Wagging. Wagging. Kit juckes will join us in a moment. Jonathan looking at the msci world index global stocks, and august 2015 hi. 600 aope, the stoxx january 2016 high up one quarter of 1 . The story in the fx market is a little bit of dollar softness. We come in 2 10 of 1 . The cable rate pushes up to one point at 133. A fifth straight day of gains. The discussion for this program in the next 10 minutes, are the bears in the u. K. Starting to capitulate . In the bond market, the bulls are not capitulating. Crude gets back to work with a little bit of rally and russia joins the output. In the bond market, the story of last week, the long end of the jgb curve, the worst week for 30 year japanese Government Bonds, yields coming in three basis points from the session. The focus is whether the boj and governor kuroda allow the yield curve to steepen and hopefully assist the banks to make a little bit of money. David they have been waiting for that in japan and it has been tough. Lets check in with our Bloomberg Team. danhyde is in kennedy in london on what is the actual brexit plan. We will start with caroline in berlin. They increased their bid but not by much. Caroline they are not really listening to the market and we are cut of worried that bayer would be paying too much for monsanto so the eat out a little bit of a sweet deal, 127. 50. That is about 56 billion when you are taking the debt out of the equation. It seems as though there was much optimism about the price point certainly coming for monsanto. You need 130ht if you are going to get monsanto to say yes. David a raised the bid but the market does not seem to be believing this deal. I think it is a 90 premium. What is going on . Caroline we are seeing way off the current market price. We are seeing currently trading at about 47 billion market cap for monsanto. 56 billion is where this deal currently is and the market does not buy it. Why the risk . Agreement,do get an what about the regulators that come in . What about the lawmakers . Are we going to be able to get a feel through those regulatory hurdles . We have do pound down going for regulatory approval, syngenta being snapped by chem china. Berlin,aroline hyde in i do not think that story is over yet. Jonathan monsanto probably once a little bit more money and you have the regulatory issues. That is a big question for the corporate world. Lets switch to Central Banks as the ecb meets paul gordon. He joins us now. The ecb decision on thursday, a wide consensus is at some point they are going to extend the qe program until her nose when. I guess they have some problems and they have to widen the pool of available assets. Paul that is the key. Most economists see an extension of q8. 0. 2 , 1 10 oft the ecb goal. It might not happen on thursday. Split, it isly going to happen at some time. If you do extend qe, what do you buy . A lot of bonds are ineligible because of rules. It could be time to send a signal that you are about to do that. Jonathan a question about how did they do that. You could tweak the rules on the deposit rate or the share limits. The Politics Around the p, talk to me how controversial it would the Politics Around the capital t, talk to me about how key, talk to me. Paul if it was a move away from buyingital key you are about one quarter of your qe purchases in german debt, a good chunk of france and italy. If you move toward outstanding debt than you are financing italy and that will raise some concern. Paul gordon joining us from frankfurt. Lets can tend to the congress continue the conversation to switzerland. Prime minister may, a tough time at the g20, a lot of people going on and on about what brexit actually is. What have we learned . Simon a lot of talk in china at the g20 and yesterday at brexit negotiations with david davis speaking in the house of commons. We are still without many details of what the plan is to get out of the european union. We know a few things. Theresa may does not fancy a point based system for controlling immigration but she puts that ahead of other issues. Talking about access to the Single Market also remains cloudy. The government intends to use that is a bit of a bargaining chip and not seek the full see the full access that banks and others would like to see. Not much meat on the bones. For the an issue lawmakers on the opposition side yesterday when david davis polk. Davis spoke. And a lot oficism platitudes. They want to know what brexit means. Jonathan we always tune into parliament for the waffle but as for the market, the conviction around the u. K. And sterling bearishness, or the bears capitulating just a little bit looking at the latest data and may be realizing this is not going to be as bad as the doomsday scenario that was painted ahead of the actual vote . Simon absolutely. A good story on the terminal showing some of the pessimist Like Deutsche Bank are pulling back against sterling against the last Morgan Stanley shelving. You are certainly seeing some data and market moves that perhaps brexit will not be quite as bad as once thought. The key thing to note is is it still early age is still early days. Jonathan simon kennedy, bloombergs brexit editor. The bears are capitulating just a touch, a fifth straight day of gains for the cable rate. Futures marginally positive. Lets look at the stocks on the move with julie hyman. Latest profit is that volkswagen is buying a share in navstar, specifically the truck and bus unit. You can see the shares are higher 26 in the premarket. This is thinly traded and these were earlier trades. They have not crossed since these headlines were confirmed earlier by reuters and the wall street journey. They are confirming it again, a 15. 6 stake. That is about 12 higher than the close on friday for navistar. We will see if it does come down a little bit. Earlier reports said the state would be 19. 9 . Volkswagen shares up by about 1 . We have a deal in the medical advice device area. A 4 billion deal overall. Steffi it does molecular diagnostic testing and you can see those shares are higher, danaher shares are little changed. Spectra energy and enbridge largestg for the Infrastructure Company in north america. Spectra holders are getting 43 point 33 a share 43. 33 a share. Providera natural gas across the country. Not much trade in enbridge. Expect shares higher by about 6 . Get an update on what is making headlines outside the business world. Emma chandra is here. Emma Rodrigo Duterte trying to mend fences with president obama. President obama canceled a meeting after an excellent explicit filled tirade. Duterte says he regrets his comments came across as a personal attack. A preliminary attack account on a Emirates Airline crash, the pilot tried to touch take off again as the plane touched down. A headwind started to shift to a tailwind and back again. All 300 people on board escaped. China is considering a wideranging overhaul of taxes. Finance Ministry Officials broadly support tax cuts for less expensive toiletries and are considering raising taxes on alcohol and tobacco. Global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. I am emma chandra. This is bloomberg. Jonathan coming up on the program, bond buying exhaustion. Will the ecb need to adjust its qe program if an extension is on the cards . We will discuss it with kit juckes. From new york city, this is bloomberg. Jonathan from new york city,. Can webloomberg call it bond buying exhaustion . The ecb is expected to extend its Bond Buying Program but the one problem, could they run out of assets to buy . Ecb, theailable to the rule is that they can by any sovereign debt with the yield above its rate. German debt currently trades with a yield below that deposit rate making it unavailable for the ecb. The ecb cannot buy it so how do they change the rules . I want to bring in kit juckes joining us from the city of london. You know this problem well and it was predicted by many, and here we are. Are we at a crucial juncture and you expect the ecb to make a tweak at this meeting . What will it be . Kit i do think they will make at least a tweak in extending the Bond Buying Program for longer, extending it through later next year to avoid having a conversation closer to christmas. They are going to have to make the announcement about how they are changing their buying. They could just turn around and say, we will sort it out, there are a lot of things we can do. I would have thought the easiest single solution was to be able to buy up lower yields just because that is less contentious and changing the t changing the capital key so the ratio of bonds they buy around the system, that is the most difficult thing. It gets them some time and that is an option. Going even lower in yields is the most efficient thing they can do. Wesense is that they think have got this under control, we can go on buying lots of stuff. Jonathan that is the message. The market has not been buying it for a while. Everyone has done the research and estimates. Seems to be the most controversial. Talk about the issue of raising the share limit, is that not controversial as well . Kit i think it is much less controversial. Story, you arer scraping the bottom of the barrel. Which corner and i scraping first . This is when you start pleading with your fiscal masters to do something on their side. Possessionsing the of each issue they can hold is less contentious because there is a lot of politics involved. I would do that before messing around with the capital key. Anyd is there any way reason to believe a different approach would have an effect on the economy . Is one of those methods better or worse . Kit i am not sure. The Bond Buying Program anchors yields, helped anchor the currency to some extent. What europe needs is to boost credit demands. The lending programs, we will loan you money for less than the banks, all of that kind of funding is much more effective. Anything they could do to revive the asset that market would be more helpful on pushing on that bit. I think this is a deeper issue. I do not think that any of this makes a ton of difference to the Economic Outlook going forward. The single best thing you could do is turn around and say, we are having easing of fiscal policy across the euro area right now and these rules around fiscal debt is going in the been. Jonathan there is another option, help the banks. I want to bring up the shape of the jgb curve because we are seeing a steeper curve, and tongues have started wagging. The boj came in to the market but did not buy 30 year debt and 30 year debt got hammered in japan last week. Are we about to see the boj embrace the steeper yield curve and is that the right thing to do . And should others follow . I certainly think those are two ends of the yield curve and at the front and i think it is important that they do something if they are driving yields ever lower to deal with the fact that that is costing the Banking Sector money. A steeper yield curve exit easier for the Banking Sector to make money to compensate for the fact that if you have negative rates they cannot make any money. That is not a 30 year yield story. Allowing normalization of the long end of the curve, that tells you something about we cannot just drive 30 yield 30 year yields lower month after month unless we assume we are stuck in deflation and no growth forever, just think is a stretch. A steeper yield curve, in a sense it is healthy and i would encourage it if i were a central banker in that regard. Jonathan kit juckes, thank you for being with us. We are wondering if we are seeing a shift in thinking. At the ecb it has all been about go hard and then worry about the banks. Up in the banks out and enabling them to finance the economy. David the banks have gotten hammered, particularly in europe. Can you grow your economy without healthy banks . Is the fed trying to get investors ready for a rate hike . We will preview John Williams speech from reno, nevada. This is bloomberg. David this is global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. , ihis is bloomberg am david westin. What are the fed president s trying to tell us . Lets go back to kit juckes. After Janet Yellens jackson hole speech the market still do not believe the fed will be raising rates in september. Will the fed speakers be trying to convince us otherwise . Kit i do not know how much they should be pushing september. I think they want to make clear as a message that september is to see whatre going the situation is, but the rates are going up. I am less bothered by Market Pricing over whether the next hike is in september or december. The market more or less prices a 1 fed funds rate in 2018. If the fed wants the market to price in higher rates, i think what the fed needs to do is push us into a situation where, if we think the economy is growing at a rate of a little over 2 in 2017, were going to go on hiking rates slowly but going to get higher than you think, as aboutd to over worrying whether it happens to be september or december, which will depend on the economic climate at that meeting. See ifbe interested to they try to push september harder but i would push the longerterm message. Erik nielsen from unicredit out with his weekly note. The fed increasingly resembles a boat in choppy waters without a compass and without a captain but with plenty of crew members only to be over by people yelling their good advice from the shore. The market still seems to be in control. Ande is the feds captain what have we learned from janet yellen in the past week . Analogy inlike my terms of, i definitely need to lose some weight and i should go on a diet. At some point in december i will probably get around to cutting back on the carbs or the beer. It is really easy on any given day to find a reason not to act. 100 50,000 payroll number, is that a reason to wait . My sense is that they have good intentions but they have got to be a bit tougher and equally, it is the same debate as the fed. Lets have a big conference to discuss new ways of thinking about fed policy and ultimately conclude we are going to keep the same old toolbox we had all along. We need new thinking a little more background. David i am not sure about you losing weight but i do worry about those people on the shore. If they need to raise rates they have to have the markets so they are not to disrupted, dont they . Kit absolutely, and that is my concern. How can you ever get rates up without is causing another meltdown in emerging markets . David kit juckes, thank you so much for being with us. Jonathan the s p 500 has not had a 1 move in over 40 days. Our next guest says that is about to change. From new york city and viewers worldwide as wall street gets back to work, futures positive. This is bloomberg. ,ma this is bloomberg i am emma chandra. 20 of m a moves news today. Bid fors taken its monsanto 256 billion in its attempt to become one of the largest producers of seeds and insecticides. Enbridge will buy Spectra Energy in a 28 billion stock to Stock Transaction that will create the Largest Energy pipeline and Storage Company in north america. Jonathan thank you very much. Wall street gears up and gets back to work. You come in on a Tuesday Morning and get to see the faces that you have missed so clearly. Stoxx 600 positive for a fourth straight day. Gains, ay streak of stronger cable rate. 1. 3347, the longest streak we have seen since march of this year. The potential that the sterling bears could be capitulating on the backside is some surprises as far as the u. K. Data. ,ussia joins the party cooperating with saudi arabia. For me, the most interesting moves over the last week have come in the bond market at the long end of the jgb curve. 30 year yields pushing much higher, and ugly week for the long end, the worst since april 2013. Pointsld around 50 basis but the question of course is whether the boj is beginning to focus on allowing the yield curve to steepen and supporting domestic banks. Times are at least wagging and it is fueling speculation. Bloombergre is a report this morning that is fascinating on what might be going on. We are not going to turn to the subject of infrastructure we are now going to turn to the subject of infrastructure. In a bloomberg piece, matt an experience at the Denver Airport should make us all stand up and take note. We should all be able to angry on smart investment works. Look at colorado where it elected officials of both parties traced and economic boom to a decision 27 years ago to spend more than 2 billion on a 2 billion airport. Dollars does not tell my cap much money but the consequences have been remarkable. A hugehe time it was amount of money and the project was assailed by local businessman. There was a campaign against it but denver voters by a 65 vote said yes to this. Even though the initial. Treacherous, it has been a fabulous investment that transformed colorado. David i remember all that problems that all the problems with baggage handling. Lets look at some of the consequences you layout. Economic impact, over 26 billion. Obs billion dollars matthew colorado went from being in the United States to a global destination. It is one of the few, fewer than 20 airports in the United States where you can travel on a daily basis to asia, europe, and central america. It is very difficult for a landlocked location but colorado has pulled it off. In the course of doing so, it has transformed the state economically. David a transformed homeownership values. We have a chart to show the average price went up over this period of time. Over 137 . Matthew what is even better than that statistic is when you adjust for fluctuation, the growth has been fast but it has also been steady. There are very few cities in the United States where you can say that about housing. David lets talk about your quote which was smart infrastructure investment. 2009d the stimulus act in where there was a substantial on money. Another 50 billion for education which some think of as infrastructure, and economists are divided