Gdp globally. Tom which is a big deal. It is a general rule that 3 is global recession. Percent. E than. 1. 1 . Is there a lot going on today . Francine theres a lot going on. We will speak to Catherine Mann. Theyre managing the debt. Conditions they see in advanced economies. Tom Deutsche Bank has been on top of this. A shift toward financial instability for next year. Francine we have ocd oecd. Terrorism charges have been filed against the man accused of setting off bombs in new york and new jersey. A complaint says that rahami planned the attack for months. Prosecutors say he praised Osama Bin Laden and hoped the bombs would be heard in the streets and he was captured in a shootout with police. British lawmakers two defeat islamic state. Parliaments Defense Committee says the u. K. And its allies need a grand strategy to defeat the extremists. The effect the panel supports the strategy of air power and political progress. The white house is charging russian warplanes attacked convoys in syria. Another damaging blow to a shaky ceasefire. The kremlin has denied it. A judge accepted prosecutors argument there is enough evidence to bring him to trial. There are allegations that wideranging kickback schemes he has denied any wrongdoing. And Immigration Campaign group is urging the u. K. To limit worker permits issued to European Union nationals here it nationals. That would mean britain would reduce migration by 100,000 a year. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. I am taylor riggs, this is bloomberg. Tom lets do that first data check. Our special coverage of the fed later today. The euro slightly weaker. Nymex crude top yesterday. Really makes it back from the 42 level. 101. 79. Sterling under 130. Yesterday,o blowout 165. To 19. 76. That is a big deal to see peso weaker. Francine stocks rallying around the world, yet it all has to do with the boj. You could argue it has not done enough. Financial institutions, the weak spot at the moment which people are worried about. Gained. X equities overall in asia and futures here. Konstantinos we will level out. We are going to go to tokyo in a moment. This is a chart that have never shown, this is mexican peso compared to brazilian real. In the middle of the chart, there is a great brazilian miracle, the rally. , thet mexico weakness collapse of brazil is back on the other side of the 90s. The recent hockey stick over on the right side, is that about brazilian strength . Is that about mexican weakness or perhaps it is about mr. Clinton mr. Trump and mrs. Clinton . That mr. Trump is doing better than good in the recent polls added onto recent mexican peso weakness. Ive never shown that. Francine it is nice. This is my chart with the boj. 10 year yields. You can see on the chart that it is in positive territory for the First Time Since march. I think we can show it to you now, but the basic idea is it has gone into positive territory because the boj introduced monetary easing. It is keeping the policy down to 0. 1 . What people are focusing on is the fact that they set a cap on the 10 year bond yield. Back in positive territory but not for long. Tom there is a lot of ways to go. We are going to go to brian in a moment. The music Market Reaction outside of equities. We will see how that seeks through off what the fed does today. We are going to show a couple of charge here. Francine this is what we are focusing on. It is to do with how the fed sees ryan fowler is the editor brian fowler is the editor. He joins us from tokyo. Brian, first of all, lets kick it off with you. The question that markets are trying to digest is how smart was this tweeting from this tweaking from governor kuroda . Tweak. It is definitely a i think it is an elegant move. They had to capitulate in certain areas. They removed the timeline for hitting that 2 target. They came back and said we are going to try and overshift that target as long as it takes, the easing policy will remain in place. Going to do more than we promised, it may take a little bit longer. Francine what is your take on inflation . They say they can overshoot the 2 inflation target, but you cannot reach 2 , you think youre going to overshoot it seems farfetched. Brian that is right. The economists are skeptical. No one can see that happening in the next two years or 18 months. The yield curve, that is the other big story. That addresses some of the concerns that banks, Insurance Companies have about rapid ability. About profitability. I think mr. Kuroda hopes that having a steeper yield curve implies there is more inflation down the line. Whether anyone believes that is another story. Some said artificial steepening. Tom i think you nailed it there with the idea you have to see it to believe it. Lets go to the chart to show the conundrum brian speaks of. Heres the japanese yield curve the red circle is the 10 year yield. Yieldegin with a 10 year. The first order of condition is to lift that above 0 . Is there any evidence they can do that . Do they have the ownership force the and are sure force to move yield up . Can cut back on purchases longerterm bonds. We had a story today showing they have been doing that for the last few months, cutting back on 10 years over 25 years. They can continue to do that and hope it puts it it takes a little bit of the shine off those binds inputs yields higher good whether it is sustainable is another question hire. Whether it is sustainable is another question. Makes itrto garlow clear that this is the death of an irp and qe. Brian from tokyo, is this something that other banks are going to follow . Brian you know, the other thing is on the zero rate, a lot of economists we spoke to renewed their forecasts that we could see a deepening of negative Interest Rates at the next meeting in november. Or possibly october, but at least by november. There isome are saying a 5050 chance to short bankshares. Some people think it is still coming. Francine thank you so much. He joins us from tokyo. Lets get on to london, Ewen Cameron Watt joins us. I am trying to figure out what todays tweaks meant. It shows that Central Banks are willing to experiment. Is that fair . Ewen Central Banks can i go backward. Central banks cannot go backward. I think there is quite interesting stuff happening. Repression in the 1940s and 1950s which cut Interest Rates in a high low range. That is what i think the bank of japan introduced today with the cap on yields. Think it ishing i of course there is no credibility in the inflation target, but the more you say there is no credibility, the longer the policy is going to last. The third thing is that leaves you that leads you to the conclusion that this is the bank minister of finance will issue as much as he likes. Merger offullscale fiscal and Monetary Policy and helicopter money. A distention between british and american economics. Americans look at short and longterm. In british have this odd thing of mediumterm. I see no evidence that a central bank can apply these strategies over the longterm, or even over the mediumterm. Djj as today llo said it is not the end. They are going to continue to and itsdaption of nirp yield term targeting. You can buy fewer bonds than you were buying before. You may be putting less money into the economy. You are using the bank of japans Balance Sheet to fix the shape of the yield curve for a pretty long period in the future. I think that is completely mediumterm, longterm, nobody knows. Tom what is so important here is we dont conflate the two time functions. One is the length of the policy and the effect, medium and longterm. The other is the length of the yield curve. 10 years is a long time. Francine on the move more immediate trouble, on the more immediate trouble, answer me this. Our Central Banks struggling to get away from global inflation . Will they ever find a way to inflate inflation . Ewen i think this is a lost cause. It doesnt seem to create excess credit. If we had not done this, where would we be . This is why the emphasis is moving in the conversation towards fiscal. You can what Monetary Policy is doing is buying the fiscal time to expand the deficit. We will see that in the u. K. At the end of the year when the chancellor is able to expand the deficit. Same is true in the United States because the duration of treasuries continues to stretch out. Tom great to have the here today. We are in new york. Lots going on including a summit with the human meetings. The fed meeting this afternoon with the ewen meetings scarlet will join us. Fed thisook at the afternoon at 1 00 p. M. Francine it is new york. It is bloomberg surveillance. Tom Francine LacquaWalking Around manhattan. Francine because the traffic is so bad. Lets get to the Bloomberg Business flash. Here is taylor. Tellico taylor into dax operates a brands and has more than 7000 stores in 90 countries. The companys putting a priority in boosting online sales rather than opening more stores. Volkswagen investors are soon got a make or for more than 9 billion in damages believed damages link to the emission scandal could more than emissions scandal. Vw denies the allegations. That is your Bloomberg Business flash. Francine thank you so much. Lets get back to Ewen Cameron Watt. If you are janet yellen, the fed, look at boj and think week, when i might ready to hike . Ewen look at the boj will be a short one. I think what we will see today will be the moving down of the dot. Term. Longterm a signaling that the terminal rate is lower. A weight andybe seahawks statement. Maybe a wait and see caucus statement. Francine what will they tell us . Ewen no change. The longterm expectation for inflation are probably diminishing. In so doing, while rates will rise over time, it will be a bit, not a lot. Any textbook proof of our new economics, whether it is boj with their original economics today . Or maybe the idea of janet yellen not working in a vacuum of a global slowdown . Are we in a land of new economics . Ewen i think we are. Japanhat moving moving into the era of regulating is is rates, the next stage it will regulate recredit goes is a kickback to what you had in the u. S. In the 1940s and 1950s and the nationalization of Financial Markets is taking place. We have seen during wartime. The textbooks will be written after the events rather than before. Tom i look at this, francine. There is so much going on today pit we look at the bank of japan as may a part of what the fed action the fed meeting was that today, this is absolutely this isly absolutely original economics from the bank of japan. Francine i wonder longerterm if they will be more disappointing because they couldve done more. Tom it is most interesting. In our next hour, questions from wilbur ross. If you are a trump supported, mr. Ross is your guy. He is adamant on the advantages of mr. Trump over secretary clinton. In our next hour. This is bloomberg. Tom good morning. From new york, Francine Lacqua in town it she is here with a summit in town. She is here for the summit. Lets get to our morning wall street. 10 merkel, i love this because i dont know much about what is going on in germany. Lets bring it up here if we could. Bloomberg view. Theyre been five defeat in every state of germany that held elections. Mistakes have been corrected. It is by far the storms party in germany. The chancellors stoicism is grounded and optimism. Ewen cameron watt is here in london with us. It sounds like an it sounds like a lecture at oxford. Chancellor merkel is the United Kingdom is to the United Kingdom speaks to. Eva this will be the most closely watched selection. Most closely watched election. Because she feels her authority will carry her through again. It will be a different shade of coalition. That is the determining factor. Germany without merkel is a different proposition from someone who has been there for a long time. Tom i read a lot this weekend. Bout strasbourg francine, i witnessed you at or Caroline Hyde at bratislava, Angela Merkel had a fractured room. Francine yet 28 liters and they dont have the same purpose. You have a fractured europe. I concern for as the merkel is the lessuse of all of moderate politicians, that even the moderate politicians like Angela Merkel will have no choice but to be either more right wing or left ring left wing. Ewen we know that germany will be a coalition. That is how the general policy has been set up. Ofrefore, it is a question is it leftward leaning or rightward leaning. I would guess that is going to be leftleaning. The same agenda for fiscal prudence and not taking big risks will be there be much whoever steps in as chancellor. Tom Ewen Cameron Watt, thank you so much. Including thesues decision from the bank of japan good on the fed on Bloomberg Radio worldwide this morning, Abby Joseph Cohen is. This is bloomberg. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Tom good morning everyone. It is a glorious new york city. The traffic on monday was bad. We go to Francine Lacqua or a rating on yesterday was yesterday worse . Francine yes. Tom it is a beautiful new york city with many world leaders. Francine and exciting. This week, the first week i have been in new york for the u. N. General assembly. It is like star wars. Tom Central Park South has six lines of limos. I will let you figure that out. It is something to see. It happens every year. Every year it gets a little more crowded. Westwood news, here is taylor riggs. Taylor the big of japan has shifted its focus of the Monetary Policy program at it will move away from a rigid target for expanding the money supply. The boj introduced zero inches rate target 14 your bonds as it stepped up its fight against inflation. Prosecutors say Ahmad Khan Rahami praised Osama Bin Laden and warned that the sound of bombs would fill the streets. He is responsible for the bombs in new york and new jersey. Rahami was captured after a shootout with police. Charlotte, north carolina, protests erected after police shot and killed a black man. Police say an officer opened fire. Members of the family says he was not armed. According to police, protesters threw rocks. Several officers were injured. It is another sign of how the president ial race is fractured. Traditional voting block. High income voters are narrowly supporting democratic cap democratic candidate Hillary Clinton. 46 to 42 among members of households republicans have always one that demographic. Chinas premier league says he is confident that relations with the u. S. Will remain positive no matter who the next president is. He was speaking in new york. He did not have anything to say specifically about Hillary Clinton or donald trump saying the election is an internal affair for the u. S. For the u. S. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Francine africas economic almostis a slowing as philanthropyberg are cohosting the Second Annual joining us now is the senior partner in great to have you here on surveillance. This is a huge opportunity and yet you see growth expectations in africa that were largely pushed because of Commodity Prices in oil. It really took it back turn in the last 12 months. They had to take a back turn because the fundamentals were so strong. We look to the growth story. We looked to the growth story. [indiscernible] [indiscernible] the fundamentals around urbanization, technology, those are there. They are there to stay. Francine that is ever structure that has the Investment Bank looking at. What is the common thing that is most misunderstood about africa. It is a huge continent with a diverse economy. The 400 companies they make a billion dollars or more in africa. They grow faster on average than the global peers. A bigger riskakes. Ppetite then certain countries redistribution of wealth is not like and a lot of our western economies. Acha which is sector, which company and look at that quite carefully. The reality is tom the idea of the slew rates. There is a whole idea of africa ,nd around the William Easterly foreign aid, how are we going to help africa . Beyond anally traditional foreign aid debate whether africa is freestanding and we move on to some new discussion of assistance . Acha i think we are way beyond that. If you look at the last 50 years, Foreign Relations investment has reached a fastpaced significantly. Us mobilizing our own resources. This is relying on foreign aid. Livingl of us are still in our memories, those who of us who were on the street. One day china showed up and bought all of the cobalt. Youve got one off huge amount of money and agreements coming in. Are those agreements wrapped around corr