guy: welcome to bloomberg markets, the european open where we will bring you the first trade of the day. this is what we are watching kurt the gloves come off. the second u.s. presidential debate got personal as a candidate discussed donald trump's crude comments from 2005 and bill clinton's past. but did donald trump outperform expectations? hold.g is set to

the doj.bank and the german lenders negotiations with the u.s. department of justice are set to continue despite a report of a breakdown in talks. when will john cryer get a deal? key question of course. it is that move on deutsche bank. the bank is behind me here in frankfurt, touching down on futures. slightly underperforming the rest of the market. we are seeing markets on the equity front looking a little more positive. the british pound, down by 0.4% this morning. again under pressure. 123.86. how will it trade through the

week when we saw negative equity markets on friday. we are lucky to get a positive start this morning. let us get you caught up on what you need to know. deutsche bank's negotiations with the u.s. justice department to result a year-long investigation into the lenders handling of a mortgage-backed securities are continuing. earlier, germany's newspaper reported that john cryer was not able to reach an agreement with the doj. declinederson does -- to comment on the talks. adopted aesses have more cautious outlook and may be less inclined to invest and hire since the brexit vote. the lobby group is using its first quarterly survey since the referendum to call on the u.k. government to take steps to left

confidence including approving new infrastructure projects. national bank president says the central bank can cap interest rates further into negative territory if necessary. jordan also new to the bank has already pushed rates quite far. you have to distinguish between an exchange rate channel. we have a lot of evidence that the exchange rate channel is working. >> will you become triple going further into negative territory? >> we still have room to go further if necessary. juliette: global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . i am juliette saly. this is bloomberg. guy: breaking news from the gcc, from dubai. contract.n euro

half of that will be going to the french firm. alstom. we will bring you more on the details on the contract. the second presidential debate between donald trump and secretary clinton quickly lived up to expectations as a better and personal face-off. donald trump dismissed his vulgar comments captured in a 2005 video and tried deflect attention to the issue. the democratic nominee said donald trump's remarks showed he was unfit to serve as president. donald trump: i did not say that at all. this was locker room talk. i am not proud of it. i apologized to my family and the american people. but this is locker room talk.

mrs. clinton: what we all saw and heard on friday was donald talking about women. what he thinks about women. what he does to women. and he has said that the video does not represent who he is. but i think it is clear to anyone who heard it that it represents exactly who he is. guy: the second presidential debate. let us turn to the peso for a guide as to how that debate turned out. we can see clearly, and i have and itthe first debate was a move up for the mexican peso. donald trump did not do well. maybe not quite as substantial as a first one but nevertheless you have to remember that we have had a very difficult week for the donald trump campaign as a result of which we have already priced in that move.

let us bring in john hardy. he joins us from denmark. what did you make of the debate in the market reaction? john: the market reaction has the take away that donald trump's campaign is struggling. not just with the mexican peso but also the canadian dollar is gapping a bit stronger. it is too early to draw conclusions about the campaign. if we take this as a brexit it turned out to be a leave. i think there is a similar risk. and the outcome is closer than the polls and the press are making it out to be. sense on give us a whether we should be seeing such a correlation between the mexican peso and donald trump's rises and falls. we have a great chart showing how they are in lockstep.

is this the right sort of function we should be seeing? john: in broadbrush terms, yes. the market has seized upon this in a boring market. what the actual we are a lady on the ground will become a postelection if there is a donald trump presidency could be at odds with how the market is trading now. i think it is just the market seizing on a theme. seenas you say, we have the moves in the peso and the canadian dollar, if you look at dollar volatility, we are not seeing much priced in yet. backve a chart that goes to the 1970's. the yellow line is the average one-month all attila the. we are below that line at the moment. given this is such a difficult

election to call, why is the market not pricing in more volatility around it? john: i don't think the market knows what reality looks like on the other side of the election. we have a lot of broad themes. it is difficult to extract how we are supposed to be trading the dollar. for example, we are seeing the troubled ends of qe, we are talking about a taper and the fed is not priced to do anything for the next 18 months. plus, where is the detergents in policy? what is the story that is supposed to drive the dollar from here. there are a lot of interesting potentialities but the market does not have a clear sense of what it is supposed to do. i think we have maybe a different picture, dollar versus the different currencies. there is a lot of uncertainty.

talk to us about the trends in u.s. treasuries and how that impacts the dollar. i know you said we are getting close to 1.75 yields. john: it is not just about the hike but about the poll away from the q e focus. it seems clear that the ecb at some point will have to pull away. the bank of japan is already doing so. the fed did a long time ago. this will mean higher, longer rates. 1.75 is a massively important level. i think it is an interesting trigger potentially for the dollar stronger especially against emerging markets and the smaller currencies. the unwinding of all of the risk parity trades. what is the slow down and what does qe mean for the asset markets? markets lot across the

is pivoting on a u.s. treasury yield going higher. guy: stay with us. we have plenty more to discuss with you including japan. john hardy is joining us. it is columbus day in the u.s. coming up, we will hear exclusively from governor kuroda who is suggesting that the bank of japan may delay its inflation target until 2018. no deal get for deutsche bank. john cryer leaves empty-handed. deutsche is called lower today. ge ceo fork to the oil and gas. this is bloomberg. this is the open. ♪

caroline: welcome back to the european open. live here from langford. dax called up 0.1%. here is juliette saly. juliette: samsung has halted production of its note 7 phone according to a person with direct knowledge of the matter. it comes after several reports of replacement phones initiative -- supplied after the initial recall catching fire. sales fell.

company isent increasing its stake in the vendee -- vivendi. is said to hold about 29% of the voting right. novo -- the company says the deal largely completes the drive to raise $2 billion. with has been struggling mounting losses and eight liquidity sweep. 50 minutes to go until the market here in europe opens. governor kuroda has given the clear signal that he may postpone the forecast date for achieving the banks 2% inflation target.

in an exclusive interview, he said it may take slightly longer to reach that 2% target. expecthe one hand, we to grow nextth year partly because of the fiscal package the government of the and the impact fiscal stimulus. and that it will be felt next year. this year, maybe a growth rate at about 1% but next year, around 1.5%. or something like that. >> and inflation will grow with that? that sense, the economy is likely to accelerate growth. how about inflation? sharply declining oil prices and because of somewhat

expectations,tion the current rate of inflation is slightly negative. so, it may take slightly more inflationreach the 2% to carefullyave study all relevant statistics review the forecast. we may change. we may not change. at this stage, one thing is quite sure, economic growth is likely to accelerate next year. thatt you seem to suggest inflation may take a little bit longer. possibly reached in 18 months. >> maybe. but already, the latest forecast made a few months ago indicated

reach,flation rate could of which 2% in the next fiscal year but that is with great uncertainty. downward risks as well. at this stage, one thing is quite clear and that is economic growth is likely to accelerate next fiscal year. that is quite sure. on the other hand, inflation rate, we expect it to gradually when?rate, toward 2%, but when will that be achieved? it is up to the next forecast. caroline: let us get a reaction to that exclusive interview with japanad of the bank of

with john hardy. he is live with us from denmark. this potential delay, does it matter? john: it really does not. the bank of japan has failed to bring back inflation. it has changed the focus on the yield curve and setting yields at a certain level and that. it allows them to step away from purchaseslarge jgb but it is also an admission of pending of it is a control of their balance sheet over to the japanese government. to the fiscalp side to provide that stimulus. he is right to point towards that because that is what will determine if nominal inflation rates in japan can reach at the 2% target. are watching this effective move over to fiscal policy, do i continue to buy the

japanese yen at the moment. we are trading a little positive. what you thinking? -- what are you thinking? john: if the japanese yield has been fixed, we start to see nominal inflation creeping up in japan. that means negative real rates in japan which is very yen negative. if we do see an anticipation of negative real rates in japan, more so than in the u.s. and we see those u.s. yields higher, than the differential would favor dollar higher than the japanese yen. caroline: we are seeing so many that's for stronger yen -- we are seeing so many bets for stronger yen. are we likely to see it holding on to 102 levels?

it looks pretty stable. i do expect it higher. i think the japanese yen weakening story, it may take some time. more of a 2017 story. we are at a tipping point yield wise. if we do see an interest in bond market yields going higher, the trigger could come sooner than i anticipate. risk, dollar-yen, longer-term, significantly higher. crash last week caught many people. this morning, trading is back up. this drift lower rather than an aggressive mood -- move lower. john: i don't see what clears the uncertainty. i think this flash crash was an

interesting test of sterling. it happened because of order flow and a liquid market but if pound would the bounce back. it has not happened. i think there is a sentiment problem with the pound. practically, there is a large structural deficit. 5% of u.k. gdp and worsening. ofre is an outflow because the uncertainty. and political leadership is looking at this hard brexit scenario and not using very diplomatic language to describe what will happen from here. i don't see any clarity. onave reassessed the risk the pound significantly lowered. if there is a headline suggesting a following -- a thawing in negotiations, that would mean one thing but i don't think so. caroline: john hardy, it has been great getting your view across the fx market.

now, we are turning our attention to the building behind me. we will be looking at the deutsche bank cause. deal as we sawj john cryer head to washington for the imf meeting. what will this mean for the future of this german lender. this is the european open. ♪

caroline: welcome back to the european open. live here in frankfurt talking deutsche bank. keep an eye on that stack. the dax underperforming potentially because deutsche bank could once again be in the line of fire in terms of selloff. down 3%. no deal struck with the doj. remember, we also saw that push higher on friday in hopes in the u.s. time that we could see q atar increase its desire for this stock. the royal family could be upping their state to 29%. guy: a lot of talk about that. who would be coming to the rescue of deutsche bank. that is one of the big stories we will be watching.

it is called lower at the morning -- this morning. pushing marginally higher. it is columbus day in the u.s. in the treasury market is closed. the european market is about to open. that story is next.

guy: good morning and welcome to bloomberg markets, the european open. i am here in the city of london. caroline hyde is over in frankfurt. we are moments away from european trading. the gloves come off. the second u.s. presidential debate cap personal as the candidates discussed donald trump's crude comments from 2005 and bill clinton's past. but did donald trump outperform expectations? samsung is said to hold output amid reports of

fires. and deutsche bank and the doj could the german lenders negotiations with the u.s. department of justice are said to continue despite a report of a breakdown in talks. when will john cryer get a deal? guy: let us talk about the european open. let us see what is happening. expectations are a slightly positive start. keep an eye on deutsche bank. the ftse 100 is getting a little bit of a lift. trading higher. market basis,ed the ftse 100 is the best of performing market this year. watch what is happening with deutsche bank. let us get the details of all of this as we see the pound to continuing to drop. we are now below 124. manus cranny has the details. the poundn does

become a problem for the british economy in terms of psyche? better.umer did up 0.2%. financials are around the deutsche bank and not having a deal just yet. wti, down 0.7%. see this rise. we are still below the $50. alexander in russia says to the market that it is unlikely you will see a deal at the energy meeting today. you had the short positions mounting. net short positions. the market is as short as short can be. is a great deal of focus on the pound. was here fromg

hsbc. he says the five stages of grief are most important in terms of sterling. take a look at the gilt market. we have a u.s. holiday today. there is your gilt market -- up 0.97%. sterling will be up front and center. on the amplification of the ftse 100. $2.6 billion deal. this is extending the current theem and taking that to site of the expo, 2020. william hill is waiting for an opening price on that. it is said that the canadian gaming stock will merge. don't forget that william hill rejected that three-way takeover. deutsche bank down 2.5%.

no deal on the table. is really the qatar want? dilution of equity? manus cranny is off to bloomberg radio. deutsche bank's front and center. executives failed to reach an agreement on a multibillion-dollar penalty and those talks are ongoing in washington. a person familiar with the matter has told bloomberg that negotiations are continuing. let us bring in citigroup's global head of trading strategies and the bloomberg finance reporter, michael moore. michael: we know that deutsche bank is exploring all of its options for what happens after

this settlement is ultimately agreed to. whether that is a capital raise or some sort of strategic move, we know that the qataris have some interest in increasing andr stake in the bank talks are ongoing in the dac -- in d.c. these kinds of negotiations, there is a lot involved. it is not just a number. it is --what does the bank admit to? what is the breakdown of cash versus consumer relief? and other kinds of penalties. there is a lot to iron out. caroline: we want to get your sense of no whirlwind deal with the doj. how systemic is this? sure, yes, itor

is generating a lot of questions from investors. deutsche bank or some of the other banks -- investors as a whole are looking forward to being able to draw a line in the sand. any catalyst would be seen as a potential positive. do we really understand what is happening at the moment? of hows an ongoing issue you price this bank in terms of its ultimate exposure. >> the general question about how you valley of -- about how is true. these banks the focus has been higher because of these events and the catalysts ahead of us. it raises a general question. for investors, trying to pick

the bottom of the banks has been difficult. but we are seeing some inflows into the sector. difficult investment proposition. keep bitingseem to at the apple. they did that with barclays and credit suisse. with that be positive if they expanded with deutsche bank? michael: having that option for deutsche bank of having an anchor investor if they wanted to raise more capital would be a positive for them. if you are the qataris and you have a longer view than trading in and out, perhaps you can see some opportunity here. but you would have to have some patience because of all of the question marks that still remain

with this bank even after you get the settlement. there is a question of can they generate enough capital internally to get to where they want to be. guy: the banks in europe have become a smaller part of the index and that is simple mathematics. but the influence they have remains fairly substantial particularly when it comes to the weight u.s. investors view what is happening in europe. do big of a discount european equities have as a result of what is happening with the financials? >> you bring an interesting correlation. you look at european banks versus u.s. banks and the european market versus the u.s. market -- guy: despite being smaller and smaller. whether qe is working. in terms of putting a discount on it, i would say a 20% as aunt would strong me

wrong discount to be applied by investors. you have to bring current see into the mix. what we have seen in the last few years, is that they never performed in dollars. from a u.s. investment point of view does raise questions. we are seeing the ftse at the moment where the ftse as high. it is only in pounds and not in dollars. to a large extent, going to the end of this year, if we get a few increases within the european banks, looking at the future and understanding that less capital will be needed, that could be an interesting turnaround for the market. it will all be linked to the fed, the dollar, and the inflation. purely from a positioning point of view, we do think normalizing does make sense. differentiateo

with the north of europe versus the south of your. don't go for the risk year thanks. guy: balance the portfolios a little bit. we will get his take on what is happening. we are watching deutsche bank carefully. we will bring you the latest when we come back. michael moore, joining us from our financial team. thank you. poundto calm, we are on watch as european leaders gather in luxembourg. will things slide further. we are also in istanbul, speaking to the ceo of general electric. haltingsamsung fall and of the sale of note seven. this is bloomberg. ♪

caroline: welcome back to the european open. let us check in on those markets. just a few minutes into trading. the u.k. outperforming again. the ftse 100 is higher. the outperform are among some of the key indices. a -- m&a is m and in the news. guy: we are down by 3.23%.

it is interesting to see that happening. easyjet -- coming under pressure. down again this morning. deutsche and easyjet in the mix. downside.also on the william hill trading up by 4.79%. deutsche, let us take you to the session charge. -- chart. it is trading down and is now at a session low. there is the sale price chart. trading at 1168. here is the bloomberg first word news with juliette saly. juliette: as you say, deutsche bank remains in the news as negotiations with the u.s. department of justice to resolve a year-long investigation continues according to people familiar with the matter.

earlier, germany's newspaper reported that the ceo was not able to reach an agreement but a spokesperson declined to comment on the status of talks and the article. u.k. businesses have adopted a more cautious outlook and maybe less inclined to invest and hire since the brexit vote according to the british chambers of commerce. it is using its first quarterly survey since the referendum to call on the u.k. government to take steps to lift confidence including improving -- approving new infrastructure projects. thomas jordan says the central bank can cut interest rate further into negative territory if needed. became to bloomberg in washington, he also suggested that the bank had arathi pushed rates quite far. >> it makes sense for switzerland. you have to distinguish between extreme trait -- exchange rate with the -- would you become durable

going further into negative territory? >> we still have room to go further if necessary. juliette: global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . i am juliette saly and this is bloomberg. now, the greek plight returns to the spotlight. the greek finance minister to two bloomberg before the gathering and can -- and criticized at the position of his german counterpart on the debt relief. >> i explained that i do not understand how he has this triangle where he believes the program will work, the imf will be on board and there will not be much debt relief. something has to give there. and i think he understands that. guy: joining us from luxembourg

is caroline koonin. what can we expect on the greek friend? today?k front >> we should see them approve this next allow for greece. if that does not happen, that would be a surprise and bad news for greece. that would send a signal to investors that the reforms of the prime minister are running behind schedule. again. the problem for greece is what comes next. greece still wants some kind of debt relief by the end of the year. they also want the imf to rejoin the greek bailout. the imf is monitoring the program but has not made any financial contribution to it and the german finance minister will be here today. he is still reluctant to give greece some kind of debt relief. alsoreek finance minister

told bloomberg over the weekend that he compared greece to a gazelle that is being trampled by two fighting element -- elephants. caroline: other elephants in the room, we used to talk about and now we- grexit are talking about greg's it. -- brexit. >> we expect a lot of brexit discussions on the sidelines. the u.k. chancellor will be here meetingbourg for the and bully the grounds for the first eu summit attended by prime minister theresa may next week on october 20. the main sticking point for eu leaders and eu finance ministers cannot restrict legal immigration and keep the

same access to the single market. forward to hearing what comes out of that conversation. we should have arrivals for you as we work our way through the day. maybe we will get more commentary on what is coming at of the u.k. had a few interesting days with the pound. other asset through classes as well. if you want to a just currencies and take advantage of their depreciation, the rate of change is too high. the rate of change in the u.k. is high at the moment. signalat send a negative regarding the implications of the pound? >> the increased volatility we see is always working. if you look at risk management part of yourf one portfolio starts moving, it creates a domino effect.

u.s., the is the dollar is having a decent to move against the em currencies. things are moving in asset classes more than equities. the clock is about to start taking on a brexit. -- on brexit. we had a big risk off and then a risk on. brexit is now starting. three some may is talking. -- theresa may is talking. has. we did a brexit basket at citigroup.

we look at things that would be negatively impacted by brexit. what we are pricing into the surface is closer to what rights it is likely to be, meaning it will hurt trade versus services. the currency will go weaker. these are things that were covered i economists but we ignore them for a while. caroline: how much can you factor in potential m&a opportunities. william hill for example. canadian companies look to be in.eping and -- sweeping u.k., it is a country where you can buy a company overnight. regulations let you do that. the currency is getting weaker. there are more targets in the

market. getting access to the u.k. free cash flow would be an interesting proposition for companies. we expect more deals to come. of: citigroup global head trading strategies will stay with us. prepare for a bumpy year and in global equities. that is a word from goldman sachs. that story is coming up next. this is bloomberg. ♪

youssef: it is 8:00 a.m. in dubai.

caroline: welcome back to the open. it seems as though u.s. and european equities could be in for a bumpy ride towards the end of the year. according to goldman sachs. what is the risk? political risk. let us get the view from anthony julia. give us your take. will we see losses in u.s. and european equities? >> we do expect more volatility. in general, it is pricing bumping this ahead troubling because of the big events including the u.s. elections. more importantly, from a , we arel point of view seeing risk in spain, france, we

and itrman elections does me that for the next 12-18 months, some of the political risks will come back and be stronger. beyond that, i would argue that from a purely mechanical point of view, we would expect more because rates are moving more. we are to -- talking about a rate hike in the u.s. in december. and this means, if we start to see a move in rates, it will feed through the classes and equities and fx. push back, the overall what wety crisis -- mean by that is to move away from quality names, staples. farmers, and food and beverage. this will create a lot of

dispersion. level, we the index will see rotation through the equity indices. when does the sterling recession come to an end? >> our expectations are not high. there is some work to be done. we enter a gdp recession, we don't expect a recession. or expensivecheap either. the one positive is that in the last seven years, the gdp cycles were not in cycle. it could beike mildly positive. guy: excellent. good news. anthony julia, global head of trading strategies.

thank you for joining us. up next, ge oil and gas ceo joining us from istanbul. this is bloomberg. this is the open. ♪

caroline: welcome back to the european open. stocks turning lower in europe. we are down across the board in the major indices and the banks are the worst performers. notably deutsche bank. let us talk about some of the big movers. let us show you what is happening. deutsche bank is down. down by 2.36%. we bounced a little bit off the earlier lows. william hill is rising this morning on the potential deal coming out of canada. 3.07%., down another

since thewn 43.38% brexit vote. ouch. will that company be on the move very soon? let us turn our attention back to energy. it is not just the brexit thing. there is a world energy congress being held in turkey this week. the informal talks come hot on the heels of the algiers agreement to cut global production. we are meeting here or we are on the sidelines of the meeting. it is a backdrop of what is an abundance of oil on the market. we have talked about why opec's meeting on the sidelines to take out some of the oil from the market. let us get some additional perspective. we will see how some of the

global firms are faring in this environment. we are joined by lorenzo simonelli. what are you doing to protect your bottom line? prices are still in the lower range. >> prices are in the lower range. what we have been focused on in ge is what is good for our customers. we want to make sure they have the productivity and solutions necessary to go forward. we are focused on standardization of our products. we have been restructuring and taking out discretionary expenses. we're focused on innovation to provide better capabilities for our customers using digital tools. an industrialuced operating system that allows us to utilize data and provide analytics and prognostics that can reduce unplanned downtime. that is a huge advantage to our customers. youssef: how healthy do you see global demand? >> when you look at this

industry, you know it will be cyclical. you have to look at it from a macro perspective. as population continues to increase command -- demand will be there. we feel confident about the long-term future of this industry and demand will continue to increase as population and energy requirements increase. youssef: the reality is the current environment has asked companies to scale back their capital expenditures. capex?ll you do about making sure we have the right investments from a technology perspective so we can be there for the long-term. we will make some necessary short term adjustments on our discretionary expenses. we look at industries from the long-term. ridden written -- cycles before in the aviation

industry and power industry. 2017, do you see a healthier industry? work will it bottom out? -- or will it bottom out? i think we will see what happens in the next few months. it will be interesting to see if opec makes a decision on a freeze. looking at 2017, we see a slow recovery. looking at demand continuing to be there and supply rebalancing. youssef: which team are you cheering for? for -- oro deal or against a deal? i am cheering for the customers to be able to go forward with the projects they have in hand. there are a lot of resources that are available to be extracted. we have to be there for our

customers. we cannot make decisions based on what opec is going to do. needsf: do you think opec to move together with non-opec to bring oil out of the market? to seeink we have got what actually happens in the next few months. they're clearly needs to be a discussion and collaboration which is starting to emerge. we will see what happens. surecus is on how i make our customers have the right products and solutions and we drive out the costs and the inefficiencies in the industry. when you think about the drilling of a well, 50% of waste. how do we go after that and make this industry more productive. youssef: when it comes to opportunities, you have been looking at iran, and as sanctions continue to ease, how close are you to signing new deals? >> we will continue to explore

the opportunities in iran and abide by the sanctions still in place and take opportunities as appropriate. youssef: elsewhere, where else are you looking for expansion? >> we continue to be very present in the major oil and gas nations. if you look at it from a regional perspective, middle east is important, latin america, and then russia. you name it, we are in those countries. youssef: we will have to leave it there. ceo oforenzo simonelli, ge oil and gas. guy: thank you. joining us on what is happening in the oil market. donald trump uses his latest gaffe to attack former president bill clinton. will he be able to turn the conversation around from his lewd comments in 2005. that is up next.

this is bloomberg. ♪

caroline: welcome back to the european open. of losses in days the european benchmark equity index. one of stock once again tugging it lower, deutsche bank. that are still concerns there was no deal struck with the doj by john prior over the

weekend. what is next for the german lender? let us get you up to date on the rest of the business flash. here is juliette saly. juliette: the investment company is increasing its stake in vi vendi to more then 20%. to hold aboutaid 29% of voting rights by april 20 taking in account the double voting rights attached to the shares it is acquiring. noble group shares has jumped in singapore. the company says the deal largely completes a drive to raise $2 billion. announcing losses and a liquidity squeeze. it will need to rely more heavily on its live video streaming strategy. bidders have lost interest.

and waltlesforce disney are now unlikely to make a bid for the social media company. desk the company does not comment on rumors. that is your bloomberg business flash. samsung is said to have temporarily suspended production of the galaxy note 7 phones after problems with the new devices. new -- that is the latest blow in a six-week crisis. -- what doesatest the latest actions suggest is happening? >> it may be a serious problem. much more than previously anticipated. remember that two months ago, they thought the problem stemmed from one supplier. they thought they had resolved

to it. recently, they found that the replacement batteries were also having problems. reports of smoking and heating up. -- there are some some analysts wondering if there is a deeper problem with the phone. caroline: a key concern for stockholders. this talk has rallied on the reorganization of the conglomerate. how much of a blow is this? >> the market is currently assessing it. it fell slightly mainly because it had reached the record last proposal there was a for breaking up samsung electronics into an operating company and a holding company and that was well-received by the market. we will see in the next several days how this all out. on what kind of temporary production halt they

are talking about. how extensive is the pullback. this will all come out in the next few days. for peter, thank you joining us out of seoul. let us turn our attention back to politics. the second presidential debate between hillary clinton and donald trump lived up to expectations as a bitter and personal face-off. donald trump dismissed his crude comments about women. targeted hillary clinton over her e-mails and allegations of sexual misconduct by her husband. saying thatback by donald was unfit to be president. mr. trump: i did not say that at all. this was locker room talk. i was not proud of it. i apologized to my family and the american people. this was locker room talk. mrs. clinton: what we all saw and heard on friday was donald

talking about women, what he thinks about women, what he does to women. and he has said that the video does not represent who he is. anyone it is clear to who heard it, that it represents exactly who he is. guy: hillary clinton and donald trump. is the us now for more author of "hillary rising." expectations were low going into this debate. donald trump was expected to to that video from 2005. expectations were incredibly low for him. did donald trump outperform expectations? remarkableht was a performance. we have not seen anything like it in american presidential debates. donald trump dropped the nuclear option last night.

he went after hillary clinton personally and her husband. anything to deflect the problems about his personal comments. it will be difficult for him to try to come back at this and have any degree of success. he was clearly trying to get under hillary clinton's skin last night. it frustrated him route the debate that he was unable to. was try toperandi get hillary clinton to come down to his level. the fact that he could not do that continued to rile him through the evening. it was a remarkable performance i think. and also demonstrating a lack of understanding of how the american constitution works. demanding to know why hillary clinton had not managed to personally deliver on a series of policy changes.

she had to remind him that that is not how it worked. caroline: james, give us a sense of how demand -- of how damaging the attacks donald trump makes against hillary clinton. they have both been losing support but donald trump far more severely. is if you interesting look back through history, the republicans tried this through the 1990's. trying to bring bill and hillary down by attacking the president's personal life. what was fascinating and reveals again how donald trump has not learned from history is the fact that it did not work. they even managed to impeach him and the american people stayed with him. what is fascinating to remember is that then and now the important role of women voters in the u.s. with bill clinton

in the 1990's. they were a key demographic in keeping his presidency. it will be important for hillary clinton to make shirts she brings home the female vote. and everything we are seeing coming out of the donald trump campaign plays to that. the idea that he has managed to alienate female voters, there are more women than men in the u.s. and they vote more regularly than men do. he is alienating one of the main death -- one of the main demographics guy:. guy:are we over emphasizing the popular vote at the expense of the college system which would favor hillary clinton? this should be a republican cycle. upare getting very heated and the market is not reacting to what is coming and we are not seeing people pricing it in.

is that because they are not looking at the popular vote? if we talk about the electoral college system, we have to remember that in the last few months we have heard reference to the national polling. whenever i get a chance -- he ignores that. basisa state-by-state that will work out the electoral vote. that is most important. all of the key indicators indicate that the surge donald trump had when hillary clinton collapsed in new york, that has been wiped out. we are now back to it position in the polls where we were eight weeks ago which is hillary clinton with a small but commanding lead across the board in key states. in anytrump is not ahead of the key swing states he needs to be. we are hearing talk that talk -- that texas and other southern

states are now well insight of a clinton victory. the fact that she is competitive in the south is a remarkable situation at this point. caroline: how long does the infighting in the republican party continue on the back of this vulgar video? >> who knows who the next key withdraw their support of donald trump will be. donald trump said i am not talking to mike pence regarding syria. there is a clear split there. mike pence has come out and chastised him and now we have disagreements on the policy as well. it would be a remarkable situation if any other videos came out. that would be the hammer blow for the campaign. his great problem is that he is appealing solely to the bright

-- to the right. that is fine in the primaries. that will get you the nomination. but it will not get you the general election. you have to come to the center ground in american politics. that is where elections are won and lost. donald trump is yielding that territory quite freely at this point. guy: we will leave that there. you can watch the most recent polls on your bloomberg. you can see it on my screen here. the latestwn headlines and polling and we have maps detailing how the key states are moving. plenty more to come on that. worth checking every day. up next, the currency market is growing more fragile according to the bank of america.

we will examine what that means exactly coming up next. this is bloomberg. ♪

caroline: welcome back to the european open. the volatility that roiled the pound came as no surprise to bank of america. they have been warning that the lack of liquidity in the fx

market is far worse then expected. tracy, have us a sense of how frequency trading is getting back into the spotlight again. exactly. you will remember that we have now had a flash crash in stocks, u.s. treasuries, and now in the fx markets. by virtue of this happening in sterling, it will get more attention from regulators. the consensus is building that it has something to do with algorithmic trading. they feed on each other whenever there is a move in a particular asset. what happens is because we do not have the traditional market makers we used to in the markets such as the big banks, many have hold back because of higher capital requirements. instead, we have computerized algorithmic movements which

leave an air cushion whenever there is turmoil. we saw that on friday. regulators will have to be determining the trade-off between the idea that market makers no longer have skin in the game and they are not exposed to losses versus the market makers that we do have, such as they are, leading to higher volatility in the asset class. radically itt the was the big liquid markets that will not be suffering. an excellentat is point. the fx market is huge. again, when you look at these past flash crashes that are said to have something to do with high-frequency trading, it is u.s. treasuries, stocks. these are some that was liquid markets in the world. the place we have not seen a major flash crash is the

corporate bond market which ironically is the market that people have been complaining about having a lack of liquidity for a long time. it is interesting that the place where people said this would be a problem has not yet materialized into something major where as in the liquid markets we have seen this behavior. guy: great stuff. fascinating subject that i think we will all be spending more time discussing. talk about some of the market moves we are seeing. at the moment, we have william hill, easyjet, deutsche bank, they are all on the move. william hill is trading up. deutsche bank is down by 2.61 2.34%,yjet down by continuing to be hit hard. caroline: in lockstep with the british pound. easyjet has had that strong

correlation. we will be talking much more about those market moves and the bank behind me in surveillance. a great interview she had with -- with general kuroda. up next, surveillance. ♪

francine: the tale of the tape. politics get personal. the trunk clinton rematch in the second presidential debate. no deal for deutsche yet. the bank continues negotiations with the u.s. department of justice. of target. governor hirohito kuroda signals that japan may not hit its goal until 2018. good morning, everyone. i am francine lacqua here in london.