that this is a course of real tightening that we have seen out of the turkish central bank, or is it another kind of mirage . Jane it is real tightening because we finally have a move in the repo, and the market is expected to have the stealth tightening. Weve got a real move here, and i think most economists, most people in the market are really willing on the central bank doing this. From a market perspective, this was the right thing to do. Inflation is a problem. Theres concern about the Financial Stability in turkey. They needed to hike Interest Rates, but no one thought that they would. The fact they have done it i think is a really good sign. The question is, will the government, will erdogan really allow the central bank to go further with this move . Alix in theory, they could not have done this without his approval in some way, considering how much pressure he has on the central bank. Jane that is what the market thought, and that is why very few people expected the move today, but i think the proof is going to be if there is any pushback on the government to the central bank in the next few days, the next few weeks. Alix when you take a look at turkey and em, they are battling the inflation issue and the depreciating currency. Any other Central Banks in e. M. Economies that are on the same path, but doing better . Jane it is quite interesting. I think if you go to more stable e. M. , looking at poland or hungary or other countries in that region, perhaps the opposite is true. They would like their currencies to be weaker because they are think and get out potentially winning more businesses, potentially from asia. Weve heard of quite a lot of on shoring in the last few months. If there is more back towards the major market, and those economies really want to benefit from that, and you could argue that for than, there is a little bit more of a currency war. A month or currencies to weaken, and who doesnt want a weaker currency . But turkey has gotten inflation problem. Alix what is your top trade right now as we head towards the election . Fx volatility is fully picking up. Alix i think fx allah jane i think if we have seen a stronger dollar, if we see that coming through more, currencies like the aussie could drop more if we get more of a risk off appetite. Alix great point. Maybe one day we can be onset together again. James foley of rabobank, think you very much. This is bloomberg. Ritika its time for the Bloomberg Business flash, a look at some of the biggest business stories in the news right now. The federal judge who will decide whether to temporarily block President Trump from enforcing a ban on tiktok starting sunday is considering postponing the deadline. U. S. District judge carl nichols said they would ask lawyers to rule on the request. Tiktok has asked for a preliminary injunction, trying to complete a deal with oracle and walmart to keep the Popular Video app operating in the u. S. Goldman sachs economists cutting their forecast and half for u. S. Growth in the fourth quarter. Researchers say they made the decision after it became clear that there would not be additional stimulus this year. Goldman economists now picked the Worlds Largest economy will now expand on a quarterly annualized basis. Is European Central bank given more incentive during the pandemic to issue ultracheap funding. The threeyear targeted loans have become one of the ecbs most important tools during the coronavirus crisis. They carry an Interest Rate as low as 1 , meaning the ecb pays banks to borrow as long as they are used to fund Credit Companies and households. That is your latest business flash. Alix thanks so much. Another banking story i am watching today is wall streets biggest names are shifting some assets from the u. K. Still, European Union operations have a way to go before they can match the assets that are in london. For example, jp morgan is moving about 230 billion to its front for it based subsidiary by the end of brexit, and the head of the unit said banks are going to move even more bankers from london. But they are doing now is just the first wave. Still, wall streets five big firms are keeping three times the equity and more than four times the, have riskweighted assets in the u. K. Subsidiaries been in the eu. The european close is coming up next, a risk off day. This is bloomberg. Look here, its your very own allinone Entertainment Experience xfinity x1. 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