Traders express concern over Deutsche Banks weakening health. A very warm welcome to count on. Im anna edwards. Manus and im manus cranny. Did you look at that debate last night . It got personal, didnt it . Anna yes, and the reaction in the markets was very clear. There in mind, the bear in the mind, the mexican peso has lost 1 3 of its value. Manus that is why we got here nice and early. Anna said, there is a lovely correlation, manus. It is of course the mexican peso in blue. That is the rally the analysts were talking about. And indeed, the drop in the yen. So, you are seeing the yen on a one month high. We have volatility in the peso at levels we have not seen since 2011. What reward do you get when the market things clinton is going to win . The currency has often declined when the trump camp improves, but tends not to gain as much with the data favoring clinton. Cnn poll suggests that 6 62 think clinton won. Lets bring up the risk of radar markets you what the are telling us. We saw a turnaround in stocks. We have the futures in the u. S. Now, suggesting this is a relief rally in risk assets. Manus ok, lets get the first word news with david ingles. David thank you, manus. Financial markets have judged the first of three american president ial debates a win for Hillary Clinton. Mexicans peso rallied from a record low and gold retreated. Separately, in a cnnorc poll, 62 said clinton won the debate. The Ecbs Mario Draghi says european banks have probability problems and one of the issues have profitability problems and one of the issues is overcapacity. He also spoke to lawmakers about how to spur growth in the region. Euro area toe thrive, we need to offer essential protections for the most vulnerable. Manus the bank of englands Corporate Bond buying program gets underway today. That boe plans to purchase 10 Million Pounds of Sterling Investment grade corporate debt over the next 18 months to help the u. K. Economy whether uncertainty caused by the brexit mode. Yuan borrowing in shanghai rose to a sevenweek high as Chinas Central Bank pulled funds for the second week in a row. According to the funding sector, we saw a climbed to 1. 24 , the highest since august 4. There are signs policymakers want to discourage the excessive use of part of money to purchase assets. Richard perry, one of the biggest names in hedge funds, is calling it quits after 28 years. He is monday down his new yorkbased flagship fund. He is winding down his new yorkbased flagship fund. He posted a return of 18 without ever having a down year. Whatever the last year, ihis funds have lost nearly half of their assets. Global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. You can find more stories on the bloomberg at top. This is bloomberg. Anna thank you very much. Lets check out the latest Market Action over in asia. Julia sally has the details for us. You have been watching the debate and the markets are reacting. Reporter they certainly have and as steve mentioned, you can see that traders viewed the debate as a clinton win. The japanese equity market was off by 1. 5 before the debate y. 5 . D and is now up b citi also came through with a note saying japanese stocks are likely to gain on a clinton president ial win. If there is a president trump, it could lead to a 5 to 10 decline in japanese equity. We has the most japanese markets staged a little bit of a turnaround after the debate. Mostly in japan, but also in korea and hong kong. Hong kong stocks are climbing after that one day selloff we saw during monday. They fell the most in two weeks during yesterdays session, but today, a lot of Good Movement coming through. The casinos, also getting a boost on this Market Sentiment that clinton won that first debate. Still some weakness coming through in australia on commodities players. New zealand is up by. 2 . And taiwan is closed today as the typhoon bears down on the region. Lets have a look at othe other stocks. Hanjin is up 23 . This, as the worlds biggest Miner Company said it could be selling off of some of hangins assets. We are also looking at hyundai merchants assets. This is because thei was talking about in hong kong, very much lifted on the back of this debate. Weekly checking o quickly checking on that yen. Investors viewed this as a clinton win. Back to you. Manus thank you very much. Just a couple of lines coming through from abe. There is no need to rethink the portfolio and negative Interest Rates coming from the raising costs to reaffirm. This is as we try to reaffirm and justify the negative Interest Rate policy. This was the first of three televised u. S. Debates. It descended into accusations and blame last night with Hillary Clinton and donald trump clashing over trade, race, and foreign policy. Hillary clinton hit trump on the handling of his business interests. Hillary clinton i have met a lot of the people who were stiffed by you in your businesses, donald. I met dishwashers, painters, architects, glass installers, marble is dollars, drapery installers, like my dad was, who you refused to pay when they finished the work you asked them to do. Anna meanwhile, trump criticized clinton for her role in the middle east crisis. Donald trump the middle east is a total mess, under your direction to a large extent. You started the iran deal, another beauty where you have a country that was ready to fall. I mean, they were doing so badly they were choking on the sanctions and now, they will actually probably, be a major power at some point soon at the rate they are going. Anna they sounded like some of the more polite exchanges. Megan murphy was at the debate. She joins us now. We went into this debate then, with trump and clinton tied in the polls. Was there a clear winner of the night . Certainly, there was a clear winner. It might not have been the performance that put donald trump away, but Hillary Clinton was largely viewed as the victor. Not only with Market Reaction, but in consensus groups, she was very successful at keeping a measured tone, laughing off some of Donald Trumps more outlandish statements and most importantly for her, hitting him where it hurt on a few key issues. One, his failure to release his tax returns. Also, his continual refusal to distance himself from his very controversial birther debate, when he called into question as to whether barack obama was actually eligible to be the president , whether he was born in the u. S. Or not. It has caused a little bit of a racial divide in america, something she seized on. It left him looking a little bit worse for wear tonight. Manus the outgoing polls from 62 gave it to clinton, which is reflected in the relief rally. Equities are pacing ahead and the mexican peso has taken a little bit of hard from this. This is the first of a number of rounds for the market, isnt it . We have always talked about whether the market was fully pricing in the possibility of a donald Trump Victory. The markets seemed quite sanguine as this campaign went on. As you said, the mexican peso emerged as the best proxy regarding how the candidates are doing. Trumpsdue to donald idea of building a wall. That would weaken the countrys economy. Overnight during this debate, we saw the mexican peso surge over 2 , indicating the markets think Hillary Clinton delivered a very strong performance. There could be a Silver Lining for donald trump. We still have two more debates and his performance, i think his campaign would admit candidly, his preparation was not where it should be to be able to match up with somebody who has the export of expertise and discipline and experience and training Hillary Clinton, particularly in these one on one debates. You barely touched on her emails. He also barely touched on her very low Favorability Ratings and her lack of trustworthiness. With so many voters out there, that has really dogged her campaign. They might say, it was such a low bar that we did not cross over it, but now we have room. Anna megan murphy, thank you for joining us. Great to get her analysis on the program and joining us now as the guest host for the hour is mike. This is the first of a number of the dates leading us president ial election. What is the big investment implication for pimco there . You saw a little bit of that this morning. You know, the markets dont like uncertainty. If you look at the two candidates, i think you get simply policy clarity because donald trump is a bit of an unknown quantity and you can see that within a Market Reaction today. The dollar is up and equities are up. They had a little bit of iraqi a rocky ride yesterday. The u. S. President ial debate is a number of political hurdles we have to get through over the next 12 to 18 months. You could look at the president ial election and the referendum in december. You have the french and german elections. Many of these risk moments out there, which were us, tend to suggest, particularly given where markets are, that could be a little bit of a more cautious start. Manus that rolling card of electoral issues, in the bond wo yourraditionally, um, world favors the volatility, the uncertain. And i buy treasuries and jgbs and gilts. Do those models still hold up at the helicopter level . I think they do. It depends on which market you look at. S. Treasuries,u there is room to go in both directions. You have thae fed on the one hand, who look like they want to raise rates. And you have 10 year yield, 5. 116 is not exactly a great value. We know they are all skewed by Central Bank Activity. That there is room to rally if we get a bad political outcome. But there is room to rally if we get a bad political outcome. Jgbs have been a tricky one because we had lower yields in the first i place. Manus this is the mob index. We are back at 2014 lows. Thing aboutesting that chart is it shows you what a good job Central Banks have done at supporting assets over the last few months. Obviously, there has been a variety of unexpected outcomes, brexit being the classic example. That Central Banks have been pretty active. Beinge thaee ecb engaged. That is what you see in that chart there. You see Central Banks pretty good at suppressing volatility. The challenge we have got is some Central Banks are moving towards the end of what we would expect them to do, the bank of japan being the classic example. I think we will see a little more of a cautious start. That is what we are doing. Anna tell us more about that start. What looks most exciting to you in the bond market . What would you avoid . We would say credit, general, have had a really good rally. You know, we would recognize that we, when you look at government yields, you have that e fed on the one hand trying to raise rates ,but in a world of low Interest Rates, they have room to rally. Looks kind of we are pretty agnostic on duration. In terms of risk assets, our things thats to buy we would be comfortable owning if we do see volatility. I know manus have got a busy day ahead of him today. Manus i know more about highyield than we ever wanted to. Mike amey, stay with us. Anna here is a quick look at your day ahead. The italian Prime Minister presents his National Investment plan. Manus 30 minutes later, we get the u. S. Consumer confidence data. And at 6 30, the bank of england chief economist speaks at an event in london. Anna still to come, fed friction. Two members of the Central Bank Show how they would have voted. Corporates. And we bring you the analysis. Anna plus, we are live in algiers for the kickoff of opecs informal meeting. This is bloomberg. Manus it is just 1 20 in the afternoon in hong kong, but the markets have a nice relief rally. Orc of those polled by cnn suggest clinton won the debate. Lets get to the business flash with stephen engle. Reporter thank you. Traders are again expressing concern about Deutsche Banks weakening financial health. They have been pushing up the cost of short data contracts. Is climbing swap faster than the five year, which could be an indication of stress. Commerzbank will reportedly announced its Restructuring Plan on friday, citing people familiar with the move. This will include 9000 job cuts by 2020. The plan, which needs approval the nonexecutive super advisory board, will cost up to one billion euros. Disney is working to evaluate a potential bit fd for twitter. However, they could have a fight on their hands. Representatives for twitter and disney did not respond to requests for comments. Urge afterd a s reports were made public that a sale was moving forward. The company is expanding around the world. The chief Technology Officer and cofounder told bloomberg about airbnbs plans. Expandingar, we were into china. We have been doing a lot of marketing in china, a huge market. All of asia has been really promising. We also have been looking at india. Increasingly we have been looking at emerging markets. Airbnb took root in the europe and in the u. S. , but we think the future of the business could be in asia. Reporter that is your bloomberg resinous flash. Anna thank you very much. Now, two Federal Reserve officials that will vote on Monetary Policy next year offer different views on whether to raise Interest Rates this year. Robert kaplan said he would hold back the hike, saying he was concerned about distortions that the lower rates were creating. Manus meanwhile, the minneapolis fed chief questioned as to whether the economy can sustain a higher rate environment. Mike amey is still with us. So, the great debate in terms of the changing complexion of the fed. One of the best lines i have read so far is that the dots that the fed produced, the dots are catching up with the market, but the market is not catching up with the dots. Would you agree with that . How hawkish do you think this will make 2017 for us . Absolutely. They are trying to hike rates in a way that does not destabilize asset markets and risk yo, you know, an unnecessary slowdown. They will do this by saying, even if we raise in the next month or two, if you keep lowering those dots at the back nd, those longerterm dots, then what you are saying is, i am going to formalize my statement not only by going quite slowly and a year is pretty slow if you keep the quench of the burning the longerterm neutral rate down, you hope to suppress the market volatility, even if you raise rates. In 2017, clearly, they are going to try to raise rates again. Mucharkets have pretty prized foced for one by the endf 2017. Anna is one a year becoming a real thing . [laughter] there is a reasonable chance they will be more than that. We think the risk reward is a little more than that, but maybe one or two. You know, we would take the end of the high rate. Anna what is the biggest threat of them not doing those rate hikes . As we go through the year, fewer and fewer rate hikes are being priced in. I think the biggest threat clearly, is they get no traction on wages and inflation remains very low. I think we have all been surprised by how sluggish wage growth has been, and whether that is a global phenomenon or domestic phenomenon. Our expectation is they will get traction on wages, but if you struggle to get that traction on wages and we get one or two fof these risk events, clearly, they will be inclined to go slower, rather than faster. Manus when we were just chatting over the break, you said, actually, i am more interested in the bank of japan. We are having this debate, as to whether this is a form of tightening, easing, and whether targeting the yield curve works. What is the consensus of pimco thus far . Would struggle to say this is a loosening of policy. They are trying to pump less cash into the system under the new rules. , they were doing you program, the aim is, if keep going at that rate, they will own 50 of the jgb market by the end of next year, which most of us would argue i think, is too high. Their intention is to anchor rates, but spend less cash. We would argue that is a bit of a pullback. Anna just briefly, you are suggesting this is unlikely to deliver more inflation . Correct. So, a statement of overshooting inflation looks like a few years off for us. Amey stays with us. Manus i am off now. 7 30 a. M. , these are the people i will be talking to. R one. L marsh, fo anna welcome back. This is countdown. In london. N 6 30 a bit of a move fact, it is weas morning. Isew edition of daybreak now available on your bloomberg and on your mobile. Lets get a look at some of those top stories. The common story is the u. S. President ial debate. A cnnorc polls showed that 62 of voters. Hillary clinton won thought Hillary Clinton won the debate, donald trump dominated on social media. The mexican peso rallied almost 2 . It has lost almost 1 3 of its value. Trump says he wants to renegotiate nafta, and has made many other comments about mexico. Finally, daybreak focuses on commerzbanks restructuring. The plans include 9000 job cuts. That is according to handle sblatt, which cites people familiar with the matter. U. S. Futures have gained. This was the first of a series of debates between the president ial hopefuls. We have been looking at the details in the market. Nejra yes, you mentioned the polls are favoring Hillary Clinton as the winner of this debate. It looked like investors are as well because it is very much risk on today, a very different picture from yesterday. You can see the s p 500 futures, the blue line rising some. 6 . Asian shares, erasing earlier losses. Up asiapacific index is now. 3 . These two moving in tandem. If we take a look at haven assets, as you