francine: shock tactics. putin blocks both donald trump and hillary clinton as he denies russia's involvement in the u.s. vote. jobs day in the u.s. this employment number could cement a fed hike this year but is the market really ready? live at the -- what brexit means for europe? we speak to the former ecb president. ♪ francine: welcome to the pulse life from bloomberg's european headquarters.

i'm francine lacqua it we have a great show lined up for you it will bring you really released material from our interview with vladimir putin. he weighs in on u.s. politics, blocking both u.s. confidence. -- u.s. candidates. he also talks brexit. stay tuned for that exclusive interview done by our editor-in-chief, john micklethwait and we when you our weekly -- composition around the uk's vote to leave the eu today. we speak to the former president citibank, --an european central banks, jean-claude she should -- jean-claude trichet a. euro-dollar, 111, 92. it is all about the u.s. jobs data. that is key to shaping expectations for the timing of the next u.s. interest rate

hike. oil rising also to do with our predict interview. putin will seek a deal with -- russia will seek a deal. let's get to the bloomberg first word news and the russian president, vladimir putin has struck a console terry note -- a conciliatory note. a territorial dispute has prevented the two countries from signing a world war ii peace treaty but couldn't told bloomberg and an exquisite into that resolving the conflict should be part of trading -- >> we don'tstage. trade in territories, although the problem of the peace treaty with japan. we would very much like to find a solution to this problem. francine: cleveland fed

president says there is a case for gradually raising -- unemployment and inflation. she cannot say processing when she thinks hikes will be necessary. florida is being hit by its first hurricane since 2005. her means top wins that's hermine's -- hermine's top wins have reached 80 miles an hour. orange juice futures surged to a high as the storm neared the sunshine state. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. let's get back to our main story of the day, shock tactics. -- donald trump and hillary clinton. he said down for an exclusive

interview with john micklethwait . russia ahead of the annual g-20 summit in china. putin denied allegations of meddling in the race. the government is ready to work with any u.s. administration. hack into the the democratic party's database. >> no, i don't know anything. you know how many hackers they are today. [indiscernible] they can be in the necessary time place. other hackers from other territories in countries. it is next really difficult thing to check. it is nearly impossible to check.

-- >> is thate really important? does it matter who hacked this data? the important thing is what we give to the public. there is no need to [indiscernible] that is not going to solve the problem. [indiscernible] i want to tell you again i don't know anything about it. imagine even [indiscernible] two american society. -- onepaign headquarters of the candidates in this case. mrs. clinton follow the

democratic party candidates. even from this point of view, could not have officially penetrated. you understand to do that means you need to have a finger on the pulse. and given the us -- given the specifics of life in the u.s., [indiscernible] is a timethink this when everybody should come clean ? russia tries to hack america, america tries to hack russia. china tries to hack america. china tries to hack russia. the purpose of the g-20 is to come up with a new set of rules so this can become an ordered version of policy when everybody's doing it, allegedly.

>> i think it would be better for the g-20 not to get involved. [indiscernible] if we -- squabbles, very serious issues, then we will overwhelm the g-20 agenda. instead of working on issues of finance, structural changes to the economy, we will endlessly argue about sears problems and there are plenty -- about serious problems and there are plenty. instead of fighting other venues are other forums. -- instead of finding other venues and other forums. francine: that is latimer putin speaking exclusively to john micklethwait.

don't miss our special report on monday at 5:00 p.m. u.k. time. plenty coming up including pugin is confident over dispute over iran's oil can be resolved. we will bring you more from that exclusive putin interview. we speak to the former ecb president jean-claude trichet. this is bloomberg. ♪

francine: we are getting some breaking news out of samsung. they have just announced that it will make global replacement program for the galaxy note seven. this is a phone that came out earlier this month. seven hasand the note been released in 10 countries. samsung mobile, they had their is making comments in seoul right now. this was purchased by one of the main news agencies because of that report earlier that they are announcing this global recall of large-screen smartphones, note seven because of fault the batteries that could catch fire. their shares on samsung are currently closed. i expect some sort of follow up on monday. we have heard an apology because

of the recent battery explosions . it is unclear how many they have put in place at the moment. we do know they are in 10 countries. they should be getting a replacement but the cost has not been estimated yet of how much that global replacement program will cost samsung. it doesn't look great, because it is so soon, close to when it was released. we will have plenty more that. we have samsung, then we have nonfarm payrolls. the exclusive interview with vitamin put pretty set down with john micklethwait for an interview and joining us from russia -- he challenged to an understatement two years ago that if crude oil will to $80 a barrel, there would be a collapse in production. he began by asking whether president putin's thinking had changed on output that crude is still below $50. oil output and elects the

output is increasing. by the way, where the world's gasers in terms of natural with a global share of 20%. francine: oil snapped four days of decline as he said he would like russia and opec to reach an agreement, one that exempts orion. -- exempts iran. lucy, great to have you on the program. i know it is difficult to take the price of oil. how does it impact how you see value? this ago -- lucy: it is had an impact on earnings over the last year. in the last couple of courses we have begin to see that impact it negative. in the last earnings seasons, we have seen that now.

that being said because nobody could forecasted to do it is difficult to know what one should do. had a big impact it we know -- with a huge hole and we are expecting more. because supply and demand being close. the falloff in production has not been as expected. francine: it look at oil, has it been expected? you halve the hole inflation debate. is there an optimum price? does it remain in a range where the stable, you would be happy? lucy: if something is not going to be a surprise to the market, that helps as far as volatility. the mood we have had an oil has been a huge source of volatility. as you say, it is not the press

itself and the sector, it has also been many companies which had exposure to energy. that exposure would only make things clear once the path came down. that is why you have seen it more broadly. francine: lizzie, thank you so much. much.y, thank you so political and business leaders gather today for the forum that is on the river banks of lake como. joining us now is francesco stretchit -- francesco: -- francesco stretching -- give me a sense of how the court is going. energy prices falling. that is hurting a lot of revenues could how do you deal with that -- revenues. how do you deal with that? jean-claude: i do not hear very well, there is a lot of wind.

francine: if energy prices are the pressure, that means your company is under pressure, how do you deal with it? jean-claude: we have been in francesco: wes -- have been in this crisis for many years and what matters -- there is a big overcapacity across europe. is developed in the states and business going very well. i have to say that half of our business comes from this solution it where relatively well-balanced across -- we were not hit that much. i have to say the markets were reactive which are the seven european areas. italy and spain relatively safe of the big impact on continental energy prices.

wellll we went pretty across this terrible. -- this terrible period. francine: how is energy consumption doing? been decoupleds from gdp growth across the areas. facthas to do with the that the underlying structure of the economy are still perhaps changed in a way that requires less energy. energy efficiency is really a working in the technology that is providing the same functions with less energy. overall, we see very little increase of energy consumption. gdp.ed with increasing and in some cases, germany notably, even the reverse

effects. this is something we have to live with it we have been observing for many years. it is another reason why we are aying it is important we move lot of investments when we really focused, not only on how we generate industry, but also how we distribute and manage. that is where most of the value is going today. francine: talk to me about mergers and acquisitions could are there any regions the look more checked if than others? could you say that you can assets are cheap because of brexit? but the u.s. remains expensive? overall, as far as m&a are concerned, there is there a little -- very diversified arena around the world. the most expensive parts of the m&a environment today in the u.s. because the valuations of companies linked to the bond

interest rates. overall, there is a lot of m&a opportunity provided you know exactly where the value is in the single markets. we don't have a broad position on m&a, but we have to be very selective and careful on what the perspective evolution of the market is. that is why we are seeing m&a is a risky business, because we know there's going to be an evolution of the regulatory -- how can you bet on an m&a move without knowing what the regulatory evolution will be? we need clarity from the eu. francine: thank you for joining us. i hope you enjoy the view. it may be a little bit windy. up next, it is jobs day in the usa. could a strong showing for august move the fed 20 hike --

fed toward a hike? we get more. tune in all day to watch our exclusive interview with vladimir putin. more from that coming up. this is bloomberg. ♪

francine: we talked a lot about russia, oil.

we also talked about the u.s. jobs data out later today. us. macdonald is still with busy, this is probably the most important jobs data, because the markets fear or consensus because we have heard it much more hawkish fed, if there is a blog number today, the fed hike in september. is it as clear-cut as that? lucy: i think so. they have set the ground quite well. over the summer, the data which we know they depend on has -- it does look as if they are set up for that. important, because of the impact on the bond markets.

francine: how do you position yourself? do we have huge market repricing? will you reprice or change your portfolio around before that jobs data at 1:30 today? lucy: we have been looking at what is priced into the markets where the risks -- markets, where risks are and the expectations in the market have been quite complacent about the fed. francine: 34%. lucy: yet seen the financial spread over the past month because you are beginning to see some concerns about those who have no finances at all. if interest rate to begin to rise slightly, -- we have seen a shift in that positioning. if you get a rate hike, there is more on that. that will affect the growth against value in markets which is very correlated to bond

yields and interest rates. very important for us -- i know it is only one month of data but it is a big month of data. it is very important to what it means for inches rates. francine: just for interest rates. francine: -- for interest rates. right, so does that mean september is off the table? or is it more conjugated the net -- more complicated than that? lucy: then we wait and see for next month's data. there has not been quite a clear verbal commitment to what they want to do next. francine: we're getting breaking news and this is the uzbek is done president -- is back a stop president, according to turkey news -- has died. there was huge speculation on

his health. we did understand by local media and this is reported that he was critically ill. remind ourselves that he has ruled was becky stop for over 20 years -- whose becky stein -- ekhistan. confirmation, we talk about these frontier markets, is there any value? is that something you would not touch? lucy: the risk assets for emerging markets has been compacted this year. it has moved to some extent, but then again it is very dependent on oil prices which we talked about. from our perspective, it looks as though -- that move -- four

emerging markets. francine: losing donald there. -- lucy macdonald there. we bring you more from our exclusive interview with the russian president. this is bloomberg. ♪

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francine: welcome to our weekly brexit show. i'm francine lacqua. every friday, we round up the news, analysis, and conversation about what is next for britain in europe. this is "brexit: what's next." the u.k. factory activity unexpectedly hit a 10-month high in august as the weaker pound helped manufacturing bounce back from post-brexit slump. markets pmi jumped. the median estimate was for a reading of 49. theresa may has set out the first of her red lines for brexit negotiations. the free to end

movement of people coming to britain from the european union, suggesting she's willing to leave the single market to do so. officials also said they won a bespoke deal, rather than one such as countries like norway and switzerland. a deal would seek to preserve passporting, the ability of banks to freely sell services of products beyond the end negotiations. sentiment among u.k. executives have regained after the shock. that is according to a new survey. the index increased to 109.7 in august, bolstered the increased exports and manufacturing. the weaker pound next british goods more competitive.

from 112.6.o 105 global news 24 hours a day covered by 2600 journalists and analysts in 120 countries. let's get back to what brexit means for europe. joining us now, jean-claude trichet, the chairman of the group of 30 and former president of the european central bank. great to speak to you. last time i spoke to you was june 24, the immediate aftermath of the brexit vote. what have we learned in the last eight weeks? mr. trichet: of course the brexit created an element of uncertainty, which is important both for the u.k., for the eu area, and for the european union as a whole, and also for the world. i was reading what the imf had imagined as a consequence of the brexit even at a global level.

i would say them as it would be, let's clarify the situation and have certainty on the process as soon as possible. that is absolutely clear. uncertainty is the enemy of growth and job creation in all economies, not only the european economies, but the global economy. francine: what will the impact of protracted brexit negotiations be on the european economy and european stability? on thechet: depending process, depending on the duration of the process, depending on the way the u.k. will decide to pursue its own negotiations, of course you might have a long period of uncertainty, which is hampering investment, hampering all

decisions by household as well as entrepreneurs, as well as firms, corporate businesses, and so forth. uncertainty is the enemy and we should all try to clarify as much as possible the situation in order to reduce uncertainty. i would say the consequences of ratic negotiations without clarity are it seems to me very important. francine: do you agree with the ecb that all clearing activities denominated in euro should be taken out of london? mr. trichet: i'm sorry, could you repeat the question? francine: i was asking about the clearing activities. there's a lot of talk and we understand the ecb believes all these clearinghouses with euros should be moved to europe, outside london.

do you agree with that? againichet: this is something which depends totally on what will be decided. the u.k.lso on the way government is looking at the single market. since the setting up of the single market, the idea was free move of capital, of labor, of goods and of services. pillars ofthe four the single market. if you maintain these four pillars, we are on the safe side . if one or two of those pillars do not exist anymore because of the decision in london, then we are in a different universe. everything depends again on the way things will be discussed and negotiated.

you have several options that depend very much on the u.k. itself, of course, and over the course of the negotiations with the europeans. francine: mr. trichet, we just heard from theresa may and she seems to be intent. these may be negotiating tactics. it may change. she seems intent on limiting the free movement of people. what city, if the u.k. and london would lose access to the single market, if this city would lose passporting rights, benefit inill europe, frankfurt, dublin, paris? mr. trichet: again, i'm not sure i got exactly because the sound is not very good. i would say -- francine: i will say the question in more simple terms. is there a city in europe that you think can take the financial capital crown away from london?

mr. trichet: the market is the market. the decisions of the investors and savers are the decision of the investors and savers. the remain camp explained very clearly before the brexit was decided that of course you had a cost associated with that decision. i think the remain camp was right in saying that. they were elaborating on that. they were quite clear. again, we will see. it depends enormously on the eliminating as much as possible uncertainties. if uncertainties are not eliminated, i don't expect the normal investors and savers the world over will say, i don't know yet what will happen, but still i am decided to invest a lot. again, it is common sense at the present moment.

that is the reason why my decide,is, whatever you reduce uncertainty as much as possible. mr. -- francine: mr. trichet, with inflation around zero, what can the european central bank do? mr. trichet: we will see what the governing council will do when time comes. i have full confidence in the governing council of the ecb. they did a fantastic job. the most important job being that they were up to the confidence of the european democracies in preserving stability, and even in the most difficult circumstances. but my main message in this respect will be the following, i have full confidence in the governing council and in the way the ecb is dealing with very difficult circumstances. , the centralcb

banks cannot be the only game in town. they have of course to rely also on the appropriate behavior of the other partners. amongst the other partners, you have governments, parliaments, structural reforms. that being said, i would also say that the eu area is not as miserable in terms of growth as is usually communicated. i compared growth in the u.s. and growth in the eu area over the last 12 months and surprisingly enough, you see area was a in the eu little higher than growth in the 1.2% in the united states. in both cases, it is a misery, not sufficient, and of course the u.s. is doing much better in

job creation and employment, but it means that all advanced economies have a period of relatively modest growth, and we have to work on that, and structural reforms in the case of europe are of the essence. francine: where do you stand on helicopter money? i know it is a theory at the moment, but there are people for it and against it. i think it was said very clearly by the president of the ecb that it was not at all in the cards. i don't think that it would be in my understanding of what has been done already, which is remarkable, i don't think it would be appropriate at all, personally. francine: mr. trichet, thank you so much as always. jean-claude trichet, the chairman of the group of 30 and

former president of the european central bank. next, more from our exclusive interview with president vladimir putin. don't miss our special report on bloomberg. ♪

francine: russian president putin sat down with john nichols weight for an exclusive interview in russia ahead of the

summit in china. he challenged putin on his statement that if crude oil fell below $80 a barrel, there would be a collapse in production. he began by asking whether president putin's thinking changed now that crude is still below $50. well if i said that it would end, then i was mistaken. i don't remember where i said that. probably just off top of my head. maybe i just don't remember. i said that new deposits wouldn't be commissioned at a certain oil price. strictly speaking, that has happened. that may be even surprisingly our oil and gas companies are continuing to invest.

in the past years, the oil companies have invested 1.5 trillion rubles. if you take the state investment in the pipeline, then the overall investment in energy is 3.5 trillion rubles in the past year. this is quite significant. our oil output electricity production is increasing. production has declined a little. by the way, we are the world leaders in terms of natural gas exports with a global share of about 20%. in the export of liquid hydrocarbons, we also hold the leading position. we still hold first place on gas exports. our internal production has

slipped a little. this is due to an increase in hydropower output for electricity. gas from our stations has dropped somewhat. there is a restructuring of the situation in our domestic energy market. on the whole, guest from is in great shape. talked to the saudi deputy crown prince. would you still be in favor of a production freeze if the saudi's want that? aware, mr.s i'm salmon is the deputy crown prince.

he's a very energetic figure and we have struck up a good relationship. this is a man who knows what he wants and knows how to achieve his goals. think the same time, i he's a very reliable partner with whom you can reach agreements and can be certain that those agreements will be honored. still, it was not who rejected the idea of freezing output levels. whoas our saudi partners decided to change their view. position repeat, our hasn't changed. if prince salman and i speak about this, i will put forward the proposition again. we believe this is the right decision for world energy.

the second thing is, everyone knows what position is all about. if production were to the frozen, then everyone should do it, including iran. but we understand that iran is starting from a very low level, relating to the sanctions. it would be unfair to leave it. that it would be correct to find some sort of compromise. i'm sure that everyone understands that. the issue isn't economic, but political. much hope that every market participant was interested in maintaining stair and -- fair and stable global prices. so you would be in favor of a production freeze but giving iran a little bit of leeway to

do what they need to do? >> yes. tune in all day to watch our exclusive interview with russian president vladimir putin and don't miss our special report on monday. coming up, theresa may gets ready for her first g-20 summit as british prime minister. will she be grilled on brexit? we will discuss that next. this is bloomberg. ♪

francine: theresa may will attend her first g-20 summit as prime minister this weekend. let's bring in bloomberg's brexit editor. simon kennedy, thank you so much for coming in. this is theresa may. she met with her cabinet this week. we have an idea of her negotiating tactic. what will happen in g-20? simon: i think what we will see in the g-20 is this kind of pressure on may to start outlining her negotiating position. there's kind of an acceptance that there won't be a triggering of article 50, the formal talks, won't begin until 2017. the rest of the u.k. seems ok with that but they want her to start shading in the parameters. she's quite clearly focused on controlling labor flows and

willing to give up some of our single market access. francine: some or all of it? simon: that is the big question. are we willing to throw out the customs union now? are we willing to do individual negotiations? all those questions remain to be answered. i suspect may is not quite ready to answer them, but that won't francine: stop the world from asking them. -- that won't stop the world from asking them. francine: what about banks? simon: i think it is too soon. a bloomberg exclusive today showing the banks and of view themselves as a special status. but itwe had the crisis, is still a huge industry. they are trying to use that power a little bit by saying to the government, they would like may to dinner she did is ideal for them, even before article 50

is triggered. rightthat, they have the to buy and sell products in the eu while based in london. that will be maintained beyond that two-year timeframe just in case we run out of time and fall off. they can make that case. they can say it is not in europe's interest to have a distorted market, deutsche bank noting how important their clients are for them in london. if they can achieve that, that would be quite impressive given people like angela merkel who say we will not have any informal talks before article 50 is triggered. francine: john mikel flight spoke to vladimir putin and asked him about brexit. vladimir putin rather provocatively said, someday the european union could shrink in size as the stronger members start to close ranks.

is that fighting talk because of sanctions against him or does he believe it? simon: putin has been a big figure in the debate. david cameron invoking him and saying putin would be one of the few people happy about exit. putin has denied that accusation. in his interview, john pointing out two things. one, the euro area could shrink at some point. it is not in russia's interest. but it could shrink if the likes of germany and france decided that it was time for a super euro of closing ranks. secondly, on brexit, he stirred the pot a little by saying relations haven't been particularly great with britain, but what is more important for him is less about u.k.'s relationship with the eu, and more interesting, the u.s. that implies that the u.k. does

the u.s.'s bidding, and suggested if the u.k. rethinks its relationship with the u.s., it might have better relations with russia. francine: as long as donald trump is president. simon: we will have to see about that. francine: it was a fascinating interview. we don't often hear vladimir putin talking about brexit. what is the most significant thing he said? simon: probably the hacking. it was a long interview. one that will be rolled out throughout the day on bloomberg. there's a whole load of interesting things, his relationship with japan, this hacking that he seems to be saying, we didn't do it [indiscernible] talking about hillary clinton and donald trump and various other things, a geopolitical interview from one of the most fascinating people out there. francine: thank you for joining

us. tune in all day to watch our interview with vladimir putin. don't miss our special report on monday. stay with us. surveillance is next. tom keene will be joining me from new york. this is bloomberg. ♪

francine: putin exclusive. the russian president tells bloomberg he is called that opec and russia will reach a deal to freeze oil surprise in algiers -- oil supplies in all tears. this employment number could support of that hike this year, but is the market really ready for reposition? lake e forum in kuomo. we talk about the upcoming referendum. this is bloomberg "surveillance." tom, a most interesting day, because wee