Down at the bank of england where the debate is how hard has brexit been on the economy . And if they take a sledgehammer to the rate, the policy affected just a month ago. Manus, as we go to the program, outside the bank of england a lot more to talk about. Let us start with the bond market. I have a great chart u. S. , 530 spread in the we have seen that widening for nine straight day. What we see here, many people suggesting that this is giving us a signal in the markets, that we have not seen since 2012. The yield curve deepening for nine straight days, investors went to be in at the shorter days, that we might not see an increase in interestrate from the u. S. Fed when they meet next week. A busy week for central bankers of course next week. And a policy is on hold, what is that due to inflation, and we see bond markets adjusting as a result. Lots of talk about in the bond market as we go for the program. Lots more from manus at the bank of england. Let us throughout the risk radar, overnight we have for you the msci asianpacific down 4 10 of 1 . A little weakness in the oil price, up right now actually at the bottom of the screen. But weakness has been weighing on the session with an asian equity session, weaker for the sixth day. Down. And expectation in the japanese market weighing on the banking sector. Manus . Just digna, let us into those asian markets look at more. As you said, 2 trillion from the perspective. But the rub, david ingles standing by. David thanks. Some things we are following right now, Hillary Clinton has released what her Campaign Calls the comprehensive exposure of her health, saying she is recovering from pneumonia and all of her vital signs are normal. Her medical condition became a potential election issue when she appeared to need help on sunday. The Clinton Campaign has criticized donald trump about his own health. He went on daytime tv to give a view of his condition, the first since december. Now, china goes to the highest storm warning, and making landfall, leaving one dead and 38 injured in taiwan. Financial markets shut for the rest of this week for the mid autumn festival of holidays. The government has told france it approved the controversial nuclearbuild two new reactors for 80 Million Pounds in southwest england, according to an official with the matter. Theresa may said at the end of july she was casting doubts, approved by her predecessor david cameron, about the concerns of the scale of the subsidy for the plants, whether chinese involvement was a security risk. Now, president obama has lifted u. S. Sanctions in myanmar, after talks with the leader at the white house. He says it is the right thing to do. And praised the transition to democracy, a good news story. The Asian Development bank affects myanmars economy this year, falling for percent, looking at the best performer in asia. As the first u. S. President ever to travel, i could see the enormous potential that was about to be unleashed. And nobody replicates that better than him. David and should not expect any help from Central Banks to save the economy from an overheated property market, that is the message from the Bank Governor. He says while raising Interest Rates anytime soon is unlikely, it is still possible. And people should be ready for it. If you read what the Interest Rates structures are, people expect that once the policy rates are made for the next five years, so it is likely no, maybe not. But there is risk. Yes, definitely. Monsanto havend been quick to assure investors of the regulatory approval, after the companies agreed to the 66 billion deal. That is the largest ever foreign takeover by a german company. Bayers ceo says they are taking steps to ensure they get the goahead. Revelatory challenge is very intense, as part of our negotiations, but also beyond, we have both had very large teams of our own people, antitrust counsel looking at it jointly, in order to assess how big the regulatory challenges might be. 24 hours aal news day powered by more than 2600 journalists and analysts in more than 120 countries. You can find more stories on bloomberg at top. I am david ingles. This is bloomberg. Anna david, thank you very much. Let us check in on the markets in asia. Haidi lun has all the action. Another down day for asian equity markets, in particular japan. Haidi it is relentless, anna, the selloff we are seeing. You have to wonder whether this is going to be the narrative from now all the way through to when we have some answers out of the fed, bank of japan, because it feels like we get closer to those meetings next week, investors are trading ever more carefully. Volatility does to be appearing today. Take a look, the steepest losses coming from japan as you said. Regionally, down for a sixth day. But for the nikkei 225, down by 1 . Topics seeing a seventh day of losses, the longest losing streak since 2014. We have a slightly stronger yen, buying into other safe havens like gold, sing a pickup amidst this sentiment. Here in hong kong, one of the markets beside the World Trading on account of the mid autumn holiday shuttering the accounts, hong kong trading up by 4 10 of 1 . But take a look at chinese stocks trading in this market. We are looking at really the Chinese Companies in hong kong going from some of the bestperforming stocks to the worst. Down over 5 today ahead of that public holiday. Hong kong will be close to mark. Australia also worth noting, numbers come founding forecasters once again. We are expecting a gain of 15,000 jobs in august, instead we saw loss of 3900 jobs. But the takeaway is that h the employment rate is the lowest in three years, we have seen recovery over the last hour when it comes to sydney, by 1 10 of 1 . New zealand a down day there, kiwi gdp coming in this morning. Seeing forecasts around the region pretty quiet, as its a holiday in session, as we are really looking at that mid autumn holiday closing a bunch of markets around the world. But take a look at the topics. You were talking about the japanese losses, take a look at financials, down by 2 10 of 1 . But we are releasing the losses across cyclicals, utility, telecom. Really on these concerns what more can the bank of japan do . But a number of bank saying look, what they are likely to do and next weeks meeting is to go deeper into negative rate territory. And this is why we are seeing the decline when it comes to the banking stocks. Take a look at the biggest losers when it comes to that tokyo session. 1. 7 . Lly is down by we have one of the leading decliners. On this concern that if this does happen, if we get a deeper dive into negative rates were going to be looking at a pretty somber outlook when it comes the bank earnings, potentially the chances of recovery there. One of the out performers, the great spot on the market, convenience operators in japan. They bounced today on the news they have a proposal from mitsubishi, the largest Trading House in japan, wanting to take e of up to 51 , as they try to dive away from commodities. Anna yeah, interesting story. And commodities, as you say. Haidi lun in hong kong. Five weeks since the boe delivered a strong response to brexit that many have forecasted. Whether the outlook warrants a change of strategy. Manus joins us from the bank of england. Manus, what can we expect . Give us more detail on what is at stake . Manus anna, i think certainly the markets resume this institution will probably hold pat, joined the cause that you saw from the ecb, wants the bank of japan and fed deliberates, the bank of england has really executed what some would say is an increased stimulus. Really 75 basis point. That was last time was down here. There are a couple of different things. One, mark carney was saying im happy with what i have done. Parliamentarians say you acted too fast, too quick on the draw. Come down to data and the debate. Look at the Employment Data we had, wages, two different story. On one of below 5 . That was core to carneys argument, rising over the mediumterm to 5. 6 . You are seeing unemployment at an 11year low. Go back nine years ago. Since thee some time recession, taking even longer for the employment numbers to come. Bloomberg industry has had a look at that uncertainty index as well all of this, with a low news, five years for brexit. No article 50. All of that coming to light. Could the uncertainty index rise, and private sector wages, this is the one negative here, the weakest in almost a year. The data says they went to hard, too fast. For the data had the lag in it. Anna the data could have a lag. And whether to revoke, another as the actual departure from the eu. Too many questions about that. But from the market perspective, lots we do not know. But we do know is sterling is considerably weaker than was prejune20 third. Cannot continue . Manus look, a people say sterling is part of the fading bright spot on the brexit story on the current account deficit, but is also part of the problem . Part of inflation potential for the United Kingdom in terms of our propensity to import . You can look at sterling. Crashed to a three decade low. We had a lovely bounce. Can they continue . Hsbc says you will have another 30 . Looking at 115 against the dollar. The cost for hedging, that tremor, that concern has dropped to the lowest prices january. Anna . Anna manus, stay with us. Let us wrong the conversation. We have geoffrey yu from ubs joining us on set. Whate a chart here, happens to sterling in the wake of the brexit vote. We saw that they plunge, down 11 i think against the dollar since june 23. Inflation looms perhaps. This is what the bank of england is really having to wrestle with. Geoffrey the message has been quite nuanced when it comes to respect to sterling, not like switzerland or sweden, the small open economys and the transition trends, at least the past was the case. What i think there is going to be a very important decision on corporates right now, especially in those exposed to rising costs. Are they going to choose to pass it on to the consumer . What we have seen over the last two years in the environment, manus mentioned the concern of people might be held back a bit, but if you know the demand might be soft in the mediumterm, do you really want to be first out there to raise prices . And risk market share as well . Some for example, if demand is elastic, very happy to do so, you will need that anyway. But for example, i think others may be a bit more cautious. Anna inflation a foregone conclusion. Geoffrey absolutely is not. And we have seen many speeches over the past three quarters or so on this. The jury is still out. Anna manus, jump in. Manus were going to get some minutes as well. Three dissenters on the Corporate Bond buying. Do you think that that language might change, in terms of the majority of the by me here getting ready for 0 . What do you put the odds of 0 in the u. K. . Geoffrey never say never. They are very, very low. And remember, mark carney he is ideologically opposed to rates in negative. Even at landmark shanghai speech in february, where he called those countries in Central Banks pushing negative rates trying to push through, the fx channel globally, and not growing growth. And we know in the u. K. Again that trade transmission on the fx side has never been as strong in europe, so i dont think they are ready to pursue the angle. Anna i guess theyanna dont have a big say, weak pound, the effects of imports unclear to the u. K. , as they might be elsewhere. Fronts, on two certainly the sentiment of manufacturers and exporters would actually welcome a weaker pound. You have also seen the earnings inflation as well. The ftse 100, that is where you have that stabilization mechanism. Secondly, i would go back to the point about passing it on. Fallen,es, sterling has at least there is a cushion there. For example, the exporters know they can choose not to pass on at this point, but if that is the initial state, the since it has stabilized, the function has demanded that they do not come off, they will have to actually pass on further down the line without too much effect. We need the data to hold. Anna we will see those prices. Yu stays with us. Lots to come here on the program. Lots of highlights for your day ahead. At 9 30 u. K. Time we get retail sales data out of the u. K. And it is eurozone inflati. Midday, the bank of england policy decision along with the minutes of this months, meeting. An hour and a half after that, u. S. Retail sales and initial jobless claims. Backedup on the program, by blackrock the bank of japan games, and influential ally when it comes to the Program Aired that is next. At 6 30 u. K. Time the u. S. Election its a fevered pitch. Navigating negative rates, the Swiss National bank has a policy decision. We go to zurich for a preview. And much coming up with manus from the bank of england. Manus absolutely, and a. We have ross walker from the bank of scotland joining us. And Deutsche Bank chief economist Charles Goodhart at the London School of economics. 9 00 a. M. Price Waterhouse Cooper joins us. Thisank of england views, is bloomberg. Manus welcome back. I am manus cranny, live at the bank of england. Anna i am anna edwards. Time in london is 6 20 in the morning. Let us get the Bloomberg Business flash. Here is david ingles. David thanks, anna. Marco marelli named ceo, while massimino resigned. He joined bank of america, and is stepping down this month, the move comes as italys thirdlargest bank is struggling to avoid a safe bailout. Bayer and monsanto have been quick to reassure investors about the mergers, the comments coming after the Company Believes the 66 billion deal, the biggest and the largest ever of foreign takeover by foreign german company, bayers ceo says they are taking steps to ensure that is the goahead. Regulatory challenges have been discussed very, very intensively as part of our negotiations, but beyond, we have both had very large teams of our own people, antitrust counsel looking at it. They look at a jointly. In order to assess how big the regular tory challenges might be. Says hend nokia ceo will waste no time in pushing through a merger without patel lucent. And he learned of the billions of dollars lost through the competition deals. Immigration is going really well. One of the things we have had in immigration is be, so we have made all of the decisions and the frontline debates. We are in execution mode, without the rationalization of the portfolio, approximate 20 customers where there are overlaps in the portfolio. David and that is your Bloomberg Business flash. Anna david ingles, the business flash in hong kong. The bank of japan has gained and influential ally easing concerns in the stock market. Blackrock says investor fears bojng crowded out by the purchases have been overblown. Compared to the 5 trillion market, compared to americas 8 trillion. The bond buying could make some stocks hard to trade. Joining us now to look at some of the macro themes, geoffrey yu, head at ubs Private Banking. What are you expecting from the bank of japan . I have a chart that shows how we have seen the recovery, a little bit of recovery in the 30year bond yields over in japan. This is for the month, back to the start of the year essentially, and we see some recovery from the recent lows, not far from zero of course. But 10year still just below 0 , just coming towards that boj decision next week. Geoffrey what they are looking for is perhaps a wider range of asset purchases, and you know also assets but on the right side, additional cuts are likely. Boj, wee thing for the go back to february and january, the volatility what they got right and wrong, i think the volatility is more about execution efficiency, communicating the right way. Because if you look at the initial news towards negative rates, how negative rates look at the markets, but then, it was a very complicated design. It was tiered. Not that they are the only central bank doing the tiered approach, but people had to spend some time looking at what they are trying to do. Trying to protect the banks, so if youre trying to do negative rates but not doing too Much Negative painful side, it eases the effect. This time, the targeted and first identify you are achieving, execute the right level, that is much more important. Especially for Central Banks, losing can ability in the markets right now. Manus part of that credibility that 2 urse reaffirming target in the timeline. We have seen that they might move on that, so is that part of the communication process, when we do hear from them . Geoffrey so, when it comes to 2 , they will reaffirm that. But again, how can they manage the expectations around the economy . If you look at the surveys on hascorporate side, 3 always been below 2 , so that is why they want to get much possibility as possible, to commit to hitting the target. They want to think about having a floating kind of target, but also possible they again do not make it to come located because the markets find out they really want clarity. Anna markets one clarity. But looking at banking stocks in japan, japan shares slide on the negative rate expectation. A lot of nervousness, but we see speculation of further negative Interest Rates hitting the banking stocks. Geoffrey it is always a difficult mix. But perhaps they can have a look at what the bank of england sought to achieve the last injection, and what the ecb finally managed to achieve. You actually cut rates, that will cut into Bank President of the, but you give incentive to go out to lend. Central bank will always take the view of shortterm the margins that he hit but if you do enough, and we will help you do this, assimilate low demand, than the possibility will increase. So, i think that message from the boj, as we saw from the boe, is necessary as the policy effect over the world. Manus geoff, thank you very much. The u. S. Election, it is fevered pitch. All about the health of the candidates. That is what they are focused on their the impact of the election on the currency market, that is coming up next. This is bloomberg. Welcome back. Youre watching countdow