Competing for the limelight. A great exclusive with Vladimir Putin, that it is also jobs day. People want to see the indication of what the fed will do. Tom right. 8 30, but on jobs at certainly the putin interview is front and center. There are a lot of different themes here, francine, not only what he said but what he didnt say as well. Francine right. And it was a twohour interview so we have a lot to get through. Lets get now to the bloomberg first word news with emma chandra. Emma for more on that interview, russia wants to compromise in the dispute with japan, that stretches back more than 70 years. At the end of world war ii, the soviet union occupied four small japanese islands. In an exquisite interview, Vladimir Putin says he wants to develop a longterm relationship. [speaking russian] there is a discussion of this topic, and we did that, we met them halfway. Withe past couple years, our relationship from the japanese side, we have moved forward. Our partners are showing a willingness to return to the discussion. We are talking not about an exchange, we are talking about finding a solution. Were nearer to it. Emma he is meeting with shinzo abe at the Eastern Economic forum. Tune in to bloomberg all day for more of our exclusive interview with Vladimir Putin, and dont miss a special report on monday at 12 00 p. M. Eastern. Florida has been hit by its first hurricane since 2005. He came ashore in northwest florida early today, with wind of about 80 Miles Per Hour. It is expected to bring up to 10 inches of rain. Georgia, the carolinas, and other parts of the east coast could be hit. Leadersuela, opposition called it the biggest mobilization in the history of the country. Hundreds of thousands demonstrated in the streets of caracas. They demanded a recall vote against the president. Venezuela has been slammed by triple digit inflation and shortages of food and other goods. Global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Tom thank you so much. Lets do a data check. We will feed you the ruble along the way with this conversation. Oil is weaker, 43. 48. Wow, that is a change on wti. Incredibleanix, lack of volatility. Day two of september. The mexican peso is weaker, not near 19 but nevertheless it is my intention in the oilbased wrubel, 65. 74. In the second section of this hour, i have a killer chart that explains mr. Putins popularity. Francine it almost feels like we talked today. I also took oil, although it is not coming up. I think the price of crude we are fixing it tom, it was mostly modest. Its a countdown to the key jobs report. As if by magic, crude. Plenty more on the market throughout the day and plenty more on the u. S. Jobs data. Lets turn now to the big story of the morning, u. S. Jobs day. Our senior fx strategist is here with us. Great to have you. You will be with us for the hour. Investors are a lot more hawkish. Is it because they mean business or they want to reposition just in case . I think the balance of data has certainly been a little better. In that sense, it is not that surprising that they are keeping a september hike as a possibility. Its on the table. I dont think they are committed to it, but i certainly think the direction has been there, and many members of the fed want to normalize rates. They want to be in a position where they feel more comfortable on both sides. I think the balance is shifted to more hawkish, but i dont think september is a dead certain. And payrolls numbers, come what may, it will still be 100 in the bag. Francine which means that if we have a blowout number for u. S. Jobs, it is in the bag. If it is worse than expected, do we believe august doesnt tell us anything . Its difficult to predict the number. Again, i dont think the fed is putting all of its hikes on one number. Francine the market is. It seems to be. In the market, whats happening is that we are leaving much toward sooner rather than later. If you look at the payrolls numbers, the balance of risks, given how the dollar has traded, i think the market wont knock on the strong side, to feel confident about september, but on the downside you need to get a soft number to see the dollar weaken. Tom dominic, one of the weirder moments of august has been sterling strength, up against an exceptional hsbc outlier call on weaker sterling. I want you to reaffirm that this morning. Here is a chart that we did. The red arrow takes you down to the stunning hsbc call, with some of the gloom crew in that yellow circle and bloomberg consensus is miles away from where dominic is. Reaffirm week sterling to 110. Absolutely. Its a structural case, its about the current account deficit, about the broader relationship with the u. K. Antieu and how that pans out. Its a longterm story about uncertainty. What we are seeing is that so far, nothing has really changed. We havent left the eu yet; it will probably take at least two years, is not longer. I think the idea that we grind toward 110 is still very much in play for us. Cyclically, nothing is really changing except a rebound in some of the data. I would say to be on balance, the manufacturing numbers yesterday, some of that could have been supported by the weakness in sterling. I think the big number we will get is the Services Numbers coming out next week, and if we continue to see strength in the u. K. Economy, then people will want to buy sterling for the shortterm. Tom quickly, is the current account deficit issue about a deeper deficit, or a present deficit for longer . Its basically that if you have a current account deficit, no matter how big it needs to be financed by capital inflows. The u. K. Capital inflows is around 7 of gdp, and that is a massive deficit whether you look at in the context of g 10 or e. M. So you need a lot of capital inflows to maintain the value. Basically, is that with the current account around those levels, even if it shrinks, it is hard to justify all of those significant capital inflows. Most of them come from europe, the very place where we are redefining our relationship. Tom dominic will come back. Lots to talk about. A packed show. We will have experts, an interview with the president of the russian federation. Coming up, our complete jobs day coverage on television, on radio. William gross of janus capital, right after the report. This is bloomberg. Francine this is bloomberg surveillance. Tom, lets get straight to the interview of the day, the russian president Vladimir Putin, who sat down with our editor in chief for an exclusive interview. He began by asking whether his thinking had changed at all on oil production, now that crude is below 50. [speaking russian] well, we find that oil output i was mistaken. True, remember where i set it up the top of my head. But maybe i should remember. I said that new deposits wouldnt be considered at the current oil price. Strictly speaking, that is what has happened. But maybe surprisingly, our oil and Gas Companies are continuing to invest. In the past years, the oil had 1. 5 trillion poin rubles, and right now the Overall Investment is 3. 5 trillion in the past year. Thats quite significant. Our oil output electricity production is increasing. Production has declined a little , i think by about 1 . By the way, we are the World Leaders in terms of natural gas, a global share of about 20 . In the export of liquid hydrocarbon, we hold the rating position. 30 the exports. Third in the exports. But this is used to increase the hydropower. Demand for gas has dropped somewhat. Thats the result of a restructuring of the Federation Energy market. On the whole, its in great shape. You are going to talk to the saudi deputy crown prince. Would you still be in favor of a production freeze, is the saudis want that . [speaking russian] aware. Ar as im a very energetic figure, and we have struck up a good relationship. The man knows what he wants and knows how to achieve his goals. Time, i think he is a very reliable person, with who we can reach agreements, and be certain that they will be honored. It wasnt us who rejected the idea of freezing. They who at the last minute decided to change their view. Repeat, ouro position hasnt changed. Think about this. We believe that this is the right decision. The second thing is that everyone knows what its about. If production were to be frozen, then everyone should do it, including iran. Iran has the sanctions and it would be unfair, on some level. I think that it makes some economic logic and it would be good to find a compromise. Im sure everyone understands that. The issue is an economic, the political. But political. I would very much like to hope that several markets are interested in maintaining it. We will have to make the necessary decision. So you would be in favor of a production freeze, giving iran a little bit of leeway to do it they need to do . Da. Yes. Francine we will have plenty more from that exclusive interview throughout the program. Lets get down to Christopher Weaver in moscow. They to speak to you. Today was an important day, because we spoke to Vladimir Putin. Run us through this was a twohour interview. Run us that the situation in russia at home. It seems that over the last three years he has been quite belligerent outside to almost mask the trouble he is having a home. I told. At home. You can certainly see a more confident putin at this meeting because the situation at home is a lot more comfortable. The economy is drifting out of recession which should drift into growth. His popularity is over 80 . Politically he is in a situation in ukraine which has been better than over a year ago. I think that confidence comes through, and the fact that it is a friendlier host country with china. Theres a more assertive putin. Francine chris, what the omega of the Foreign Relations between the u. S. And what we heard from Vladimir Putin . He says that russia did not hack those dnc emails, but said it was in the public interest. Then he slammed both Hillary Clinton and donald trump. It is unclear if hes endorsing trump somehow what is the story . Look, like the rest of us in the russian media, they are enjoined with an unusual election in the u. S. , but the official position from the government is to stay neutral. You havent heard any formal comments either endorsing clinton or trump from the ministration, and you wont get that. The position is to stay neutral, to deal with whatever administration comes in later. But it is quite clear over the last couple years, there has been a shift in the political relations between russia and the west, and i include europe in that as well. That position is not going to be improved for a very long time, of the administration here in moscow has been consistently clear about the fact that they want to differentiate themselves from what would be a difficult political relation with a friendly, open investment policy. They want western investors does come to russia and stay in russia even though the political backdrop will be more difficult. Tom christopher, you mentioned the government. This is where the confusion is in the west. His letter putin a czar . People are certainly referring to him or in that sense, but its probably not in a bad way. It obviously has connotations from the past, but when you think of czar, the makes key decisions at the top, but it is someone who was also keenly aware of whats happening to people and the economy. This is something that was not properly appreciated in the west until recently, that economy matters a great deal. The focus has been on geopolitical issues, but over the last year, we have seen those issues to some extent calming down, because they desperately want to see him step down in the Financial Sector sanctions. They need to access foreign credit and debt, because they need to boost investment to restore growth. Restoring growth back to that 3 or 4 level, this is something that he is now more focused on than any other issue. Francine thank you so much. Chris weaver. Tune in to bloomberg all day for more of our exclusive interview with russian president e region, and dont miss our special report. This is bloomberg. Tom we welcome all of you to bloomberg surveillance. Particularly we welcome all of you watching in russia. Vladimir putin speaking with our john nichols. We will have parts about today. Why is wider putin Vladimir Putin . There is no other way to look at it then dollarruble. It spans the history from after 1989, and of course 1992, the red is the massive uncertainty and instability. The end of 1999, where he steps aside. Inin steps in, takes over 2000. And there it is, the remarkable stability of dollarruble. You have a financial crisis in the middle of the screen. Then thetability, yellow circle is where oil breaks 100 per barrel. Dominic is with us. Dominic, this is an amazing story that links directly to Vladimir Putin, doesnt it . Yeah. When you look at that chart it really does tell a story. But it is worth remembering that we are in a new era. We have a Floating Exchange rate. The cbr can manage it to some degree, but the currency cannot flex more, it can strengthen and weaken in line with russias fundamentals, and i think that makes for a more dynamic story and gives the economy that flexibility to potentially come out of this recession we has have seen. That has been a big flex point for the rest of the economy. Francine what is the one thing, quickly, apart from oil, that the central bank can actually do to help with currency in russia . I think with a have done in the last few years has been pretty prudent. When they have had to, they have raised rates. That created domestic challenges as well, but really, they got to a situation where inflation is coming down. They are maintaining a relatively prudent stance. Our view is that if the ruble strengthens to aggressively, they would step in as well to manage things that built their reserves. Maintaining a prudent stance for now. Francine dominic, thank you so much. Coming up, we speak with the former italian prime minister, arrigo lester. We will also talk about importing finance and whether italy can gain anything from brexit. This is bloomberg. Francine this is bloomberg surveillance. Lets get straight to the first word news with emma chandra. The Vladimir Putin says hacking of Democratic National committee emails and documents was a public service, but was moscow responsible . He spoke with our editor in chief in an exclusive interview. [speaking russian] no, i dont know anything about that. You know how many hackers there are today. And they are so delicately imprecise. Mark andleave their then camouflaging acutely, mark other hackers from other countries. An extremely difficult box to check. We did not do this at the state level. Emma to did more today for more of our interview, and go to miss our special report on monday at 12 00 p. M. Eastern. Hurricane hermine has weakened to a tropical storm. It made landfall early today in northwest florida and pushed into georgia. The storm has wins at 70 Miles Per Hour, that it is still expected to bring up to 10 inches of rain in the carolinas and other parts of the east coast. Global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Francine thank you. Italy is due to hold a referendum on constitutional reforms later this year, adding to uncertainty that the country has been facing in its banking sector. Lets hear from italys former prime minister, who joins us from the the forum in chernobyl, on the river banks of lake como. Thank you for speaking to us. What does the referendum mean for the future political stability of italy . In como, the weather is very good today, its wonderful. But some worry about the political and economic weather, not only for italy but europe. You mentioned the referendum in italy. Italy will host the referendum on constitutional reform, and i hope it will be approved in the referendum. I dont know when it will take place, but of course, it will create a lot of instability, and there is a big discussion around the elect or a low. Rhw political the political instability, there are many worries. But they are linked to the hadomic situation, and we today the bad news of zero growth for the last two trimesters. That was not expected. This is why there are worries in italy, in europe. Francine what will the prime minister, matteo renzi, do if he loses the referendum . Isyou know, the referendum very important because of the constitutional changes. We decided to create a country able to decide to deliver, but it is not enough. Its one part of the big picture. It means Economic Policy at the european level, the national level. That have to add, the fact in this. Period, italy is very much affected by the migrant crisis. In january, february, the European Union close the agreement with turkey, and now this very summer, the vote of the migrants is again in the central mediterranean. Migrants arriving here in the last six months. Italy is in trouble on migrants, and if you put together zero growth, migrant crisis, political instability, we are entering a period that is not the best. Hope we can go out from this problem and we can overcome the obstacles. Francine there is also the banks. Went willingly finally sort out its banking sector, which is really sending worrying signs to markets internationally . Of course. Cb stress tests had good results on the one hand, and one bad result on one bank. So there are many worries on this point. That these worries are focused on one problem. For the rest, i am not in government today. I am out of politics, i am in service, teaching. I trust with the government does. Clearly that the situation is under control, and i think we have to trust them. Francine they do so much for joining us. The former italian prime minister. You can hear in the background, a beautiful shot across the river bank of likake como, the most beautiful place in italy. We will have to get back to him. Coming up, also from the river banks of lake como, we will talk to jacob wrinkle of j. P. Morgan chase, live from the forum. This is bloomberg. Tom good morning, everyone. Jobs day later this morning. Center, the International Relations of the conversation with the russian president ,