♪ anna: volatility is back with a vengeance. asian stocks continue, while u.s. and u.k. futures point to a higher open. yunkern commissioner gives a speech. said to be proposing a higher offer of $56.5 billion for agricultural firm monsanto, and doubling the fee. and unilever's ceo tells bloomberg best central-bank stimulus is limiting economic growth. nothe reality is is it is giving us the growth that we expected, and the reason is that

there is too much towards the top of the market and not towards what some people call the real economy. ♪ anna: a very warm welcome to countdown everybody. i am anna edwards. manus: i am manus cranny. you had in the headline. over they in the u.s. past five days up by 50%. in europe, up 19%. a wonderful story on the bloomberg. it is called misery, not talking about me. [laughter] misery loves a companion. have a look at this. it really does tell i suppose a phenomenal story about asset class correlation. let's have a look at the full screen, dollar for us. oil a big culprit. gold down 22 out of 24 of the developed markets. they are indeed done, in terms of the equity market.

there is the risk radar in terms of our perspective this morning. anna: msci emerging markets down 3%, misery loves company. nowhere to hide. but how you like. manus: i love that. anna: are things turning around? do things look different as we go towards today's trading day u.s. future pointing? to a stronger opening. actually in positive territory. but asian stocks have been down for the fifth day. dollar-yen telling you some down when you have a decline in yen at 4/10 of 1%, not listing japanese stocks, often that is the case. but in today's environment people are nervous about what the boj will do the financials in japan. manus: it comes back to the divergent story. talking about cap. yousef said yes, one of the asset classes that the investment committee is saying it is investment flat. bank of america, sorry, in terms of cash fund managers, hoarding

5.1% in september, the highest since 2001. 54% ofterms of shares, those surveyed say stocks and bonds are overvalued. the question is, will central banks tolerated? anna: let's get the first word news. hey,is haidi lun: haidi: guys. president obama has criticized what he calls donald trumps adulation of president but in your putin, said he considers him a role model. it was part of a broad attack on the republican nominee, as obama spoke at a campaign rally for hillary clinton in philadelphia. meanwhile, eight weeks from election, democrats are feeling queasy about hillary clinton's narrowing lead the real clear. numbers show 2.5 presents with an donald trump. proposing increase as it tries

to clinch the acquisition of monsanto, to three the biggest world supplier of pesticides, raising the bed per share, 56 $.5 billion. that is a 25% premium above monsanto's closing price in new york yesterday. spokespersons from of thumb is declined to comment on the proposal. one of the world's biggest consumer proposals says europe's vote to leave, has been let down. speaking in an exclusive ceo with francine lacqua, unilever's ceo gave his inclusive economy. >> many have not seen and comes go up for the last 20-30 years, worried about their children having jobs, pensions being secured, and they see increasingly a world that is stacked against them. system, thatrent

is not assigned to them, as it was for some people in brussels, or immigrants, or other things. di: aiming to resume launching in november, following the dramatic explosion of a spacex rocket. it also destroyed and israeli satellite that facebook atlanta use to improve net service across africa. they're still trying to determine the cause of the incident. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 100 countries. you can find more on the top . this is bloomberg. manus: thank you very much. let us see what asia is doing in terms of the space. we have futures in the u.s. and europe. david, how is asia coping with that in between session? think what isso i well worth noting about asia is that asia never quite switched from the risk aversion.

tuesday, saw everything a little bit of a rally, and we had the selloff on wall street overnight. asia again waking up to negative sentiment. and again, we are down for a fifth day, some point over the ort five days was always one two big markets that drag everything lower. right now, roughly down half of 1%. not that bad. volumes are not quite there. just a few things to know. down five straight days in line with a we have seen across asia. longest losing streak for new zealand so far this year. and the reason i think about is because it has really been outperforming throughout the asian-pacific this year. and i southeast asia, think this really is reflective of the changing of the paradigm of monetary policy. because when you look at werging markets in asia, talk about southeast asia a lot. it is the longest losing streak in weeks. in fact, looking the past four weeks, only of three times. every single session apart from

those three sessions, southeast asia has been down there jakarta putting down the worst slump, going back to october of last year. i just want to zero in on japan, 4/10 under. you are moving out of the nikkei, that is if the boj does choose to tweak monetary policy by taking rates more negative and not so much the act of purchase program, that arm of stimulus. which is why it is really playing out in the equity section. let me bring up my topics index. have a look of financial. everything but the banks are lower. if they do take a policy rate further, below zero. that is also playing out before i go. i want to show you the bond yields. the yield curve, what we're seeing in japan it is really steepening at the moment. everything q5 and 10-year on the way down. 20, 30 on the way up. really steepening on expectations that the boj may move, and obviously the curve of

tokyo. anna: david ingles in hong kong. jean-claude junker will set out his expectations for europe when he gets his annual state of the european union speech. manus: brexit, growth, migration are a few of the issues he is expected to touch on. francine lacqua is at parliamentary she joins us now. i suppose everybody is going to be focused on what he is to say about brexit. francine: good morning. absolutely. brexit is what they want to hear about, division in the u.k. without the eu. leaders are meeting in bratislava to talk about brexit. we understand that actually he will not be mentioning brexit, certainly not the main focus of his speech. why? because he continues to say that the u.k. is still within the eu. we do see parallels with the u.k. we know he is embraced by

ambassadors and firm dialogue's were awkward, just because they cannot influence the agenda or proposal, but brexit again will have to take a back seat for now. this is very clear when you speak to not only eu officials but insiders that they believe the brexit process will take so long, it will not be two years of a could be five or even 10, before they even see this finishing the job. anna: starting to talk about brexit into the future. francine, what else will be on his agenda today? francine: well, we know that he wants to talk about immigration. we know that it will be a 90-minute speech where he will be talking about borders. we get the sense that when you ker, he asked the heads what worried them? and for the first time he seems a lot less commonality, so a lot of countries focusing on different things, would

personally makes them worry. the commission overhead, it can be as weak or as strong as the members. .e understand that yunker the existential crisis for the european union, also getting some new initiatives.we are expecting an update on the stability pact, but the overarching theme is that he will ask leaders and parliamentarians here if they believe in europe? and if they do, he will talk about migration, and if they do not they need to go back to the drawing board. you cannot really imagine a commission that is strong and believes in the future of europe, if a country does not believe in it. manus: francine, going to be interesting couple of days. francine lacqua and stroudsburg. anna: head of market strategy at swiss quote bank joins us. peter, thank you.letter to see you. as we look ahead to the state of the union from john claude yunker and the bratislava meeting on friday, europe asking

a lot of questions. does brexit mean more or less europe?that is the big peter: question i suppose on the table. i looking at more of a figure, sort of a representation your i think it is very interesting how much focus we are putting on this. because it was almost like he becomes the de facto head of europe. people are looking for him to provide details into what the forward progress of europe is what you look like. and that to me seems very presidential for a unified, you know, nation or sort of a singular place or singler visionary and i think it is very interesting we had the rise of this presidential aspect in the u.k. and now is happening under jean-claude junker in europe. i think it is very interesting people are looking at him for a unified view in europe now. it may be his moment. manus: many people talking about his plan, fiscal status or the need for european response. that, or thist

putting pressure on government? peter: to me, going to be an aspirational speaker you know, he went around and try to find consensus among the nation heads. he found very little of it. any details will really be put forward, the divergence between countries. what he wants to do is have broad sort of aspirational strokes, to bring europe together to unite them under one flag, his flag. and again, this may be a great opportunity for europe to come together. anna: we will see. or not. east, they hade a falling out with each other over a number of issues. peter: a year ago today, about a year ago, we heard a lot of views about what you want to do to move forward on immigration, you know europe and russia policy, it really has not made very broad steps. in terms of what he is the last year, it has been very challenging. manus: something much closer to home, the heart of the

franco-german and italian axis personifying broad market the government says the possibility of him not winning the referendum is 60%. morgan stanley says 35%. what do you say? is the italian referendum the big burning? no matter what jean-claude uecker says. the reality is real risk. peter: it is very but the motivation to hold europe together, you know if there is someone to keep the united, then they can go through all of these issues, even the political ones in italy. so, the risk is there, but i think if the conviction to hold europe together is there, then they can see through the smaller election. but you're absolutely right. there are enormous cracks in europe. they have not gone anywhere. situationn europe with the great situation. but they have someone to move forward under a single view, which he may put out today, you have a very good chance of

moving everything forward. anna: plenty of cracks as you suggested. but the chance of moving forward, to manus' point earlier, there has been a lot of expectation this year building around fiscal stimulus globally. really, the g-20 meant a great deal. what is your expectation for europe, how does that influence your investment strategy whether we are going to see a great deal of renewed impetus towards fiscal stimulus? peter: i think there is going to be. we saw the g-20 meeting, a movement away from monetary thinking more to fiscal. the knowledge of people taking advantage of low interest rate environment. so i think whether it is in europe or the u.k. or in japan, there is going to be more movement towards fiscal stability. we do not think that europe is a place where, there is still long term concern, primarily the political situation. and we continue to see the u.s. as a better investment. and most likely, it comes to the

fact that we do not believe the fed will raise rates in september. always going to have to be the rest of the hour, this is our view, and the primary driver of asset prices right now is what the fed is going to do. so we have these italian situations, the political situation in italy, but it really be about what the fed is. and we see europe still very, very much in conflict. manus: hold on to that particular thought. we'll talk about the fed. peter stays with us on countdown. anna: here are your brexit-themed highlights for the day ahead. discussed, john claude yunker delivers his state of the union address. an hour and a half later, unemployment data out of the u.k. manus: theresa may takes prime minister questions. that is in the commons. 3:00 p.m. u.k. time, brexit military david davies testifies in parliament as part of those committees. anna: coming up on the program,

central banks, the ceo of unilever says more on the guzan interview. 6:30, and london time will it be a luxury letdown? we will break the numbers down. anna: 15 minutes later, growing the bid. a buyer is set to provide a higher bid for monsanto.we have the full details. this is bloomberg. ♪

♪ shot: you are looking at a actually of the harbor in hong kong. hang seng at 2357. you are seeing u.s. equity futures bounce, u.s. futures bounce. just trading to catch up, going slightly higher. london, let us get

the bloomberg business flash. haidi lun is with us. bedi: a buyer is said to proposing an increased offer trying to acquire monsanto, to create the world's against maker of seeds. willing to raise the bid to $109 per share, or $60.5 billion. above the closing price of monsanto in new york yesterday. spokespersons for both companies declined to comment on the new proposal. the resources for the world's most popular beer is considering a bid for sab miller's central and eastern european acid. valued at about $6 billion, according to people familiar with the matter. they say the process is expected to start next month, after sab's miller deal with in bed closes.chinese resources have declined to comment. warren buffett had a $1.4 billion white from his fortune,

falling percent yesterday berkshire hathaway fell 2%. at the same time, wells fargo lost position as the world's most valuable bank to jpmorgan. the share price has been hit by revelations that employees opened more than 2 million accounts without client approval. samsung without a software update to south korea that caps the capacity of the galaxy 7 battery at 60%. it is a stopgap measure to prevent overheating, as the global recall continues. the unusual move announced on the first day of a major national holiday reinforces the urgency that samsung is trying to contain the prices of new. not just samsung, but apple has also suffered an embarrassing technical glitch, after some customers reported difficulty of getting their iphone operating system to the latest software. it lets people unable to use the phone, plugging them into a

computer. hundreds of social media users complained about the program to apple's twitter account. company apologized, saying it here is a brief issue affecting a small number of users, which was quickly resolved. that is your bloomberg business flash. lun with the business flash in hong kong. totral-bank policy has been skew towards driving markets not of the so-called real economy. manus: speaking in an exclusive interview with francine lacqua, he gave his views on intervention since 2008 article crisis. >> i think the interventions that we have seen are at the end of the day, the crisis of 2007-2008 have increased by 57 trillion, and it is limited economic growth. is awould argue that it further disaster. we might be in a worst position your i have some 70 for that. but the reality is that it has

not given us the growth we expected, and the reason for that is the system is too much towards capital market and not towards what some people call the real economy. anna: still with us, peter rosenstreich. let us take that from unilever, making the broadpoint, let's make that more specific to you in japan. the nikkei is reporting that the central bank boj could go further negative, deepening the yield curve, buying less of the long end. what is your expectation? peter: i don't think it will get much. i think there is the realization that the boj is especially hit a wall, an additional monetary policy and action will have a very small effect. but a major affect and eroding the credibility of the bank. that is some in they need to start consider preserving. and making these microtunes about slightly lower interest rates in an already flooded market, i think it is going to really not get the proof that

you want. and we see the yen getting stronger, and will have to figure out more ways of not doing anything by doing something, and i think will be extremely corrosive. we do not expect much axon next week. manus: we assume a shift in the yield curve. this is the rebirth of the japanese yield curve. talking this morning about seismic shifts, is this the beginning of a seismic shift? would global central banks tolerate this shift? peter: i don't think it is would be a central-bank question. i think there is roughly 10 trillion sitting on the sidelines in negative yielding paper, which you would easily start flowing back to places when anything either remotely attractive appears. you saw the german 10-year pop above negative for a split second. and all of a sudden, capital rushed out of the u.s. into europe. anna: down they go again. peter: exactly. sitting on the sidelines. any type of upwards move on the

short-term curve, we don't think it is really sustainable. given the sort of wall of money that is out there. anna: the conversation about how supportive central banks need to be, focuses i guess on the ecb, boj. that is the tone of the conversation. on the other side of things, the fed and the whole question of whether he will see higher interest rates, agreeing with jamie dimon, saying yesterday -- that we should see an increase in interest rates in the u.s. now saying it would be risky. so many views of course. peter: i guess there are two things. one, the data. to us, it is unsupported. we see the inflation is underperforming we see the labor market not. producing the weight growth that was expected. manufacturing deteriorating in the number. the data is not supporting it. the credibility of the fed, somewhere along the line janet yellen has become a 10-year-old in the schoolyard getting bullied by portfolio managers,

gary herbert do something. we think it would be a big mistake. anna: your point on inflation, one year deflation probability index it has increased. the odds of lower inflation, having increased, to your point -- anna: i love that sort of image of janet yellen being bullied by bond traders. let's talk about the dollar. how does it affect your world? it is interesting. gundlach says the dollar dropped. would you agree? peter: we are more balanced on the dollar. exactly. our core scenario is that we do not believe the fed is going to raise rates in september. you know, because of these external drivers, meaning that if rates start going up in the u.s. the flood of money into the u.s. will be destructive. so, we do not believe that we will see a significant uptick in dollar.

but on the other hand, things like europe will continue to remain weak, so my currency will do well. anna: peter rosenstreich stays with us. up next, talking oil prices. ♪

♪ manus: looking at a beautiful shot of the imperial palace in tokyo. dollar trading at 102.97. waiting for some the luxury goods producers to deliver the numbers. month saless, five fell by 13% on a constant fx base. the estimate was for a fall of 11%. byhemont both downgraded barclays. talking about swiss watch exports. we saw a drop of 18% in the

european numbers. europe.lower in the estimate was for a fall of 13%. we missed on the global headline. we missed on the european context, as well. when it comes to asia-pacific, down 9%. that is just a skip above what the market was expecting. worse in europe. the u.s., tiffany had a tough time. american sales down 6%. the estimate was 6.5%. a little bit of a beat. what you have on hermes? handbags? anna: nothing yet. the maker of luxury goods, more details, momentarily. manus: i have not been buying anna jewelry. the watches down 50%. anna: worse than the estimate. manus: both worth in the estimate. we will wait for the handbags and scarves.

on daybreak. anna: a new edition on your bloomberg and mobile. if you want to find it on your bloomberg, let us take a look at the top stories making today's edition. the cover story is all about buyer, said to be proposing an increased offer as it tries to clinch the acquisition of monsanto, degree the world's biggest maker of seeds and pesticides. this is really influx. manus: i have that my garden. a money tree. [laughter] it just keeps on growing. and a couple of fivers. a slightly more sobering story is of course, that libya will be in the start boosting oil exports immediately from ports recaptured from the rebels, adding to the global supply situation. that is according to state owned nation oil corporation. anna: daybreak looks ahead to jean-claude juncker's speech later on today. it is thought he will deliver a

harsh warning over the future of the eu, following the brexit vote. we mentioned that b word with francine lacqua earlier on, who was in stroudsburg. anna: asian stocks extending the loss, is a catch up or getting ready for something? nejra has the latest. nejra: the big question. looking at the msci asia-pacific, down for a fifth day, the longest losing streak in four months. japanese banks leading on the topics index, boj considering delving deeper into negative interest rates. and chinese stocks headed for the lowest close in a month the last trading day of this week, that is amid speculation that the central bank will not add to stimulus.that is what the selloff generally globally has been about, concerns about the limit of monetary easing. as i say, global stock volatility has come roaring back this week. i decided to bring of the msci asian-pacific volatility.i

showed this chart a little while back, because you can see we hit a real low in inatility te earlier september. perhaps the end of august. it has come roaring back. gauges for japanese and hong kong equities have actually climbed this week, to their highest level in more than a month. now, talking about the selloff, just wanted to show you the yield on the global developed market sovereign bond index. yesterday,d to 0.6% the highest since june 23, the highest since brexit in other words. it has risen as you can see my record low in july, so a global bond selloff that we have been seeing. now, treasury yields of course have hit the highest since brexit, as well. with them, about her has been moving higher, heading for the strongest level since august. the bloomberg dollar index. goldman sachs has been bullish on the greenback since 2014.

it said the market is underestimating the path of rate increases, and holding onto it even though the dollar has actually slept 3.7% against the major peers this year. anna: thank you very much. nejra with a few charts on the markets. richemont has slumped 13%, a worse than expected result. joining us now to discuss is deborah aiken. great to have you this morning. manus has just been going through the headline numbers. they are just coming through now. richemont convinced of long-term prospects, but the short-term five-month sales down.the estimate was for drop of 11%. deborah: i don't think it will surprise -- if we look at the spread, it was quite wide. it did go down to -14, 15%. the biggest issue is twofold. one, japan more negative than

expected, even on the strength of the yen, not much chinese. and some quite parables, the second side was when i look at the whole portfolio, they do not have enough coverage in the u.s.. where the u.s. a lot of numbers have been faced by better u.s. numbers. they are down now. we are looking at what is happening in terms of brands. we would like to know what they're doing with cartier. we know it is doing very well. in linearound 20 times, with the sector. it has underperformed by around 10%, versus the rest of the sector the last three months. so, i do not think these. rise overall, more about as you said the long-term outlook. manus: looking back at some the trading notes and updates from barclays last month, talking about this weakness and watches. when you look at the split in richemont, looking at the probability of jewelry versus watches, there talking overcapacity.

overcapacity in this industry, is that something you concur with? deborah: we actually did a report very recently, last week, looking at sales and capacity overall. the big watch manufacturers like swatch, near 80% inventory to 50% fornly about richemont. the products amongst the richemont stands alone. there is an issue longer-term. july down 14%. watches,olved swiss next tuesday the 20th we have all of that, to go for. but the companies are saying longer-term they are transitioning, putting more metal in. $5,000 plus. there is a lot to be done but they are transitioning. ,and we are more positive for

the longer-term sales. anna: deborah aiken on the luxury space. peter rosenstreich with swiss quote bank still with us talking about the swiss. bank. we don't account for luxury. peter: on the one hand, you have this overvalued swiss franc. we can discuss that. but in asia, the chinese yuan going through significant relatively right now in the chinese sort of defending the currency from excessive weakness. they raise overnight bonds significantly overnight, so you have a weak yuan, strong nc, meeting exports will continue to deteriorate. it is not more complicated and that. we can discuss the quality of the brand, how the manufacturer processes, and so on and so forth, the brand identity, but when it comes down to in my idea

is the divergence between the currency. manus: i mean, what i will actually do, why not show where it is. this is reality of how you create those beautiful charts every day on bloomberg. we will not bother with that. the last time the smb actually got into gear, was back in 2009. of course they cap the franc. will they be forced, i'm just wondering, they verbally intervened. nobody believes in. peter: they are intervening. if you look at the balance sheet and the expansion, we can confidently say they are intervening. and you look at the euro-swiss exchange rate, you see the base being sent around 108, 107, that area. we are confident they will continue the operation.the interesting thing about this is, you know, it is a very difficult

communication strategy between the fed, ecb, smb. fed and ecb are extremely commutative about policy, every member. manus: activist intervention on a virtual daily basis. peter: the old speak softly and carry a big stick. we have not heard a meaningful policy speech from them since probably may. exactly. may of this year. basically a blackout, where there has not been much quality. smb, it is about analyst reading the data and extrapolating what the next move is going to be. it is not a constant indication that you get from other places. so, it is interesting. the volatility that we're seeing because of the fed speak and the ecb sort of putting out these medications, these random acts of volatility, i think they are

behind-the-scenes. i think they are very vigilant about what is happening in the u.s. and europe, but they are not communicating the way that we see other places. anna: manus likes the sound of that. manus: yes, i do. the expense bill is rather expensive. we do not get a lot eat because of the cameramen. anna: coming up, buyer is set to propose a higher bid for monsanto. we have the full details of next. manus: 15 minutes later, jean-claude juncker gives his state of the union speech. anna: ceo of consumer goods giant unilever says stimulus has limited impact on economic growth. more from that exclusive interview. this is bloomberg. ♪

♪ just after 6:44 in london.

manus: 1:44 a.m. in new york. futures indicated a bit of a reprieve, but will the volatility return? we are of a quarter of 1%. that is the latest on the future. anna: crude trading the lowest close after more than a week, after the agency says they expect the oil glut to continue into 2017. oil prices up just a touch this morning, around half a percent on wti. sees they says he price staying around $50 a barrel in the short term. bob: i think we are in balance, i can see the price $50 towards the end of the year. and in 2017, a little bit about that, in the 50's. but there has been more than a trillion dollars of projects in the industries, we will see effect it is a very the key is the man beard and there is demand growth of over a million barrels a day in china and north america. and as long as that demand

continues, i think you will see a tightening of the market. manus: let's talk about china. one thing to note about oil, it is ryan chilcote. u.s., weata for the get more of it, what can we expect? ryan: interesting, bob dudley a bit more optimistic than even opec, which has a report out this week. saying they see more supply coming to the market than they originally thought. so, you know, bob was one of the first people to go out there and he says low prices for longer, and he amended that too low prices for longer, but not forever. so, interesting that he is a bit bullish, because obviously the glut continues. what brings me to my glutmeter. p.m. london 3:30 time. that is 10:30 washington, d.c. time. they come from the department of

energy, giving us a status check on the stockpile in the u.s. this is their data. as you see, a pretty perfect inverse relationship between how much oil they have in the u.s. and the stockpiles, and the brent crude price. the higher the inventory number, the loyalty overprice -- the price.the ovail we had industry data suggesting the last week stockpiles rose by 1.4 4 million barrels a day. that is not an awful lot. that is less than an hour of global consumption, but it is a trend that oil will not welcome, because what they want to see are the stockpiles declining rapidly. that is not something we're seeing just yet. anna: we spend a lot of time discussing the likelihood of an oil freeze in algeria. how important is that? do not get my hopes up? ryan: i think that is fair. the market is not getting hopes up.but here's the thing.

they are actually not talking about an oil freeze, what they're talking about right now, the opec countries plus russia are agreeing to, caps that they themselves would come up to. iraq for example would say i will cap at 4 million barrels, producing tule and barrels right now, but i would agree to 4. i would not go beyond that. the same with opec used to have quotas, amongst themselves. so it does not mean even if they do reach a deal in algeria that they would actually cap levels where they are today, or that we would see supply removed from the market. that is really important to keep in mind. nonetheless, talk while it may be cheap compared opec, it is useful. suisse announce the last time opec announced talks, you see the short line white against oil. the price of oil went up. same thing this time around.

opec announcement talks in the 27. you see the oil price to not shoot up, but at least moderate decline. so, at the end of the day in algeria, they don't have to do much. back to sit down and talk, they happen have any arguments like they had last time. that might just be supportive of oil price. manus: let us see what they do. all very reminiscent of that road to doha. let us talk about bayer, back on the agenda, ready to make monsanto'tempt to woo boards. anna: the german company increasing. nejra joins with the details. nejra: are they going to be forced? $129 a share offer according to those familiar, comes after bayer made an unsolicited offer back in may of $122, raising it to $125 in july, and last week it can back with a third offer

of $137 a share. the latest is 20% above monsanto's closing price on tuesday. it is below what some analysts were saying was needed to actually clinch the deal between 130-135. but if it is successful, this would lead to the biggest deal this year, and the largest ever by a german company. we're talking about $56.5 billion at this offer level. manus: what exactly happens next? i mean, this comes down to what? valuation? breakoff agreements? what is driving this? bernstein released a report, they always knew this was going to be a higher bid. bayer yeah, i mean what is also considering is raising that break the two around $3 billion. manus, what will happen next is monsanto's board is scheduled to discuss and potentially approve the proposal tuesday.

now, of course wednesday and we haven't heard anything yet,ba but i guess we could. board is set to reveal the deal today. and announcement to come shortly thereafter, this all according to people familiar. but of course, talks they still fall apart. remember that bayer's wooing comes against the backdrop of consolidation in the crop and seed industry. a series of deals could use just a few global players. you have china agreeing to acquire syngenta. dupont and dow chemical agreed to merge. the thing is no one wants to make the last deal, coming under great scrutiny from antitrust officials. but that is the rest. anna: the race against antitrust. nejra with the details of that m&a. the u.k. government will outline aims for future relationships when it issues a letter, formerly trickling the process of leaving the bloc.

dave davis was speaking before parliament. davis: we are not going to trigger article 50, until sometime the new year, after the end of this year. because we are going through that process. you can talk any position you want to here, but essentially negotiating, yields tactics, legality, the legality of article 50, the endgame, all of those have to be very clear before we start. and so, we will arrive in that sometime in the new year. anna: meanwhile, the ceo of one the world's biggest consumer disc makers says britain's vote to leave the european union happened because citizens felt let down by the system. manus: speaking with francine view onpolman gave his

the more inclusive economy. paul: many have not seen incomes go up for the last 20-30 years, worried about their children having jobs, pensions been secured, and they see increasingly a world that is stacked against them. it is not a vote against the current system, that is not for them, as it was a vote for some people in brussels, immigrants. manus: peter rosenstreich is still with us, from swiss quote bank. when it comes to, brexit the machinations, the start of the show francine covering the juncker, no one really knows. one thing i can tell you in. late. the u.k. reacts. this is unemployment. reason i bring this up, coming so far, reality tells us this. in the u.k., six quarters of

negative growth, 10 years ago this week, this is unemployment. this is what mark carney is trying to avoid, by bolstering policy. peter: well, you know, two months after the vote, three months after the vote, now deciding about article 50. wow, this is really want to be a slow burn. very similar to the abandonment of the floor, where people came out and removed very quickly from the swiss exchange rate. all of a sudden, everything is fine. no effect. and a year later seeing the significant erosion it has had through exports into consumer behavior, you know something we can really reflect back into the u.k. it is not going to be immediate. as you said, the longer-term behavioral changes that we have not anticipated yet. you know, i think the quick move, things like selling real estate was what the market moved to, but the longer-term effects

i think are really far from showing themselves. anna: one thing to weather the brexit vote, another thing for the brexit. we need to draw a distinction. we don't know much about the latter. that is talk u.k. inflation. and surprising to some people, input prices at factories, the fastest pace in almost five years suggesting there is inflation building, partly because the swiss. ound, setat weak p off potential short-term problems with the brexit, that really gave them a 50% sort of increase in competitive valuation. so, i think that actually smooth out much more than saycarney's decision to cut interest rate. i think there is the stability in the u.k. we are seeing inflation. sing the labor markets continue to improve. we are not seeing significant erosion in europe, would think would be a significant negative

for the u.k.. net things that relatively stable. manus: how much more vulnerable are gilts, relative to the bond selloff? this is just a little bit of an indicator. how much horrible is the currency here, and the fgi gil there? peter: sterling -- manus: slowburn down. peter: i'm sorry. your italian accent, my american accent -- manus: the vulnerability. peter: i don't think sterling has that much more erosion. and we do not believe it is as horrible as people expect. we don't see the brexit as that first of all, we see it as drawn out. number two, not such an extreme negative as many people are anticipating. anna: perfect place to leave it. perfect place to leave it.thank

you very much. peter rosenstreich. manus: up next, talking about jean-claude juncker's state of the union speech today. this is bloomberg. ♪

manus: -- moving beyond brexit, european commission resident junkball younger gives his state of the union speech in stratford. pushing the bed, but here is proposing a higher offer of 60 -- $56.5 billion and a doubling the break free. unilever ceo tells bloomberg that the central bank stimulus is limiting real economic growth. >> it is not giving us the growth we were expecting. the reason for that is the

system is too much tech toward the capital market. ♪ manus: you are welcome to countdown. i am manus cranny. anna: i am anna edwards. 7:00 here in london. we are getting news from the luxury goods maker, hermes, maker of bags and the silk scarves. they are talking about a challenging market in asia -- japan. they are talking about the context being challenging in hong kong and macau. the context in america is still uncertain. target. -- sales growth they're giving us their numbers for the first half of the year which do not be a million miles away. that profit came in at 545

million. the operating income is 826.8 million which is above the estimate of 818.5 million. backward looking, not too bad. in terms of the messaging, they are talking about sales growth target being ambitious. they are talking about the challenges ahead and abandoning this ex currency sales target. it is a company that is increased -- this is the company's largest division with some items commanding waiting lists. they could run up to a year. manus: did she wait a year for her kelly bag, i don't know. they are buying back watches from shops and retailers in hong kong. let's set about markets. futures -- let's talk about markets. london, frankfurt and paris all switching around. misery loves company but you're

seeing a run in some of the asset classes. -- whention is if you you have had moments of volatility, people are complaining about how quiet it was, how repressed the volatility was good let's have a look at this volatility was -- have a look at how volatility was. that repressed volatility is back with a vengeance. is cash the new asset class of kings? anna: let's show you where we have been overnight. asset classes over in asia. asia-pacific down .3% on msci. the broader ager measured down -- 486 --day -- 46 weakness coming through in the japanese currency against the u.s. dollar. that is failing to lift japanese

exporters, because japanese equities stressing about what the boj is going to do. manus: let's have a look at the bond market. we have third-year government -- 30 year government bond markets in the u.s. 2.13 -- the previous 10 was 2.310. german government bond yield back in the positive territory could all of this money that is rushed in, the question is will it stay? bank of japan and the fed next week. week, theesk next bank of japan -- next week, the japan is going to look at more negative rates. can that steepening continue? anna: let's get to the bloomberg first word news with haidi lun. >> the billionaire

considers the russian leader a role model. was an attack on the republican nominees fitness to be president. eight weeks from election day, democrats are feeling queasy about hillary clinton's narrowing lead over donald trump. the real clear politics average 2.5%.ls has them within bayer -- to create the world's biggest maker of pills and pesticides here to bayer is willing to raise the bid $229 a share or $56.5 billion. companiesle for both have declined to comment. goods maker says the

british vote to leave the union -- speaking in an interview with he gave hisqua, views on the needs for and more -- a more inclusive economy. >> many have not seen in their incomes go up for the last 20 or 30 years. more and about their children having jobs, their pensions being secure and they see [indiscernible] not a vote against the current system that is not defined for them as it was according to some people for brussels. >> global news, 24 hours a day you can find0 -- more stories on the bloomberg at top . i'm haidi lun. this is bloomberg. manus: let's get into the -- asia. we are set for a better tone in

europe. u.s. equity futures are up. what is doing? david? david: we are not quite getting the bit at the end of the session. at this time, it is 2:00 p.m. in hong kong. we have a lot of major markets closing up shop. let me get started with a look at the currency. cohesiveness,this the correlation remaining strong. that is another example of that happening. have a look at currencies. there is a lot of demand for the dollar. not all are falling against the euro-dollar. have a look at equity markets right now. currencies, bonds i will show you in a bit. equities are mostly lower, fifth straight day of decline. we are down by about 4%.

if you do want to get a better understanding or sense of here in asia of what the expectations look at southeast asia. when we start talking about the fed hiking rates, this market tends to get sold up and money gets pulled out. it is not a coincidence that this market has only been up three times. every civil time, that's every single time, the market has gotten sold off -- every civil time, the market has gotten sold off. slidend was on a similar up until monday this week. we are seeing a rebound for that market. rate decision comes out in 90 minutes. asia is down roughly 9%. japan is closing up shop. we are still talking about the bank. have a look at financials on the topix index. , and again on this report

from the nikkei, if the boj does act to adjust its stimulus package, it is going to be on the right side further hurting the net interest margins. anna: david, thank you very much. jean-claude younger is set to give up his vision for europe later when he gives his annual state of the union speech. manus: brexit, growth and migration are a few issues that he plans to touch on. francine lacqua is in stroudsburg. ahead of this money speech -- this is going to be a broad church of subjects. what is going to percolate to the top? i think people be disappointed that he will not say as much as we would hold on brexit. we understand that the president's position is brexit has been voted for it is not actually happened.

the european parliament is meeting at the state of the union which starts in an hour where our inbox was so empty as this morning and they expected the empty in terms of the of article 50 for quite some time. in preparing hisun speech, he went to all heads of state and he was asking them what they wanted to talk about. he was asking them the proposals a wanted to put forward and it is clear the president was coming back disappointed that there was less interest than there was even let 12 months ago. brexit will be mentioned. he will talk about the fact that it puts in play some kind of existential question about europe. he won't address it had on. this is a 19 minute speech so he will be touching on various other things.

anna: plenty of issues for the eu to scrapple with are we going to learn more about ambitions with regards to migration and fiscal stimulus? francine: right. that is what we are hoping for. this is what the european central bank president has been asking for, fiscal stimulus. the problem is the commission and the markets expecting the silver bullet. you will probably not it today. if you have with numbers and we are expecting mr. jean-claude juncker to talk about the state of europe being fragile and frail. the commission cannot be strong. if you look at the state of the union, very different from what we're seeing in the states. the commission is not an executive arm. what they do is execute the will of other states. states -- 288 week

weak states, it is difficult for them to make proposals that have teeth. ,e'll hear about growth project infrastructure spending. overall it is not the silver bullet that markets really want that will get today. manus: silver bullet's, that is a we need. francine lacqua in frankfurt. show.ardy, welcome to the no silver bullets according to francine lacqua. but it btw i. -- put up bcw i. the personification of political risk diverging. there is the euro, 1%. there is a great big golf that can be traveled in politics unfold in europe. how susceptible is the euro? jon: i think the euro is doing

quite well for a couple of reasons. the premier reason was less weeks's ecb when you are seeing ecb admitting practical limits of qe. they cannot do more. it is trying to cry out for the fiscal side. the political risks are there longer-term we are seeing those on rolling in 2017. there's a gap. there is long-term political risk. the elections early next year. for now, the markets are not treating the euro is a risky instrument. it seems a safe haven. anna: what about the risks around the fiscal story? we've heard from many central banks around trying to hand the bat on from central bankers to fiscal actors and persuade the government to do more could what appetite is there in europe to do more? if there is appetite, where is it? john: i think that is what we are seeing, it is a passing of

the baton. the volatility is about writing this volatility -- purchasing of assets and into the unknown of when this does go stimulus comes on board. in europe, the task is far more difficult than it is in japan where we are close to coordinate central-bank, government policy. the u.s. perhaps as well under a trump presidency. but perhaps a clinton presidency will see stimulus as well. manus: how do european assets react to a substantial younger plan.- younger i'm having a little dream there of what might happen. how might european assets react.

-- juncker it is going to be about the political heads. actors, germany, france court needing action and showing a commitment to this more than eu. the eu is a figurehead institution on this front. " back to the local risk are we going to see juncker perhaps bringing people together. we look at -- where there is risk of division, the east-west division. where do you see the frontline politically as a europe tries to work out whether what is needed now is more europe post-brexit or less? john: i am surprised that juncker has survived. he is still there. i don't think he is the political head that collects commitment to europe. i think we see a transition away

from that. it is not about the eu emission, it is what the government showing a commitment to europe. there is a lot of political risk on the path especially popular risk. this antiestablishment tennessee tendency.ee -- manus: as the debate and policy, of central bank the ceo ways in. this is bloomberg. ♪

anna: welcome back. 7:19 in london. let's get the bloomberg business flash with david ingles. david: less about bayer who is proposing an increased offer to clinch the acquisition of monsanto, the world's biggest maker of seeds and pesticides. bayer is willing to raise the

bid to 129 dollars per share -- $129 per share. 22% of monsanto's closing price in europe yesterday. buffett has $12.14 billion -- that comes as berkshire hathaway fell 2%. wells fargo losing its position as the world's most valuable bank to jpmorgan. the shares price has been hit by revelations of employees opening more than 2 million accounts after approval. a softwarel push out update and south korea -- at 16%. it is a soft get measured that prevents overheating. global recalls proceed.

-- the urgency with which samsung is trying to contain its deepest -- that is your bloomberg business flash. anna? manus? manus: david, thank you. the unilever ceo says that central-bank policy has been to skewed toward driving capital markets and not supportive enough to the real economy. anna: speaking into -- and an that speaking in an interview with francine lacqua, he gave his views. day, our end of the crisis of 2007, 2008 has increased and it has given limited economic growth. if it wereargue further disaster, we would be any worse position. it is not giving us the growth that we were expecting. the reason for that is the system is too much contact

toward the capital market and what some people call the real economy. what you see and you take the u.s. right now, many companies prefer to do the special dividends or share buybacks, and really have significantly reduced the investments in their own companies. that goes at the expense of longer-term growth. yet it move this -- you have to move the system and the right direction. for of these issues security and employment or climate change cannot be managed by focusing on quarter to quarter. you have to be sure that we value things that count. if were hitting the planetary boundaries, you have to stop valuing it. we need to move our economic system more toward rewarding labor and putting some more unrewarding on the capital market. manus: mr. pullman speaking to

francine lacqua. this is that members of the bank of japan are open to more easing. it is to be split on the best steps. these are a couple of 's coming in about the bank of japan. it is a question of can they have their cake and eat it too. john hardy is with anna and i will talk about this which is the bomb curve in japan. it is deepening. they want that. where do they go? what is your reckoning? john: the focus will be on the negative rates. we have this here to system which is novel -- we have this. -- theoretically take a take that negative rate and put it quite low. i think they would like to do that and folks on that. the reason like a steeper yield curve, it hurts ask ability to make profit and affects credit

into economy. it is self-defeating to do -- to encourage a flat yield curve. the focus will be on flight yield rates until we get into a transition of fiscal or helicopter money policy which i think is coming. anna: you do think it is coming? what form would it take? that seems to die away a little bit. when would you expect to see something of that ilk? john: i think the markets are wondering. the bank of japan will be the first to do it. it is after the u.s. election. it probably requires a weaker economy. they are going to do their last rounds of yield curve steepening . first it is gone to fail and we will both see the transition to helicopter money in 2017. manus: let's bring aboard to the u.s. , rayelly euro, jamie dimon

dalia says there is risks to the economy. saying let'sarion get over and done with. let's raise rates. john: i think the fed will like to raise rates almost desperately so. that is the signal they have been giving off. the economy is not operating with the latest round of numbers it hike but it is looking to be more likely a december hike -- numbers. they hike but it is likely to be more likely a december hike. toward.eading anna: what you see in the underlying u.s. economy that will support or get in the way of that? the inflation story -- john: some of the data points to strength in the economy. there is a difficulty in disentangling the collapse energy. -- the collapse in energy.

i don't see a huge growth revival. anna: it sounds like the dollar gets stronger. john: i do think the dollar gets stronger with this goal recognition that we are pushing toward the line asset purchases era.a -- asset purchase/qe ndex against -- man: that's manus: john, thank you very much. we have had a couple of big luxury brands report this morning. small, -- richemont, a tough time on watches. anna: keep an eye on the luxury stocks. suggesting we will be stronger at the start of trade for now. when we came in this morning,

asian equities sessions looking weak but that is picking up on yesterday's story a little bit. u.s. futures look stronger. that is it for countdown did on the move is up next. this is bloomberg. ♪

guy: open to on the move. 7:30 in london -- welcome to on the move. 7:30 in london. i am guy johnson. here is what we are watching, stocks are flat. bonds are back. summer of activity ends as of volatility makes a vengeful returns it is the central bank put being called in. jean-claude juncker assesses the state of the fragmented union. we are going to hear from here