Steady today, near their highs of the session. Look at the refiners in particular. Ofre is a shutdown refineries in the caribbean because of Hurricane Matthew. We have Oil Prices Higher as well with that inventories report that vonnie alluded to. Weve been watching Department Stores as well today. Sales may grow at a faster pace than last year because of rising wages, because of a stronger job market. Increase in spending during the holidays come excluding things like gasoline and restaurant sales. You have retailers higher today. Wheat also been looking at today. Wheat investors are focused on where to hide. End,ycle is going to rising yields and the treasury market not helping these guys. Coming full circle back to the hurricane, lumber futures up 1 inay as a lot of folks florida battened down the hatches here in anticipation. Lumber prices going higher. David thank you very much. Lets check in on the first word news this afternoon. Her Hillary Clinton at Washington Home preparing for the second president ial debate. John podesta told reporters that the town hall setting is a natural format for her. Format that a donald is not as used to. Mr. Trump has hinted he may releases 2015 tax return. The wall street journal reports that trumps comments were reported by nbc after last weeks president ial debate. He said he would release his current returns as soon as they are completed. Leaders from nearly 70 nations have pledged more than 15 billion in aid to warravaged afghanistan over the next four years. Nearly as much as the corruption plagued government was promised in 2012 during the tokyo donors conference. The eight comes at a critical point in afghanistans battle against the taliban. Cars isof self driving driving another goal in the u. S. Zero traffic deaths in the next 30 years. Inreased seatbelt use addition to campaigns against drunken and distracted driving. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg. Vonnie Global Investors are greenspan alan shared this view earlier on bloomberg radio. Down at cannot stay levels theyd will move relatively soon. Wholly independently of a centralbank policy. Vonnie this is evident in the earlier,action Jeffrey Rosenberg explained the socalled mini paper tantrum. Taper tantrum. sffrey around bernanke talk of tapering, the memories are being reignited here. Theres a lot of misunderstanding about whats going on around the ecbs conversation around tapering. Its a testament to how fragile markets are to any signs of changes in Monetary Policy support. Jon you wonder how deep this whole is now. No one is pretending for one moment the reason bonds across the eurozone are trading in their territory is due to the magnificent credit quality in the credit space, perhaps even more so. The disconnect, does that mean the banks have to keep on digging whether they like it or not . Jeffrey its part of the policy prescription. If youre going into quantitative easing, you will extend that into Corporate Bonds for the explicit purpose of try to benefit into the real economy the pass through of further accommodation. Markets will anticipate that. It will be hard to unwind that without seeing some kind of volatility in market prices. Look at the price of credit after the announcement of the expansion of the Corporate Bond purchase program. First, it was surprising to the market. Any attempts at unwinding these degrees of policy intervention are going to require a lot of communication if they are going to avoid disruption. , youve got Goldman Sachs jpmorgan, Even Deutsche Bank looking at 2. 5 yields and the outlier call saying what. 35 at willnd of 2015 things not change, Balance Sheets will stay quite large. Where you fit . Jeffrey a lot of it is conditional. At hsbc andes view some of the other views, clearly the other views towards higher Interest Rates are talking about a continuation of what we know today. With the fed is saying is as long as things proceed on the path as we see them today, the fed will normalize. Thats where you get the higher Interest Rate forecast you cited. We have seen significant time a surpriseain with to the consensus outlook because some other event has occurred that has tripped up our consensus expectations that as long as everything proceeds as is currently the case, we will raise Interest Rates in december. We can all guess what that surprise event might be. Theres a lot of potential offense that can certainly disrupt that consensus view of a march towards a hike by the fed in december. There are no issues that undermine the current level of Interest Rates. You can see both scenarios play out there. Alix Morgan Stanley straight is by u. S. 10 year treasuries and tenure 10 year bunds. Jeffrey the view is a problematic one. What we got yesterday was a misinterpretation. Eventually, the ecb will have to describe and discuss how they will exit their qe policy. The next form of communication will not be that one, it will be a very different one. It will be an extension of the qe program and how the modality of that program will need to about. Does need to evolve. When it comes to expressing the shift in Monetary Policy come our favorite expression is going back to the shape of global yield curves here. Despite what the levels might be in terms of qe on, qe off, what we are seeing is a change in how qe is being implemented. You are seeing that in the case of the bank of japan. You will have to see that also change in the case of the ecb. We see global yield curves steepening. That is our best expression. Vonnie that was Jeffrey Rosenberg speaking earlier on bloomberg. David nicky newonking will join us, next. This is bloomberg. Vonnie this is bloomberg markets. David time for the Bloomberg Business flash. Meet the doj in court working on a settlement regarding the Mortgage Backed securities. Serra says the bank should settle between 4 billion and 5 billion. Another step taken today by jeff companyose exploration conducted a safety test of its that they plan to send crews and sell seats to 250,000in 2018 for 350,000. Vonnie lets put the spotlight on south africa. Meetingnce minister with investors in new york this week. Making the case that south africa is open to business despite ongoing political turmoil. He made his Investment Case in an interview with Francine Lacqua. Avin weve had huge inflows into the bond and equity markets in south africa. At the moment, foreigners own over 35 of even our land denominated bonds as well. Joining us now is the ceo of the johannesburg stock exchange, nicky newonking. Thank you for joining us. Tell us about the Political Risk in south africa. Is down 1 that is a lot to do with the rand. Nicky also with global markets. We have a strong, vibrant, noisy democracy. That contributes a bit to some of the turbulence. We have extremely strong institutions, very critical minister of finance, very critical independent reserve bank. Vonnie you are meeting with investors in new york. Whats the case you are making for them to take more business to south africa . Nicky you have these robust institutions, very strong rule recognized by the World Economic forum five years in a row. Investors dont have to worry about investing there. They can just choose the stocks to invest in. Vonnie why would somebody invest in south africa if its not clear that he will be the finance minister or whether jacob zuma will stay on as pie minister . Prime minister . Nicky the minister of finance minister revered you can see the number of corporate traveling with them today. In emerging markets, they are used to political turmoil. In america, you have your own turmoil. Is the credit downgrade something that concerns you . Nicky no good comes from a credit downgrade. We are highlighting the strength of the institutions. We will have to navigate whatever the rating agencies throw at us. You have government and labor working together on these issues. That is something the agencies are listening to. Its also about the investor base. Its all about building credibility. Perceiveow do you business to be Going Forward given that we dont know whats going to happen centralbank wise and with the rand . Nicky we are used to navigating south africas is highly regarded from a management perspective. You see a lot of business becoming proxies for the african growth story. Investors are looking at what are the other Growth Opportunities you can access through south africa. David youve been working to prevent the creation of alternative exchanges. Why is that . Nicky we are a relatively small economy. The worlds 18th largest exchange. Depends on what the rand is doing. You have to ask yourself whether the complexity of a fragmented market can be sustained in an economy that size. We dont think so. Competition is introduced, you want to make sure you have level Playing Field and you manage systemic risk. What one doesnt want to do in opening it up is bringing too much uncertainty for investors. Be wrong withould having a second or Third Exchange operator . I know you appealed granting license to one. Nicky its more the basis on which exchanges are allowed to operate. You want to make sure the policy properly investigated and publicly discussed. Those have yet to be discussed in south africa. When they are, we will be happy to complete vonnie the reaction from investors in new york we spoke with one of the largest lenders. He said they were stopping lending until the situation is clarified. Have you seen much of that . Nicky not expressed like that. Theys are looking to have not focused on the minister as an individual. Vonnie thank you for joining us. Why hes hoping the Treasury Department will help them avoid criminal charges. Thats next. This is bloomberg. David you may have never heard of he is wanted on criminal charges in greece and is currently hiding out in maryland. We spoke with Matt Phillips about this story. How did this unknown in economist come to get a very big job in greece a few years ago . This guy spend most of his career working as an of security economist in washington. In 2009, as he was watching the european debt crisis unfold and his home country of greece was at the epicenter, he felt the desire, the patriotism to apply to a job that had been posted, they needed an independent statistician to scrub the countrys Economic Statistics and six years later, he got the job in 2010 and sixers later, rather than being seen as a hero who saved his countrys economy, he is vilified as public enemy number one there carol he applied online and got it. When he went to greece, he started going through the data and found a lot of problems. Matt tons of problems. For years and years, greece had been cooking their books, making their debt look smaller. Their economy look better. It did not come to light until everything started to fall apart in 2009 and 2010. When he found was pretty egregious. Things were kept off the books, things were completely misstated , there were lots of entrenched interests to keep this secret. What weno, this is not are going to do, we have to be overt about this. I will not give authority to the board of the state statistics authority. Released them, the eu never had a problem with his stats. They had lots of problems with his predecessors statistics. David its a fiveyear term. By the end of it, he is carrying a gun to work in a briefcase. , heithin a month or so noticed his email was being hacked, he was getting death threats. Hes a black belt in jujitsu. This is not some shrinking hes a large man, a blackandwhite kind of guy in that things are right or wrong. The fact that he felt endangered physically and felt he could not be in the country anymore says a lot about the pressure he was under. Vonnie he was in charge of the greek statistical office. There was a board that oversaw it. They were upset that he put out information before they okayed it. Isnt that the whole idea . This is what got greece into trouble in the first place. Matt thats right. You wonder why they okayed this to begin with, what they expected to happen. They got the right guy for the job. There are a lot of entrenched interests who felt otherwise. Avid that was Matt Phillips you can read that fascinating profile in the latest issue of Bloomberg Businessweek. Vonnie breaking news on booz shares downon 3. 5 . One of its contractors is accused of stealing classified u. S. Government documents. The contractor was arrested back in august and subsequently fired by booz allen hamilton. They had also employed edward snowden. Oil climbing towards 50 a barrel. 2. 5 now. Supplies falling for a fifth week. 58 as been well above during the crucial level the dollar index is down slightly. Still showing much strength in the last few days. David the dow up about. 75 . The s p 500 up. 5 . This is bloomberg. Vonnie this is bloomberg markets. Commodity markets are closing in new york. Lets have a look at the big movers today, starting with metals, gold trading much more subdued after yesterdays pretty volatile selloff. At 1259ures trading. 10. Ong demand from automakers down 3. 25 . Orange juice futures giving back some of the recent gains. Forecasters watching the path of Hurricane Matthew as it approaches florida. 4 . Es down numberchart library, 4043, oil climbing near 50 a barrel after stockpiles fell for a fifth week. Crude inventories were down by 3 million barrels. You can see oil prices rising. At theterest in futures same time it is rising as well. Futures is the blue line the bti futures is the blue line wti futures is the blue line. David joining us is caroline abramo. Lets start with the hurricane. The latest forecasts indicate this will be spinning off to the east. Folks in the oil industry breathing a siam relief sigh of relief. Caroline you look at natural gas and oil this time, the storm is not veering in that path. It is much more nuanced. At natural gas, we see demand going down when you have a hurricane and exports decreasing, which has a dampening effect on prices. Vonnie lets have a quick look at the be mapped. If you want to look at the actual storm, you can map it. At the very worst them it will delay three days, but the supply will eventually get there. What is the main impetus behind this move . Caroline we had the opec move. The deal is real. Where you see that sticking power in terms of cooperation, its been supportive of prices. Youve also seen the fifth straight reporting of crude inventories being down. A lot of the market is scratching their head and saying, whats going on here . All indications are that we still have a lot of supply. As we get towards 50, producers are incentivized to produce. Producers likest russia and opec will put more supply on the market. Here, we have a deal there are still about two months until november 30. Is there any chance this could fall apart . Caroline we saw open interest. At the highest levels since 2013, the highest levels weve ever seen. The market is very long. We have supplied that could come on the market. Rig count is starting to tick up. People are talking about crude moving out of storage and you see the refining process on vessels which means it is still here. Vonnie the bloomberg commodities index, we are seeing it pick up again now. Caroline base metals has been a great performer. Theas continued number one commodity yeartodate. To your question about the we see those gains continuing, things are shaping up to look good to the end of the year. Today, jeffier curry was on bloomberg surveillance. Crude oil struggled to rise above 50 a barrel. If you start to see a stronger dollar, that will put downward pressure on the cost structure and downward pressure on oil from a macro perspective. When you look at it from a micro perspective, you still have a lot of supply out there in the market. The three big places, nigeria libya adding more supply second, we have a wall of supply. Spot of coming online is next year. The third one is lowcost russia. Like sovie slowing. Is what is the man coming from china and india . Jeff demand growth from 2010 has been bouncing around it has basically been a flat line. China,een a slowdown in it is not growing at the same rate it was in 2009 and early 2010. Theres not a story in demand. That underscores a broader issue facing not only the Commodity Markets but in terms of looking at the global economy. Domestic demand is relatively stable. What we have going on in these different markets is an investment problem. What is the risk of one of these Companies Cutting back to much on investment . 10 years now, we see oil should back up to 150. That is the thesis when you think further out. The sooner we can get to that 2020, probably 2019 or when you look at the overall increase in supplies, the sweet spot is 17, 18 and then they start to taper off in 19. We havent talked about the other source of supply, shale. Thats the one that responds when you get into that 50 a barrel rate. How much do we understand about how many producers are in shale . Do have a better grasp than we did last year . Jeff you can separate them into three buckets. Fordpermian basin, the eagle and the boaken. The permian guys are becoming competitive even against the ancost players on international basis. Cuts, they will see a market share from opec me go into 2017. Tom when do you know which way it will break . Are you waiting to see price or some other indicator that will tell you about 50 do dollars or above 53 . 52 or jeff producers come in and sell that market. Their economics are in that 5055 they have drawn a line in the sand at 50. You get into that 55 range, the marginal guys it