Regionally. Investors look to a News Conference this morning from. Ario draghi the European Central bank kept its Interest Rates unchanged and traders and investors are waiting to see if draghi signals a willingness for more quantitative easing. We are one day away from that august labor report. Lets get you started with the five things you need to know this morning. Matt miller is here, watching the markets. I think we ought to begin with the ecb. I mentioned the ecb held steady as expected. Draghi has the opportunity to make news this morning. He will be asked about quantitative easing. Asked about the inflation outlook, about china and global markets. Lets find out from ons nichols what the world expects. Hans i was in frank for yesterday at a big banking conference. Everyone is wondering what is going to happen in terms of quantitative easing. Is mario draghi going to hint it could be longer . September 2016, that is when it is expected to end. When we get these predictions for the Global Outlook for the economy for 2015 and going forward, if we get those in about 30 minutes time and they show that inflation has been disappointing to the downside, that it is not at that. 03 they aghi will be asked about the effectiveness of quantitative easing. I think i am most interested in what he has to say about quantitative easing. He is not going to way too much into china. He is not going to be a market commentator that he could indicate whether or not he thinks they need to tweak quantitative easing. Erik one of the things im wondering is whether he will be asked for some kind of report card on the quantitative easing strategy the ecb pursued over the summer. They frontloaded quantitative easing because they knew trading would be thin going into the month of august, particularly in europe. August turned out to be as volatile as we have seen since 2011. Hans the argument that a lot of traders want at their desks that traders were not at their desks in august was not quite true because we did have unusual august. There will be a report card on quantitative easing. Two weeks ago we got gdp figures. We saw the same old diverse story. We saw some resilience in germany and spain. We had that surprise figure where greece went up. We saw flatlining in france and the question is, is quantitative easing effective . What can draghi do to talk down the euro . Will there be talk of parity once again . In the beginning part of the summer, we were talking euro parity. We are closer to 112, 113. Erik 105 seems a long way away. Hans nichols is in berlin. We will see you in about half an hour. Warning thatn is bank revenue, International Investment bank revenue is down 19 partly because of china. I know mario draghi is not focused solely on rich people in stock markets but that is an important part of what any central bank is looking at. Erik what is number two . Matt the International Monetary fund maintains Global Growth will remain moderate but the Downside Risks have increased. Turmoil. Ce shifts and a further strengthening of the u. S. Dollar in the lower growth in china. Hitting all the right notes ahead of a meeting coming up september 4 and fifth. The fed meeting Christine Lagarde and the imf are hoping to influence more than this. They have come out and said do not raise rates. Erik the imf wants monetary conditions to be as easy as possible in part because it knows that there is almost no willingness outside of china perhaps to undertake fiscal steps to stimulate economies. Matt props to china. I like that. Erik lets move on to number three. Pimco. It once ran the Worlds Largest mutual fund. Total return fund. Assets in the total return fund continue to dwindle. Falling below 100 billion for the first time in more than eight years after almost 100 million one of withdrawals in august leaving pimco with about a third of the money and managed at its 2013 matt 293 billion at its peak. Erik thats when bill gross ran the total returns. Matt 28 consecutive months of outflows. They have been losing money. Erik this is still the bill gross affect. Pimco is an institutional money manager more than it is a retail money manager. Institutional flows are slow to respond to developments like bill gross departure. Many of the reviews that Money Managers were forced to undertake after gross left are just now, over the past few months, resulting in the kinds of decisions to reallocate from pimco to western Asset Management or blackrock or j. P. Morgan Asset Management. Matt time to take action at twitter. In the three months since the Company Started searching for a new ceo, the slot the stock has slid and several executives have left. TheBoard Meeting to discuss results of a search they should have done before dick costolo actually left. Erik will dorsey have shaved for this meeting . Matt i dont believe he will have shaved. The twitter board wants a fully committed ceo. Basically, they do not want jack dorsey running square and twitter. Just because he is young and has a Silicon Valley beard, he cannot run two companies . Sergio runs like 18 company successfully. Been also paypal. The ceo ran both his misses without a problem. Erik converging views from the worlds biggest mining companies. Rio tinto says it is maintaining. N outlook reaffirming its forecast that a week ago, bhp billiton trimmed its forecast. Demand is getting tricky to call. I think blazon berg probably nailed it. Difficult to figure out what is going on in china right now. Lets move to our top stories. Heres vonnie quinn. Vonnie china marks the 70th anniversary of the end of world war ii by announcing the biggest military cuts in a most two desk decades. Thesident says he was 2. 3 million soldiers on duty. Stephen engle is in beijing. Im reporting outside of Tiananmen Square in the heart of beijing where the victory day parade is rolling by. Here we have the tanks and artillery of the Peoples Liberation army as they thlebrate the 70 anniversary of the end of world war ii. This is the president s opportunity to show his grip on the military and to show unity to the chinese people. Bathing thiso parade in nationalistic tone, hes sending a message to the world and the region that china is a unified power and that it will be a force to be reckoned with. Expected toa is overhaul its military and put it under a unified command. The political crisis in guatemala. The president president molina has offered to resign. In aedly involved with bribery scandal. Congressional leaders are meeting in emergency session to discuss the offer. The Republican National committee has issued a challenge , apparently aimed at donald trump. Our reports the rnc has asked the republican candidates to promise they would not run as a thirdparty candidate. Last month, trump threatened to launch a thirdparty bid if you does not win the nomination. The county clerk from kentucky who refuses to issue marriage licenses to samesex couples will be in federal court today. Kim davis could face contempt of court charges. Davis argues that her faith will not permit her to issue licenses. Serena williams is one step closer to her goal of winning all four grand slam events in one year. Her secondround match. She struggled before winning. Seconden seed won his match. Dance with ang a fan out of the stands. Erik thank you very much. Is the fed going to hike rates on september 17 . You will get different opinions, just usually not inside the same firm. That is what we find at deutsche bank. The team is calling for a september mood move. sis is bill Murray Ghostbusters you. Cats and dogs living together. s global head of rates research. Dominic good morning. Erik are you the cat or the dog . Dominic im not sure which. We are not as far apart as you might think. What is most top of mind for janet yellen and colleagues at the fed . Dominic that is where i am slightly different from a lot of people. I think yellen is trying to convince us everything is fine because it is all driven by expectations. The biggest fear that she never wants to talk about is that inflation is too low. It will not get to their targets and it could fall. They dont want you to know that because that in itself will feed that outcome. Erik will we get a window into that kind of thinking when we hear from draghi today . Dominic i think so. I think you had a window at jackson hole. Markets. In the they dont want that to get into the economy and he will see more of that. That means if they if the fed does decide to raise rates in the september meeting, they will have to be very careful how they do it. They clearly cant make it appear to be a big policy error. Was yesterday, bill gross out with his monthly Investment Outlook saying too little, too late. If the fed moves toward five basis points, does it matter . The real window of opportunity was earlier in the year. Dominic i dont think there has been an opportunity to raise rates. Unless they try and do this incredible feat of convincing the markets it is a one and done for the perceivable future. Anyone who is lived through tightening by the fed knows to convince markets of one and done erik you have lived through tightening cycles. Are lots of people that not seen the fed tight never. Is they willdanger go in thinking, they have done one and two and not do another one for a long time. Other speculators will test the fed and say, these guys have raised in september, why will they not go in december . Before you know it you have trading off a 50 basis points. Erik are those the bond vigilantes . Dominic some people will test it. Once the fed gets off zero you know theyre in the process of normalizing. Itll be hard to convince markets they are one and done. Erik we will take a break and come back and finish our conversation. Dominic konstam. We will be taking you to frankford where mario draghi will be talking about Monetary Policy. The ecb held steady on its Interest Rates but we want to know what drug he has to say about what draghi have to say about quantitative easing. Stay with us. Rik you are on Market Makers some items you want to put on your calendar. And it shall jobless claims and the Monthly Trade balance will be out. A 30, mario draghi begins his News Conference. Twitter is meeting to discuss the ceo search. Stuck down since the search began. Dominic konstam. He is head of local rates research. At deutsche bank. Gross Investment Outlook came out yesterday. I want to quote from something he said about where to position oneself as a fixed income investor. Bill gross i think feels differently than you do. He says h private equity and hedge related returns cannot long prosper if Global Growth remains any make. Near cash such as one to twoyear Corporate Bonds are my best idea of appropriate risk reward investment o. You feel differently. Dominic i think i agree with the idea that we are going to a difficult period now. I would include longer duration Corporate Bonds. When i think about duration i think about treasuries and long dated treasuries. Erik i should add he has felt that way for some time. He is been at the short end of the curve in corporate and agencies for a while. Dominic in the long run, it does not make sense. Carefulu have to be over the next six months or so if theres any kind of , the marketrisk will rally and we will have a lot of flattening pressure coming through. On a sixmonth view looking for things to change, to be more constant that you can be short duration. Erik what would trigger that slide to quality . Has china yet to be resolved . Is it going to be a devaluation in china markets are not expecting . The fed and whether or not the fed can manage this sort of one off tightening no one cares about or no tightening which would be perhaps better. Allow assets to find some footing. Erik you talk about the risk and risk assets. Do you believe we have seen a widening in Corporate Bond spreads, more so in highyield. Do you believe they will at current spreads remain anchored to the longer end of the Treasury Curve or are they going to widen further . Dominic i would be defensive. Worried they would widen further. The reason is, the tight spreads we have seen in recent past has been based on a valuation metric. It is not based on a fundamental earnings outlook being brilliant. If you get any combination of china and the fed doing the wrong thing, that could deteriorate. You end up having to cheapen them up for that reason. Erik to what degree are developed its in emerging markets in china and outside china influencing the direction of rates globally right now . Clearly the emerging markets are in recession and they have been the biggest part of Global Growth. There is a flight to quality and concern about emerging markets that keeps yields lower. There is a counterforce. Some are worried the selling of a treasuries as part of intervention undermines the treasury market itself. Historically, that is not true. The global liquidity issues dominate. All the stuff these banks are selling, short dated. Erik great having you here. Dominic konstam, head of research at deutsche bank. Coming up, how successful donald trump has really been. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Erik you ask Index Futures are pointing to a higher open. Yesterday, recovering much of the ground that we lost earlier this week. Mario draghi, the ecb president against a News Conference at 8 30 this morning. We will be taking you to draghi. In the meantime, i want to talk about donald trump. When asked to name a leader he looks to most for advice on managing his campaign, trump said i look at me. How successful has trump in what it comes to managing people and businesses . Max abelson spent some time with trump and his cohorts in has a view to share with us. Max i was not asking about his campaign. I was asking about managing his company. Erik im saying its important to know those things if you want to evaluate trump. Max i know what you mean. We went in, we dove into his business world. I spent time with these deputies. His former bodyguard is his chief operating officer. He has got his kids. There was a teenage waitress he met who is now the head of marketing. It is this Amazing Group of people. Erik what did you learn . Max to be honest, i think people have two cliches with mythic about donald trump. Erik only two . Max here are the central ones i had. The one extreme is this idea he is a fraud that he plays a businessman on tv but he is not a reallife businessman. Erik and that is not true. Max on the other hand, this idea as the biggest celebration new york city, things that come from biggest developer in new york city. Things that come from him. What was fun for me, hed knowledge is that is true. He talked about how his company has pivoted and it has changed from being a company that puts up skyscrapers to being a landlord and this golf bigwig. Erik trump seems to have learned the same lesson folks like, i do not want to equate them, that Rush Limbaugh learned. The more you say something, even if it is not true, the more people believe it is. Max that is a profound american reality. On the other hand, i will say Rush Limbaugh i was about to say Rush Limbaugh is not a businessman in the same sense trump is. He probably has a real company. Donald trump has put up huge buildings. In chicago and las vegas he owned parts of buildings that came up. They both opened in 2008. He has struggled in the last decade when he is put up buildings. Erik he has made some good trades overtime. Max when i was with him erik he has actually made a few good deals. Max there is no way to deny. The fact that he fell so low but he managed he did not go bankrupt. He managed to rise up and transform. Erik what were you able to draw away from the experience you had with him and his people that might give all of us a sense of how he would operate if elected to office . Max the thing that kept coming up time and again is that this guy gets involved in the most minute of details. He runs his organization where people are building up golf courses or resorts and he will go in and pick the marble in the lobby floors and the chandeliers they go up in the golf club. The fountain we drove by. Erik he has an eye for detail. Max i have to say, it is also a kind of management i find hard to a manager how to imagine that hard to imagine how it would translate to the white house. For government, micromanagement is ineffective. Giant earns are susceptible to inquiry. ,hat makes his touch wonderful it is hard to imagine him being able to do, running the largest government on earth. Erik it would be i wonder whether his skills at out inting would play International Diplomatic circumstances. To the wants to think extent that he is a builder he would be able to bring that to the oval office. Erik it is a terrific story. I urge everybody to read it. It is an this week plus bloomberg businessweek. You can find it on bloomberg. Com. It is a 30 this morning in new york city. Vonnie quinn has initial jobless claims. Vonnie coming in just a little higher than forecast. 282,000 people filing for unemployment last week. We are still in that whole area 275,000. Continuing claims, 2. 25 7 mi