>> ahead of the bank quiet time frame. as the campaign discloses suffering from pneumonia. firm urgeskorean turning off smartphones immediately. we are far from perfect. thehe cfo tells us that

company is still far from overcoming this. welcome. happy monday. back and locals volatility is unraveling. the volatility is up and they finally broke out of above or below and this changed with the s&p 500 utility index. this is a correlation we are keeping an ion. and this negative near

is a huge flashing signal. the dollar and commodities are down. the question is if it is a temporary movement or baker. we have seen the volatility increase and a lot of people are concerned about this. what take a look and see is happening with global stocks. and the indexis we arer for the u.s. and and wehat the yield is saw the increase on friday and manus was talking about the correlation breaking down and we and a 10ates go higher

year yield go above zero. you can see the stronger dollar uan was south korean you down and north korea was doing nuclear tests. andant to bring up crude producers increased the drilling risk incan see some this market. you.ank clinton has canceled a trip to california. the campaign disclosed she was suffering from pneumonia. stumble and to

needed help moving to the vehicle. the team is evaluating the rest of the week. consideration as there was a dismissing of an idea of horse johnson's support. there was a further indication of division within the government. >> theresa may is a driver. clear that, she is focused. -- are all >> completing preparations for a nuclear test. this and it comes

korea finished their test on friday. companies are still far from overcoming the omissions crisis. it remains to be seen if the euros earmarked will be defined. twitter spoke to caroline hyde. to producerying solutions for the customers and regainors and we have to the trust. doneed to work hard and we work hard. we're making progress and overcoming the crisis. slumpedng shares have

usersgulators warned the of the premium smartphone to stop charging them. they have called passengers to stop using the devices. dozen have batteries that caught fire or exploded. we are powered by more than 2600 journalists and analysts. you can find more stories on the bloomberg app. this is bloomberg. >> thank you very much. .tanding by is david the equity markets are playing part of the catching up game on friday. run us through the big moves. >> we are seeing the extension of what you are talking about and you can look at asia.

was. not as easy as it have a look at the biggest hits. we're talking about new zealand and hong kong. you look at the scores of the moves and we are talking deeper under this hood and they are out of character. we're looking at three standard deviations for this market and the last time we saw these moves was back in 2011 and we started having a score of 4.6 and we have not seen moves this fake for this market. kong andstory in hong there was not a single stock on the index. up and, apart from

heavy,he volumes are heavy than usual. have the index and that will do it for that market. , it is about the money reflective of the risk aversion going on. >> thank you so much. the federal reserve governor will be the last to speak ahead of the quiet time frame. some think he will flip-flop and that a tightening is coming. in the meanwhile, there have been bets on an interest rate hike. overheat, ifould

policymakers wait too long. joining me now is the head of macro strategy. it is great to have you on this program. we were talking about monetary policy coming. is this the markets playing catch-up. >> you had a time of compressed volatility in the markets have not really had the new stimulus to deal with and the question is if this is a change of policy and are we at the end of fiscal policy taking over the reins. there are fiscal implications and a lot of this has to do with notsioning and does necessarily have to do with a

fundamental shift in the outlook. policymakers believe they have the levers to pull and there is a seismic shift towards fiscal and i doat is going on not think it is a catalyst for a huge change. >> what you think the government bonds will be? if markets are complacent, will they be you evaluating what is going on in the other yield curves? i think about the fed story. >> i think this has more to do they haveurves and been globally trading for some time and the bank of japan is thinking about a form of the

flattening and they are looking at a normalization with carryover implications in the u.s., with higher rates at the same time. disentangle at to policy shift and if markets are getting a shock after a time. >> you talk about people getting bet withand this is a and we are positions anding at the fed meeting signals from different policymakers with the market flip-flopping.ny

she is towards the dovish end of the spectrum. services in the manufacturing and there is no particular reason to be shifting. also, with so many people meeting, theis last thing i want to do is throw the grenade over the trenches. this could stop the moving. t-shirts that are and this tracks and there is a chart that

we have prepared for you. really throw a grenade into the bond market? what would you expect next year? way.ink of this in another are we in an immensely inflation-free world? the growth could write -- remain anemic. we will not get a shock and all fiscal stimulus. this will be low. >> the markets have priced in a clinton victory. will this shake the markets? >> it will make people nervous. newswill react to this because they have on perceptions.

who knows? anything to do with this ranking that increases a potential for that is on the mind of the markets. the noise andut you look at the core fundamentals of the economic scenarios, growth is low and will stay low. the valuation of bonds could be relatively rich and we are not talking about the start of a huge bear market. >> will it go to this level? >> this is where we are starting. >> ok. >> let's get you up to speed with the week ahead. what do you expect in the agenda ?

appearance scheduled before the quiet time frame tomorrow? a session gets underway in new york. >> on wednesday, the state of the union address given to the parliament.ymer -- we will round the week off with a gathering of leaders. >> coming up on countdown, eight different issue, after spending -- on a scandal. volkswagen is looking to clawback some of the money discussed. >> a stock exchange today. is the unit set for a choppy opening? >> the same old problems. weighing on the crude prices again. we will get into this

conversation. this is bloomberg.

london. 6:18 in >> let's get across to sherry. good day to you. andhares have slumped again have seen the biggest fall since 2008. said that the aviation authorities around the usingcould have to stop these devices. these phones had batteries they caught fire.

the images on the camera. convincing critics that the features are safe. morningss that the could be ignored. there was an accident using the autopilot technology. the executive board says that they will combine operations for carmaker ishat the changing the electric car strategy to rival tesla. comment.ned to this is you are bloomberg business flash. >> we have breaking news for

you. they are pushing ahead with the this in the see fourth quarter with the new and existing shares being placed simultaneously and staying with the energy and funding it for businesses. >> it will be interesting to see how much is with the renewable business. there is speculation that they will sell 10% of the business this is how they see this before the emissions cheating

scandal. >> caroline hyde was told that .here were profitability issues evenat is skepticism and without the crisis. had profitability issues, even without the diesel and we are honest about the have a lots and we of room for improvement in and toal to free up this free up the funds for the future. >> for more, we're joined i caroline hyde. he admitted that the shortcomings with their and talked about investing in the future.

how are they planning on getting out of the crisis? and its a balancing act was spoken about candidly. he tried to say he was far from perfect and he wanted this to be a force for good and they had to intoe discipline and move electric vehicles and ridesharing with the edge and a andof a perfect storm settling in the united states. at the same time, they have to be aggressive and they are usually exposed to slow markets in latin america.

they have now been locked out of the markets and had to reimpose this and came back. have a listen. will looking at the extended time in the picture. and a plan and we have a strong underlying and wes supporting us have strong fundamentals. it will certainly come back to the capital markets and is working for us to have the

and it isy available paying off. >> friday saw the first criminal enough?nd will this be candidly, they said they were not sure and they cannot be precise until the cover the entire amount they have to pay out. usersettled and european are under some stress. they have devices in cars and he did hit back on the desires with the compensation for the european car owners. they have not seen a lot of paint everyu cannot customer with the same brush.

that is speculation as to whether this will be enough to move forward and they need to start making some great cars then to bring forth discipline. >> great. charlie, you see something like this come into the market and are you concerned? wallere has been a huge hitting the market and the reality is that the investment requires you to be cautious because the company sounds like it is having issues and it sounds like they have a lot of wood to chop. terribly infused in

the debt. take a closer look at the decision today and this is bloomberg.

shot here a beautiful and i am afraid that we are seeing stocks move lower in the dollar-yen looks weaker. daybreak and the top global equity markets and u.s. futures are indicated to be down.

asia is playing a catch-up game. this is all because of a concern that central banks around the thed will be questioning benefits of reduced monetary policy. markets andd in the the relationship is with bond and equity markets. at a speechook later in this will be the last scheduled appearance before the premeeting quiet time. there will be mixed signals at a rate decision from the fed. >> this is the world's largest hedge fund manager. protected .2 $.5 billion

and there is a new strategy last and inflows are a rare and hedge funds have had a good battering this year. utility listing and the decision to spin off the fossil fuel business is in in -- theo the shift shift in wind and solar. tell us more about the timing of this and what this will focus on. the areaill focus on and the reason they are doing they are lesse

andcted by the commodities they hope to go forward with less impact from oil prices. >> tell me about what is ahead and what will drive the earnings this morning. what will drive it? >> they will be primarily driven markets with oil and gas prices being important. these are the main areas. important why this is and what it says about the industry. atthey will watch closely

the valuation and whether it around 10 billion or what the market thinks it will generally trade at. it will probably have an impairment, at some point. >> it will be a great day in the markets. thank you. >> the index took the biggest stocks.e u.s. chilcote has the charts. >> you mentioned the pacific and the biggest loss today since the

brexit. down in a chart that is the equities are generally down with the hong kong stocks down gotyou see comments that we in there is concern that central banks are generally cooling on monetary easing, spooking the markets. down.tures are watch the equity markets. well. as you can see yields rising and it .5%.y andyield has been rising

there was a selling off today. on germane yields bonds in 25 minutes. oilnt to talk about performing right now and this is with a targetyear in crude since the beginning of june. the rates have been rising in the oil prices have not really been where you think they should go. part of the concern is a resilience in shale, even with oil prices. happens, all what

the oil versus will get together cap on oil and markets.s who the >> thank you. let's get you up to speed. and theyeing declines are adding to the momentum with and and ears later today there is the warning that the and thecould run to hot volatility is back with the nasdaq futures potentially

dropping and momentum gathering with equity futures. >> take a look at this and you andsee the futures are down you can look at the terminals lower. the markets open really, you are seeing losses across the board. charlie is still with us. it will be interesting to see who breaks out of this and the stocks selling off. to earlier alluded you that this has something to do with market aboutics and it tells you

a nebulous concept of central banks that is sort -- that support asset prices. are we about to abandon the rewrite on central banks? we have a comprehensive view coming in the science are that they will stick with this policy to makek in the concept this happen as soon as possible may have policymakers learning that this is not a sprint and they will not necessarily and to reinflate right here may find it takes longer to learn about this process. >> you have central banks this only takes

a minimum of market movement to overreact with the bonds held by the bank. more.ould be amplified >> liquidity has been shockingly had and that flash crash we on friday will not help much and it will make people cautious. the approach here is the think about what we think the world policymakersdo and may be shifting with the long-term and the expectations are not really going to change .ith violations and investment

now.ay with us the work permits are under consideration as a way of controlling migration. idea ofismissed the changingor the group divisions in the government. cabinet isn's -- the pretty united. >> settling in the backseat. clear they are in the same direction. >> so, i found that you had boris johnson spiking up the

hard scenario. you think we will go through volatility with somebody holding up a flag? yeshe answer is probably and the reality is that the big question for the u.k. is the type of brexit we will cap. or will it have open access? negotiations need to be carried out in there could be more of a harsh shock to the economy. we do not have guidance and it is clear that the softer brexit would be better, from the economic hit. necessarilyt is not

this.le, depending on >> i want to ask you about the signaling ah yields they had chance and outlook inte with an the boe. >> there is a temporal question and, if there is a core action a a correction, we will see policy. now, the reality is that whenever will come will take years and not months.

soon. look to be too things are not as bad as they think. even -- we have not you couldthreats and see a correction. andt could be five years stephen was here from hsbc. do you expect zero risks? >> i do not expect any more.

a it may be a case for correction. it is the start of a big move. >> a one-word answer on the longer-term. the selloff.s of >> charlie stays with us all stop >> -- with us. >> treasuries and middlemen turning their backs on the market. we will take a look. >> how are they weathering the brexit? plus, secretary says she's looking at the work permit system.

this is bloomberg.

>> 6:48 in london. it is new york you are seeing their. >> it is a point lower and the dollar index remained unchanged. >> the volkswagen cfos is the company is far from overcoming the crisis. they spoke exclusively to caroline hyde.

they had to regain the trust. >> we work are hard. it is a long way to go. >> samsung shares have slumped again. were -- called on people to stop using the devices during flight. batteriesn phones had that caught fire or exploded. an--ewater associates

by thelows reported financial times are a rare exception in an industry that has suffered from poor performance and client reduction. out aftero move , the vacancy rates in paris, frankfurt, and amsterdam are the lowest in a decade. 90% of the investment banks are considering dispersing employees across european cities. that is your bloomberg business flash. >> the bond trading club isn't

what it used to be. this demonstrates that it was where the joining the markets middle man. >> for people familiar with the event, -- spokespeople declined to comment. we are joined now and can you explain what went on? and arduouslarge process. crunch, theyto the decided not to go through with in banks.

they are looking to make the markets of bonds and it has less to do with increased costs and bigger andg the role less appealing. >> let's bring in the conversation. see with liquidity? what do you notice? the firstuidity is and they are focusing on risk assets. act and less willing to

the ability for us to access harder and theis is gettingtransact harder and harder. problems withse this is actioning and big problem and it serves no one's interest. the lack of liquidity creates there ise pricing and no investor. >> paul, you had a great quote at the end of your story and said the risk-reward was not worth it. >> you see it elsewhere.

>> there was the dropping out of there ismarkets and credit suisse. as charlie was saying, there is cause for concern. that is a a moment one-off. think this tells us anything about the bigger trends in the u.s.? seen this since the and you can look across

the figures and you can see this in the markets. overseas central banks? we will go direct to the fed be under no illusions and the is a lot of debt to absorb in the u.s. market. it is only when you get to places like japan that you have dealers for the primary are necessary.

>> thank you very much. >> the federal reserve is in focus. this is bloomberg.

manus: will the governor turned hawkish in it, -- amid comments? the usa today futures are pointing to a lower opening for market. hillary clinton cancels her three-day trip to california after the presidential nominee's campaign discloses she is suffering from pneumonia. the south korean firm urging users to turn off their smartphones immediately over battery fire risk. crisis.esult is a lot of success.

the cfo tells bloomberg in an exclusive interview that the company is far from overcoming the emissions cheating crisis. manus: welcome to "countdown." i'm manus cranny. nejra: i'm nejra cehic. let's see how things are opening. manus: down. manusnejra: absolutely. ftse 100 futures look like they will open 1.3% lower, dax futures heading down to look like they will open 1.5% lower. same for the cac 40. selloff wed-based could be expecting of the european equity market open. and also, looking at u.s. futures, when we see those markets open later on, s&p 500

looks like it could open down more than 1%. u.s. stocks saw their biggest loss since brexit on friday. this is concerned that global central banks are putting an end to monetary easing. we saw both stock and bond selloffs. manus: we did. this 30 day correlation between docs and treasury has turned negative. the view in the market is clear. they are readjusting their expectation level on what central banks will do. will the fed hike? will the ecb not consider any more qe? let's have a look at the risk radar. volatility is rising. at the end of last week, we asked what would cause it. vix ramped up, these stocks -- volatility is a rafting. msci all world equity down. on? will they say later there were warnings about overheating in the u.s. economy. msci world index down 3/10 of 1%. then you have 10 year government

bond. they breached the 1.66 level. we saw 14 basis points added to treasury. they are the cheapest in four months. morgan stanley says it is time to sell government bonds. the korean won the very personification of that risk that the fed may go for a hike. wn, pretty much across the whole specter in asia. we are also seeing talk of north korea's potential for another nuclear test. nymex crude down, we dropped nearly 4% on friday. there is more coming online. is this road to algeria paved with negativity? speculators boosted their bets for lower. nejra: i'm taking a look at bonds. we saw the german 10 year bund yield return positive for the first time since july on friday.

oh! looks like we are still in positive territory. up seven basis points. if we look at spain, we are seeing those yields had higher, and portugal as well, the worst performing bond market this year. basically a selloff globally in bonds on friday, as we saw that correlation breakdown. it really was the longer data security leading losses. yes, 10 year yields on the treasury. we have that bond there again. a bit of repetition but it is important, rising to its highest since june. breaking news. manus: let's have a look. giving guidance for the year, full-year earnings per share to the marginally ahead of last year. ab foods is the owner of both the sugar business and the primark business. they say that grocery revenue is

marginally ahead versus the previous year, and in terms of profitability, they will be ahead of last year. primark. somebody has been in, probably me . nejra: [laughter] manus: they will be 9% ahead of last year. let's get the bloomberg first word news with shery ahn. shery: thanks. hillary clinton has canceled a two day trip to california after her campaign disclosed that she is suffering from pneumonia. the democratic presidential nominee abrupt we left a 9/11 commemoration yesterday and appeared to stumble as she moved toward her official vehicle. her team is still evaluating the rest of her week schedule. the british home secretary says work permits are under consideration as a way of controlling migration into the u.k. after brexit.

speaking on the andrew marr show, she dismissed the idea that the foreign secretary boris an indication. >> i am fine with the cabinet working united. boris is not the driver. theresa may is. the rest of us are in the car. clear that we are all focused in the same direction, that we will deliver what she is after to do. shery: north korea has completed preparations for another nuclear test, conducting its third detonation for the year, according to south korean news, citing government officials in seoul. it comes after they carried out their fifth nuclear explosion on friday and claims they can now fit an atomic weapon on a rocket. the volkswagen cfo says that the company is still far from

overcoming the emissions crisis. it remains to be seen whether the 18 billion euros that the carmaker has earmarked will cover the cost the scandal. he spoke exclusively to caroline hyde. >> we are making progress. we are trying to provide solutions, technical solutions, to our customers, as a regulator. we have to regain the trust. we disappointed the customers. we need to work very hard, and we do work very hard. so, making progress, but we are far from fully overcome. it's a long way to go. shery: samsung shares have slumped again, seeing the biggest fall in years as u.s. regulators warned users to immediately turn off their cell phones and stop charging them. aviation authorities around the world have called on passengers to stop using the devices during flight.

e thousand phones released last week caused fires. global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . i'm shery ahn; this is bloomberg. manus: thank you. breaking news coming through in the global gas business. x said theyra are set to terminate merger talks. putting them together would have created the single largest industrial gas company in the world, and that probably would have run into some considerable antitrust regulation, because it would have gone from four key players to two. that was the view from bloomberg intelligence. really, the whole concept of consolidation, that bites the dust. nejra: they had been exploring a

combination off and on for years, and it was supposed to be an all share combination, according to people familiar with the matter. but it seems they will terminate. let's check in on the markets in asia. david ingles is standing by. david: we have seen better starts to the week. in fact, it is quite bad. just a few things i want to point out about markets in asia. more than a handful of markets are shot, especially across southeast asia. if things don't improve, expect the markets to catch up tomorrow. back., volumes are the markets that are open are seeing significantly heavier volume compared to the 30 day average. we are talking about selling pressure there. the scale of the selloff we are seeing today is something we don't see regularly. we are talking 90% of stocks, roughly speaking, are on the way down. depending on which markets you look at -- hong kong, for example, or new zealand --

virtually every single stock of these benchmarks are on the way down. as you can see, the magnitude of the selloff -- it speaks volumes. when you are outperforming a market that's down 1.2%. if you look at the scores of some of these moves down, and i talked about this earlier, we are talking about standard deviations of at least three. statistically speaking, this is something you don't see very often. in new zealand, we have only seen the move down this much five times in the last seven years. as far as percentage, that's the biggest drop in over five years. very quickly, let me wrap things up with a look at the markets. fairly reflective of the risk aversion out there. you are seeing money flow into the dollar and the yen, which is gaining against the dollar, down about 1/5 of 1% on dollar-yen. yields are mostly on the way up, especially on the longer and of the curve. nejra: david ingles in hong

kong, thank you. federal reserve governor lael brainard will be the last of the central bank members to speak head of the traditional premeeting quiet period. some watchers think he may flip-flop, signaling that tightening is coming, while others see her urging patience. manus: meanwhile, the boston fed president has put bets on the interest rate hike. ys the u.s. economy should overheat if the policymakers wait too long to tighten. we have nick nelson, head of european equity strategy at ubs, with us. nick, here we go, the market is reappraising volatility. lael brainard will be the last to speak. the joke we haven't markets -- tony what you make of it. >> we have had a very comfortable over the summer, and post the u.k. vote to leave and some of the other risks we have had, with the italian referendum coming out in november, early december, the spanish elections

-- there are a few things in europe and the u.s. that have been in the background, and markets were incredibly calm. we have a view that the fed will be raising rates gradually, starting in december. we think at the end of the year you get a hike, maybe two next year. we think it's a very gradual path, that equities have got so used to the lack of volatility that they just needed a little bit of a kick to get them back into where we think the rate profile is. nejra: nick, we saw the vix volatility just up there. here's a chart showing the futures, betting on volatility in the next three months. they are trading at their highest level since 2013 vstoxx, to the thesv so they are expecting the call will not last. what do you think could drive more volatility? is it going to be the fed, elections in europe, the bank of england and the fallout of

brexit? >> i think it's a mix of those things. i think the fallout on the u.k. vote -- we saw obviously in july that pmi in the u.k. clashed at six or seven year lows. weak numbers from the housing market. quite a few of these bounceback in august. we are in this strange period in the u.k., because we haven't gotten negotiations started, we haven't triggered article 50. but i think we have got those dates about the italian referendum, which is clearly very important, and maybe toward the end of the year, spanish elections. as you say, the fed. i think you put all those together and they give us enough event risk to see a pickup from this very weirdly low period of volatility. look at some of this data. this is the dollar, the brexit spike, payrolls down.

the market is building a position in long dollar. some would say that you are wrong, that it goes lower on a hike. the market is beginning to adjust itself, isn't it? >> is an adjustment process. we would argue that by the end of the year it will probably be stronger than where it is now. we think that the growth premium in europe relative to the u.s. is narrowing. we had many years where europe was massively underperforming in terms of stock markets and earnings growth. ap --e think that cag europe is being pretty resilient. if you look at what was being thrown at the eurozone, it has hung in pretty well. the most recent pmi's and confluence indicators have been pretty robust. nejra: you have some interesting thoughts on em exposure for european stocks. of course, the stronger dollar tends to hurt emerging markets. is that how you see this feeding through and european equity is, or is it just concern, that we

see that hiking cycle? >> well, we think the dollar doesn't strengthen munch. if you go back to the trade weight back in november, that was quite a major peak. would argue that the dollar moved sideways or down. what you see also from emerging that they are weak.ibly currencies are down some 40% of the last five years relative to the dollar. this year, they are up slightly. if you are a european company weak. currencies are down some 40% of the last fiveand selling to asi what's coming back in rail and rubles, that was depressed. that is now bottoming out. we are also seeing pmi's as indicators showing relativel strength. we would argue a bit of em exposure, if it's the right price, is not a bad thing to have an european equities. manus: more or less the exception is 25 basis points. stay with us; we have more to

get through with nick nelson. far from perfect. that's how the vw cfo describe the position of the company, and that was before the omissions cheating scandal. nejra: in an exclusive interview, he told caroline hyde there were profitably issues and overinvestments. >> there is still some skepticism in delivering results. even without the crisis, volkswagen had a lot of success but we had profitability issues with the core passenger cars. and we are very honest about those shortcomings. we have probably been overspending and over investing compared to our peers. with a lot of room for improving, there is a lot of potential for free of the money to deal with the unfortunate payments as a result of the crisis, but in order to free up the funds.

manus: for more, we are joined by christoph rolled. he admitted to some shortcomings, talking about investing. this is a really strange time, and a strange message to send. how are they planning to get out of this crisis? two maink there are initiatives; one is a comprehensive reorganization of the company to remove decision-making bottlenecks in the volkswagen headquarters. they have already started to shift responsibility of from the headquarters to the individual brands. the other one is the point that we refer to as the issue of overspending, especially at the volkswagen brand. in research and development, they used to spend a lot of money on new machinery, new tools for each model. that's an area where they will need to improve. nejra: christoph, friday also

saw the first criminal charge from the u.s. investigation. the 18 billion euros in provisions -- is that going to be enough? what is the cfo have to say about that? >> yeah, the visibility there remains rather limited, and the proceedings have only just started to kick off in the u.s., with the first detailed information on who is responsible, how many departments and people have been involved. the legal investigation jobs day is still ongoing. the report we published in the second half of the year. and that will also determine the financial damage that will be done to the company. it's so far relatively difficult to estimate, and that is the point he also made in the while they dot the have a better handle on the total financial cost than they had a year ago when the scandal ted, there is still

some insecurity left over. manus: ok. chris, thank you very much. great interview by the team out there inted, there is still some insecurity left germany. autos reporter. up next? nejra: fourth is not the driver. the u.k. home secretary downplays talk of a split in the cabinet over brexit. we discussed the latest of elements. this is bloomberg. ♪

manus: 7:22 in the city of london. futures are indicated lower. it's a beautiful, sunny day here in london. the british him secretary says work permits are under consideration as a way of controlling migration to the u.k. after brexit. nejra: speaking on the andrew marr show, she dismissed claims that boris johnson's nomination is an indication of

division. >> i find actually that the cabinet is working pretty united. boris is not the driver. theresa may is. the rest of us are in the car. >> so he is in the backseat? >> actually, no. she is clear that we are all focused in the same direction, delivering what she asked us to do. manus: nelson is from ubs. he's in the ubs driving seat. the thing about it is, we get these moments of hard brexit discussions. 132.71, hard brexit seems to be relatively subdued in terms of risk reception. >> i think fiscals most people have -- negotiations of negotiations. from so far removed tha

triggering article 50 and begin airing the official -- and beginning the official process, we will have to see what they look like. so this is obviously the u.k. government and the cabinet trying to get their views across and get their own opinions solidified. i guess there is still huge amount of uncertainty, and we have also got interest rate outlooks as well. we have had some pretty aggressive response from the bank of england so far. the question is do they go again? do they need to go again? we have that very sharp indication in july, pmi's at seven euros, housing surveys at record lows. and then this bounce back in august. i think most people are still waiting to see what the effect on the greater economy is. nejra: nick, sterling volatility is coming down from this chart here. when you look at sterling, you are saying the moves that we have seen since brexit

essentially should boost ftse 100 earnings by some 6%? >> pretty much. if you have a 10% and the bounceback, roughly that against the dollar, and the euro, that gives you about a 6% boost earnings. clearly the ftse 100, where three quarters of the sales guys at the k, we can worry about the u.k. economy, but for them it is much more and issue of 250 than 100. yes, it is certainly a boost and benefits. manus: you say the ftse 100 training at the highest since 1 988. is it all in the price? do i trim back my u.k. exposure? >> it is highest post bubble. but that's a great point. i think we go back to those multiples from 2000. but look, i think it is quite stretched, even with these fx

upgrades coming through. remember, big averages close to 2014. we're looking relatively stretched. we think there is better value in europe, and the data is holding up quite nicely. yes, it doesn't have the boost of the week, but it doesn't have the concerns or issues of the vote. nejra: briefly rank them for us. eurozone, ftse 100, 250? >> i think that is right. when you look at the 250, it is half and half. the u.k. banks have a pretty flat yield curve, potentially another rate cut. that is not good news for banks and their interest margin. manus: the debate in terms of the yield curve. thank you so much. nick nelson, head of european equity strategies at ubs. nejra: that's it for "countdown." "on the move" is up next with

caroline hyde and guy johnson. they will be speaking to the ceo of universe in frankfurt. lower,equities indicated all the way around the european complex. let's see how the trading day holds up. this is bloomberg. ♪

guy: welcome to on the move. welcome to monday. to thecounting you down european union. i am alongside caroline hyde in berlin. here's what we're watching. after severalng weeks of post-brexit slumber. the stock market falls out of bed. investors turn bearish as volatility comes surging back. brainard -- looking to settle the rate debate.