Holding talks about its options including an Asset Management ipo. What will it take to restore confidence . And a spinoff, energy goes public, pricing at the top end of the range. In europes biggest ipo. We will be speaking to the company ceo. Isoline the ftse 100 higher. The outperform or because of the flash crash of the pound. Aversion to all about the Great British pound once again. Little bit talk a about what is going on with the fair value in what is happening with the pound. The pound having an impact around the world. And it will have an impact on the ftse. If there was ever a chart, there it is. The flash crash of the pound rippling around the world. You do not have the british pound sitting up your very often. Down by 1. 23 . That is where we are trading. Seeill be interesting to how this ripples around the world because of the performance. We will find out whether the ftse enters a bull market today. At the moment, fair value suggests not but we are getting close. Will we break the record highs this morning . Let us get you a bloomberg first word news with juliette saly. Deutsche bank is holding informal talks with security for to explore options including raising capital. Should mounting legal bills require it. The say senior advisers at top wall street firms are speaking to representatives of the german lender about ideas including a share sale and asset disposal. The bank is mulling an ipo a set of its Asset Management unit. Deutsche bank has declined to comment. Chinas Foreign Exchange reserves declined to a fiveyear low in september with speculation that the central bank resumes selling dollars to court that you want. It shrank to 3. 17 trillion. Double dose of monetary and fiscal stimulus including using by the Central Bank Next month so says one of the Prime Ministers economic advisers. Haseckons fiscal restraint limited the effectiveness of the bank of japans radical monetary easing and it is the biggest reason that inflation has not risen to the 2 target. To beane matthew is said the strongest storm and one of the costliest to hit the u. S. Since 2005. It is bearing down on floridas east coast forcing Nuclear Reactors to shut creating fuel shortages and knocking out electricity to millions of people. Four storm is expected to make landfall near Cape Canaveral and then track along the Atlantic Coast racking up as much as 50 billion in economic losses. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. I am juliette saly. This is bloomberg. Guy thank you, juliet. Let us get more on what has been happening with the pound, plunging overnight. On some trading platforms, the decline was even bigger than 6. 1 . The biggest decline since were exit. They say it was exacerbated by computer initiated tell orders. That seems to be happening more and more often. We are in singapore. A lot of fingers are being pointed at the algorithms overnight. Is that a fair criticism . Probably. No one really knows what happened. The speed at which it happened 10 only be explained by computers. The trouble with computers is that they Work Together and they have orders to sell at a certain level or when there is a sizable move. If someone made a trade that it enough to trigger the orders, all of the computers move in and it all happens very fast. It is hard to blame someone else. I think it is computers at the end of the day. Caroline we have seen this happen with the rand and the kiwi earlier. What can be done . A one of the problems is Foreign Exchange market is still mostly overthecounter. It is largely unregulated. I will get a lot of hate bell for saying that. Some regulation of the Foreign Exchange market is necessary. But it is completely unregulated. The truth is that it is becoming more and more leveraged. Two thirds of the market is traded in options. That means youre just trading on your debt. You have to hardly put any collateral behind it which is a problem. When you add computers to the mix, you will see a lot of flash pressures coming up. I think it is a problem that is becoming more and more on the regulators mind. Let us get more now from the head of a global fx strategy from aberdeen Asset Management. Let us kickoff and talk a little bit about what we got yesterday from the chancellor of the exchequer speaking yesterday. The u. K. Chancellor said this guy we will come back to that in just a moment. Let us talk about what is going on in the market. Give us your take on what happened overnight. No one can really know for certain what is behind this abrupt drop in sterling. But regardless of what really caused the massive move of 6 overnight, there is an overarching point. It is not just about brexit in the sense of free access to the Single Market and trade becoming costlier anymore. I think investors has started questioning that they are becoming perplexed about the uks vision towards immigration, openness, and friendliness towards business. This is paramount giving the Global Status that the u. K. Has enjoyed for so many years. I can only remain bearish on sterling here. Perplexed by you what is coming out of the chancellors mouth . Are you bearish on the pound . I think it is difficult to be bearish or bullish on the pounds. It suggests we will go lower. The uncertainty around brexit suggests we will go lower however we have had better Economic News since the referendum than anyone wouldve expected which supports the pound. Unlessels a one day bank it continues this feels a one day thing unless it continues. It is a difficult one to analyze. Guy talk us through how clients are reacting. Everyone isch confused. The more we talk with clients around europe, the more we see that the question has moved away from the soft brexit into hard brexit right now and everyone has started questioning what they are going to do as far as investment projects are concerned. In terms of the actual play, it is fair to say that over the past few weeks, we have seen the recent closing of sorts that right now, the clients are repositioning short sterling again. Of course, all of this factors into inflation. We have a great chart showing how Inflation Expectations in the u. K. Have spiked . Inflation been long linked assets for a long time. You get that response from credit. You almost do not need to double up on that debt. We will shift higher in inflation. That is guaranteed from the shift we have seen. Guy what will the bank be doing surrounding all of this . It has been aggressively buying into the markets, more so than many expected. What would be the next step . Isthe big question now december. Do they cut again this year . And this is less and less likely. They have really looked through some of these moves. The pound is down a lot. Oil is up over 52 a barrel. These Inflationary Forces are pushing things on a little bit. If you are only going to cut 1. 5 , you can probably wait until next year. Wading through this shortterm volatility. Guy give me a sense of what you think the bank of england will do given the inflationary spike we are expecting. Is there a sense that the bank needs to keep its powder dry . We have been warned that it will be a bumpy ride by the exchequer. We are reaching a state where there is not much point in keeping the powder dry. Furtherthere will be raising in november. I do not think from listening to mpcr of nbc numbers members there was a speech by bread been broadly recently which is illuminating. Uncertaintying that is keeping away investment. That does not mean that this will not happen further down the road. I think there is further easing coming and further weakness in sterling. Guy we will wrap it up there. Thank you for joining us. Coming up on the show, jobs day things standing hawkish. It is europes biggest ipo. Rba Spinoff Energy goes public today. We will speak to the ceo at 8 45 a. M. London time. Still to come, will the new lows in the pound drive the ftse to record highs . We will bring you all of the action from the market open. This is bloomberg. Guy 7 45 a. M. In london. It is to 40 5 a. M. In the u. S. And it is jobs day. Investors will be focusing on the allimportant nonfarm payroll that comes out at 1 30 p. M. U. K. Time. Another month of unspectacular but solid growth is expected. Set, we have on ever guessed from aberdeen Asset Management. Are you with the market in the december move . I think yes. We will see what we see with the jobs report today. Anything less than 200 in the consensus area, there is still a good probability but less so. Is around the 250 number. Guy you think 250. The big recovery from the august levels. The employment component to that, and the inflation component, all of that pointed to a higher number. Big number. At is a give us a sense of what the bond Market Reaction to that will be . Will there be an upward shift in yields . We have seen a big move over the last week. Aboutern about well whether we would get a tapering has pushed yields higher and that may be enough to offset what could be a big number from the payrolls today. To be lesstends logical than people expect. If we see a 250 number, we will see treasuries to klein again. Guy this is a bit of fun. This is the league of champions. And this is what you can do. You enter to 50. The survey number is around the 180 level. 172. The numbers that people are going with our around north of that. Quite a punchy figure. How do you expect the u. S. Economy to grow from here . The fed will not be just looking at this number. But it will look at what the what the occurs lead indicators are telling us. Is there a sense that the u. S. Economy is gathering momentum . I think we have got gradual growth in the u. S. But we have a volatile payroll number and we have a really volatile survey number coming through. The linkage of one to another would suggest a bigger number than what people are expecting. It does not necessarily mean that we will go gangbusters growth in the u. S. Yieldse if we do see edged higher in u. S. Treasuries, are you exposed to u. S. Debt, particularly corporate . The durationdged risk of highyield in the u. S. For now, we are quite happy to hold that position. If it goes much higher, it might be an opportunity in the short term to go longer. It feels a safer place to be though with all of the risks stacking up against you with the yields staying where they are. The spread has been widening out. How wide does that become . How far can we push that relationship . Not much further. And we have seen germany go back into the positive. That is a reaction to the pushing up of the u. S. Yields. There is very little going on for the german yields to get their teeth in. It is all about what change we will get in the u. S. That gap between the u. S. And germany should narrow but at the moment it does not feel like a positive narrowing. Will be keeping a close eye on those bond yields. Forks to watch coming up you. We are edging towards the market open. Biggest ipo in europe, glencore. Energys are on rva and as it spins off its clean energy units. Guy you will come back. It is looking pretty depressing out there in london this morning. Not just the weather but the pound. It is trading sharply lower after the big move overnight. Down. Down, the ftse is up. That me take you to my terminal. Atare trading on the futures an elevated level. That is the fair value. 576 higher. Overo want to take you here. The ftse is up year to date 12 . When we are approaching bull market territory, in euro terms, we are down by 7. 2 percent. It all depends on where you sit. Traveling to the u. K. Is a little bit cheaper. But all eyes on some key german tax. Deutsche bank called higher. So much news. Deutsche bank is speaking to the department of justice. Will the ipo Asset Management unit in the press. Are they potentially looking at a Capital Raise . Also, so much news in terms of our ipos here in germany. Energy, the biggest ipo in europe, energy is coming to the market. We have seen that particular stock down after spinning off the unit. They will keep 75 of the clean energy part of the business. The ceopeaking to later. And another utility to keep an eye on because of activist investors. Reported here in europe. Ipos. A sense of we are seeing some money come to the market. Will this be snapped up . Pushedyone is getting out of their fixed income assets and they are looking for other assets. It from the credit side for quite a while. Decent dividend opportunity for people. Guy facilities have had a bad time, why am i buying this . In terms of credit, they have been rock solid and that reflects the concerned people have for the end of qe. Are still looking for that kind of opportunity and this is a good way of getting it. Guy we will come back and chat in a bit. Coming up, the open of the market. Like it is going to be a very solid open for the European Market for the ftse market. The ftse 100 and 200. 6190 is where we are pointing to at the moment. The fair value takes us just north of the 7000 mark. The market open is coming up next. Guy good morning. Im guy johnson. We are here in the city of london alongside Caroline Hyde in frankfurt. Where moments away from the start of trading. Crash. E fridays flash the pounder plunges as much as 6. 1 against the dollar in a move thats that traders say was exacerbated. With the ftse enter a bull market today. Capital raising questions. Deutsche bank is said to be Holding Court including an ipo. What will it take to restore profit. Rwe Spinoff Energy goes public pricing at the top end of its range and europes biggest ipo since glencore. Will be speaking first to the companys ceo we will be speaking first to the companys ceo. Guy we are moments away from the start of european trading. We are waiting to see what the ftse looks like. Lets see how the pound effect is rippling through. This is what we are expecting today, a positive start to the ftse 100. The white line is a ftse 100 is at the ftse 100. It is now climbing higher, we are up 2 we are up to since. Story. N fx translation lets get the details of what is happening in the gilt market with manus cranny peter manus there is no doubt about it manus cranny. Manus there is no doubt about it, there is a huge issue in the market. Trade that really do hold up in the market. The disputes are going to be prevalent. Equities around the rest of europe on the side of financials. Deutsche bank is going to be the lead. German production coming in with a rise of 1 . This is the sterling flash crash. This is the brexit day where we dropped by 8 . We broke the bandwidth of standard deviation. We down 1. 5 standard deviations. You want to see this chart. 4108, the break of 120 opens up a new channel on the downside. 105 could be on the cards. Great british break off. He break evens are rising the consequence of the slowest sterling of this lower sterling is felt everywhere. The break evens rose by 24 basis points, the biggest rise since 2013. It futures are down 70 points on the opening trade. We have a drop of 70 on the overall gilt market. This is where the real pressure begins to come to bear with inflation. Rising follow the wrong reasons. Mr. Hammond was quick to say they dont necessarily they are not concerned regarding the level of sterling. Delta lloyd is in focus with an in. They are undervaluing the bids and the company. They are not opposed to the transaction. It was 5. 3. Down 27. 97, bidding for delta lloyd. Program. A divestment up by 10 billion. We understand they are going to sell the business for over 3 billion. Do we have an opening price for Deutsche Bank . Three weeks ago, it took a question that he would come to the market for capital. John cryans word. Stock up. 3 . Credit suisse as Deutsche BankCredit Suisse adds Deutsche Bank to its performing stock. With that in mind, the question for the markets is this, will they support and equity raising . They have 10 of Deutsche Bank. It is going to be an important part of the question. Manus cranny off of bloomberg radio. Deutsche bank working on an ipo. This comes as a report suggests the embattled member is holding formal talks with is pretty firm to explore crises Management Options including Capital Raising. News clearly a number of options are being explored. Talk to me about how those options are set up. What are the most likely . It is been an exploratory stage. They are assessing what could be the option based on what the final legal bill comes to in terms of boosting those Capital Buffers that could take a hit if a fine were to be higher than the bank has provision for. If there was a fine that was higher than that, they want to set aside and think about selling an asset, or indeed selling stock. Those are the options there. In a set of decision, we understand is going to be icult to make until caroline leeza, one of the options is m a. Anyeemed to shake up exertion that we will see deutsche come together. Abn said they were in talks to merge but the dutch seem to back that to one side. Could we see consolidation in the Banking Sector . Consolidation across european banking was something that we were not likely to see for the next couple of years. Suddenly the summer you had results talking about the need for consolidation along european banks. The bill yesterday which we understand was set aside does raise the prospect of banks looking beyond the borders again to consolidate. This would be banks of Different Countries and it wouldve been the biggest deal since the financial crisis. It certainly does get that type of conversation going. Guy looking at deutsche right now. Team is turning around and saying we need to raise money. Weve got to put more capital to work. Every time we have seen this happen, it has gotten worse. You wonder how many mor