anna: good morning from bloomberg's european headquarters in the city of london, i am anna edwards. manus: and i am manus cranny from dubai. here are our top stories. anna: the u.k. and the eu said to have plans to wrap up a brexit deal in november. then you nafta. the u.s. has made it clear that a new tripartite agreement will happen to be finished by friday. canada hailed mexico's concession as a positive thing. and be careful. president trump accuses google of pushing biased news. the white house says it is looking. at the social media outlet.

♪ anna: good morning, everybody. it has just gone 6:00 here in london. manus, it is a bit heavy going and the asian session, shanghai composite underperforming a little bit this morning. we want to see some a breakthrough in the trade story, whether it is with canada or something more long-term, or over in china, we will wait to see. on the bond markets, i thought it was worth putting this in, 2.3% is a 10 year yield. movement has been higher in u.s. yields in the past couple of days, influencing what we have seen in the equity markets. some of the rate sensitive stocks dropped in the u.s. yesterday, although u.s. stocks hit yet another all-time high, so be aware of that one.

we have the canadian dollar on the rise this morning. reports in the global mail suggesting that canada could be ready to accept concessions in particular around the dairy industry of course. crucial to global trade conversations, manus. manus: i'm am not even going to try to go there. the closest i get to the supply inin am a anna, is frlc functionality. consumer confidence is at a 13 year high, according to the u.s. fed. if you have fear of missing out, you need to get into this market. its is the volatility index, went up, volumes of a five-month high, 1.5 million contracts traded. it is an equal and opposite measure that i am using. what you are seeing is a put to

call ratio which is the lowest since june, this fear of missing out. i am not long on the s&p, how do i trade it? calls.k at call options have been the biggest constituent part of the move, and that is what many people in the market are saying, the market has this fear of missing out on the next level. pimlico says implant of all is cheap, they are long on the market are we on our next guest will be joining us, she will tell us if she has a fear of missing out. the long-term premium compared to bonds is nowhere near that overboard signals. those are the features of what we have, anna, but u.s. equities are definitely in focus. anna: it is interesting what you say there about the fear of missing out. our bloomberg intelligence colleagues writing that the latest fair value cut say that

we could get 390 on the s&p. we will have more conversations about u.s. equities. start ofat the our trading day, they could be up of them but at the start of the trading day. let us talk about what is happening in europe on programming. we will be talking to the french deputy finance minister on "bloomberg surveillance at 10:30 a.m. london time. the focus will be landing in france and germany. that is get the bloomberg first word news update with juliette saly in . ♪

manus: we are having a bit of a sound issue with julius valley, of course, we will get you the major headlines. are at the morning their range across from google in terms of the president is saying. a couple of other breaking news headlines for you. amazon's price target has been raised. this is another interesting calls by morgan stanley. $2500, and even though you are seeing this whole discussion about regulation in the tech space, that is perhaps a bit more to where the likes of google and the other of out there. a great call their for amazon. our top story this morning is how close we are to doing the deal with canada. the foreign minister has rejoined nafta talks with canada as a u.s. of deadlines loomed this friday, to reach a deal to renew the pact.

one analyst says in the u.s. mexico trade agreement set the stage for a productive set of talks this week. mexico was is that able to do something that i think must have been quite difficult for them, to make those concessions, really setting the stage for the productive conversations for us here this week. anna: christopher land there, the foreign minister of canada. -- kristy a freelance. we are joined by jodi schneider this morning. more things to fix it or in terms of this trade conversation. it looks like canada's inclusion in the trade deal is looking more and more positive, the canadian hitting a bounce from that early this morning? jodi: yes, it is looking more positive. seems to think this could happen. the question? is, how quickly the u.s. trade representative, robert lighthizer says he would like

this to happen on friday. that is not a lot of time, and it is important for the u.s. to get canada on board. it is much better to have a trilateral agreement, a remake of the old nafta agreement than just a bilateral agreement with mexico. they would have trouble getting debtor the u.s. congress, and they know that. that is a bit of leverage as you pointed out earlier. there he had been one of the issues, and it looks like there he seems to have worked out, but there is a remaining hurdle. canada, for prime minister trudeau, the nafta agreement contained language that allowed there to be a set of panels that would resolve anti-dumping. the canadian negotiators are saying, that has to remain. if the u.s. waters down that language or tries to remove it, do an agreement.

for some reason, the u.s. or canada will have to blink on that. manus: yes, that is definitely one of the important headlines. here we are with canada and the united states. as far as canada and mexico are concerned, they will be seen as wins for donald trump, but what do they really mean in terms of backing up his campaign pledges, about ringing jobs home back to the u.s. they? jodi: that's right, president trump and candidate trump when he was on the campaign trail, came against nafta, saying that under nafta, the u.s. had lost thousands and thousands of jobs, and we cannot allow that to continue, and a nafta would ring the jobs to the u.s. and significantly reduce the trade deficit with mexico. analysts are telling us, not so fast. thisunder this agreement, preliminary agreement with mexico, you would not

necessarily see a return of manufacturing jobs to the u.s.. even in the auto sector, where they have increased the amount to 75%,nal auto jobs from 62.5% in the current nafta agreement, analysts are saying tot it will take a long time change the supply chain operations and relationships, and that it would not necessarily result in more manufacturing jobs, therefore not really changing the dial on the trade deficit with mexico. anna: yes, jody, some of our colleagues writing some great stuff on that. those in the supply chain who theady work are specified dollar power level in the agreement. great job our colleagues, you can dig into that on bloomberg.com. now, u.s.-china trade talks. president trump seemed to wants to detach one from the other, didn't he? that now ise said

not the time to talk about trade with china come of that we should focus on this particular agreement. some analysts were trying to say, this may be means that there will likely not be a deal with china. others are saying, there is something in this agreement that means that they are sort of tough on china, in an indirect way. for example, some of the language would prefer mexican components over chinese components, for instance. other things would deal with the relationship with china in an indirect way, on intellectual property. so we may nothing the u.s. coming to the table so quickly on trade talks with china. week, the chinese delegation was in washington and there wasn't really much visible impact. manus: jody, thank you so much. our bloomberg senior international editor in hong kong, thank you so much for breaking down the latest on trade. lucy macdonald is the cio of global equities at

allianz global investors, cio . we hope the canada gets on board from his market perspective. this overallok at progress? is it a small step to progress? lucy: yes, the whole trade issue has been a major source of concern this year. the market over all has been held back. ande need progress on that, it will be seen positively, but it is a china nexus of that is really in focus. anna: you say that it is a china story that is real interest. what about what we know about whatever it ends up being, how do you see it? is a game changing, or isn't it?

analysts for example were saying that they do not expect the revised terms will have any substantial microeconomic effects. with that mean that the lens with which you look at the conversation -- what does that mean for the conversation? lucy: as i said, china is the big story, and that is what we will be focusing on more. certainly, when you are looking at some of these industries where you have already had some tariffs imposed, it becomes clear and clear what we have said all along, that these are very complicated supply chains. but when you look at the automotive- industry, half the sales are from overseas and the remaining half, the production is from foreign companies. it is very, very complex, so trying to have very simple outcomes from these talks, is not likely to succeed. manus: no, it is not.

one thing that we have seen from markets is the glimmer of light in the trade talks, really reflected in the movement of higher equity markets. we have talked about the car relations, take a look at this. this is what we started the day with in the gtv library, the top call ratio. fear of missing out? -- the gtv library, the put to call ratio. lucy: i think there is some of that, but cash levels are relatively high, which generally is the most supportive for the markets. effectiveook at how the markets performed in the last few months, they seem to be doing better. that looks like it is coming to a halt at the moment, we are at a time where we are waiting to see if there is a next leg to push up.

at this time of year you would not necessarily expect that. anna: estimates suggest the s&p will go in the blue, just higher from here. colleagues at bloomberg's intelligence saying that the s&p will go up higher from here. view.ng even a stronger how much further do we go on the s&p? -- if that view is right, do you see any logic in that? lucy: as i said, the concern aout trade has been very much source of volatility in markets it has been the number one concern. we have a backdrop where you have growth very strong, but possibly less next year, so that is the backdrop. trade has been something that has been very front and center,

in investors' think in this year. in the easing of the attention will be positive. manus: the other big story, lucy, is that we know that the trade policy, america first, there is a great deal of discussion about what the dollar policy is. citigroup was actually worried. if the fed and the treasury got on board with a weaker dollar, they might have about $200 billion to actually go at it. the you worry about the fx policy in the united states, just get on with the day job and go, i need to look at the stocks and i cannot be distracted on whether he was to go with a stronger or a weaker dollar? lucy: we do look at all the macro effects in the companies we are investing in. however, the forecast and currently is a bit of an art, not one that we have spent too

much time doing. the existing, with precedent, it is even more difficult to forecast. i think it is something to be trends,, to look at the and see what impact it is having on that companies, but not spend too much time trying to foresee it. anna: thank you so much lucy , macdonald of global equities at allianz global investors. this is the asian equities session for you, underperforming a little bit in the chinese markets. asia-pacificmsci is an positive cor territory by .25%. ♪ manus: let us see if they can pull another one out of the hat. coming up, the united kingdom and the eu are said to drop their october deadline for a brexit agreement.

what does that mean for britain's chances of getting a good deal or any deal at all? and later, the u.s. president lashes out at google, saying that it's search results are biased. this is bloomberg. ♪

♪

manus: ominous clouds in hong kong, the hang seng index flat on the day, and the yuan weakness will be of little help to chinese stocks. 6.8. is the dollar yuan, according to goldman sachs, chinese stocks lose when the so that is ates, lower the ny. 6.1 say that it is actually in the next three months, 7.1 in the upcoming three-month favored. she is back, we have full, voice

and vision. juliette saly has your business flash. juliette: manus, i find my voice. a sweeping investigation is said to have found evidence adjusting that standard chatters iranian business was more extensive than previously admitted. are said to bes weighing criminal penalties against the bank and its employees. the spokesman said that they will continue to cooperate with investigations and are engaged with ongoing discussions with authorities. goldman sachs telling traders to be very of the federal reserve chairman's comments last week as on.sh interest rates that comes as the 10 year treasury yield fell on friday after this beach at the kansas city fair annual policy symposium. he said that there does not seem to be an elevated risk for overheating.

yields have fallen to the lowest since 2007. investors led by blackstone will start marketing $8 billion of risky corporate loans next week. it would be the biggest leverage loan offering of the year. bloomberg led by bank of america, is holding investor meetings next tuesday in a london and wednesday in new york. bloomberg lp, the parent company of number canoes, competes with to thomson reuters. anna: thank you so much, juliette saly there with the business flash. whether united kingdom and the want talks they to wrap up in a few weeks, sources have told bloomberg that they know him to finalize divorce terms by the middle of latest. the this longer timeframe is another

indication that negotiations are struggling to make headway, making it difficult to get votes from a various parliament leaders. lucy macdonald, cio of global equities at allianz global investors is with us. what worries you when you look at your portfolio? is it brexit-ready? no action required? for a global investor, it is not the most important thing happening on the planet. investede investor, the impact on sterling . it could mean something. but for global investor, one could really just sit and watch. there is some apparent value within the united kingdom market, but brexit is again, not the only source for that. there is also the fact that iswth in the united kingdom the first in europe and there is some lingering socialist threat behind a very weak political

situation, so it is not the only reason why the market has dipped, however, there is some value there. cannot ask you about that? you mentioned the socialist threat in your notes. do you speak to the investment community about this? it is something that is of concern, because clearly, markets are capitalist. manus: lucy, you talk about the risk, taking you back to the labor shadow chancellor talking about how there might be a run on the pound. this is implied volatility, we put it together very quickly for you. underpricing perhaps, some of the negative outcomes? these are three-month at the moneyball and one year at the money vol. we have come all the way down.

are we under pricing the sterling risk? lucy: we could very well be. really the point that i am making, it is not just about brexit, there are other risks there. in, picking what is priced that is one of the things that we have spent time on, but it is not clear. -- the global not investor completely understand you have just stayed away from the u.k. or steadily away from businesses that are going to struggle about the exit? much exposureve to domestic united kingdom, which is a messy the area that will be most affected. lizzie, thank you very much. she will be staying with us. have a lan coming through reflecting on the

terrible situation in italy. the ceo is open to the government becoming a shareholder. rese are reports in la epubblica. ceo, castellucci journalists there. this is a huge issue digit the tragic collapse of the bridge in italy. we are looking at the response levels of the biggest shareholders in that stock as well. anna, we will talk about italy. anna: yes, speaking of italy, we will bring you the latest on their plans with the eu budget, live in milan with the details. especially when it comes to the euro zone conversation this morning, we have had the finance minister in italy suggesting

that there is no plan to breach eu deficit rules. there was also a meeting setting up an even stronger anti-immigration front. is this change in the eu current tour? we will talk about that when we come back. this is bloomberg. ♪ this is bloomberg. ♪ retail.

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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. anna: this is "bloomberg daybreak: europe." here in london. the immune rupee dropping past 70.395 to the dollar to a record low for the indian currency. stock has seen a strong run of gains. investors remaining optimistic. the gauge pushes into a zone that some read as a signal on the indian -- you have got breaking news from european companies, manus.

manus: we do indeed. this is the world's second-largest distiller to give us the numbers. this is where the market will probably focus the most for guidance, for the full year. 5% to 7% in 2018 and 2019. that is the organic growth rate. they raised their guidance. we are going to talk about at 4% to 6%. an upgrade.e 5% to 7% in terms of organic profit. 8.99%.andsales at they are proposing a dividend up 17%. ambition for the company is to get up and over the 15% payout. it is jamison that is their star performer service beat. they raised their guidance on china and india, but of course we will have a conversation with mr. ricard.

the deeper into the numbers and what is going on. let's set you up for the trading day. it will be about data. consumer confidence rocketing to the highest level in 17 years. time, we will get the expectations for the second quarter for growth. has it slowed? that is the question, anna. anna: half an hour later, dominic rob in front of the house of lords. select committee for an extraordinary mid-recess session. the continuous phase of brexit conversations and negotiations even though as we report the timing seems to be slipping, manus. manus: the e.u. defense ministers start arriving indiana for tomorrow -- in vienna for tomorrow's meeting. is standing by. we have a little bit of movement in terms of global trade

discussions, but it is not exactly pumping is higher, is it? annmarie: that's right. we have seen a bit of appetite for risk assets with hopes of a trade guild between china and america questions. they are struggling to find a direction after the recent rally. japan and australia up this morning. china down .4%. the hang seng is up, but relatively flat with a bit of a choppy session. this of course after the s&p fluctuated throughout the day yesterday. closed under that level. i wonder what is happening in the u.s. treasury market? it is on track for the quietest quarter. specifically, look at the red line. 1965.since since the start of july, the rate on the 10-year note has exercised a span of 21 basis points. in market seems to be pulled different directions. the commission saying the record divergence in positions are as

asset managers continue to add to longs with leverage fronts increasing their shorts. we see the tight range, the most since 1950's. moving on in the fx world, the history.aking this is showing the volatility between the one versus the euro -- yuan versus the euro for the first time ever. the offshore has been more volatile than ever, more so this month against the euro. bank of america is saying the narrow spread shows china is moving towards a more flexible arrangement in terms of managing the currency, and that is willcting the yuan weaken more this year. anna: juliette saly has that update for us in singapore. juliette: thank you. the u.k. and european union is said to have dropped their october deadline for a brexit deal. they want any agreement wrapped up in the next seven weeks.

bloomberg understand that behind-the-scenes, senior officials admit this is unlikely . sources tell us they aim to finalize the terms by the middle of november at the latest. the u.s. and mexico will commit to maintain transparency over how they manage their currencies as part of their trade deal. that comes after donald trump heounced on monday that plans to announce a new trade joy in mexico intended to replace nafta. clause thatd a commits the countries to transparency and currency matters. >> some countries in the past currency -- used currency manipulation to be artificially more competitive. so this understanding of what we are doing is basically sending a signal to other regions in the not tolerate will currency manipulation as a way to attract trade. juliette: in washington, and economist has won senate confirmation to become

vice chair. he received backing in a vote of 69-26 and reinforces the u.s. central bank's leadership as it faces criticism from donald trump over plans to keep increasing interest rates. local news, 24 hours a day, on air and at to talk on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. anna. anna: juliette saly in singapore. the dow been an much you wo representatives have discussed ahead of the european union elections in may. both leaders have talked about a political alliance at an e.u. level which would exclude the left wing parties and bring to the for the identities our government represents. a minister has said the country is not planning to breach the european union's

budget deficit limits in an apparent contrast to remarks made by his deputy, his own deputy prime minister, so joining us from elon is our southern europe editor, jerrold colton. good to see you this morning. why are they meeting now? is he building the rhetoric in terms of migration? says hefirst of all, he is his hero. he is definitely the man of the moment for the anti-migrant movement in europe. it possible he wants to be around him at the time where he is getting most of the press. he may want some allies in any future battles in europe, particularly over budgetary concerns. to you.od morning how realistic is the plan that these two men have put together then?

they clearly have a lot in common than terms of their worldview, but there are those in europe who see things a little different. face of it,the there is some common ground. they are obviously both coming at the migrant issue from the same direction, but there is really one important difference. which is that hungary does not want to take any migrants at all and italy is looking to find other countries to take migrants met are arriving here. i think it is going to be very hard to bridge that gap. anna: thank you very much. jerrold colton joining us from milan at the latest on those developments. macdonald still with us. i have a chart that shows the spread, and it shows it has gone out to levels we saw at the times of the european debt crisis. how concerned are you? politics havehat often been noisy and i will not thishis struck me --

affect me? lucy: it cannot ignore it. it would be good to be able to ignore tally in politics, but you cannot in this case. in the transition through -- transmission through the euro is something we will watch. the budget discussions that they are having, because they can be a source of instability for the currency, but also for growth because of the economy. anna: so we have to watch it. and the political situation is febrileite free ball -- in italy. calmng someone trying to the markets is certainly welcome. manus: lucy, in terms of the strength of europe and the currency, we have abm this

morning saying the worst is behind europe. the economic surprises are on the up. the euro will trade back up towards 125. often times we have talked about the currency, the plus and a minus. if that is the case, the worst is behind us and the euro accelerates higher, would that shift your perspective in terms of core europe? think they are right. that has not really been noticed , the fact that the momentum has started to improve again in europe after six months where was disappointing. i think they did have a point there. eurompact of the weaker will be coming through in a belatedly -- belatedly on earnings. one does not have to worry about the immediate impact on earnings. is scope for europe to do better relative to the rest of the world, for the rest of the year. anna: not enough for you to get involved in european banks? lucy: no.

i mean, i do not know what would need to happen for him to get involved in banks. probably a lot of consolidation. anna: matt challenge? -- that challenge? lucy: capital levels are far too low, it is still fragmented, and many banks are not really operated for high return, so we are likely to spend to much time there as global investors when we have a very limited number of companies that we are invest in. anna: lucy, thank you very much. lucy macdonald. let's switch gears. trump trolls big tech. the u.s. president lashed out at google, facebook, and twitter for what he claims is biased search results, giving preference to negative news stories about him. pres. trump: google and twitter and facebook, they are really treading on very, very troubled

territory, and they have to be careful. it is not fair to large portions of the population. manus: joining us now for more on the story is peter elstrom, bloomberg asia's managing editor. what is he specifically annoyed about? it was really a highly unusual day. he started off this morning tweeting about google, accusing the search giant of rigging its search results, the urging some of the -- burying the conservative voices that support him and being the fake news media. he accused the tech giants more broadly including -- not giving enough room to stories that support him. but there is a lot of negative news for the president at this point, of course. his personal lawyer pled guilty to eight counts.

his campaign manager was found guilty of eight counts also in the u.s. there are many other steps that are difficult for him at this point, so these news results are showing up. it appears he got the statistics where he cited that 90% -- 96% of the results from google were actually negative if you look under trump news. it appears he got that from fox, from a source that is not widely recognized as authoritative on the subject, but he is going after them for what he sees as promoting some of these critical stories about him. the: peter, and away from google story specifically, the rest of social media, i was reading this morning about how there is evidence that extreme views are very well shared on social media platforms, extreme right and left, but the algorithms are a bit of a black box, so that means that maybe the companies want to respond on that. how are companies responding in the face of this criticism? peter: google came out with a statement and said that it does

results basedarch on any political agenda. it uses algorithms to try to promote news and information that it these as most valuable to its readers. google is not very transparent about exactly how they develop that algorithm. they sort of talk in broad tropes about what goes into that in many different characteristics. they said in the past that they have a bias in favor of accurate new sources and that is maybe what a showing up in these search results. there is a tendency for google to emphasize news sources that they believe are accurate and deemphasize some they think are less accurate, but it is a very difficult subject for these tech giants because they do not want to be perceived as media companies that are making editorial choices about what people read or they do not read. instead, they want to be viewed objective technology companies just using algorithms, but we are seeing more and more

how difficult of a balance it is for them to strike. manus: yep. it's always interesting to see just what it is that irks the president on a daily basis. peter elstrom. anna, what have we got -- what have we got? anna: a conversation on emerging markets. thailand sees no imminent need to hike rates. our interview with the nation's central bank governor, next. this is bloomberg. ♪ overnor, next. this is bloomberg. ♪

anna: this is "bloomberg daybreak: europe." the day just getting started in london. the pound weaker against the dollar. down .1%. check out what's trending across the bloomberg universe. let's start on tictoc. vittorio's secret is getting worse according to an analyst from jeffries who put out a the tubenote saying tops were not in style and the leopard print pajamas were a

fashion miss. manus. manus: i have no comment on that story whatsoever. themberg.com, the u.k. and e.u. are said to have dropped the october deadline to reach a brexit deal. officials want to reach a deal by november at the very latest. much safere on territory with that. most read stories on the bloomberg terminal over the past hour -- concerns.dled jpmorgan picks a google executive to help shape the bank's ai strategy. trump warns tech giants that claiming search results are rigged. more details on all of those stories on tictoc, on bloomberg.com, and on the terminal. now for emerging markets, and thailand's central bank is under no imminent pressure to raise

interest rates. nation's solidhe buffers and relatively strong capital. that is all according to the governor of the thai central bank. take a listen. it has always been data dependent. we evaluate the trends of the economic outlook inflation and the different scenarios ahead of us. if you look at economics development, we have seen smart growth momentum coming lately, but although growth has become a bit more thed race, you look at scenarios ahead of us, and there are quite a number of factors we had keep our eyes on. for instance, the trade protectionism debate going on in the world, and that could have a big impact on economies like thailand. even though we might not be the target countries of such trade

protectionism's, thai production is very much intertwined within the asian supply chain. haslinda: so you're saying that a september 19 rate hike is not likely to happen because it is still too early? aerathai: we have to evaluate number of factors. it is up to the committee to decide. haslinda: what is the biggest concern for you right now? is it the strength of the thai baht that could be a hindrance for exporters, for instance? veerathai: that is also a concern. the baht has appreciated ahead of peers, at a faster rate than peers. it has appreciated quite significantly during the past month. wouldnormally, the baht move in line with pure currencies, but because of the strong external positions that have led to some investors considering thai baht as a safe

haven currency among emerging-market currencies. also resulted in the tightening of the domestic liquidity condition, but we also are concerned with other risk factors that we have to keep our eyes on. the recovery of the tourism theor from the incidents in south that has resulted in a decline in confidence among a number of chinese investors. we saw a drop in tourism activities during the past month or so. but trade protectionism is something we have to keep our eyes on. it has to remind you that, you know, with our strong external positions, the need for thailand to increase the policy rate is not as imminent as other emerging markets. we have strong enough buffers so we are not under pressure as other emerging markets that

might be vulnerable to the global financial conditions. he was speaking to allinda amin on rates and things global. of course, emerging markets are critically important. a have been battered, bruised, had some respite. lucy macdonald. no market was more battered and bruised than this market. conditions are tightening slightly. the credit impulse is fading ever so marginally and shadow banking is on the way to contraction. how do you look at china? is this a splendid opportunity that we are misreading or is this a falling knife? lucy: it is certainly offering some more value. but for reasons which are , and the trade is

the biggest impact. what you are seeing with the trade tensions and the stronger premium risingk in china and around china as well is where we came at the beginning at the trade tensions as saying that there would be an impact in the rest of asia because of the supply chain of chinese companies but also u.s. companies operating in china and of asia forhe rest their supply chains. there would be a long tail of impact -- tale of impact and that is what we are really seen. we have not got into the next age of the sanctions yet. anna: a very large one, the world's largest democracy, has seen a really strong rally in its stock market and maybe even the results of the challenge china is facing on the trade side. the indians and sex -- the 80 foldtock climbing

since the 1980's, propelling it towards the milestone. is this somewhere you look to with interest? the mainis certainly reason why you have seen that strength has been because it is much more insulated from the trade tensions. lucy: domestic demand, domestic driver, so that is entirely logical. it is not without its risks. , also moreion concerned about monetary policy and the commitment to maintaining the lid on inflation , so those concerns are there. of tradeeeping away tensions seems to be the major driver. see: the r.b.i. saying they upside risks to inflation. manus: it is certainly buffeted by trade. i'm talking about japan. it's in the gtv library.

this is the selling that's going on. the biggest exit us literally , 35 billion dollars has been pulled out of the japanese stock market. staggering.quite we have not seen this kind of a drawdown to 1987. how do you look at japan? lucy: i think that again is down that'se tensions because the largest part of the economy for japan. and i think that behind it, there could be some disappointment at the speed of in terms of abe micro-reforms, but the major reason for that is to deal with concern about trade. anna: love to talk about on trade. we finished where we started. very nice circular conversation. allianz.onald, cio at conversationinue

with us on bloomberg radio. we will continue to talk about the trade seems as the u.s. imposes a deadline to reach a deal. have seen positive news flow pushing up the canadian dollar. we will talk more about that, next. this is bloomberg. ♪

manus: good morning from dubai. i am manus cranny, and this is "bloomberg daybreak: europe." anna: i'm anna edwards in the city of london. these are our top stories. manus: dropping the deadline, the u.k. and that you you said to have -- that you -- said to e.u. to havethe plans. a new apartheid agreement will have to be finished by friday. canada hailed mexico's concessions as a positive for talks. them better be careful. president trump accuses google of pushing biased news with its

search tool. the white house says it is looking into the social media algorithms. very warm welcome to "bloomberg daybreak: europe." the stock markets are moderately better bid this morning. the news that canada is making the noises is that they are rolling towards the friday deadline. mexicans made some concessions that they see as good news. that is adding to the spirit of what is going on in the equity market this morning. 7/5.ve london up by whatever you want to believe from the brexit discussions. we are under a little bit of pressure in terms of slippage. 5.5% this morning. it is to do with trade.

would that mean more pressure china?to bear on we are awaiting further gdp numbers from the u.s. as well so that may add in the overall global sentiment about growth. anna: absolutely. wait for the gdp numbers. the strength of the u.s. underlying economy, a talking point we discussed many times. this is what we got from asia. it is heavy going. we are seeing gains of .25%. looking for more solid news flow around canada and china. if we get through these nafta talks, if it is nafta 2.0 or some other agreement, what is the timescale? those questions being asked by investors. the rest 10 year yield, 2.87 -- the u.s. 10 year yield, 2.87. we see the yield coming down a little bit, but the yields have been moving higher over the past couple of days and that has led stocks coming off the boiler a little bit, but the broader picture very positive

and that is helping to drive the asian session as well because we saw new all-time highs on the s&p yesterday. we are focusing on the canadian story. now andt experts supply management. the dairy industry in canada, points of contention between them and u.s. farmers. all of that very topical. we have seen a bounce in the canadian dollar. maybe they are about to make concessions. of those canadian dollar gains being unwound a little bit as we go through the overnight session in asia. manus. a little bit of breaking news coming through now . i do not have one. that is not the breaking news. it has been news from everything from goldfinger -- it's happening. they will sell shares in london here it in london. very different to ferrari which sold their stock in the united states of america. first half revenue comes in up 8%. it is london that wins yet on a

grand coming to the market. of course, what you have got here are some key investors in italy. the kuwaiti fund management company has a large stake as well. it sold 140,000 cars per year on average. ins london that wins the bid terms of where they want to list. that is different from where we saw ferrari. the valuation waiting for a little bit of an indication on what the value is. the speculation on the valuation is it will be around 5 billion pounds. that was the intimation from the market. publication of the regulatory results and their intentions to list comes through on that brand. i would say that's going to have the rarity value attached to it in terms of iconic cars and rarity values.

let's get back to something which has real value and perhaps even higher yields to come. we have all got it wrong. goldman sachs, they released their note. misinterpreted everything said about jackson hole. we are underpricing a lenient, .ore dovish powell for rate hikes, 2019. that is what i think will really irk the bond market if it is the leading light in the bond markets. 3.5%?hat take you up to does that take you aggressively hire? -- higher? will they or one they bust the limits on spending? who is right? that is a question for us to focus on. and the bund market, just four pips higher. juliette saly. manus, thank you. the u.k. and the european union are said to have dropped their october deadline for a brexit

deal. while both sides publicly say they want an agreement wrapped up in the next seven weeks. bloomberg understands that senior officials admit this is unlikely. sources tell us they aim to finalize the terms by the middle of november at the latest. u.s. president trump has issued a warning to social media companies after he accused resultsf rigging search are negative news about him. his reelection campaign texted his tweets to supporters. "the fake news machine is control." out of the president commented after foxbusiness says google favored liberal news outlets. he offered no substantiation to his claim. twitterump: google and and facebook, they are really treading on very troubled territory and have to be careful. it is not fair to large portions of the population. albante: hungary's victor and matteo cellini have

considered a united front ahead of the european union elections in may. the two nationalist anti-immigrant leaders talked about a political alliance at e.u. level which would "join different energies with a common goal." alban said he wanted to spread his anti-immigrant views within the european people's party and is looking forward to the e.u. legislative vote. on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . starting to see a little bit more downward momentum. in the latter part of trade, we see chinese markets under pressure. -- 300 up by around it looks like canada, mexico, and the u.s. are working towards

some kind of deal. the yen being retreated. we are not seeing investors pushing to save havens. must have a look at some of the stocks we have been watching in the region. of the front one runners. this is the construction maker in australia coming through with pretty good numbers. the ceo on bloomberg markets: asia saying he expects good growth to continue.shares up the most since 2009. china southern under a little bit of pressure, falling the most in two years on the klein -- decline. competitors bowing out of one of its key metrics, so that is starting to give more support to tsmc, the chip manufacturer. anna: juliette saly in singapore with the latest on the markets. rejoined nafta talks as a u.s. deadline looms to reach a

deal to renew the past. the u.s.-mexico traded do you meant sets -- trade agreement sets the stage for talks. endahe karen, good -- curren, good to have you with us. looking more likely today, certainly more so than one we saw the first headline break about the bilateral conversations just yesterday. does this set the stage for nafta 2.0? >> it does seem to be something of a significant breakthrough, by all accounts. fact that canada is now back at the table, the foreign minister has arrived. they will clearly try to adhere by the u.s. timetable. it is supposed to be in terms of the labor market. canada is coming to the table, but there are , suchal issues for canada

as the dispute resolution team. this course, they are protecting their own farmers, too. donald trump was flagged as an issue. mood is positive. by all accounts, it looks like we are moving towards some kind of an outcome on nafta, but of hours, it remains to be in whether or not they get over the line or fall over the hurdle. everybody is trying to divine what does this mean for sino u.s. -- what does it mean for china-u.s. negotiations. china. more pressure on do you concur with that? is it that much more of a beast of pressure? enda: what's interesting is there was a view going around yesterday, is this a template for china? does it mean china gets kicked off -- ticked off?

it might embolden the hawks in washington that if you go get muscle, you will get some concessions, and it might try the same tack in china. the issues with china are perhaps so much more structural and so much more going to the core of the broader u.s.-china relationship than just a simple argument over tariffs. the u.s. want to take on china's future economic model, made in china 2025. their ambitions leading high-tech economic leader for the world. that will require much more than just sitting down and agreeing on by more good than services from each other. is a structural issue that a lot of economists will tell you it takes a while to run off. the new economic cold war. manus: thank you very much for your contribution this morning. now joining us for the next 30 minutes.

welcome to the show. would you agree that even if canada and mexico and the u.s. come together, it might not be the game changer for markets? it's just one pawn on the big chessboard? >> i think that is exactly right. we know trump really likes these moves.tements, these big we have not been a loss of movement within the market. there has been some small movement maybe from some of the components, but looking towards the end of the week when people expect there will be some resolution, and then moving onto the next big thing, which is china and the bigger moves there. this is played out and currency markets and we are seeing reaction there. mexican peso, american dollar, it has beenyuan -- part of the trade conversation

in and out of the white house. i want to talk about where the dollar head. i have a chart that shows dollar forecast looking pretty optimistic in the white. the dollar index coming off recent highs. are we changing direction in the dollar or is the dollar still much loved as the president likes to describe it? not as i would like to agree some much with the trump sentiment, but certainly, i think we are seeing the strong dollar, expecting that to continue to the end of the year em certainly with the currencies sold off, a lot of market defending it challenging particularly when it comes to refinance and some of the debt, having to pay back some of those metrics. it could be increasingly challenging for them when they are not being able to do that to their own currency. manus: let me put this to you. is it to do with mexico and canada?

terrace may will be removed. you have a fiscal stimulus. you have a moderately gradual fed. have a look at this, the gtv library. everybody says it is priced to perfection, but is it that to perfection -- stacked to perfection? the analysts are getting anson their pants -- ants in their pants. louise: i think what we are seeing is a lot of analysts are updating and companies are feeling bullish through the end of the year. that is a positive signal for equities. they arepect continuing to see lots of robust, fundamental economic signals. just yesterday, we had the u.s. consumer confidence that was very strong, so we can -- all the indicators are pointing the right direction, and that is where we are eating things going. manus: thank you very much,

louise dudley. if you are a bloomberg customer, you can watch the show using the tv function as well as the video stream and you can grab all the charts that we put together in this show. you can even message us directly. nothing too hard. [laughter] hard onespast the onto the next program. coming up on the next program, martin has announced plans to list shares in london. what does this mean for james bond's favorite car brand? 007 or bond in london? berkshire hathaway ceo warren buffett will be joining us live on bloomberg. you can catch that at 4:30 p.m. london time. this is bloomberg. ♪

manus: 7:18 in london.

it's wet and dry. cable is a little bit wetter and thinker this morning. -- danker this morning. there will be slippage in terms of the timing for a deal between the negotiations. no brexit comments. the deal may slip from october, so we understand now that it may well slip into november, trying to get a deal across the line on brexit. we are down .8%. it is a car, an icon, a roller coaster. brand.ames bond car it would like to take a spin through the district. they will list on the london stock exchange. joining us now is our global business managing editor for global business, benedikt kammel. the prize.ins

valuation, first of all, is going to be key. anna wants to know the ticker they might use. [laughter] benedikt: if you look south to ferrari, they took the ticker race. it could be bond, could be 007, could be something dull. we will get details on september 20, when they want to put out theyull perspective, so have given themselves a little bit of wiggle room on the details, and they came out with a really chunky statement saying we want to float given some numbers, and they look fairly healthy, which supports this plan. revenue is up. earnings are up. unit sales are up. right now, they are targeting for next year,s and they want to double that to about 14,000 cars in the midterms, so they really see a growth trajectory for the company. to you.od morning

if you want to get your hands on these shares, how much of them are going to be freely floating on the london stock exchange? how much is going to be still locked up? that could be an important factor for some people. benedikt: that's right. we are still pouring over the details. looks as if they might have res withheld for customers. if you are an aston martin owner, you might be in the money on this one, but in terms of the flotation, we will have to wait and see on the exact details. the 20th of september is the full release. the intention is laying out the strategy. the company says the time is right. high net worth individuals are out there and looking for these types of cars, branching out into a different segment. they want to come out with an suv at some point. they are reviving the labonte are reviving another

brand. all those things combined, they feel now is the time to do this. they are looking at ferrari, who had an incredible run on the stock market. if they can do it, why can't we? manus: absolutely. the one thing they have to do is emulate that movement by the likes of mercedes, which is stretching the brand. if they are going to double the numbers, they have to stretch to the other side as well in terms of coming perhaps down the cost chain as well and giving us something cheaper and more affordable than the 2000 pound db 11. benedikt: that's going to be the issue. how do you preserve the brand cachet and make it accessible for people like you and i? that will be difficult. it is easy to sort of selby superhigh expensive companies. they have come out with a couple. that is really something that supported the numbers, but will they have cars that are sort of in the porsche range maybe? that is something they have to look at.

the brand infamously launched out into the luxury segment. sell aston martin paraphernalia so you can buy back and key rings and other things. there is a yacht. they are already sort of testing the brand architecture and's being how far can they -- and seeing how far can they stretch it? that's going to be very interesting. as you say, 14,000 cars is a lot to sell, and they cannot do it all with sort of north o one million type special editions. ok, i am fascinated now as to which ticker it lists under. the stage is set for something creative. thank you very much, benedikt kammel, joining us from berlin. after brexit. the u k and e u -- say they want e.u. say they want

the deal wrapped up. middle of november at the latest. louise dudley is still with us here in london. as you look at the brexit conversation, things seem to be slipping a little bit? how are you brexit-protecting your portfolio in march? louise: i think people's expectations are thinking more likely that a no deal brexit is an option and on the table, so therefore, what we are actually trying to do is ensure that we are taking that slightly longer-term view, trying to ride out the short ebbs and short-term volatility within the market, and thinking more long-term positioning, who are the winners, who are the losers? and in terms of that brexit-ready portfolio, do you think it is the consumer that comes under perhaps the biggest domestic squeeze? is there a huge differential in terms of what you want to do?

it is of course so much more tied to global growth. think so. that's a bit of a positioning decision. at the same time, you have lots of companies which already have existing relationships globally. they will think to optimize their business. they probably have already done those kind of things, and certainly, they will be looking at difference in. as you say, it is most likely that they are assuming that there will not be a strict deal as such, so therefore companies will be positioned for that and we do not expect too many big shocks in the near term. anna: do you see the panel weakening? i think at the moment, there is still a loss of volatility. in africa, there will be news headlines that come out. actually, from now, we see it rebounding given the optimism

has just come off, and that would be short term. we just had a conversation about aston martin. they have gone from london in terms of their choice of listing . they do have a big kuwaiti investor. investor.ian how important is this? is this one of those litmus moments in luxury brands listing? louise: i think as was mentioned before that they will have watched for murray. -- ferreri. they will be watching the hype around tesla and thinking now is the right time. it's in the forefront of their minds. also, we are seeing consumer goods being particularly strong in terms of their branding. they have a very strong brand and we are expecting those that and to playoff the lower end goods. selling globally.

manus. manus: yes. "bloomberg daybreak: europe" is done. guy johnson and the team pick up with "bloomberg markets: european open." this is bloomberg. ♪ xfinity mobile is a new wireless network

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guy:. you are watching "bloomberg markets: the european open." from our european headquarters in london. i am guy johnson alongside matt miller. in asia struggling for direction after the recent rally as investors assess the latest developments on the trump administration's trade policies. futures in europe are pointing higher. the cash trade is less than 30 minutes away. on. america's rally rolls the s&p