anna: the final debate. hillary clinton and donald trump's bar while the republican nominee refuses to say he will accept the result if he loses. as policyhi and focus changes are on the table for december. watch the decision and news conference right here on bloomberg. there is no turning back. theresa may is set to tell her fellow european union leaders in brussels that the brexit boat must be honored. vote must be honored. ♪

a warm welcome to the program, this is bloomberg "daybreak: europe." i'm anna london, edwards. linear earnings to get to. we have some sales numbers for .ou for the third quarter revenue in the third quarter, 1.7 5 billion euros, comparable sales in the third quarter down by 3.3%. rival infrom the u.s. the vanilla lighting area yesterday. they missed estimates. phillips along with other lighting companies trading down after results of that. this business has increasingly relied on led-based bulbs.

we will speak to be ceo of philips lighting in just under half an hour. ro's get the numbers from che, the drug maker based in switzerland. the estimate was 12.6 billion. .ust a shade below the estimate nine-month sales have come in at 37.5 alien frank's and their confirming their outlook. on amonth sales rising 4% constant basis for this switzerland-based business. tumor drug a breast to help it stay in the lead. be of the big questions will

a study.by we will speak to the ceo of the fund. stay with us to hear more about what's happening at roche and philips lighting as well. sticking with the drug set her, we have numbers that financial guidance has been upgraded. they said to have excellent operational results. going into the sales numbers for all of the various products, but the nine-month net revenue is at 1.7 9 billion s, ahead of estimates of 595.3. drugs are iny focus. we will speak to them as well in just a few minutes.

let's put corporate earnings to one side for a moment. what is happening in the markets overnight? has been the third and final presidential debate between the contenders, hillary clinton and donald trump. we will be looking for any reaction and markets from that. the asian equities session went higher in response to the third and final debate. the australian dollar trading down. the price of a barrel of crude not far from the 50 month high it touched yesterday but the oil price down just a touch. we will bring you those details. here is angie lau. predict mariost

draghi is unlikely to announce fresh measures at today's meeting. they do see the december decision as the most likely for additional quantitative easing changes. the qe program is scheduled to end in march. following the decision right here on bloomberg. the u.k. chancellor of the to the treasury committee, the retention of passport into the injury will be -- into the industry. >> i think they are also realistic and looking at other passporting to protect their interest. we are obviously working closely with industry on looking at all the options for the future protections of luncheons

financial services district. the december fed hike is .ikely but not a done deal the columnist said central banks have the started -- distorted those paying to close attention to the tightening of interest rate moves. >> the market is obsessed with the wrong rings. the market is already upset with the timing of the next hike and his not fully understood that regardless of when it comes, this is a very different cycle. this will be a shallow interest pointycle and a terminal well below historical averages. what the market should be looking at is the cycle as opposed to pricing the exact timing of the next hike. cutrazil central bank has its interest rate for the first time in four years.

the board voted unanimously for the reduction in caution. foreigndepend on situations. even as the economy plunges to its deepest recession on record. news 24 hours a day powered by 2600 journals -- journalists and analysts in 120 countries. this is bloomberg. let's stay with what is happening in the asian market. we see the asian session is looking stronger from an equity perspective. factoring in everything we heard from the presidential candidates tonight. >> asian stocks were tracking higher ahead of the debate. markets open for about an hour before the debate happen but where seeing it reflected in the

peso. asian stocks higher for a third consecutive session. the 104pushing toward to the dollar. the u.k. was flat and underperformed the region yesterday. hong kong having a very good session up by .6%. energy players pushing that index higher. share marketn closing flat with the disappointing jobs number coming rue. unemployment was down slightly but a number of full-time job lost as we see the transition to a more casual work force. the employment number has impacted the aussie dollar. aussie has had quite a bit

-- big dip coming through in the unemployment number. thee also been watching renminbi today because we see a little bit weaker there. let's get back to the presidential debate. donald trump has refused to say whether he will accept the results of next month's presidential election. hisaid he will reveal position at the time of the vote. >> i will look at it at the time. i'm not looking at anything now. i will look at it at the time. we will find out on november 8. i will tell you at the time. i will keep you in suspense. clinton is ahead in the polls. she said she was horrified that a major party nominee would denigrate u.s. democracy in that way. ms. clinton: every time donald

thinks things are not going in -- in his direction, he claims whatever it is is rigged against him. this is how donald thinks. it is funny, but it's also really troubling. that is not the way our democracy works. anna: let's get out to las vegas. megan murphy estate up to bring us up-to-date with what is going on. what else stood out for you? >> definitely that one comment about him saying he's unsure if he will accept the results of tonight's debate, but there are other points we should highlight as being potentially very important to voters and people across the globe. it was a heated debate on the position of women in the wake of these controversial comments of donald trump in the wake of other accusers coming forward and saying he made unwanted sexual advances. he was saying they were wanting

anclaim same, and there was extraordinary exchange about russia. donald trump talking about his relationship with that regime and his refusal to say whether he believes there were russian hackers. some of the key campaign advisers e-mails coming out. he is saying this is essentially a rigged election. it culminated in the moment he said this is something we will have to look at, voter fraud and is biased media. essentially it will come down to that he's not saying right now, and it's an unprecedented in moment, that he's not sure whether he will actually accept result of the election on november 8. that will be the one thing everyone is talking about tomorrow. anna: and saying bladder putin

is not his friend, but it would not be a bad a never russia and the united states were friends. we had a poll yesterday that pointed out the extent of it. who one tonight, though? >> is clear that hillary clinton was the winner in terms of how people saw the debate. it was a better performance from donald trump at least for the first 60 minutes, but once again she was able to get under his skin and while him. that's when he made comments that distract from his overall message. weaknesse moments of from her campaign in what was a airy disciplined performance. he needed a true game changer tonight. he needed a landslide winning performance to close the gap. we show her with a nine point lead. what the poll breaks down is that hillary clinton is leading among men and among less

educated voters. thank you so much, megan murphy with the latest from that debate. jane, great to see you this morning. we have gotten used to looking at the mexican peso. this paints the picture for us. the trump average poll versus the mexican peso, we are used to wes straight up now but didn't see so much reaction in today's debate. is that because the markets think they know what's going to happen? >> i think they do. the market needs to look ahead at this point. there is an assumption that if

we have a clinton presidency that it is steady as she goes. downarket needs to knuckle and see if there will be changes. terms of fiscal policy, clinton has said she needs to improve job growth. and they need to look at protectionism. hillary clinton was always a supporter of the north american the trade agreement. perhaps it will need some changes. at this point there could be some changes, assuming clinton comes into power. they could have a market impact. there are questions about

what a clinton presidency would really mean. this chart shows relative to marketlections, volatility is really quite low here. assume there will be a clinton victory in the election. there are other things that play. the u.s. yield curve has been pretty flat. dollar.n impact on the dollar-yen. because the market has been pushing out expectations for the past year and a half, it's had a dampening effect on volatility. anna: nestlé is the world's biggest food company. sales growth,anic

3.3%. the estimate was 3.6%. the full-year margin improvement is something they are targeting. of 3.6.e estimate how much can they pass on higher material costs in emerging markets? ceo,ompany will have a new mark schneider takes over on atry worst from the ceo the moment -- on january 1. schneider comes with a medical background. we will expect to see continued emphasis on health from nestlé.

leave the earnings there for the moment and talk about what's coming up in your day ahead. here are some highlights for you . the big macro event is the easy .ou policy announcement that's followed by mario draghi's news conference. you can follow all of that live as we get jobless claims from the united states. shares of nintendo jump ahead of a knee heat and its new gaming platform. president be tightlipped about the new stimulus plan? ms. brexit on the back honor? burner?exit on the back all this is still ahead.

♪

anna: welcome back. this is "daybreak: europe." its forecast to 3.5%. that's the key bit of the puzzle for nestlé just breaking. angie: nintendo's long-awaited new game console will be revealed later today with a three minute video u.k. time. it's the first glimpse of the device since it was hinted at last year. it is scheduled to be released in march.

the ceo of barclays has acknowledged that banks will have to change and adapt in the face of exit. it continues to make progress in cost cuts. >> we've made a lot of progress in core businesses and we will reduce what we expected to be a 1.6 billion non-core cost this year. once it closes out, i think we'll have the cost income ratio we seek. increasing guidance on the back of what is called expert operational results. great to have you on the program. let's start with the upgrade you've given the market this morning. explain the outperformance. what was better than you expect ed?

iswhat has been happening the launch of two products. patientsthe number of is beating our expectations. now we are in a position to be able to have greater guidance. isa: one of the headaches generics. when you expect those generic set of been somewhat delayed in coming to market, when you expect to face that competition now? think if it's not this year , it should be at the beginning of next year in the u.s.. and at the end of next year in europe. >> the first quarter of next year? is that the timeframe you are looking at? >> yes.

anna: what kind of impact will that have? what can we expect to see in sales next year? expecting thely sales will decrease rather beidly, but they should compensated in great part or --ally by the increase of you see now we are replacing one product with two, and two products that have 10 years of growth in front of them. we arewe can say that ready to deal with the patent issue. we are in a good position to grow for the next 10 years. anna: you've been diversifying your strategy that's evolved around -- what are your expectations of success with

medicines to tackle m.s.? market.ard talk >> it's a very busy market, but if a patient's treated with the market, one patient out of five every year as a new relapse. we want to decrease this number, and one strategy, and we are the only company to do that, is a combination of drugs. the same type of strategy like diabetes, welike want to combine the drugs. we have the ideal drug which can be used in combination and we looking atg to try all oral combinations of drugs. your can i ask about

business in the u.k. in the wake of the brexit vote? has it changed anything about the way you do business? no, we cannot really change our prices every time there is a currency change. we would never stop in every country. good for the not pharmaceutical industry. scientifics a very background in regulatory terms, in terms of scientific, it is playing a very important role. it's -- in the pharmaceutical industry. i'm personally very sad that pharmaceutical industry particularly, not including the u.k.

anna: thank you very much for your thoughts. of next, more about the numbers coming through from phillips lighting. we will get to the ceo of that company, next. ♪

for you. a new edition is now available at bloomberg and on your mobile. let's look at some of the top stories this morning. this man looks pretty cheerful in this photo. he will probably leave rates on hold ahead of risk events like the u.s. election in november. any movie is likely to be in december according to a survey of economists when you economic

forecasts are due. more on this in the next half hour. the next story is the final u.s. presidential debate. hillary clinton was the clear winner according to a cnn poll. donald trump refused to say he would accept the election result if it goes against him. on theresa may and her first eu summit. one suspects brexit will creep in. look for further developments on the start toward russia, that seems to be one of the headline stories. -- sayingy will have there will be no second referendum. earnings from phillips lighting, the spinoff from phillips on

, despite comparable sales falling 3.3% in the third quarter. let's dig into the numbers. the phillips lighting ceo. wait to have you on the program. you say you are more cautious about comparable sales growth. give us your outlook, how cautious are you this year and into next? >> thanks for having me. let me give the our perspective on q3 to answer your question. we've experienced the market conditions in turkey and countries of europe. we continue to enjoy double-digit growth but despite this, we've continued to improve

our margin by 250 basis points in q3. last but not least we have doubled our cash flow. we experience stock market conditions that we think are andg to be prolonged in q4 we said we would be returning to growth in 2016 and we see that still. is it a downside to your expectations? >> we have different indicators we are looking at. we see that the company at this point in time is moving strategically in the right direction. concerned,ales are

we are working on a daily basis .o improve our growth profile the underlying growth profile is improving. lasts. see how long it to growth inn 2017. anna: much has been made to the return to connected light systems and services instead of the sale of led's only. what kind of changes are you looking to do for that strategic >> we have the potential offering an unprecedented experience, totally immersed in the light show.

create light shows in the stadium. if you wake up during the night and you need to go to the toilet, you're looking for the right light switch and don't want to have a strong light that will blind you. you can just wake up and there will be a soft, blue light guiding you to the place you want to go to. connected lighting is allowing us to do that we could not do with conventional lighting previously. anna: it sounds life-changing. me ask you about the wake of the brexit referendum in the u.k.. has anything changed and are you putting up your prices to reflect the reduced value of sterling?

>> we have strong investments in the u.k. as a company, nothing has changed. we are facing currency depreciation. whenever possible we are also taking pricing measures. we have seen lately a softness on the u.k. market, especially when it comes to investment. we are probably a bit more cautious on the professional side. anna: thank you very much for joining us, the philip lighting ceo. let's check in on the markets. mexican peso after the last of the u.s. presidential debate. >> let's have a look at the chart. it is unchanged at the moment but has risen to a six week high

after that third presidential debate, outperforming all its major peers. you can see it weaken after donald trump gained traction in polls and has been steadily strengthening after the first and second debate and now after the third. september 26.ce moving on to volatility, we have a great chart looking at dollar volatility. this is three-month implied volatility. this is a measure of projected yield fluctuations over the next 90 days. this gauge is approaching its .owest in almost two years it's also below the one year average. ahead of all the uncertainty

about the u.s. election and potential fed rate rises before the end of the year. it could be negative for the bond market because they will plan a large economic stimulus package and that means higher inflation. the 10 year yield is unchanged today. and's looking at treasuries the mexican peso. let's look at the asian markets. risk appetite here today heading leadingenergy stocks the gains of 1.5%. this is because wti is still trading above $51 a barrel. crude is weaker today but there was a surge yesterday. and of the groups gaining the msci asia-pacific index has hit its high for the month today.

not expecting a change to policy today. the euro rematch unchanged but holding near its weakest level since july. anna: the ecb decision around all things stimulus for the european economy, economists mario draghi announcing new measures. could there be more ironworks at the press conference later? caroline joins us. knows -- there will be more stimulus, just not yet. >> precisely. economists thinks today is the day. 19% feel there will be more .timulus about three quarters of the economists we have spoken to

feel the quantitative easing process will be between so maybe they can low -- they can buy below the deposit rate. about 40% of german debt is not eligible to be bought by the ecb. banks are having the idea quantitative easing could be tinkered with by december. the rally in banks has risen because investors are hoping quantitative easing will change the way they purchase and it could strengthen yield curves making banking damage more profitable. admitted this week that

they understand that perhaps it's affecting the banks. are we likely to hear anything from mario draghi to calm concerns that the ecb may be looking for an exit? caroline: he will have to face a lot of questions. they are discussing how they might exit quantitative easing. we understand it was not formerly discussed by the governing council. he will try to reduce any nerves that the ecb is looking at the exit. when you have unemployment of rate10% and the growth pathetic, how could it be time to be backing away run stimulus

-- away from stimulus? anna: thank you very much, caroline hyde from frankfurt. you can watch the news conference right here on bloomberg. ofoined by the global head economics at societe generale. thanks for staying with us. let's talk about the ecb. economists are not expecting any change but were looking for clues for december. this chart shows the clustering of expectations around the month of december when we are looking for a change to the stimulus program from the ecb. draghi toct mario sound quite dovish in his overall tone. we don't think he wants to create a vision of a significant

tapering coming in the short-term. we do expect him to tweak the parameters and were looking for changes to the issue limits, to raise it to 50% and the issuer limit at 33% for vernment paper. time.ould buy them more we expect them to start tapering as of march 2017. we think there could be some tapering that could extend perhaps another six months. that thisresting meeting is going on. there's a huge amount of skepticism in the market. politicians are skeptical about the drawbacks versus the merits of quantitative easing.

what is he going to say to stop the market from tapering and how will the market calm the fears of the bund's others about the downside associations of quantitative easing? it is very interesting right now . tell us about your view on tapering and when it's going to kick in. being discussed somewhere at the ecb. economists are bringing forward definitions for when the ecb will start winding down there purchases. next year is where people think to be expecting some sort of tapering to take place. jane that there will be an extension of the

program. this is a key point. the ecb wants to take its time on this. they are in no rush. keep in mind that on the one hand, we would like to see steeper yield curves from banks. but you don't want your risk premium going up too much too upset all the risky assets. and keep in mind that low interest rates are a big bonus for public finances. the ecb is caught between risky tanks, and public finances all at the same time. it's a delicate balancing act. we recognize that pushing interest rates further into the negative is perhaps not quite so productive. that doesn't mean we want interest rates to go up in a big way anytime soon. questions around the health of the banking sector. low rates are part of that

story. >> if you look at it from a macro perspective, it's clear that slow growth, flat curves, it's a challenging environment for the profitability of banks. keep in mind uncertainty over the future of the capital markets union are big factors for the european banking industry. this chart got -- one of my colleagues got ready for me. this is the difference in the attitudes toward the euro between the head finds -- hedge funds and asset managers. what is it tell you about what we expect to see in the euro? >> the ecb has had little control over the euro for months. the same can be said for the bank of japan. the power of changing

expectations with respect to the fed. at the beginning of last year there was a different perception about fed interest rate moves relative to where we are now. about are thinking moderate pace of interest for hikes. that's had an overwhelming impact. it's been difficult for central banks to weaken the currency. anna: thank you very much. coming up, crunch time for nestlé. more on that story still ahead. ♪ and dolls from refuses to confirm if he will accept the u.s. election results if he

loses. more on this story when we come back. ♪

anna: welcome back. we could see a bounce at the start of the u.s. equity trading day. after what we heard from hillary clinton and donald trump overnight. eu leaders will tell the brexit boat must be honored and a second referendum is not in the cards, according to two senior british officials. she will face 27 leaders eager to learn more about her brexit strategy. good morning to you. how will eu leaders welcome theresa may at the summit? brexit will be talked about. if she keeps the approach he

had during the conference for decision, clearly the eu wants more clarity about exactly what is her intentions in these negotiations. the eu leaders at the moment negotiation. not a theresa may will just be invited to do a short presentation about where she stands on brexit. 10 or 15 minutes only over dinner tonight here in brussels. with the european people's party minister. he called her attitude era get and say she will tell the eu

council exactly what she wants. >> no one was asking them to leave the european union. we offer them a far-reaching deal for the british interest but they refused it in the referendum a few months ago. now europe is simply waiting for their message, what do they want to do? may to saytheresa tomorrow and friday to the european council. for the moment we see a lot of chaos in london, a lot of uncertainty for the economy. >> the leaders will certainly listen to her with great interest. the eu president has said he had a good conversation with her on

wednesday. it was either a clean break from that you or no brexit at all. anna: thank you very much, joining us there from brussels. stay with us here in the studio. let's talk about inflation. showing howchart various central banks around the world are struggling to get inflation to 2%. the white light is what is happening with the u.k. and inflation. weakness in the pound seems to be one way. this is the key point. there is good and bad inflation. at the end of the day you want to type of inflation with wage gains behind it, which gives it more consumption. the theme of higher inflation numbers is a global theme. we're beginning to see the effect of the oil prices turn.

over the coming months we will get to oil price gains that can get as high as 50-60% year on year. that will be a significant driver. fine, is even short-term changes in oil prices can affect medium-term inflation expectations. that is one factor. the china deflation story, it's .ot becoming deflationary it seems to have faded to the background. the issues around the u.k. currency. this could give higher nominal deals. some specific british characteristics there. willcarney has said he live through a rebound in

commodityprices? could there be an underlying case for paying more attention to that inflation? >> it will be related to the fact that it will fall out of the index. we will see higher inflation in the u.k.. inflation andcore strip out the effects of higher energy prices, we will still get lackluster core inflation, indicative of where the demand is. the u.k. data shows that average earnings -- inflation is at 1%. we will have less money in our pockets to spend on things that or not energy or solar things that are hit by imported price inflation. anna: thank you very much for joining us, jane foley.

up next, backing the banks. isl the u.k. chancellor, he next on bloomberg. ♪

>> hillary clinton and donald trump spar over abortion rights, gun control, immigration, and foreign affairs. the republican nominee refuses to say he will accept the results of he loses. qe in question. mario draghi in focus as economists could it policy changes are eligible for december. you can watch the decision and news conference here. no turning back. europeanis set to tell leaders that the brexit vote must be honored.

anna: the numbers coming through from the london stock exchange talking about continuing operations my revenue in the third quarter up my 15% and that number comes in at 376.2 million. total income from continuing operations. they are going through the capital markets revenue up by 16%. the big strategic story around the lse is around the attempt to -- over.as as to asking questions how likely this deal is to go ahead given the brexit vote and other factors and as such we have done a survey of 18 event driven [inaudible]

saying there is a 40% of a chance. impacted by market related weakness and they say revenue is up 13%. details coming through from the lse this morning. the watch what they have to say about the talks. let's have a look at the futures. we had a host of earnings out from the likes of nestle and others. the overarching theme is it could be one of the factors what looks like will be a positive start to trading. 1% inund when three of germany and france and euro a little less.ps let's have a look at the risk radar and see where we have been on these asset classes.

the most thisting far, energy stocks getting a hang higher after the third and final presidential debate. that was seen by investors as broadly positive for clinton. that would be what going has shown. we do not see quite as much reaction as you can see their for that number as we have seen in previous debates. we jobs data out of the austrian market surprisingly weak. the aussie dollar was down. the price of a barrel of oil, still at they with -- 51 dollars a barrel. not far from the 16 month highs. we talked about inflation and a big global theme, we have that unexpected drop yesterday, that was behind the move higher. let's get to bloomberg first word news. surveyed predict

mario draghi unlikely to announce fresh measures at today's meeting even though growth remained stable. they do see the december decision is the most likely for .dditional stimulus the european central banks qe program is scheduled to end in march. you can follow the decision right here on bloomberg. chancellor of the exchequer says financial services are very high priority for the government and brexit negotiations. speaking to the treasury committee he said the passporting for the industry would be the ideal outcome but there are other possibilities to explore. >> i think they are also realistic and are looking at other options beyond passporting to protect their interest. we'll be working closely with industry on looking at all the options. future protection of london's natural services businesses.

>> mom and all arian said the december fed hike is likely but not a done deal. central columnist said bank have distorted public markets and investors could be paying to close attention to the timing of interest rate moves. >> we now have a market that is accessed with the wrong things. the market is overly obsessed with the timing of the next hike and has not fully understood that we does regardless this is a different cycle. this is going to be a very shallow cycle. there is lots of stop and go in the terminal point that is well below historical averages. what the markets have been looking at is a cycle as a whole and pricing that in as opposed to pricing when it is the exact time of the next hike. changeanks will have to and adapt in the face of brexit. speaking to bloomberg and singapore just -- they said

oakley's continues to make progress. >> we have made a lot of progress in getting out of these non-core businesses and in 17, we will reduce what we expect to see a 1.6 billion non-core cost this year throughout four or 5 million -- four -- 400 million or 500 million. it will have the press -- profitability we seek. -- votedard led by unanimously for reduction and caution. that will depend on further progress on economic reforms and inflation. the movie is a turning point for the central bank which hoped to hold the key rate at a high. global news 24 hours a day powered by more than 26 hundred journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at go.

the oil price may be -- weaker.worth your something that is boosting some of the oil related energy stocks. juliet: we have seen a good rally coming from the likes of hong kong and australia. if you have a look at the hang seng you are seeing some of these key energy players driving that index higher with the likes of petrochina. they are trading off the back of what we saw on the u.s. session with oil holding onto that high. we have seen it did little in asian trade. looking at the a strong market it closed higher by .1 of 1% despite the fact it had a disappointing jobs number and you saw the gold players supported. 6% inion mining up by

sydney. this is the market you want to be looking at, the nikkei up by 1.4%. weakenedei the yen toward 104 and the u.k. is trading at levels we have not seen since april. it had a bit of a fluctuating session over the course of the day but ending very strong and if we have a look at the year to date chart you can see that the nikkei is at that level we have not seen since april 19. and the router topics at highs we have not seen since may. you can see the index is down by nine part -- 9.5%. a to part of the shanghai composite although there has been encouraging signs in that stock. inflows coming in into hong kong. this is on the back of that positive gdp number coming through yesterday and ppi and last week. investors in asia seeing some stabilization coming through in that economy and the other thing we have been watching is that fluctuation giving a solid thoughton that markets

hillary clinton won the final debate. higher for a third consecutive session today. anna: everything you need to know about the eating -- asian trading today. one of the things that -- in that part of the word -- world were listening to the debate. debate, theinal republican nominee says he will reveal his position at the time of the vote area -- the vote. it atum: i will look at the time. i think the voters are seeing through it. we will find out on november 8. i will tell you at the time. i will keep you in suspense. clinton who is ahead in the polls said she was horrified that a major party nominee would denigrate u.s. rocker c in that way. way.- democracy in that

ms. clinton: he claims whatever it is is rigged against him. this is how donald thanks and it is funny but it is also really troubling. that is not the way our democracy works. anna: let's get to analysis. thank you for staying with us. let's talk about the u.s. and what you expect from the politics and how that impacts on the economic area and we were saying earlier that the immediate sense of the market is likely who is likely to win. markets think they know the answer and now do is see markets trying to find out more about what the clinton presidency would look like? >> the other point of uncertainty which is still out there is whether she will have a majority in congress are not. that will be determining for how much she will be able to push through in terms of her political program and then there is that uncertainty that you are talking about.

what is the political program once the election is over? we also -- often see that, lots of spectacular headlines and once we get down to business things turn out to be slightly less spectacular. first of all at the global level, one of the big questions is what her position on the different trade deals outstanding will be. and then the second big question which ties into the global scene is how much will happen on the fiscal front. what we have seen so far is we have seen spectacular fiscal headlines coming out of many countries starting with japan over the weekend. we had italy. lots of spectacul headlines. once you dig down and look through the numbers you find out in the case of japan and europe come a there is not really that much fiscal stimulus coming through in the pipeline. my expectation is it would be on the same in the u.s., a little bit of fiscal stimulus, a bit of infrastructure spending but nothing spectacular.

probably you need a next recession to hit through before you get that fiscal stimulus and our expectation is that next downturn will kick in in the second half of 18. anna: i pulled out the map that shows the electoral map of where the key states are likely to lean and where all the states are likely to lean. if we are talking about somebody might not have been but has a lot of power in washington more broadly in terms of congress, why do you not see any further fiscal push because central banks, not specific to the fitbit central banks have been talking about a need for more fiscal stimulus. >> when we listened to what the central banks say, they are not always that specific on what the government should do more. if you -- and your -- in europe, we need better for needed fiscal policy and structural reform. that is true in the u.s. as

well. if you look at the number of scores about doing business in the u.s., the u.s. has been coming down on some of those international surveys so i do think even in the u.s., there is a case for reforming around some of the labor market structures for reforming around education, reform is part of what the central banks want to see because you want to boost them on but you also want to [inaudible] yellen talk about how the demand side could be driving the supply side of the economy. at the same time, i do not think the central banks want to see massive uncontrolled fiscal stimulus. there is that concern out there going back to the 1970's. it comes back to this delicate balancing act. don't over rely on monetary policy but do not go to aggressive on the physical side either. anna: be careful what you wish for. with my next question we will upset mohamed el-erian. marketsuggesting that

were fixated in the short-term on what the fed will do.ll do. they need to recognize that the cycle is different. looking at the work function and what markets are expecting to see. we have a 64% probability of a hike in december. if the election goes the way the polls suggest it will, does that happen, the rate hike in december? >> i do. i agree with mohamed el-erian that the focus is too much on the next meeting because of we look at the same probabilities, what is the probability of having another rate hike in twice 17? the market is saying it is a 50-50. look at the probability of having to rate hikes in 17 and the market is saying it is 1%. the market does seem to me very focused on this short-term and not really thinking about so much what does that mean for the longer cycle. and it: you see inflation

looming larger than maybe other participants. , partee an inconsistency of it is an inflation story but it is a real economy story. look over to the equity market and look at their valuations. the equity markets are telling us the economic cycle will continue, we will continue to get decent growth numbers, maybe not very strong but still decent growth numbers and that does not quite fit with the fed doing it once in december and probably not again. anna: thank you for spending time with us this morning. 715 a.m. in london. rate decision day at the ecb. economists do not see mario draghi announcing fresh measures but could there be more fireworks at the press conference? caroline hyde is live outside the ecb in frankfurt. most economists are not looking for any stimulus right now.

caroline: the rain poured down in hamburg -- frank for it. nothing is expected, not one single economist thinks today is the day for more stimulus. be why.december will inflation forecasts from the ecb and the outlook for growth, that is when they can determine crucially where they feel the need is. it is likely to be extended. still buying 80 billion euros per month. send the abbvie three months by six months. that is the anticipation through december. the key question is whether they tinker. are they allowed to i more, perhaps increase the amount they are allowed to buy. and at the less moment, the yields are so low across the board despite the

selloff in bonds is late. , 40%f their sovereign debt above minus 0.4% in yield. we start to see the banks do rather well. notably the banks that have ramped up on the stoxx 50. maybe if they allow bonds to be bought below that negative deposit rate or maybe that will help steepen the yield curve and make banking comfortable. that is less than u.s. banks. topic at the conference. hear anything for mario draghi to calm concerns?

even if not officially. of experts are thinking he will done those concerns. we have been told by officials this has been discussed. they have been discussed at all sent shockwaves through the mouth -- market. notably they will say for the time being there is likely to be more stimulus, not less. and when qe will stop. are not going to tell us. notably we will see how the forecasts go in december because with unemployment above 10% with growth at 0.3% and inflation at 0.4%, that is well below the

target. it looks like stimulus cannot the tapered off just now. anna: thank you very much. you can watch the following news conference right here on bloomberg. but get the bloomberg business flash. juliet: nestle has cut a revenue and -- forecast. the world's biggest food company said revenue will rise about 3.5% on an organic aces. sales growth for the first nine months came below analyst expert -- estimates. russia's third-quarter revenue rose 4.5%. sales climbed to 12.5 billion swiss francs in line with analyst estimates. the company does not report third-quarter meetings. and reporting sales growth that beat estimates as demand for its jamison irish whiskey surged.

the world's second-largest distiller said organic revenue rose 4%. on strong sales in the americas and also europe. nintendo has long -- nintendo's new consul will be released with the release of a three minute video at 3 p.m. u.k. time. it will be the first glimpse of the device since the company hinted at its existence last year. little is known about the product except it is scheduled to be released in march. shares rose in tokyo trade after the announcement. tesla is betting on self driving cars saying all model s and model x vehicles will have the necessary hardware. each car carries eight cameras and 12 sensors to give 360 degree visibility. the upcoming model three will have the same capability. the autopilot system has been under scrutiny after a fatal crash in florida in may. that is your bloomberg business

flash. anna: thank you. financialmond said services are "very high priority for the government in brexit negotiations. so passporting for the industry will be the idea. think they are also realistic and are looking at other options beyond passporting to protect their interests and we are working closely with the industry on looking at the ofions for future protection london's financial services businesses. by anthonye joined brown. you have a conference taking place in london. thank you for coming to talk to us. we heard philip hammond talking about how parts of the industry are working on something other than full passporting. are you, is that something that is on your agenda, not getting

full passporting? >> we would like some version that allows banks to serve customers in the eu 27 and banks to carry on serving quest -- customers in the u.k. what is the legal framework there, underpinning the 20 billion pound trade. the ideal is having full free trade and financial services under and by higher regulation standards as i have at the moment. not some form of the recording -- third country passporting. there is a discussion about it the once. about passporting. this is a pale shadow of passporting. it is uncertain and it could be terminated at short nerd this -- notice. anna: are you willing to accept that full passporting might not happen yet? >> absolutely not. having an integrated financial market has been good for growth

and we should keep that integrated market and financial services and the free trade. it is important when you go into debates to, into negotiations to ask for what you want. in the national interest and the european interest to have continuation of some sort of passporting system and that is what we should ask for. anna: experts talk about how this is not coming from government but trade experts say it does not look likely we will stay in a single market. what looks likely is some kind of free trade agreement because they want some recognition of financial services in there. if it was an sba plus, with how with that sit with you? >> the single market does not look like that at all. the prime minister has ruled that out.

the expected outcome is some sort of egg free trade deal, it will probably be all-encompassing including financial services. the trouble with that for us as an industry, we will leave the eu in 2019. it takes years to negotiate a rapidfire trade deal. it has to go through parliament's and 27 countries, it will take years. what happens the day we leave the eu? anna: do you think the treasury should pay for continuation of the current relationships until the new trade deal cut -- kicks in? >> we do want transitional relationships. we have to have something that bridges whatever we have now and when the new deal is great. we have seen the speculation in the media about that. we would like to see some concrete proposals. anna: we hear lots of reports about fallout around these negotiations and people in the cabinet come from different

parts of the argument. howare you talking to and do you view it? >> they are in dialogue with the industry. that is not an issue. it the government will have to set itself up. it has been a unique set of circumstances that they have had to set up new departments and reorient the way the government is working. they did not plan for it but it is now and we do have clear lines of communication. anna: do you have a chance to get your thoughts and views to rs? more prominent brexitee are they interested in talking? >> everyone realizes it is a key pass. this is our biggest export industry unlike other industries. it is all and everyone realizes we have to get this right.

part of that is making sure we continue. anna: you are going to be asking for reduced taxation on the banking sector create some of the more exceptional ratings brought in in the last few years. it is -- is it politically will get that? >> the previous government has brought in five banks. thee is real concern about competitiveness of the u.k. as a global financial center. people keep saying what to do to make sure it remains competitive and we have this surcharge, a surcharge on banking -- on banks. well could be justified receipts were low because it's were a lot of losses. i expect corporation tax comes out and it should be phased out.

anthony brown. that is it for daybreak. bloomberg markets, the european open is up next area a quick look at the future suggest we will pick up. this is bloomberg. ♪

guy: we are bringing you the first trade of the day. i am alongside caroline hyde who is right for it. a bit of a clue of what were watching. markets barely budging after last night's debate. clinton victory christ in? and will mario draghi keep the markets in suspense once again about the central banks