Forecast. We will bring you that interview with the ecb president. And the ax falls again at goldman. The bank prepares to cut jobs for the second time in three months as the focus returned cost cutting. Very good morning, everybody. Welcome to the program. Lots of breaking news to get to. Lets have a look at some of these numbers coming through. Have the numbers coming through from the shipping business which transports 1 5 of the worlds containers so really interesting insight into the way the Global Economy is spinning and the shipping industry in particular. We are getting the numbers through. We already heard from them last night about how they were upgrading their guidance, raising their fullyear guidance so that already sets a positive tone. They said they will initiate a new Share Buyback around 10 billion danish krone. That program will run for 15 months. E will be speaking to the ceo that is the conversation at 7 30 u. K. Time, so in around 25 minutes time. Let me get to some data out of the auto sector, the car sector. Europe october car sales falling by 7. 1 percent on reimposed virus restrictions so given that many parts of europe have had to reimpose those virus restrictions to some degree, after having lifted them during the summer, that will have an impact on the ability of cars to be sold or a willingness for european car sales falling as countries reimpose those restrictions. Newcar registrations dropping 7. 1 . Sales have been in decline all year. Moss to talk about in cars. The u. K. Bringing forward deadlines around ending the sale of petrol and diesel cars so lets talk about that later with Bloomberg Intelligence and a little bit of more breaking news for you on the macro front. 0. 7 mer prices rising by year on year against an estimated five point having percent. Bloomberg economics tells me we need to look for the Second Quarter here to see a big pickup or a much more sizable pick up in inflation because of base effect to do with tax cuts that came through to fight the pandemic. Just under one hour away from the start of the European Equity trading session. Futures have been looking sluggish as if we are looking for new dynamics to trade around as we have digested a lot of the latest vaccine news, asking what is next. Not far from record highs. European stocks, both pretty mixed. Futures looking a little bit sluggish, pointing to the downside. In the asian session, we have seen japanese stocks dropping. Record covid cases, part of the story. The gmm sees where we are seeing this coming through in the asian session. Chinese stocks looking resilient despite the fact that we have seen the threat of further regulation coming through from the United States in the shape of the sec. Lets get to our conversation with mark cudmore from the markets live lets not do that. Here are your top stories we are covering this morning here at bloomberg. The senate blocked the nomination of judy shelton to the Federal Reserve board. Its a step back for Mitch Mcconnell and President Trump with senators in quarantine. The republicans fell short of the votes needed. The senate can reconsider her nomination, but time is running out. The u. K. Is announcing a 12 billion pound plan to tackle Climate Change. In a blueprint, Boris Johnson says the move will create support for as many as 250 thousand jobs. Sales of new petrol and diesel 2030,ill be banned from earlier than anticipated, and the government will invest in electric vehicles and renewable energy. Three former lawmakers in hong kong have been arrested over a scuffle in the Legislative Council chamber earlier this year. They have been detained for allegedly trying to disrupt a vote banning criticism of the Chinese National anthem. The arrests are the latest blow to hong kongs Democracy Movement after the passage of a sweeping security law in june. 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. Now, we will get to our conversation with my colleague, mark cudmore. U. S. And european futures edge and lower. Investors taking a bit of a pause after sending stocks to alltime highs in the waco progress towards a vaccine. Thats get to mark cudmore from the markets live team, who can give us his perspective. Looking for a new catalyst and direction. Do you see anything that moves us drastically away from these levels . Mark im not sure we are necessarily getting a new catalyst. Its just the thinking around the catalyst the last week is evolving and that is that this whole debate about whether the threat of the virus now and the next few weeks is more important than the optimism around vaccines next year, essentially how forwardlooking are investors, and part of the problem making the calculation is we dont know exactly when that vaccine will make a material difference to many first world societies, which had the biggest impact on global economies. The thinking is turning more negative and one of the things we are seeing is that last week after the pfizer announced in, we saw the s p 500 bike to a record high, intraday record high, and even after the results from moderna, we did not reach that high again. The intraday high was still the highest level in stock and im of the view that that will not be broken again in 2020 even though we are not far off of it because every day that goes by, we get more material negative headlines on the virus, and yet the vaccine does not get any closer. We have a Global Health crisis now. Interesting to listen to what the central bankers are saying about the Global Economy at this point. We heard from Jerome Powell talking about how he sees the solid pace of recovery in the momentum risks losing as the virus surges. I wonder what evidence of any you saw in the u. S. Retail Sales Numbers yesterday. In a sense, they look more normal. Sales is theil stuff of normal times and yet times are anything but normal. Theres two different ways you can spin this. One is how we hit mystic the headline number we missed the headline numbers and we have not seen a rapid pace recovery and therefore it is running out of steam and that is the more negative take. The more positive take is we are seeing an improvement from a year ago and overall, we a more normal world and that is a positive thing so i think it gave a little bit for the bulls and the bears but it gave a little bit more for them given that we did miss expectations and we have definitely run out of steam. Whether we see that as a good thing or not, we are no longer getting the rapid recovery we were seeing earlier this year. We might be heading towards a second downturn. Anna and what do you make on the latest on the Brexit Debate . We have seen lots of reports about landing zones being may be in view and lots of reporting about whether we will get movements monday, tuesday next week, over the next two weeks, depending on if you are listening to the irish or sources in brussels. What do you make of u. K. Assets at this point . The market live team have been asking questions about which ones will get some love from investors postbrexit. What are you hearing . Mark i long ago became muddled by the situation and have struggled to keep up with twists and turns but i think the eventual path has not changed at all and that is that we have set for a long period of time that we expect negotiations to go right to the wire because thats the kind of e. U. Norm and the u. K. Side seems to be doing the same tactic so therefore, it will go right to the wire but we expect it will be made and when the deal is made, we expect some kind of relief rally but it does not necessarily mean the u. K. Economy will be wonderful next year so after that relief rally, the longerterm pitch is one that might underperform. Despite all the headlines and the twists and the turns, im not sure whether that eventual path has changed any different from there that we would have the conversation nine months ago. Maybenine months ago, even four years ago. But yes, we will see. Now, ray dalio, not exactly sure he gets bitcoin, and he was saying this very openly on twitter. Edgewater Associates Founder ray dalio saying he might be missing something when it comes to bitcoin for so for those of us who are missing something, 18,000. What has been the renewed enthusiasm for bitcoin, g10 . Do you think . Completehave seen the shift to extraordinary policy from Central Banks all over the world and that has impacted into oil market. People arethe chasing various different assets to provide some value. You want to diversify. Even if you believe in bitcoin or not, it often a one of the options. Theres even equities, whatever you want. Bitcoin is certainly a very valuable asset in that world where fiat currencies are being devalued by policy, so that is one facet of this. The other part is what we have seen is a real acceptance by the mainstream hedge fund Natural Community this year so when we had the real parabolic move, it was much more of a retail threat and there were big financial names coming into it but they were really the margin. It was a big story. Now, we see most mainstream people say they own bitcoin, we are seeing companies talk about putting some of their Treasury Holdings into it so it has entered the mainstream. Its very hard to put a level on it. Theres no valuation here. It is essentially a greater floor. About a speculative asset. Its about accumulating the next one at some point in the future which means you cannot put a specific value on it. The great news is that means it is unbound on the topside because of how much demand is out there and the bad news is that this means when it starts collapsing at some point, it means there is no floor. In the shortterm, that means this move could go an awful lot further but it a hard time. You so much. We are now fully briefed. Mark cudmore, thank you very much for joining us this morning. We have been talking about what some of the Central Banks have already been telling us has been going on. We have been hearing a lot from Central Banks with regards to the Global Economy, and we will continue to do so. Our newbeen holding economy form so we will be healing from the bank of england, next. This is bloomberg. With the virus now spreading at a faster rate, the next few months may be very challenging. We are not going back to the same economy. We are going back to a different economy. Before we had this great news about vaccines, we had some pretty negative news concerning the second wave that fully came about certainly earlier than anything we had anticipated and that also has an impact on the outlook. May be the change, if you like. Focus and must now push ahead hard with the necessary changes to support our clients. Was Jerome Powell, Christine Lagarde, and Andrew Bailey morning of a tossed path ahead, and escalating berries cases continue to be front and center for investors. Joining us now is the ubs paneuropean economist. Lets pick up on the european ecbs view of the world. We are just hearing from Christine Lagarde, and what is your expectation now for the eurozone and for the level of gdp contraction that we see . Will it be half the size of the spring as a sort of rough rule of thumb or what are using to guide you through this probably this period . After strong bonds, the focus is now on how bad the Fourth Quarter is likely to be. Now, we think that compared to the spring lockdown and gdp contraction, is likely to be smaller. Specifically, we expect a 3 decline quarter on quarter, so close to 12 in the Second Quarter. Factorsmention two which are key in terms of why the contraction this time around should be smaller. First, in terms of mobility restrictions, we are now essentially back to may levels, so less severe than the lockdown in april. This is largely due to the fact that the most recent lockdown measures suggest that across european countries, sectors such as industry, construction, and also the education centers, remain open this time around. Secondly, purely because we are still we start much lower starting point this time around and that means that in terms of numbers, contraction is likely to be smaller. But overall, i would say that taking into account our expectations of 3 quote unquote endcline, we expect gdt to in 2020, so around 7 below this prices level. Really interesting that certain important sectors are able to stay open as you point out, and that might be in comparison to may rather than march and april. How does the ecb respond to this . We were hearing from Christine Lagarde stressing that we need to focus on the quality and duration of the support that the ecb will bring, not just the euro size number is attached to it, but what are you expecting the ecb to do as we head further into winter . At the lastnk back meeting, essentially, the ecb has precommitted to deliver an additional policy stimulus at the next meeting on december 10 and then at that meeting, we expect the ecb to announce an extension and increase in their emergency purchase program, so we expect lasting until the middle of 2022. For the cheap loans for the Banking Sector essentially. What about the Recovery Fund . How much of a game changer has that been in your mind and how concerned are you about it being politically sidetracked by voices in Eastern Europe unhappy with conditionality attached . How much expectation did you put on that Recovery Fund . It, when the about leaders agreed for the Recovery Fund, we knew that this was an agreement in principle and there were a number of issues that still had to be resolved so we did expect some negotiations to continue. Now, the latest news from hungary and poland are clearly coming as a Downside Risk, but our base case remains that a political agreement will be hungaryand poland and will give in and the package will be approved. In that context, its worth mentioning that, when we think about how much funding both countries will receive from them, then specifically, in the recovery and resilience facility, which is the core part of the Recovery Fund, the two countries are essentially entitled to close to 5 of funds in the form of grants, so that quite substantial. In terms of the timeline, i would note that the key date is tomorrow with the summit where we are likely to see more negotiations happening. Anna yes, ok. Thank you so much. She stays with us. We will get further thoughts from her shortly when it comes to the u. K. A quick look at where we are on European Equity market futures, we are expecting to move a little to the downside but we are a little lacking interaction, still trading around alltime highs on Global Equity market. The tokyo market under pressure because of the infection numbers there. Zeroing in on a deal. Brexit negotiators are edging towards an agreement. A breakthrough may come early next week. We will discuss, next. This is bloomberg. Opinion, doin my not own bonds and do not own cash because they are producing a lot of debt and producing a lot of money to fund it, so that is changing the nature of capital flows. Its also changing how those flows go to china in terms of the comparison of that part, particularly as it opens up so i think its behaving sensibly but do not use old multiples as reflections of the limitations of what is expensive. Things not to buy from ray dalio. Speaking to bloomberg at the new Economy Forum. You can watch more of that conversation at 8 00 a. M. U. K. Time or anytime on the terminal via live. Lets turn to the u. K. And the brexit conversation. Officials are reportedly planning to strike a deal early next week. Sources told bloomberg the two sides are making progress on the biggest sticking points. We know the paneuropean economist is still with us. What difference does a deal make do you think for europe if it is a very skinny deal committed in scope to adjust goods and even only some of those . Case isreva our base that there will be a narrow trade deal covering goods sectors specifically and the key difference between that and nodeal at this point is the entire thing. We still expect some barriers to occur at the start of the year, which will be which will affect trade deals from the u. K. Side but the key difference is the two sides are now trying to avoid it. Anna i was looking at savings data in the u. K. , and it has obviously picked up substantially. We see that in a number of developed countries because of an inability to spend during the spring months. How much of a comfort is that as we head into a period of potential disruption . Anna titreva the spike in Savings Rates in the Second Quarter essentially indicates that there is some pent up demand in the economy. We did see some of that coming through in the Third Quarter which supports the growth bonds back in the Third Quarter more broadly. When we think about recovery Going Forward, we expect Savings Rates to remain elevated over the coming quarters and also reflecting the fact that precautionary savings are likely given theite high outlook for the labor markets and there areweak concerns around increasing unemployment. An