francine: investors focus on the boj and fed this week. central banks decide on their next move. calling for calm, the london mayor offers reassurance for the -- brexit negotiations. alertrk and new jersey on . a bomb goes off in new jersey this morning as new york city deploys 1000 more police after an explosion on saturday. we will break down what this means for your selections. ♪ francine: welcome to "the pulse." live from bloomberg's european

headquarters here in london. first thing's first. let's get to the markets. it seems to be rallying a touch. oil rebounding, dollar sliding, copper declining. you can see the japanese yen, 1.0205 -- 102.05. there is a -- there's an article saying if the fed doesn't do much, it is all about what the boj does. , what peopleore pay to borrow in yacht -- borrow in yuan. 0.713 -- that the value up 0.713. let's get to bloomberg first word news. nejra: a device found in a rubbish bin has exploded. that is according to ap citing officials.

the fbi was working to -- found in the same bag. the discovery of the package after an explosion in manhattan injured 29 people. oil is on the rise after clashes in libya halted what would be the first overseas crude shipment since 2014. reports from algeria saying opec may call a meeting if members reach a consensus later this month. the secretary-general told the country's state news agency that he is optimistic about the talks . non-opec producer russia will be there -- maybe agreed. london mayor has urged uk prime minister to decide quickly to build a new roadway at the airport. it will show the city is still open for business in the wake of the brexit vote. york. in

>> we should announce in the next few weeks the green light to a new runway at galway airport. heathrow has two. around --her issues no public subsidy. there would be jobs growth. may i am saying to theresa is let's get on with it. nejra: the european union's top competition that later is standing by her decision to tax from4 billion in apple. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. i am nejra cehic. this is bloomberg.

francine: a big week for central banks. the boj kicks off its two day meeting tomorrow split over what kuroda will pull out of his hat. the u.s. rate decision in the fed on wednesday while futures are pricing at a 20% chance for a hike. what more can central banks do? hard andy are trying the fact is -- >> they are trying hard and the fact is there is only a limit to what monetary policy can do. policy and other policies have not been there, so they have been the only game in town. what we are now seeing, particularly in japan is not enough. they are going to have to do something else. francine: they will have to do something else. we are introducing our next guest, gilles moes.

thank you for making the time to come in. fed and bmg -- boj, what will be the most worrying. gilles: this is where you have the widest array of possibilities. the ability of monetary policy in japan to really move the dial. without the necessary clear return on the real economy. it is clear the boj [indiscernible] especially from a selfish european point of view, because investors look at the boj for guidance as to what the ecb could do. it is a point of focus. francine: what are you expecting from the boj. my chart of the hour shows the correlation between the fix and the yen dollar. the yen seen as a haven. confounded to what

governor kuroda can do next. gilles: on the target we think that the boj will stand firm on the need to bring inflation. there is a debate on this. on the technicalities, it seems the boj seems to be nervous -- fell intot that negative territory in july. essentially something around the way you could deliver this is shifting a little bit the focus of the purchases, currently the target. target five and 12. they could create uncertainty on where the boj could focus good from an economist point of view, i fail to see what would be the point in delivering this. francine: is this an inflection point because kuroda could say

hold on, negative rates have not worked as well as i have wanted them to. this could backfire, right echo gilles: -- right? gilles: we don't know what type of negative rate he has in mind. it is unclear what it means for the long end of the curve. having negative yields at the long end of the curve creates issues for long-term investors. from the economy point of view, if you stick the curve, why is there no improvement in inflation expectations. the thing you do is tighten monetary conditions, so i understand it is appealing for the boj to move away from negative yields. create anyreally additional stimulus. back to what was discussed before, we all thought it would

be about fiscal at the beginning of the summer. monetary policy would come to complement a nice ingredient to what would be really a change in the fiscal sense. things are probably muddier than expected. francine: boj did try it. there was a day where they said this is what we are doing on when you went into the detail, a lot of it was already planned out. gilles: fresh stimulus is the issue. francine: in europe? right. are you expecting more stimulus? gilles: i think we're putting too much hope. we already have a fiscal push in europe. [indiscernible] there is a change in the fiscal stance. and as longomentum

as germany clearly doesn't want to reverse its fiscal stance and -- ing as other countries don't think we'll see a lot more than what we have seen. francine: is there any doubt in your mind that they will not raise rates given that the market is only pricing in a 20% chance. them.: we are considering francine: y? because of the uncertainty, lack of wages and the presidential election? gilles: the fed seems to be a glass half-empty mode. they will always care about the risk and they are taking, where they are in the cycle and where [indiscernible] it makes sense to err on the side of caution. the market looks much better. inflation is normalizing.

there is no case for it in trying to push things to the extreme and guess a decision. francine: gilles, thank you so much for now. he stays with us. we will be talking about oil, brexit. pulse" including angela merkel's party suffers -- a warning indicator for banking -- should the world worry about china's debt? the chancellor phil hammond says the u.k. could give membership into the single market. we'll bring you the interview later. this is bloomberg. ♪

francine: welcome back to the pulse. i'm francine lacqua. let's get to bloomberg business flash with nejra cehic. nejra: australia's stock market was hit by a series of glitches. traded started more than hour late. i was followed by two for the outages after investors were unable to why some shares. issues come as markets are braced for u.s. and japan's central banking -- lehman ceo says the geopolitical term of its could -- geopolitical turbulence could crimp orders and 2016.

after --e everyone is maximus capital spending. there is a lot of uncertainty basically -- the geopolitical titans of the world. 2017 will be another complicated year. are upnoble group shares after the commodities trader says it is seeking an investor is on track to raise $2 billion and also warned it could be another two years before return to profit. in number of factors including a commodity rout, a second-quarter loss have caused the company shares to slump. that is the bloomberg business flash. francine: thank you so much. oil is on the rise. it has rebounded. that is after clashes in libya halted what would be the first overseas crude shipment from the

-- 2014.e 2014 good let's welcome gilles moec. and will kennedy. thank you for joining us at what are the chances we get an opec meeting in out years next friday? >> we have had a lot of rhetoric based on the secretary-general who has been in algiers. things are going well. [indiscernible] says it is going to be deal but it will not be anything firm. advisory talks to sound out what sort of action may be possible. emergency opec meeting afterwards to determine any agreement. francine: they are talking about talking in the future. isl: this one in algiers going to be an official opec

meeting. between that, there is a meeting between russia and saudi arabia. we got an autumn full of oil meetings. francine: i love this. we knew this might happened because this is what happened 12 months ago or 18 months ago. if you look at the price of oil, it raises up some $10 on the back of hope that something may happen. thiss: what all of rhetoric does is underpins the market. they know they've got to go against the possibility of some kind of policy action. the cap between -- and what they are actually doing. if you look in the biggest oil producers, they are producing as much as they possibly can. advanced production is rising fast. russia is producing more than 11 million barrels a day, more than any time in the 1980's. francine: gilles, how concerned are you? i know you don't want

to talk about the price of oil. people are seeing risks which for opec is there's too much of the stuff. yet, they cannot help themselves. -- you are seeing the car crash but you are saying i don't have an option at the moment. everything is so short-term that crisis.o -- another gilles: central banks do what they have to do according to the mandate. i am not sure there is a car crash coming. there's a crash coming if there --no proper reaction from the private sector or public sector. francine: which we have not seen for five years. gilles: if you are a central bank and you have to comply with the mandate, your mandate is to try prop up the economy as long

as inflation is not in target. -- it is not your fault. the point that is increasingly made by central banks is in europe we have a problem with transmission of monetary policy stimulus. say then the ecb should stop because it is harming or it could should to continue -- or it should continue but there are some measures to be taken. the begging sector can be healthy again -- the banking sector can be healthy again. every time he comes back to the central bank but i think the central bank is not doing what it should do. francine: if you look at the iea, they said the global oversupply in oil -- is there a danger of producers start curbing, it will launch another 18 months to two years? will: i

think there's a lot of gloom about the market. they are not feeling optimistic about next year. they see prices starting to glut , higher than $55. there is very little spare capacity. they could not add that much to the market quickly as anything goes anywhere. francine: will kennedy, thank you so much. us.es moec stays with we will be talking a little bit about european politics. partyt, angela merkel's leader support in berlin as anti-immigration alternatives for journeys -- for germany -- how does this change the political landscape? we will discuss this next with june. this is bloomberg. ♪

francine: welcome back to "the pulse." german chancellor angela merkel's party and the coalition partner lost support and regional elections as the anti-immigration alternative for germany siphoned off the voters. gilles moec is still with us. i don't know that this is very telling or something we should think about. gilles: this is something we have been monitoring.

from a macro view, you say this is a normalization in politics. [indiscernible] germany was bucking the trend now it is back to the floor. one thing on the results yesterday, what is interesting the polls were right. it is something we have been .ealing with since brexit every time there is a populist movement, there's suspicion that the polls are not accurate. this time they were expecting 13% to 15%. it seems that we have a proper good idea there. trigger -- from a political point of view, i think what we care about is it is not the sense that they could -- those populist parties are having an impact on the agenda,

even when they are not in power. [indiscernible] if you look at the european council, no decision was made and as long as the biggest countries are stuck in their own political agenda -- and we have general elections in germany and to moveext year -- try the european agenda. francine: does this mean the moderate politicians will have to move more to the right or left? we are seeing it to some degrees as european politics are fragmented in france. gilles: i wrote two months ago the elections in france a very socialocusing either on cultural issues or on economic reforms. the pressure from

the nation of france to be more about social and cultural issues , so what it creates is when you got a government finally coming was such a economics second order issued during the campaign, there is no clear mandate for whoever comes into power to push through reforms. it is something we need to care about. this obsession about those reducing the brain time available for pushing forward economic issues. something that he wrote in the that it wasdea about about -- it was a lot about military union, where's the biggest problem we have --

the government is not focusing on what has been the biggest issue. francine: when i was in strasbourg that we talked about they were trying to find a common ground which they do not have by working on security in the fight against terrorism. they felt like this would get a united front. gilles: that is fair. there is a common purpose. one of the issues being the eu is not normally reform for this. that they do this is completely understandable. why they are doing this, we still don't see any proper progress which really as an the main problem. francine: thank you for your insight. -- coming up next, as a warning indicator for banking stress climbs to record levels, we ask if the world's debt?about china's

we talk about government intervention in china. we also talk about the possibility of the next financial crisis in china. this is something we talked about two months ago when there was water being thrown a writ. is that back?

francine: welcome to "the pulse." live from bloomberg's european headquarters right here in london. let's get to bloomberg first word news with more on those devices in new york. nejra: francine, a suspicious device found in a been near a new jersey transition has exploded as a bomb squad was attempting to disarm it. that is according to ap. the fbi was working to disarm one of five devices. the discovery of the package after an explosion in manhattan on saturday injured 29 people. .il is on the rise this morning

after clashes in libya halted what would be the first overseas crude shipment from that port since 2014. reports from algeria say opec may call a meeting if members reach a consensus on strategy later. told thetary-general country's state news agency that he is optimistic about the upcoming informal talks. not opec producer russia will be .t the discussion a deal to cap outputs maybe need -- maybe agreed. london mayor -- the london mayor has urged theresa may to build a new road at galway airport. he spoke to bloomberg in new york during a trip to promote relations and reinsurance investors following the june referendum. >> we should announce in the next few weeks the green light to a new runway at galway airport. heathrow has to.

two.athrow has heathrow has issues around every structure. galway is ready to go. there would be jobs and growth. a better galway leads to better competition for heathrow. what i am saying to theresa may is let's get on with it. nejra: the european union's top competition regulator expanding by her decision to demand more than $14 billion in tax repayment from apple and may investigate other u.s. companies. she meets with jack lew in washington later today. global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. cehic.jra this is bloomberg. francine: thank you so much. let's talk china, the overnight interbank surge the most since -- amid speculation that china's central bank is intervening.

a warning indicator for taking stress climbed to a record. take a look at my chart of the hour. 30.1%, credit stood at the highest ever in data which stretches back to 1995. let's bring in miranda carr. miranda, always great to have your perspective on what is going on in china. it should we worry? miranda: the fact that china has too much debt in the system, particular corporate debt is not new news. -- particularly corporate debt is not new news. we have seen studies about this. here, aware that over china is aware of this. what you are seeing with that rising debt, that shift. they are taking money out of corporate debt which could be slightly high risk and shifting

it to government debt. you have local government financing platforms. china is going to collapse story , also at 15 trillion of that -- so 10% of the gdp figure is shifting on the fiscal balance sheet. that keeps the debt levels elevated but it means -- the key thing it is not going to revolt. therefore you are not going to see some crisis. the other interesting thing, mortgages is aware your risk are going to lie because that is what we saw prices, the housing bubble developing. now in the last figures, the debt figures, he saw household credit taking of the biggest proportion. that is where the debt is shifting. francine: they are trying to limit that. it seems that authorities are putting thing in place to do you erisk it to make

it more sustainable. miranda: the debt issue, it may seem incremental if you're looking from the outside. we are talking about the debt. this is basically kind of rolling forward some debt which has not been able to be repaid into equity which may get written down to zero. it is a long process of writing it off. economy. comes up the it is not an efficient way of doing what it means you don't get crash. francine: you kind of rollover. miranda: it is a bit messy. it --ne: what you make of we saw this massive surge in the past 24 hours. miranda: you have two factors, the pboc intervening post agreement to prevent the currency weakening. also the bank is having as we

get to the end of september, the -- whiche to scramble covers offshore cnh and on their mainland activities, they basically have to scramble for cnh to fulfill their ventilatory ,bligations. as we used to say you saw a surge at the end of the quarter, then it comes down. it does indicate they are intervening quite heavily in the markets and also trying to support the currency. francine: is that a good thing that a it is not a judgment -- a good thing? it is not a judgment. we know they want to be flexible but at least they have a handle on it. miranda: this fits in the whole shanghai accord we've got the u.s. and the china halting off how they are going to manage the currency depreciation. that is a long-term thing we are

not going into some major crisis, but the side effects of that are significant, because they have to keep interest rates high on shore in order to keep the currency. they have to keep the reserve requirement high. weakening,d it as but it is like throwing sand in the tank, it doesn't stop the engine. it is not going to explode, but you've still got sand. francine: talk to me about outflows. this was the big concern to everyone to go. now it has peter dolph. off. has petered are things getting worse mood? miranda: there is -- getting more smooth? miranda: theare --

real pekin capital outflows was to do with -- in terms of the hot money outflows, property market and anticorruption investigation. now both of those have settled down and we are in the tier one or two cities. why should you take money out of china if you're housing prices are rising every year? you might as well keep it in and put it to work somewhere else. francine: that makes sense good miranda, thank you for coming on. up next, we'll hear from the london mayor who wants to reassure investors that u.k. capital is open for business. the latest on the device was exploded near a transition in new jersey this morning. that comes after the weekend blast in the chelsea district. j -- this is bloomberg. ♪

francine: welcome back to "the pulse." european stocks higher this morning. let's it to mark barton. mark bowe -- mark: we're rebounding from the -- the gauge fell for a second week last week . that is the longest losing stress since july. friday's close was the lowest since august 3. every single industry group is rising today ahead of this big week which includes meetings from the auto reserve and the

bank of japan -- from the federal reserve and the bank of japan. interesting call today in the last they are so from goldman sachs asset management. it is betting there is a rally in the dollar that propelled it to a seven-week high on friday. this is the bloomberg dollars spot index which gauges the dollar against 10 of its leading peers. goldman sachs cutting its forecast and gains from the dollar into the yen. it is not optimistic about the boj policy meeting this week. goldman sachs asset management says we expect to see dollar weakness versus g 10 and emerging-market currency. this is gold and this shows how investors are cutting their bets , hedge funds exiting from gold speculators cutting their bets on a rally. holding this holding global and traded funds back to buy -- down

from a three-year high in august. the net long position in gold futures which is what this chart 11%, to hundred 48,000 contracts for the week ending september. if we are talking about speculators, let's talk about oil because it is heading for the sidelines or speculators are heading for the sidelines as opec members discuss freezing output. money managers cutting wages over falling and rising crude prices for these talks at opec begin. long positions in blue. stocks are rally today after that big trouble last week. francine: mark barton with your acid check. the mayor of london has been in new york to make sure that stranger investors that the city remains open. -- the city remains open.

the brexit --was the perception may be created overseas that london is going to stop being open-minded. we've got to campaign. london is open. tom: where is the next alternative? >> my message to friends in america, business people who do great work in london is in london you can have access to regulators.s, parliament is there. why would you want to go elsewhere? when may speaks for you to london and for the rest of the united kingdom to europe, who is she speaking to? do you know who you should speak to to move forward business and

politics? >> one thing we have been impressed upon the prime minister is crucial that when it comes to negotiating with the european union, london has a seat around the table. tom: how do you affect that? >> it means for example when it comes to getting ready for negotiating relationships and access to the siegel market, our government needs to recognize that is crucial for london. -- london is as powerhouse for the u.k. the government recognizes that even if you were in favor of the brexit, if you are on the right side of history, it is in your interest to get the right deal with the eu, because if you don't, it could lead to jobs leaving london. tom: the idea of a single market. a wonderful story on the idea of london in the united kingdom, do

they need the eu single market? or do they not? can you go at it alone? >> we will survive. the issue is increasing prosperity, having more jobs, growth, being a beacon for the rest of the world. that means having access to the single market. that means talking to our european neighbors. my point is simple. we've got to use brexit as an opportunity to reconfigure our relationship with the eu but also recognize america, canada, .ustralia, japan, india francine: must watch tv. silicon. talking to this is a great scoop by --omberg. a name shut out

thank you for joining us. how realistic that the u.k. ,oved away from single market lose passporting rights and still thrives? >> the ambition is to keep access to the single market and have a guess have a passporting equivalent. -- have a passporting equivalent. that is what the government is banking on, the fact that it is too costly for the eu for the company to raise a lot of money in london to give up london as a financial center. this would be a great time for london. at the moment, those are not the noises we're hearing. francine: it is not one when you look at switzerland, the eu seems to be standing pretty firm. why would they be so nice to london if things could be moved to frank for it. a lot remains in play here because negotiations have been started that's have not

started. -- have not started. you have a chancellor that is the most post single market person, but i think he has come to realize that david davis, liam fox are not as wedded to this idea of this in the market being the key to the u.k. survival, as perhaps he once was. immigration is what this brexit vote was all about. politically, it would be toxic to give that up. francine: how much does the chancellor has a say -- have a say? do we know the power play? svenja: this is a question that the city is asking. he used to be the case that the treasury was all-powerful and george osborne was the second most powerful man in the cabinet. the power is shifting, because the public did a brexit vote.

david davis is the man who campaigned to brexit. was in supportay of it, she was in the remain camp. francine: when do we find out? i think they are try to look for a lawyer to find help for the government to shape their teams. svenja: it is not just lawyers, you've got to create the whole bureaucracy. you've got to move that bureaucracy from brussels into the u.k. government. that is no small task. triggers -- until article 50 triggers, we won't know what negotiations are like. francine: svenja, thank you so much. one of our lead reporters for the u.k. elections. up next, bombs explode in new york and new jersey. how will this shape the rhetoric in the run-up to the u.s.

election. this is bloomberg. ♪

francine: "the pulse." this is "the pulse." -- this is "the pulse." nejra: australis stock market was hit right glitches in today's session. traded started an hour late because of the problem. that was followed by two further outages after investors were unable to buy and sell shares.

the issues, as the markets for japan's and ecb's desk japan's and the feds -- japan's and the feds easing this week. the head of europe's for japan't engineering firm -- the delay spending on projects. after -- not too much about capital spending. a lot of uncertainty in the marketplace. [indiscernible] the geopolitical titans in the world. year.ill be a competent nejra: south korea shipping is cutting its fleet by returning some chartered vessels to its own as it struggles for survival. to company has returned their owners and plans to remove 13 more container carriers.

didill decide whether it distressed company that's whether the distressed company -- whether the distressed company will be revived. remco a suspicion -- francine: a suspicious device exploded near a transition this morning. this comes as authorities continue to hunt for those behind the bombing in new york's chelsea neighborhood that injured 29 people on saturday. more on these elements, let's head to michael mckee -- for more on these elements, let's head to michael mckee. are we wiser about who is behind the device? and what are authorities saying overall? michael: we are no wiser. iss is you in week -- this u.n. week. as youvernight mentioned, five-found near elizabeth, new jersey, very close to the newark airport.

that's one did explode while being examined by a robot. -- one did explode while being examined by a robot. the two bombs in new york city on saturday night, one of which exploded. 29 people injured. governor andrew cuomo says it doesn't appear to be an international connection. five people were detained overnight. no further details but as cuomo said if you plan to bomb in new york, it is an act of terrorism. does this play into the presidential race? michael: it is hard to say how this will play longer-term, because we do not know who did it. it doesn't stop donald trump could he tweeted out he will make america safer, he doesn't say how. hillary clinton said she it. it doesn't stop donaldcondemnedt wanted to wait for more information before commenting.

francine: what is the one thing that you will be watching for. -- watching for? there is the presidential debate next week. depending on what we learn from these devices, will that impact what the candidates will say? michael: the impact on the race of the bombs will depend on whether or not americans feel unsafe which may depend on who eventually is found to be responsible for this. as you point out, the debate is going to be a major event. all of the headlines leading up to that, because of donald trump has closed the ground with hillary clinton very dramatically. francine: michael mckee joins us on surveillance. i will also be joined by tom keene who is coming to us from new york. we pick up the conversation with james bevan. australia chief economist -- all of that and much more coming up. ♪

francine: central banks crunch time. investors here from the boj and fed this week as policymakers decide on the next move. the overnight interbank yuan rate surges and hong kong. -- the london mayor stresses the importance of its access to the single market in an interview with tom keene. this is surveillance. there is a lot going on this week. first of all congratulations on a great interview