The u. K. Government sets up discussions with industry as brexit disruption closes in. Negotiations with the eu are set to crash through an informal deadline this weekend. Good morning. Just over an hour to go until the start of cash equity trading. Let have a look at where we are on the futures picture. Futures in europe looked to be a little bit to the downside. Lets break into the futures to talk about whats going on with the u. K. Economy growing in the Third Quarter from the previous quarter. Growing by 1. 1 in the month of september. The estimate was 1. 5. We were hearing that from our colleagues moments ago. They were talking about the estimates for september and the First Quarter. The number i have penciled in from them was 1. 5 gain in gdp for september. It is a little bit below that. The broad theme is the same. That 1. 1 in september adding to strong rebound numbers earlier on in the Third Quarter. The Third Quarter comes up by 15. 5 . That could be a smashing of a record in terms of quarterly growth for the Third Quarter. We know the backstory. We know the big drop in growth that we saw in the Second Quarter. Many places around the world experiencing something similar, if not to the same extent. Normal life is anything but normal right now. We will see where the Fourth Quarter goes too. We will talk about the possibility for w shaped recoveries shortly. Burberry, sales down by 25 . This is for the first half of the year. The estimate was a drop of 27 . Not as bad as and to zepeda. A focus on how the rebound is going, in particular in the u. S. Markets and in china. Things have looked much more like normal life. The company saying they are encouraged by the recovery in the Second Quarter, remain conscience of the uncertainty of the environment. They are going to cut markdowns. This will be revenue headwinds in the second half of the year. They say they are wellpositioned to deliver growth in the medium term. A few lines coming out of burberry this morning. We keep an eye on that stock as it opens up along with all the others this morning. Global stock rally show signs of stalling as investors assess a deteriorating coronavirus situation in many economies around the world. Indicators of overheated equity markets. European futures pointing to a negative open after a muted session in the asian markets. Lets get to laura cooper. She joins us now. Interesting to think about how the market is dealing with the latest vaccine virus news flow. The numbers keep tragically getting bigger in terms of infections and deaths. In places where weve seen tough lockdown measures, belgium, netherlands, there are much more encouraging signs around infections coming down. Even in places with big numbers like the u. K. , france, germany, some sense that these high levels are starting to plateau a bit. How is the market dealing with this on a daytoday basis . The virus story. Laura what weve seen so far is that these forwardlooking markets are looking through these nearterm virus infection risks. The risk of tightening lockdowns. Instead, they are pinning expectations on vaccine hopes. The eventual economic recovery taking hold. That has really underpinned this optimism that we are seeing priced in. What we are seeing today and early price action, just looking at futures, is that investors are reassessing the balance of risk. There is a timing mismatch between the deployment of vaccines. Again, we have nearterm infections. We have yet to see infection curbs bent lower. Instead, they are studying. That does raise the risk of tightening restrictions. Still to come in the u. S. A lot of this optimism that is priced in could still get be challenged, given the fact that theres a great deal of uncertainty that still lies ahead before we see growth hopes take hold. 3 even if we see anna we know what happened last time and time in terms of the lag between europe and the United States. Where does new york go ahead . Lets get back to the u. K. Growth story. We had u. K. Growth numbers out at the top of the hour. Growing 15. 5 in the Third Quarter. A record in terms of quarterly growth. Not much of a comfort when your economy is still nearly 10 9. 5 below precovid peaks in the Fourth Quarter of 2019. The pound retreats a little bit on this news flow. How do you think the market rear will react to this kind of gdp data . Laura the fact that the u. K. Economy rebounded in q3 was really largely expected by the markets. We did see that that is captured in these numbers. That comes after that record contraction we saw in q2. Markets are instead going to focus on what is actually going to happen in the Fourth Quarter. Like you mention, Economic Activity remains at 10 below its prepandemic peak. The u. K. Is clearly lacking. We add an brexit risk on top of that, that is really going to create quite a challenging backdrop to the u. K. Economy. We are likely to see a doubledip recession. The pound has remained relatively buoyant over the past week or so. Thats reflective of markets pricing out bank of england on the back of these vaccine hopes. Clearly, if we see the lockdowns extend given this challenging backdrop as infections surge, that may not yet be off the table. I would expect to see upside for sterling capped from here. Anna weve been focused on the u. K. , what the pound is doing. We just had this data through. Let me stay in the fx space. Let me ask you the question of the day. How will the vaccine affect the doppler dollars trajectory . The dollar is a haven. There are a lot of things pushing at the dollar at the moment. What is the thinking . Laura theres a confluence of factors. We are seeing a tugofwar between the bullish and bearish narrative around the dollar. In the near term, the dollar risks look skewed to being higher in the coming months. This reflects the potential for mobility data to be challenged against the tightening restrictions. Growth challenges potentially heightening in the u. S. The backdrop remains challenged abroad as well, even just looking at europe. ,hen we add in the potential speculators are on the bearish side of the trade. I would expect that that provides some tailwinds to the dollar. I would not expect it to be a broadbased type of move. I expect that we see these challenges arise as equities come under pressure and commodities go lower. It could potentially see the japanese yen gain traction. The weakness could be dominated in those high data pairs. At this stage, its likely that the sharp reversal that we have seen and dollar gains is likely cap for now. I would expect to see some uplift in the dollar in the coming months. Thank you very much. Lets get a bluebird first word news update. Heres laura wright. Laura president elect joe biden is naming ron klain as his chief of staff. He played a leading role during the pandemic and Public Health crisis of the obama administration, leaving the white house response to the 2014 Ebola Outbreak to get he has been chief of staff to two Vice President s. Stomping out dissent in hong kong, disqualifying lawmakers who are not lawmakers. Its a message to joe biden that no amount of pressure will force china to cholla tolerate defiance in the former british colony. The move was met with condemnation. [inaudible] a replica of the surveillance state and mainland china. Im afraid its a reminder of the fact that you cant trust any china promises. Weve seen today, the snuffing out of the last remnants of democracy in hong kong. Laura turkeys president is signaling a cease fire with international investors. He is pledging to contain inflation and support market fairly policies. Its a uturn from his unorthodox view that lower Interest Rates promotes lower inflation. The odds are out about his change of heart and how long it will last. Global news 24 hours a day on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna thanks so much. Up next, alphabet soup. The virus cases surging. Is the economy on track for a w shaped recovery . A doubledip recession. We talk about where that applies and where it doesnt, next. This is bloomberg. Anna welcome back to the European Market open. 45 minutes to go into the start of European Equity trading. Asiapacific looking flat. Losing momentum in the rally we saw at the beginning of the week. That was driven by the promising vaccine news flow. Futures into europe and the u. S. Looked to be a little sluggish. Lets get a bluebird business flash from laura wright. [no audio] [inaudible] laura a slew of antimonopoly regulations. Little about how harshly they plan to clampdown. The Worlds Largest shopping spree has raked in a record 75 billion. Sales for alibabas single day were almost double last years tally after the ecommerce giant added several extra days and services to the count, unlike past years. Alibaba did not provide a detailed breakdown of sales. Sonys playstation goes on sale today and a new spiderman game. Its a key test for the Japanese Company amid the pandemic gaming boom. It goes head to head with microsoft new xbox. 113previous console sold million units. Thats your bluebird business flash. Anna thanks so much. Global daily covid deaths have hit a new record, raising fresh concerns about the spread of the coronavirus. The chief economist at a below Global Management told us the resurgence is creating new worries and the recovery would probably be w shaped. Joining us now is the bnp paribas chief economist. I think about europe as one entity for a moment. Are you expecting to see a w shaped recovery from coronavirus, given what we saw in march and what we are now experiencing in the Fourth Quarter of this year . William yes indeed. [inaudible] now we have a less deep v. It expects the negative impact on french gdp to be about one third of what we saw in the Second Quarter. Once the measures are being eased, we will again have a mechanical rebound, as happened in meme midmay of this year. Anna are you seeing any reasons to be more hopeful . Iss depends on what it precisely that drives economies into contraction at this point. Ive been looking at some of the data. Smaller countries in europe have seen a real dropoff and infections. That has come in part at a high price in terms of Economic Activity. Lockdowns and belgium and measures and then netherlands. Infections coming down. What is it exactly that drives we get week Economic Performance . It is the response of governments. What are you seeing at the moment. William the reasons to be more hopeful than we were in spring is that companies are well. Repared cities and countries have really organized. That is working very well compared to what we saw in spring. Do not forget that china is doing very well. Thats having a fairly beneficial impact. Anecdotally, what you observe is traffic. Sport, highway its very busy. It is anecdotal, i admit. The concern that one has is that it is concentrated in a number of sectors. That mesa crucially important. Downturn. E final not more is going to come. If there was a another cycle in this recovery, the more you have of them, the more negative they become in the long run. Really thinking about issues. Anna thats interesting. If we relax too much over the festive time, around christmas, we can make things worse. What is the limit between the lockdown and corporate solvency . Services industries, such as hospitality or aviation . Is that where you are focused . William indeed. That arecompanies lossmaking during the downturn and then barely getting their head above the water again when the economy recovers. And then a number of weeks later , things are again starting to deteriorate. One should keep in mind that the hospitality sector, a lot of their clients are fairly reluctant, even in normal times, normal times. They are very reluctant to go as much to restaurants, travel, so on. Thats another very important. Important point. It makes it important that the vaccine will be administered sooner rather than later. Anna Christine Lagarde at the ecb said that the ecb will be there for the second wave. Its important to keep stimulus in place. Until the recovery builds in its own momentum. Are you expecting to see what the ecb has put in place long into next year . Ecb needs to do something because of its inflation target. Tothe near term, they want provide more support. You have to be realistic. Is this a problem of insufficient loan demand . Not at all. Its a problem of, do i have the confidence . Does my Balance Sheet warrant that i would . Those are the real issues. Central banks will do more. That in itself will underpin confidence. At the end of the day, its a matter of how you manage the health risk, how do you bring down the number of new infections. What is going to happen on the fiscal side . That is why all eyes are turned towards the u. S. Also why people welcome the year, ats that next premature tightening of fiscal policy in the European Union in 2021. Anna thanks very much. Stay with us. Its all about fiscal policy. We will get to that in our next conversation. The bnp paribas chief economist staying with us. Coming up, the u. K. Economy expanded the most on record in the Third Quarter. We look at the path ahead. We will talk fiscal as we were right rightly alerted to dubai william. This is bloomberg. Anna welcome back to the European Market open. 23 minutes past 7 00 in london. Yesterday, a mixed picture. U. S. Tech stocks doing very well. Europe moves higher. We will retreat at the start of the European Equity trading. Future suggest we will be a touch weaker. The u. K. Economy expanded the most on record. That rebound has been derailed by increase in virus cases. September saw the slowest growth in the u. K. Since april. Bnp paribas chief economist is still with us. A question on the u. K. Weve had data out this morning which gives us the scale of the rebound we saw in the Third Quarter. It raised many questions about where we go in the fourth. The fiscal support that weve seen from the government has been very focused around the furlough scheme. Now extended to march. Was that a big game changer for you . Did that add stability to the u. K. Outlook . William unimportant consequent of that is that it should keep a uneaseuncertainty and from households. It is striking if you look at the surface. Unemployment expectations have seen a big jump in strength. They have barely come down subsequently. What you observe is that when expectations are high, it already has a negative impact on Consumer Spending today. Thats why it was so important to expand the furlough, as was announced last week. Anna you see unemployment jumping. A strange situation. Its not like recessions in the past. Unemployment jumping yet savings going higher. At thegot income disposal of households. How are you analyzing the impact of that uptick in unemployment that we are seeing in various parts of europe . In onm the uptick employment has been rather limited. , thes actually been unappointed situation is more about what happens last year. The jump in on implement expectations. Its bigger. And,the furlough schemes you still have to expect there will be companies out there that will not survive. In the end, it will cause an increase in unemployment. Its also acting as a drag on Consumer Spending. Meaning slower Consumer Spending growth. Anna yes. William savings have been so important. Will they be tapped into . It depends on how confident people are about their employment outlook. The concern is that it will just morph into more precautionary savings. Much. Thanks very certainly something for us to watch. The bnp paribas chief economist. Thank you very much for joining us. Well position for new covid19 driven demand. Up next, we speak to the cfo. We get the latest from him on the efforts that the business is making, the investment the business has in helping vaccine candidates. We will talk about other parts of the business. Semiconductors and the like. This is bloomberg. You can go your own way its time you make the rules. So join the 2 Million People who have switched to xfinity mobile. You can choose from the latest phones or bring your own device and choose the amount of data thats right for you to save even more. And youll get 5g at no extra cost. All on the most reliable network. So choose a data option thats right for you. Get 5g included and save up to 400 dollars a year on the network rated 1 in customer satisfaction. Its your wireless. Your rules. Only with xfinity mobile. Anna welcome back to Bloomberg Markets european open. 30 minutes until the start of cash equity trading. This is what futures look like, a far cry from excitement early this week, we are retreating a little bit. Futures suggest that weaker opening. We focus on the here and now of the virus. There are plenty of events to look forward to. Tencent will report earnings. Y will seek to reinforce it is in the same boat as ant group. At 9 00 a. M. London time, the iae will release its Oil Market Report as opecplus is considering delaying a plan using production cuts. Could they keep production cuts a little longer . We will get u. S. Jobless claims at 1 30. It will be closely monitored as the second wave is growing or is it the third in the u. S. . Disney will report thirdquarter results after a reorganization that tightened their focus on streaming. Lets get a first word news update. Vaccine trials has had a key goal, it can get data to an independent Monitoring Committee within days. It will decide whether the vaccine is effective, if it does not work or if the trial should continue