♪ anna: angela merkel clinches a fourth term, but her win is tinted. -- tainted. we are at live from berlin with postelection coverage. manus: trump at three countries to his travel ban, opening himself up to new legal challenges. reformre repeal and tax a top the agenda on capitol hill. anna: japan prime minister is calling a general election and might seek a stimulus package. ♪

anna: good morning, everybody, a warm welcome to germany decides, a special edition of our program. i'm anna edwards in london. manus: i'm manus cranny. the hurdles have been jumped in the netherlands, france, and now germany. brzeskis according to is that merkel could be a lame duck chancellor in her fourth term. this is the dax at the moment. the hurdles have cleared. it's going to be a chancellor and a coalition led by merkel. discounts trading at a on the s&p. best --september, the since december last year. the valuations on this chart

aok as if the dax offers position of a value. that is what the chart suggests. about the biglk thing. we touched new records on global equity markets. down a bit.ific is radar, we have all our currency. it is a nice gauge of what we are on the coalition holding story globally. we had the u.s. dollar against the japanese yen, the yen is down. abe is going to call a snap election today. could he push for a big stimulus package of $18 billion? the euro is in there. the initial reaction to the german reaction and what could

be a period of negotiations. manus: you have the new zealand dollar up. this is about protracted negotiations. it looks like we get some breaking news coming through which is the swiss industrial sector by ge's industrial solution business with $2.6 billion. they expect the deal to close in the first half of 2018. $200 million of synergies. anna: all about synergies. going to be live in berlin and we have by the of guest coming in and elsewhere from germany. also, the market implications and everything you need to know about your investment strategy. let's get the bloomberg first word news update with juliette saly. juliette: the u.s. president ordered new travel restrictions

on eight countries, placing the current ban on six muslim countries. affects north korea and venezuela. the move opens donald trump to a new wave of legal challenges as two groups challenging the earlier policy say they still feel the restrictions as targeting muslims. republican tax negotiators are targeting a corporate tax rate of 20% according to two people familiar with the matter, higher than the 60% that donald trump once, setting a key decision on a top legislative yardage. they are expected to recommend cutting the individual tax rates from 39% to 35%. donald trump accelerated his criticism of the nfl by saying fans to consider not going to games despite strong objections aom players and owners and

longtime computer, robert kraft. he said he was deeply disappointed why trumps comment about players who refuse to stand during the national anthem to protest treatment of minorities. iran has testfired a new ballistic missile in defiance of donald trump according to press islamicing broadcasting. it is capable of reaching much of the middle east including israel. the president said he would press ahead in the face of washington's demands of the country. oil helped gains above $50 a barrel as opec is halfway to clearing a global glut and urges producers to stay focused and finish the job. risen 7% this month on

forecasting rising crude demand and gulf coast refineries resume operations after hurricane harvey. russia's foreign minister says nuclear weapons are keeping a first strike against the nation. he said americans won't strike they are not sure it has atomic bonds. tensions a ratcheted up as donald trump's foreign minister traded threats. shinzo abe's ruling party has a commanding lead in opinion polls before his announcement of a snap election later today. democratic liberal party held a 43%. he is expected to convert that election will take place october 22 at a news conference at 10:00

a.m. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . that expectation coming through from prime minister abe is weakening the yen and pushing the nikkei higher. elsewhere, it is generally awake such an across asian markets. property developments are battered today. this applies in taiwan under pressure because of disappointing sales and south korea's cost be weaker by 8%. we look at the stocks in detail, china has risen fivefold. we see new chinese cities adding to these property curves ahead of the party congress in october. htc was the best performer on friday and remains to be so today. billion deal $1.1

with google and amazon boosted its stake in india's shopper's, sending its price up about 50% in the india session. stake toell a 5% amazon for $28 million. manus: thank you very much. angela merkel's victory was marred by the halloween out of out ofport -- holloweing the support of the two main parties. they plunged to historic lows. anna: the votes went to the anti-immigration afd as a sign of the growing his appointment in the biggest union. >> a new challenge in front of us. namely, the fact the amd has entered -- afd has entered the federal department. we will analyze this closely and in depth because we want to gain

back those voters of the afd by solving this problem by giving them solutions and certainly by the politics. merkel, german chancellor in waiting for a fourth term, giving her version of events yesterday after the exit polls came out. matt miller in berlin with more. the early indications are we are headed to jamaica. , indeed thetely social democrats leader martin schulz yesterday said, he will not participate in another grand coalition. he will go into opposition. he placed blame on the strength of the afd on angela merkel's soldiers -- shoulders. very interesting events at the parties after the vote last night and the debate they held on german television. all the leaders came together in an elephant around, really

cracks between martin schulz and angela merkel, mostly from merkel --ide of it site. -- side. merkel doesn't show that much emotion. lost 12, 13,lition 14 points. what happened? happened basically is, almost everybody assumed theel would win and after tv debate, many people thought schulz would not be chancellor. because merkel was supposed to feltnyway, a lot of voters it was safe to counter protest for the fringes. but they went straight to the other parties such as the fringes. if we look at it slightly differently, if you take the

parties that are politically close, the conservatives and the liberals, together they lost 2.5 percentage points, which is not all that much. while it looks bad for merkel, for the overall conservative liberal can't, it was not such a bad thing. matt: how much of a problem was it the afd moves with better-than-expected showing in the election? guest: it is taboo for germany since the early 1950's. we have a radical right-wing party in parliament that will make a lot of noise. judging by how they are doing in a state parliament, they will expose themselves as fairly phony. my guess is, yesterday's protest boat, after years of grand coalition, that marks the peak of electoral appeal for this

right-wing afd. they have slogans, but they don't have policies. manus: very good morning to you. we are all heading to jamaica as anna just said. that seems to be the consensus. what is the risk that schaeuble the position as finance and it goes to the ftp? how real is that risk? guest: i would not call it a risk. you know have three party groupings, the conservatives, liberals, and the greens who all want significant jobs. the probability that charlotte schnot -- schweiger -- aeuble might not be finance minister, on european matters

very close to that. would behink they significantly affected by this. the ftp and the greens couldn't really be very much further a late from each other in terms of every single issue there is. how are they going to negotiate a truce to join forces in this new government? guest: on some issues, they are fairly close. they represent urban liberal votes of germany when it comes to civic rights. that's one thing. the other thing, if they both have to straight on their core message, the greens on the environment, and liberals on economic matters, it might work out. exploit all their

policies, they can't do that. but if you focus on their core strength, jamaica can work out as good as the recent coalition. anna: good morning to you. do you take martin schulz at face value when he says no grand coalition for the spd? there is another conspiracy theory that maybe he allows to make up to run for a little bit but then might change his mind later. is that still possible? we are not into conspiracy there is in berlin. i was taking it at face value. there is always a slight possibility. out, ifng else works they were really to face a choice between calling to say early elections or state of government or having talks with merkel, they probably wouldn't

do that. but it is highly likely they won't have to do that. it is highly likely the jamaica coalition talks will be difficult, but they will work out. the least likely of scenarios is that germany would go for new elections. that is something the social democrats would prevent in the end, but they probably won't have to do that. manus: let tie this back to markets. a moment of shakiness, but nothing prophetic. do you think this election outcome could transfer itself because the risk afd has arisen more than anybody thought? the left did not as well as people thought, but this could be a precursor to a volatile italian election and volatile european markets. guest: yes it could be, but i guess this will be mostly market talk about this. -- 12.6% of the afd

the afd is better than rejected, but not such a resolution area relative to other european countries, the strength is modest and i don't have the impression people will be watching the afd in italy. my impression is they are watching how le pen failed in france with the anti-euro message. matt: it was higher in the afd, right? most people thought germans weren't telling pollsters whether they were going to vote for them. some were forecasting 15% for the afd. guest: the whisper numbers are unreliable, especially in recent state elections. afd gained a percentage point more than the last two

opinion polls suggested. thiswe have seen is, since tv lovefest and away, -- in a way, many of the voters went to the two mainstream parties. that trend was visible in the opinion polls and continued throughout the election result, the end result is something the country can live with and i think the country will remain at its -- as steadfast as the italians will take note of that. anna: thank you for your analysis. chief economist at baron beghe stays with matt on that rooftop over in berlin. work,ou are traveling to you don't have to miss out on the bloomberg analysis. you can jump to bloomberg radio on dab digital radio in the london area.

ongoing coverage of the german election. coming up on daybreak, we get analysis and market reaction to merkel's when and the return of the far right to germany's parliament. anna: the japanese prime minister is expected to call a snap election. all the details. this is bloomberg. ♪

♪ stocks are a little bit lower, off a 10 year high for asian equities. markets are juggling north korea risks along with the global story. this top story, germany has decided and put together a coalition. joining us is pimco's managing director. begins andiscussion

we end up with a jamaican coalition. the market was lower and you can see more italian risk in the market. your market assessment as you look at the election outcome in germany this morning. think we could see a little risk in the peripheral markets this morning. afd sharesmply the took out of germany and the enter aod the ftp will coalition alongside merkel's pdu csu as well as the green party. some of the commentators leading up to the election have painted the ftp as being anti-euro and therefore we might see this reaction in the markets. i disagree with that, though. position aretp's closely aligned to the personal views of schaeuble, so from that

perspective, i would not expect a risk off if we do see that when the markets open to last for much longer. you: how important is it to , to german bunds and to the market in general that short blurb stays in -- schaeuble stays in post? guest: he has been a minister.ing finance if he were to step down and the to runninge claim the finance ministry, were they to enter a coalition government. if you were to vacate the majoron, i don't see a transition on the fiscal front, but terminally will be running -- germany will be running a balanced budget. it will come up on the you --

european policy fronts. macron will make a pro-european speech, talking about federal structure for the eurozone. the ftp once a confederation of independent states that run a role-based fiscal policy. that's the euro side of the coin and we have seen a little bit of euro weakness this morning. what about the equity side of the coin? do you see any problem with the greens coming into a coalition when automakers are under pressure in this country? guest: i don't think we will see major changes to environmental or industrial quality on that front. many of these changes are already afoot and have been brought in by merkel's government already. the withdrawal from the coal industry, the changes in the

automobile industry in the wake of the diesel scandal. expect, even if we do have the three-way party coalition, a major change in the industrial policy. ftp,: you mentioned the perhaps we are over egging the risk putting give urged from merkel's position. e-cig potential coalitions will implement mild tax cuts in 2018. as of the bond demand, do you sit back and -- and bond man, do you sit back and say, i don't want to take my foot off the gas? they cut this in a pre-election phase ranging from .5% in gdp, the proposal coming from the euro, the ftp will go

further. there proposes will take euro to .9% gdp. there are additional reductions in the solidarity surcharge plan for later in 2020, almost preprogrammed. we are not talking about radical, large changes in budget deficits and bond supplies. if anything, this will work towards the ecb's goal of stronger growth in the eurozone and hopefully some inflation from the central banks perspective. if anything, such a policy mixed with ftp would probably support the ecb's exit from monetary policy that year. anna: thank you for your time this morning. pimco's managing director joining us with the latest reaction from pimco regarding the german election. much more from berlin. in brussels today.

in an amazinguss speech on friday. we talk about brexit next. this is bloomberg. ♪

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♪ ands: live shot of tokyo the emperors palace, a little bit of a selling and dollar-yen, yen down by .8%. waiting to hear from the finance minister in japan. he is expected to start speaking in osaka. of apeculation is that will go for this snap election and could be seeking ¥2 trillion in an economic stimulus package. we will see how that is attacking the markets. nejra cehic is standing by. nejra: that means the nikkei is

buting the trend in asia the asia-pacific index is lower for other day, falling from a decade high. some people saying this could be to do with asian stocks hitting expensive. ,his is the asia-pacific index the five-year average is the red line, trading ahead of its historical norms if we look at it on this basis. this is the euro and a new zealand dollar coming through. after the german election and the difficulty angela merkel will face in making a coalition. the new zealand dollar is the worst performing currency against the greenback, the election raising questions of what will happen with the next government. --mentioned dollar strength dollar-yen strength. this chart shows the correlation

tightening. some people say the point where we might see downward pressure on the yen is the 10 year treasury yield up 2.25%. that is where we are now because according to some people, they start becoming attractive to japanese investors because they buy dollars pushing down the yen. taking a look at the other spread, at its highest since 2015 on this spread. brexit negotiations restart today after three months of scant progress and the real fight is about to begin as discussions resume in brussels. the uk's aim is to break the deadlock. they want to move on to talk about what the future trade deal might look like.

i have the chief economist of baron byrd. has the u.k. got what it needs to get out of the way with brussels before it can move on with trade talks? guest: definitely not yet. the u.k. is officially ready to pay for the first two years of the transition period, but there needs to be much more detail and a clear readiness to pay the views beyond these two years. i think the negotiator will note there is progress, but not enough to recommend to the 27 eu heads of government to move to where britain would like to talk about, future trade relations. anna: on the subject of market reaction, i know you want to keep away from the immediate, but i find it fascinating, we pulled up this function to show the pound bouncing against all

the other currencies. maybe the negativity was just too much on friday and some of that need to be on land. what is the upside on friday for the u.k.? did you take away any positives in terms of the uk's position or the u.k. economy? some ofes, i can take sight from the speech, mainly it was another step in the right direction. it doesn't strengthen the in the end, the u.k. will go for soft brexit rather than hard brexit. the point remains of though, this is just a step in there needs to be significantly more steps. london needs to get real more than it is getting real before serious talks about trade after exit can start -- brexit can start. but it is a step in the right direction and it should be modestly market positive,

including modestly sterling positive. manus: in terms of medford saids comments, manfred the prime minister brings no more clarity. we are going to have to wait for angela merkel to have a mandate for brexit in terms of the german position. at least until early november. do you think that reflects the german position, merkel will plate really hard ball in this? or will she move with micron and it was constructive? guest: i think the german position is a very clear. issuel not be a serious in coalition. s to get real about what brexit means, then we can

talk about trade. i don't think it will in the progress in any way -- i mpede progress in any way. britain still needs to move its brexitns more on the till before serious discussions can start. can't britain be a little encouraged by the inclusion of the liberal party, the free democrats in the coalition? they didn't seem the most eager to get a good deal with the u.k.. guest: yes, but i think that is a very small point. after all, we have 27 countries in the eu with a fairly united position. all german mainstream parties are not far apart. these are differences in degree,

which will not be relevant for -- euerall you negotiate negotiating position. they might exist, that are small, so small that 27 countries jointly will have them as a deal with written in these differences won't move that in any significant noticeable way. manus: when it comes to moody downgrading the u.k. on friday, you have s&p have the country on negative watch, moody warned about the debt burden and the public finances and fiscal consolidation thing at risk. do you share their angst or do you take the government's position batting these issues away? guest: brexit is that for the british economy. we have already seen that this

year. with much of the rest of the economicing excellent growth and the u.k. is losing out on this and seeing stable growth. brexit makes it more difficult for britain to balance the books. having said that, moody did not have a good trigger for the downgrade because the floor and speech by theresa may was not negative. it was a small step in the right direction. i'm surprised of the timing of what moody did, but not the overall judgment that the u.k. putting the u.k. in the more difficult position without exit. -- brexit. anna: in terms of the pan-european picture here, as we digest everything you have seen in germany in the last 24 hours

and we look ahead this week, what are we going to be looking at when macron speaks? a lot of people will talk about further european integration, or haps news around shed budget in europe. what's the focus? guest: my focus is whether macron will add any details to these overall long-held french ideas of having more fiscal integrations, something close to an economic government. so far, macron has showed a great enthusiasm for more european integration without adding new ideas to paris. that is what we will be watching out for and in the end, i'm convinced the new german will make and macron the steps toward further integration that hasn't been discussed before the european

monetary fund, the rainy day budget for the eurozone, the construction for the rainy day budget, where national capitals will keep some degree of control. there will be progress and macron's speech is the opening gambit for the talks that will happen until the middle of next year about that. matt: the chief economist at barron bank, you correctly forecasted everything so far, so we will see how this progresses with the german election and brexit, as well. if you want to continue listening in london, continue on dab digital radio. you can also go to the web or pp toobile with an act t listen to that. are expecting

shinzo abe to call a snap election. headlines from the boj governor kuroda. manus: the 2% price target is still distant and they want to achieve an economic cycle. the bank of japan is not simply aiming for an increase in inflation. 2% is still a distant target. anna: coming up on the program, president trump at three countries to the list of restrictions. we get the latest from the u.s. travel ban. plans of a snap general election. this is bloomberg. ♪

♪ lumber daybreak europe, it is 6:34 in london. digesting the german election.

we will hear from janet yellen tomorrow. a lot of the fed speech this week. we'll have a few more lines from governor kuroda. let's get a bloomberg business flash with juliette saly. juliette: chinese property stocks plunged in hong kong after edit housing first, adding speculation that the court rising prices. they rolled out restrictions over the weekend with most retails between two to three years of purchase. areel cars in germany falling. automakers and the potential of vehicle dan in the country led to significant changes in the consumer behavior. vw is also offering special financing to boost sales. majority owners softbank is

willing to accept a stock discussion merger according to people familiar with the matter. it would value sprint near its current market price, it's a telecoms majority order is talking that sprint shares should be a significant discount. that is your bloomberg business flash. anna, manus. manus: president trump added three countries to the list of nations whose citizens face restrictions on entering the united states. his revised travel ban includes north korea and venezuela. anna: left speak to jackie edwards who reports to first word washington. how does this revised travel ban differ from the initial policies and the different countries involved? issued newt trump

restrictions or suspensions on travel to the u.s. from eight countries. this is a change from the original travel ban which covers six majority countries. countries involved with this ban included syria, somalia, and iran. chad, andnorth korea, venezuela. they have restrictions tailored to specific countries. in venezuela, restrictions are targeted toward officials. are band, most provisions expected to take place october 18, different from the old ban, from which was effective immediately and that caused confusion for airports, for airlines, and for air travelers. thesehis grace period,

new changes to roll out, federal agencies will be more equipped to work with airlines and travelers on what they need to know about the ban. it is unclear how this affects court cases that are dealing with the old travel ban. the supreme court was upset to hear a case on the old travel ban in the next few weeks and it is unclear if that case will be scuttled because of this new , or if the case will still be heard. manus: what is the latest on trump and tax? where is the compromise for trump on this? it is important he went something on tax. he is going to indiana to talk about tax overhaul

according to a source familiar. he confirmed the administration hammered out a plan, a tax framework that they would work with going forward. on whatt very detailed the plan was, but he mentioned he would like the corporate tax rate to be set at 50%. this is different -- 15%. this is different from the sources. it is unclear what the plan is, but we should know more on wednesday. anna: jackie, thank you. a lot to look out for in terms of what politics delivers. the politics in japan also fascinating. shinzo abe holds a commanding before hisnion polls announcement of a snap election. manus: the yen is weakening. all ahead of news conference

with japan 10:00 a.m. u.k. time. a great deal of expectation in terms of abe. what can we expect from the announcement? >> we are expecting a twofold announcement, one the snap election announcement. right according to the partners, given the stands on north korea has resignedly been welcomed by the japanese public. the latest polls showing hobbies cabinet hitting a 50% approval rating. also the big opposition, the democratic party is in disarray. key members resigned and they want to take advantage of this disarray to bring the poll up much sooner than he has to.

he doesn't have to call it until next year, but he seems to be doing the timing game right now. anna: why are japanese stocks rallying? japanese politics or the week yen and benefit to exports? to do with also has the stimulus package, another reason that might -- another thing that might be announced at the press conference. is this weakening of the pot to voters by shinzo abe and his voters. the yen is weaker on that and japanese stocks, if you look in the history books, when snap elections are called, stocks do go up and they are bucking the trend in tokyo. the regional stocks are down. manus: there is a lovely piece on the bloomberg this morning.

the japanese are slumping into stagnation. there is a debate on what he might go for. ¥2 trillion is a popular package. what could he do if he is reelected? could he move on a sales tax hike? which direction do you think he will go? stephen: we have been getting those headlines from the boj, they will keep on going for this 2% inflation target even though it is a distant target according to mr. corona. in the stimulus -- mr. kuroda. in a stimulus package, they are likely to bring it up to 10% next year. they are already sticking their money under the mattress. again, he might pause on that right now just to sweeten the pot, as well.

it is something he wants to do and the government will be pushing forward. if he does get reelected in this abe election, watch mr. push for revisions to the constitution in japan. anna: lost to watch for on the geopolitical front as well as the economy. stephen engle joining us on the japanese story. the deal the bidding process that last several months after the u.s. company put its unit up for sale in december. of the gy has the sale assets taking a long time to get there? the deal is done. >> the deal is done. it was announced this morning. it was a long time in coming for two reasons. ge and abb are under pressure

from activist investors. ge has a new ceo and perhaps this has something to do with it. the asset was marked up for sale, but perhaps a new ceo wanted to come in, have a look, and get a better look or as good a deal as possible for the american company. anna: is this part of a bigger change in portfolios for abb? is there a bigger story here, tara? >> i think industrial companies on both sides of the atlantic ,re redoubling their portfolio under pressure about winning contract competitions, increased from asian companies. there is a general changes in the way products are manufactured, increased automation, the new type of big industrial companies are having

to change the way they are doing things, advise companies about how to make better use of digitalization, robotics, and all kinds of these new technologies on production lines. tos type of deal has a lot do with these industrial companies looking at their portfolios and trying to figure out where their new focus and new world is going to be. manus: there is a new focus in the train industry between the french and the germans. the ouster has won the approval of mr. macron. take us through the details and ramifications there. >> that is right. -- what is driving this deal is that there was a major merger between two chinese companies this increased

competition in europe and north ,merica that the big players german siemens and french alstom. themany months, it appeared consolidation in the industry was going to become between the german and canadian countries. surprised by a lot of people watching the industry, siemens had been holding conversations with the french rival. anna: tara, thank you so much. tara joining us with the latest on these stories. we talked about gmm. manus: you have stocks in asia a little lower. the pine is kicking along. -- the pound is kicking along. we are cranking on gas against the new zealand dollar, up 1.25%. anna: negotiations set to take time in new zealand, so that is weighing on the currency

generously. out on thehollowing social democrats. this is bloomberg. ♪ what did we do before phones?

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manus: germany's splintered parliament. parliament. merkel's win is tainted. election coverage. anna: trump adds three countries to his travel ban opening himself up to possible new legal challenges. obamacare repeal is at the top of the agenda on capitol hill. manus: japan's prime minister is expected to call a general election. mayay also speak and it -- also seek an $18 billion stimulus package. ♪

manus: you are welcome to "bloomberg daybreak: europe." it is our flagship morning show right here in the city of london. imf manus cranny. anna: -- i am manus cranny. anna: i am anna edwards. >> here in the capital of berlin. germany election results yesterday for angela merkel falling down to 30% of support. she has been pulling around that is 6% and last year she garnered -- around 36% and last year she garnered more than 31%. immigrants, -- her social democrats only getting .0% as manus mentioned, the afd, the right-wing party come into parliament with a better mandate than some have expected around 13% of support.

this could change the picture. the first time it has had six parties since the 1950's. anna: lets more as a go through the program. really fascinating development overnight. we are watching for the japanese story. shinzo abe is supposed to speak later on today and we are going to be keeping an eye on that election story. we call the elections, the 22nd of october. we will be weaker at the start of the european trading day. it has been really mixed. the japanese stocks doing ok. bouncing because of the weakness in the yen. hong kong stocks really suffering, down by more than 1% in this morning's trading. manus: you are seeing a little bit coming from kuroda being that far away. a new headline coming in, you got abb than the geo--- done the

deal with ge. this is a stock buyback at covington. ntt will buy 1.5% of the shares for ¥150 billion. let's put it together, you got sterling. the euro is slightly better off of it. this is dollar yen, because what you have got is a snap election, willie: for stimulus package? $18 billion. there is a lovely piece saying beware of selling yen. history shows there little impact. it is qe that drives dollar yen. anna: that is the question the market is asking around the yen. how long will coalitions last? what will the end coalition look like? what will the presence of the , what does that mean?

we put the new zealand dollar in here to show the coalition talks are not limited to europe. coalition talks taking place in new zealand halloween the election that took place -- new zealand following the election that took place there. manus: just another headline coming in, this time on unilever. another deal coming through this morning. unilever set to buy carver. the deal, 2.20 7 billion euros. euros.billion that is a deal set to come through from unilever. productsious osmotic -- various cosmetic products.

oflly echoing the types companies both unilever has been going for a late around that side of things. looking at the markets. manus: you get equity markets a little circumspect this morning. they are try to judge how long it takes before we all get on the plane and go to jamaica. the possibility of the jamaica coalition in germany. anna, you drew my eye to the bottom. gillespie that andrew wrote -- the last these that andrew wrote. up .12.e you'll get a coalition. will it be the middle of november or december? let's go to flu teslas go

to bloomberg first word news. juliette: the u.s. president has ordered new travel restrictions on eight countries, replacing the current ban on six 30 muslim nations. in order targets travelers from iran, syria, chad. sets of donald trump for what could be a new wave of legal challenges. they still see the restrictions as targeting muslims. in washington, texico sheet is -- washington tax negotiators are targeting -- setting up a key decision for the president on a top priority. the plan he will see is expected 35%, down tax rate to from 39.6%. iran has testfired a new ballistic missile in defiance of donald trump. that is according to press tv

setting islamic republican of iran. iran unveiled its latest missile capable of reaching much of the middle east including israel. president rouhani about he would present head with the ms. -- press ahead with the missile program. turkey has sent a final warning to iraq to drop plans for a referendum on independence scheduled for today. a council said the vote would "have terrible consequences for the region." the president said on friday that he is ready for serious ilog but only after just for serious dialogue but only after referendum. oils have gains about $50 a barrel. they are about halfway to clearing a global glut. that is after an agreement to maintain output cap's through march, the end of price route -- price rout.

crude has risen more than 7% this month and as he was gulf coast refineries continue to resume operations after hurricane harvey. japanese prime minister, shinzo abe, ruling party has a commanding lead before is expected announcement of a snap general election later today. a poll said his liberal democratic party held a 44% to 8% lead over the main opposition them credit party and he is expected to confirm the general election will take place on october 22 at a news conference at 10 a.m. uconn -- you time. -- 10:00 a.m. u.k. time. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top people have yen weakness ahead of the speech from prime minister abe. elsewhere you can see it is a down day across asian markets.

led by these down turning property developers in hong kong. speaking of those property developers, this is -- [no audio] shopper's stock is an indian retailer that is risen the most since 2012 after amazon took a 5% stake in the company. mitsubishi motors looking quite well on the closing in japan. it could be making a smaller suv that will be electric and that could be in production by 2019. that is a wrap up asian markets. matt? matt: juliette, thank you. joining us now here on the martin von slaven -- martin wansleben. let me ask you your reaction to

yesterday's results. martin: it is a difficult result is we're not used to our state of the bundestag. that is a little strange for us. on the other side, it is much easier, the result them he had in holland are the situation in poland, even in england. the situation is much more difficult than we are facing now in germany. matt: much more of a mandate for the populace right. yet the liberal party -- you have the liberal party back into , possibly into a ruling coalition. is that good for a congress? martin: we're not talking about , as about topics and results. what we need in germany is a

strong position across euro, across the international challenges and what we need in germany is investments in education, investment in infrastructure. this is especially true for digitalization. more innovative companies. matt: don't we also need to cut taxes, reduce regulations? german citizens are paying a lot more in personal income taxes than their counterparts around the world pgm situation where .onsumers -- the world yet a situation where consumers are not allowed to buy things on one day of the week. don't things need to change it -- change as far as society is concerned. martin: this is what we mean. we need tax cuts. modernization. this is true for the

administration. we need a more distant lysed -- more digitalized relationship. it is a huge topic. we need a strong government. matt: let's bring in anna. anna: good morning to you. when you look at the likely makeup of the bundestag and the 13% they goes to the fd, what impact will they have on policy that matters to german business? i know there is a demographic challenge and many people suggest there needs to be continual immigration into germany because of that. german businesses will want to see a semi-flow of labor. reason whyuess the the amd would get such a result would be scrutinized in the upcoming days. the main topics is about

terrorists, migration. it is not much about business. we are expecting the other parties, especially the greens and the liberals working closer together to set a clear lance mark -- clear landmark against populism. we are exporting everywhere. then a phobia we cannot afford -- xenophobia, we cannot afford. matt:matt: mark -- manus: marti, good morning to you. you mentioned trade. what more do you want to see from angela merkel? she stance separately from donald trump would be a -- she stance separately from donald trump who would be a bilateral list.

what way do you want to deliver? ahead is veryenda demanding and challenging. reestablish a relationship. it is very important for german businesses that we need a better relation to turkey. we need to solve the brexit case. it is a tremendous importance .or german business britain is one of the most .mportant customers you mentioned it already, we better trade relationship across america, europe first, china first. that is obviously not the result to face the challenges ahead.

matt: germany needs to invest a lot in infrastructure. blondeuld the state, the -- the bund get the money for that? way to sell the government stake in deutsche telekom, what do you think? martin: we don't have the problem to get the money. we do have a challenge to spend it in a properthink? and in an investment way. this is what we have got to do. we should change from consuming, from spending money, from consuming activities for investment. we need better foods, infrastructure, invest in digitalization and digitalization means not only infrastructure but education. matt: thank you so much for your time.

-- ofo of the assertion the association of german chambers joining us live from .he rooftop here in berlin coming up, more expert analysis of the german election results as is speak to the deutsche bank chief economist. this is bloomberg. ♪

manus: it is 8:20 in the city of berlin. euro-dollar down a quarter of 1% . the 13% run that you have had is almost done. and report upon 1%, the ecb will reset the agenda. here is your german market board for you. ds, pragmatic and unchanged.

neutral for the blonde market -- for the bund market. movement,ery spread you want to fade the news. anna: if the of corporate news. let's get an update with the bloomberg business flash. juliette: abb has agreed to buy general elections and a show -- general electric's business. it will strengthen abb's number two position in electrification and lead to a long-term strategic supply listenership. it has the potential for cost energy for two billion dollars in expected to close in the first half of next year. chinese property stocks have plunged in hong kong after cities added housing codes. the authorities would pull back on measures to cool rising prices.

the news agency reported that eight cities including some sing rolled up the weekend with home resales within two to three years of purchase. volkswagen has reportedly said sales of diesel cars in germany are falling. the automaker said discussions of potential vehicle bans have led to significant changes in consumer behavior. vw is said to have offered a special financing to help host sales. that is your bloomberg business flash. anna: with us for further analysis of the results of the german analysis, stephan schneider, chief economist at deutsche bank. thank you for joining us. ask you about everything that angela merkel and her team had delivered on the german economy. it wasn't enough to increase support. unemployment down by half since

2005. growth averaging but she didn't do any better this time around. growth is not enough for the german electorate. what do you expect on the growth front? the test doesn't hold true for germany in the selection. -- doesn't hold true for germany in the selection. we have seen over the last three years which is now declining but still this is an ongoing issue. this is caused some frustration with the grand coalition parties altogether. almost 14 points altogether and has strengthened the borders on the left and on the right. issues thatbout the germany has to deal with now? investing in infrastructure? ? investing in infrastructure? digitalization? cutting taxes? these are things that schaeuble

has promised. can they get them done? stefan: one should take a step back from the election propaganda. the german government has them a little bit and boosting investment. if you look at the construction sector, they are working at full capacity. you might end up with higher prices. germica coalition would be tricky for merkel to manage. if you look at some of the issues within europe, social security, especially environment, it almost seems the two parties are the opposite end. if you look at it from a very simplistic, kind of power balance, you might even say, they neutralize each other and merkel will keep on going with her kind of course. she is established a lot and 12

years. some in thector is cdu was lost heavily treating these losses to the fact that they have not been catering sufficiently to the conservative part of the electorate. members see the party of the democrats are pushing a little bit more to the conservative elements. the balance merkel has to deal with. manus: how much of a risk is a brexit and a hard brexit to the german industry in terms of the automakers? in terms of the exporters? that relationship between germany and u.k. is very hard and heavy. how much risk is there in this brexit negotiation for germany? stefan: even if brexit which is

hard to see workout relatively smoothly, that would be quite a setback for the integration of the two countries. if you look at some of the flows were parts of auto parts going back-and-forth between the two countries, this will be impacted. it will be negative. it is naive to believe that the german elections will be the decisive factor when it comes to brexit negotiations. all, a dealabove between the u.k. and the eu. if you look at the positions of the various parties which are likely to form a coalition, everyone is basically saying the same thing. yes, the u.k. is important but there can be no cherry picking and it has to be an orderly deal. anna: i asked a guest earlier how important it does that schauble confirms as an economist, what is your view?

almost like every economist, the market liberal economists. a big fan of schauble. if you look the coalition talks, you have basically for parties, if you split the cdu who are looking for government positions . that will be a very interesting question to see whether schauble will stay. that is a signal. i am looking for it because it will show some continuity in terms of the government finance, ad in terms of persisting on halfway rules-based approach within the european union. manus: thank you so much. chief german economist at deutsche bank. a couple of headlines before the next team picks up, from kuroda. we are going to keep watching north korea.

anna: future coverage will be all over that story coming out in japan at 10 clock a.m., just at 10:00 a.m. abe is set to speak. this is bloomberg. ♪ what did we do before phones?

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guy: good monday morning. welcome to bloomberg markets, european open. equity trading cash we will bring you the first trade of the day. i am guy johnson in london. matt miller over where the action is in berlin. loses.wins and she gains at historic fourth term. what does this mean? the future of europe? abe's advantage. he