is scheduled at 4:30 this afternoon. missing reaction in terms of the canadian dollar, mexican peso. the u.s. dollar is strengthening against the other currencies. joe: it is. important to note -- it is not massive. less than 1%. throughout this week as various things have gone -- we have to mexico announcement, there have been modest moves. we will see what happens. according to "the wall street journal," no deal at this point, but whether that means there cannot be any deal ever were a modified trading relationship, at this point we don't see panic or anything like that. just a modest decline. you see the dollar rallying against the peso. he doesn't even get us back to where we were around noon today on the peso. context on the size of these moves.

throughout the day there is been perhaps some of baking in that we might not see a deal. theartificial nature of deadline -- the delos to get approved by congress. they can still go to congress with some sort of announcement. it is not like the good old days where they needed to raise the debt ceiling before monday. caroline: canadian officials are set to be returning tonight. let's bring in michael mckee, our man on the ground who knows all things international and the economy. probably not the final day. michael: probably not the final day, but the final day for the time being. we knew that chrystia freeland was not optimistic as she entered the meeting with the u.s. trade representative, and they fail to reach an agreement. we don't know exactly why.

with -- there are said to be several issues. it electoral property. we don't know who has ever to compromise and who is not. they are going to leave washington without an agreement. joe: why has there been so much focus on today? is, as you were talking about, an artificial deadline set by the trump administration because they want thedeal signed by the time mexican president leaves office. the president is required to submit a notification for congress that the treaty is coming 90 days before happens. this is the day he would have to do it to meet the december 1 deadline. caroline: let's go to laura of the wilson center canada institute. you have been looking at the elements of the us-mexico deal, tolerable but not optimal. it seems that the canadians don't feel it is operable enough

to get the deal done today. laura: let's take the glass-have-full approach today. having the canadians at the table made a big difference. away from the table, since the end of may, when the u.s. and mexico took up discussions on rules of origin for autos and sunset clause -- when they left at the end of may, there were 10 issues out of 30 to settle. two more moved ahead, we think. they have been trying to move through 20 issues in a week. despite goodwill and political tweets and every thing else, they made good progress but i don't think a deal is the area. things are coming out of the woodwork, and that is what we would expect to see in the cap or 11th hour before the negotiation is settled. joe: the most difficult thing gets pushed to the end. in your view, does chapter 19 dispute resolution -- are there mutually agreeable resolutions to these?

there probably are usually agreeable solutions to both of those things but they are politically sensitive and canada. they will not move forward until they see a good outlook for a deal. then we move into the complexity. chapter 19.es's complicated canadian dairy industry is at play. working out when a solution would look like with two incredibly complex policy areas is not something you can do in an overnighter. caroline: it looks like the u.s. and canada nafta talks are expected to resume next wednesday. michael: headline from our washington bureau from either the canadians or americans. the president in here he going ahead with a notification to congress to reach a deal with mexico, and that starts the 30-day clock before they have to

have the full text of the agreement to capitol hill. they have a month before they can negotiate. one could see this happening where they go back to consultations in ottawa and the u.s. decides to sit down if it wants to make any changes and get together without the artificial pressure of a deadline and say that we are going to continue working on this. there is the legal question about whether the president's notification of a deal with because he was, authorized to negotiate a three-way deal, not a two-way deal. congress is the judge. if they come up with a deal in the meantime, members of congress could overlook the legal niceties. joe: one of the challenges with any deal is the domestic political pressure in canada, given the unappealing politics of agreeing to something with president trump. in your view, tell us about trudeau's political capital domestically. laura: the politics has been a

sideshow, and sometimes they work for trudeau -- after the g7. the comments from the president really unified support around trudeau. in other cases when they fall apart a little bit, he is looking week. but generally canadians are different from americans in that they have a broad general support for trade. that tends to help. they are not having to fight that battle. at the same time, one of the things the prime minister is having to do is look at his provinces. the provinces have a real impact on a trade decisions. québec has a dairy and aluminum. québec wants a deal on aluminum, wants to open up those markets again, but it wants to keep protections for dairy. as much as we are negotiating in washington, the prime minister is negotiating with premier stock at home. caroline: in an interview done with president trump, he said ultimately that canada has no choice. laura, do you feel canada does have some sort of choice?

is there any way they could be kept out of this trilateral agreement? well, canada does have a choice. we wonder what would happen next because we have never unwrapped a trade agreement like this. but canadahas support in congress for trilateral deal. congress might not let the president support with his bilateral plan. support for candidate in the business community, the u.s. chamber of commerce. and the presidential congressional action could be stalled in the courts. while there is a certain amount of concern, it is tempered in canada with the realization that whether presidents as does not necessarily become the law of the land, or he doesn't happen immediately. we saw the canadian dollar sell off a little bit, but the moves remain pretty modest. we are not seeing dramatic swings. in your view from the currency market perspective, how is all

of this being digested? analysts who say that the outlook for the canadian dollar is not correct given the rate environment in canada. you have all this trade shopping of canada. the outlook for currencies is not that strong, and this is another negative factor weighing it down a bit. caroline: laura, it interesting, before joe was asking you about trudeau's political capital, we saw a surprising break from the standinge instead of all as one, canadians on all sides of the aisle standing together, it seems that the opposition party has started to lash out at trudeau for not getting a deal done. believe, under more pressure with -- will he come under more pressure with headline risk over the weekend? laura: absolutely. there is also a domestic issue with respect to pipelines. the conservative party is

looking for breaks in the armor. trudeau has been pretty tough to take apart. and especially with chrystia freeland as the foreign minister, she is hail and canada as a rock star. it makes it tough to go out as well. but with things starting to crumble and the tweets from the president, i think the conservatives are going to take full advantage of that. want to back up and reiterate the headline that talks will resume next week. mike mckee, when you see that we won't have a deal but they have agreed to talk next week, this is different than sometimes you get the talks full apart and nobody is talking. michael: we had reactions in the equity market, now it is reversible to basically what they are saying is they will take a break rather than cancel the talks. it is not over yet. these kinds of things are difficult to negotiate.

they have been talking for just about a year now here. one can understand why it is difficult to put an artificial deadline, as the administration did, even as we were just saying there were making a lot of progress last week. it is impossible to get through everything. the idea that they are coming back takes a lot of the drum out of this. it is a break, not a collapse. caroline: laura, we know that some of the stumbling blocks have remained. the dairy areas from the sunset clause, for example. what about the tariffs in terms of steel? are you expecting an easing of the implications there wanted by canada in terms of the u.s.-canadian relationship? laura: optimistically, there would be some sort of easing, but it would be the result of u.s. industry saying that we need to be steel and aluminum our prices are going up for vehicles and their cans. the national security tariffs

have been an effective vehicle for the president to show his imf i am tough on trade, i'm doing what i said i'm going to face, say tohis his base, i am tough on trade, i'm doing what i said i'm going to do. they have tried to keep those on separate tracks. sometimes that is not functionally possible. but i don't see canada saying, hey, we will give you this if you get rid of those tariffs for us. joe: we talk about the canadian dollar, but of course, the mexican peso strengthening a little bit, but not doing great. talk to us about the tensions between improving ties with the u.s. vs. the downdraft across and where mexico fits in. lananh: that is an appointed question because the u.s. dollar has been strengthening across the board and that includes the emerging-market currencies, that includes mexico. escalate,de tensions

as we get more drama around trade and the lengthening of the negotiation process with candid we have the semi-deal with mexico there is a concern about emerging markets across the board. in the absence of any other drivers -- joe: does the concern over well in terms of big picture -- is that the bigger story for the mexican peso? lananh: definitely. it looks like that is the case with the market reaction. the em issues is what is worrying investors, and that is something that affects the mexican peso. it adds to a lot of volatility. caroline: you see the dollar continued to be strengthening today. .5% on one-day movement. the u.s. has issued a fact sheet on the u.s.-mexico trade agreement. the u.s. trade representative

has released a fact sheet on that deal. trump will be traveling to paris november 11. nafta talks are said to have made some progress on the core issues. that is why we are seeing some relief rally. we are seeing the initial knee-jerk reactions fade somewhat as the conversation continues. in terms, therefore, laura, of what you expected to be done come wednesday, what do you think needs to be taken away, one needs to be crossed in terms oft's and dotted in terms i's? laura: the more complex issues that are the sidelines are really brought to bear. i don't think we had a thorough treatment of electoral property yet. we don't have a thorough treatment of labor, the

environment, things that are very important to the negotiation that we know are important in the transpacific partnership. shen i look at the fact sheet that were released from they are a once over lightly. we need to make sure all 32 sectors in the agreement are well done. we cannot say to the broadcast industry or the pharmaceutical industry, hey, we got a great deal on a dairy, sorry about your luck. joe: it's interesting from we are getting these back-and-forth eal, now someno d progress on the issues. but really mild reaction overall. equity market come in addition to the loonie come in addition to the peso, trade never is really broken through in a consistent way as a major driver. michael: well, failure in trade has never broken through. we have not seen a complete collapse or really bad ratcheting up of the trade war.

that has come with the idea of tariffs on china next week. market seems to believe that these things will work themselves out. "the new york times" is out with a story that the way the administration is going to phrase the message to congress is they are going to say the u.s. will enter an agreement with mexico and canada. robert litan heiser earlier this week said we would send out a notification that we are entering a deal with mexico and canada is welcome to join. but if he says can do is coming, -- canada is coming, that would be another positive for the markets to take tuesday morning. caroline: not just canada and mexico, but it is china as well. that was a shot across the bow from trump this fixing that more tariffs are coming from that direction. how much are you expecting volatility to stand out in comparison with the lack of volatility? lananh: we have seen a brutal

move in the markets this month and i don't think anyone think that will stop anytime soon with the trade tensions and the escalating tension between the u.s. and china. those tariffs that mike was talking about are imposed, then we get a ratcheting up of that. that brings a downdraft of emerging markets and pushes the dollar up. it adds additional stress. caroline: talking of additional stress, the toronto exchange hitting a monthly low at the moment. messing market reaction in some areas -- joe: even as the canadian dollar nots in there -- again, huge moves. caroline: autos are still the worst performing sector in the u.s. it is down some 30% year to date. there has been some pain in certain sectors. the record highs mask individual moves. we want to give advice to laura dawson of the wilson center, and

bloomberg's michael mckee and guyen as we break down these headlines on the nafta news. no agreement today, but they resume talks as of wednesday. this is bloomberg. ♪

caroline: recapping the trade headlines can we have a brand-new one. u.s. and canada, the deal has broken up without an agreement for now, but they are coming back on wednesday. we are getting headlines from the u.s. trade representative saying that the talks will trumpue with canada, and aims to sign a deal with mexico if canada is willing.

they will be discussing once again and coming back to the table on wednesday. canada's foreign minister has been scheduling a press conference for 4:30 does afternoon, which we will bring to you live. joining us for white house perspective is to lose honor and above. what you make -- toluse onorunnipa. the white house reaction has tapered off because many are hoping that on wednesday that will be an agreement on the table. >> we have been changing narratives -- seeing changing narratives hour by hour. first the deal looked like they were close and then they were breaking down and now they have agreed to have a pause until next week. it is in part because the president is trying to drive a hard bargain. he told a couple of my colleagues at bloomberg that he wants to push canada very far, and if canada does not make a deal right away, they will have

to make a deal because the u.s. has more cars than the canadians do. he says he is willing to move forward with car tariffs if necessary. it looks like the negotiators were able to make some progress, but were not able to close the deal by the deadline that the president initially said. it is not clear how they will work out the deadline issue if they end up having to come up with an agreement after the deadline. but the president has a little bit of wiggle room based on some of the legislative language that would give a 30-day period after he sent some documents later today to come up with a deal that includes the u.s., mexico, and canada. they have a little bit of time, but it is not a lot. joe: it sounds like when i look through these headlines that traded deals are pretty complicated, and there is progress and maybe the discussions went well today, but it was perhaps a little unrealistic. to expect that all of the details would be worked out. toluse: this is an incredible he

fast-pace. you had mexico agreed to a deal on monday, and canada would come down to washington and hammer out the rest of the details within a week. these are very, lex agreements, very complex disagreements about a number of different issues that need to be worked out between the negotiating sides. it was not very realistic that it would all happen at the snap of a finger. the president tries to make things sound like they are very simple, but these are complicated negotiations and it is clear they will take more time to work it out. caroline: we are getting a headline that trump has notified congress of a plan for a new north american trade deal. the plan still stands. minas why we had this awkward, artificial -- remind us why we had this awkward, artificial deadline imposed for friday. toluse: in congress you had artificial timelines based on laws that were written a long

time ago that slow down the process. by the president signing this and notifying congress, it gives congress 90 days before any deal goes into effect. the reason that 90-day period is so important is it mexico you have to transition between the current government and the incoming government that will be sworn in at the beginning of december, and they were hoping, both the u.s. and mexico, to have this deal in place before the new government comes in. once you have a new government, as you saw with tpp, you can have different ideas from the new president. they wanted to get this done in time. today is the deadline for notifying congress and having this new agreement, into place before the new mexican government comes into place. playsr or not all that out the way that the president and his negotiators envision remains to be seen. a number of hiccups could come along the way, the first of which may be that canada would not sign on to the deal. caroline: we thank you very much. toluse olorunnipa has been

outside the white house to recap some of the headlines. trump has notified congress of the plan for a new north american trade deal. the trade negotiator for all of this says that the canada trade talks were constructive and they made progress and they will start again on wednesday. joe: the s&p just one green, 0asically -- there is, up 1/10 of a person. reaction to constructive headlines. caroline: maybe beckoning more record highs. in a moment, back in the green. toronto not faring quite so well. this is bloomberg. ♪

caroline: what'd you miss? let's check on the markets. 0.0 massive unchanged -- up 1%.

tech -- it is tech committee is tough. caroline: nasdaq, another record high. joe: half a percent decline in the canadian dollar. caroline: plenty to be digesting as we head to the market close. this is bloomberg. ♪ retail.

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caroline: "what'd you miss?" stocks are holding steady as we get headlines. u.s. trade talks with canada resume next week. joe: i am joe weisenthal. caroline: and i'm caroline hyde. minutes with our market in just a moment. joe: you can watch our stream on twitter. caroline: let's get to the market minutes now because it has been a volatile day to say the least. stocks are remaining pretty resilient in the face of these headline risks. the dow jones is off by 1/10 of 1%. attack is still continuing to offset some of the lows. nasdaq got a record high again. the russell 2000, it seems domestic waiting is outperforming -- weighting is outperforming. joe: let's take a look at

government bonds looking at the two-year and tenure. a little steepening today. .wo-year is down to 2.63% there's a lot of concerns about the flattening curve. more selling in e.m. sovereign debt, the biggest he story for the week and one of the key things people watch when they get back after the long weekend. the brazilian tenure is up another set of basis points. caroline: contagion seems to be the watchword when it comes to the emerging markets. many feel it's time to find distinctions, but at the moment, they all get embroiled. the argentinian peso is stabilizing somewhat today as the imf said we are there to support it. all consumedupee and the indian rupee is hitting a record low. the end is an asian -- the

indonesian rupee also getting hit. we didn't see stabilization in the argentinian peso today. the euro is getting a little hit on the fact that we've seen a potential negative outlook when it comes to sovereign ratings and inflation falling in that particular part of the world. dollar,e canadian because the looney, all eyes indeed as we see no deal for now. will they reach a deal next week? the dollar has been strengthening against the canadian dollar and the dollar is up 3/10 of 1%. joe: on commodities, let's look at oil and gold. it's not a big day with west texas falling below $70 a barrel and gold is doing nothing. those are today's market minutes. caroline: "what'd you miss?" get headlines on nafta, trade talks with canada resume next week. no deal was reached today. for more, let's bring in jim

head of fixed income from denver. give us your take on the nafta read, because how much of a concern is it that we have not reached a deal today? is there more hope that next week will come afresh? jim: i think there is still hope that next week we will see a deal. i would not worry about a short delay. generally, what you see in canada and mexico is generally positive. i think a deal will be reached. i think the substance will be less than what is making headlines, but the real test is china on trade and that is what we should keep our eye on. joe: how do you see that playing out in the market in the day that had? probably the most important thing is the risk on and risk off element to see an emerging markets. trade is important, but again,

it is china that will matter. near term, the emerging market for moral is probably front and center. when you see these, you also have to ask, is it a systemic risk. for me, as long as global growth is holding up, the likelihood is that it is not systemic and more often than not, it is a buying opportunity in some of these areas like em. it's painful when it happens. given the extreme weakness in others, you could expect contagion. these are some of the things happening when you get tighter monetary policy, see unwinding of the onstream the -- extremely uneasy conditions. recession isean a imminent, but policy will pick up and quite quickly often. caroline: where is the buying opportunity when it comes to fixed income then? jim: i would think it is probably countries like brazil.

probably local currency is looking quite attractive. the currency aspect has been most severe. argentina and turkey are clearly not for the faint of heart. i think you have had enough pressure in the markets so a recession more downgrades things like that and are probably imminent. i think a cross-section of the em economies that are probably not as vulnerable to the externality is where i would go. joe: is there a catalyst that would turn this around? part of the concern is the strength of the u.s. dollar seems to be quite a challenge and it is hard to know what can turn that around. in your view, what is the type of thing that it say, ok, enough selling? jim: i think it probably is a sense that perhaps central

bankers are backing off a little bit. perhaps reassessing how much they might need to tighten. short-term dollar strength will be a problem. i think the real issue for most e.m.'s is whether the dollar can appreciate another five cent -- 5%. if that tightening of liquidity , to me, thatrates is the key that sent e.m. lower. you will need number eight in one of those factors -- numbreak in one of those factors. caroline: italy's outlook has been moved to negative from stable, but they have kept the overall debt rating system complete. what do you think of italy because there had been plenty of pressure on the country and we saw yield spread between germany and italy widening. is this still an attractive prospect from a debt investor point of view?

jim: it is probably getting to the point of being attractive. i think you clearly have the risk going into the second half of this year, what will they do with the budget and things like that. a lot of the bad news is priced in. probably not for the faint of heart, but i think it is going to start looking quite attractive. joe: let's bring areu.s. long-term rates extraordinarily quiet. it was one of the quietest quarters for five decades or more. is this going to break in which way would you expect to see rates go? also, why do think it has been so quiet? jim: i think you would have to look at this as a statement that the fed is doing what is appropriate. the fact that long rates are stable is tellingmove accommodae

front-end. you are avoiding the inflationary pressures that might normally lead to higher long-term rates. wage inflation has remained in check, so as long as that happens, you get demand. there's a lot of demand for duration globally. you have to remember the u.s. is such a high-yielding market on . i think that has helped restrict any rise in yield. when you look at global growth, it looks like it may have peaked. when you look at a high-yielding market like the u.s. in that context, it will gather interest as the fed is tightening. most importantly, lack of wage inflation, high yield on a relative basis, and the fed probably doing the right thing has kept volatility low. caroline: jim cielinski janus henderson investors head of fixed income, thank you very much. caroline: the latest in trade --

and the trade war with china. $200 billion in tariffs could come as early as next week. we will look at that next. this is bloomberg. ♪ ♪

>> i'm jenna dagenhart, let's get to your first word news. nafta talks between canada and the u.s. have ended without an agreement. bloomberg learned both sides will return to the negotiating table next week. the foreign affairs minister said a news conference will start in about 20 minutes. they said the two sides are working hide but "we are not there yet."

president trump today was the deadline for the agreement. >> it is a victory for nearly 700,000 undocumented immigrants specifically for children known as streamers. judges shut down the programs representing daca. president trump is coming to the aid of a one-time rival, ted cruz and his reelection bid. mr. trump tweeted he will headline a rally for the republican in october and added that ted had his complete endorsement and called for his democratic opponent -- called his democratic opponent a disaster. brett kavanaugh is not the only thing -- only one engaging in practice sessions ahead of the conference hearing from the senate judiciary heady --

committee. they're also prepping for the multi-our question and answer session. kavanaugh is expected to talk on issues like abortion, campaign finance reform, and gun violence. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart. this is bloomberg. caroline: thank you. breaking news again. president trump wants to move ahead with the deal in mexico. trump the same to congress that there is a plan to enter the mexico deal by the end of november. the new president of mexico came into office in december. this is why the bush has been there to see a deal done. a bilateral deal is the only thing they managed to agree with. the question is with, legally, whether they can put that to congress without a trial agreement with canada as well. the white house releasing the

letter on the mexico trade agreement earlier. trump is saying the plan is to enter a mexico deal by the end of november. interestingly, we have been talking about president trump talking to nafta -- about nafta. let's talk about the $200 billion worth of chinese tariffs on imports. confirmed in an interview with trump that trump smiled and said it is not totally wrong. washington is here to discuss. the impact has been digested by and put some concerns into the market and we have seen and put some concerns into the market and we have seen the yuan have an effect. how much of a tangible effect will it have imposing these tariffs? i think the devil here will be in the details.

all of the tariffs will be set. are they going to be 10%, 25%? we will need to see the numbers before we can guesstimate the size of the impact on the economy. our initial calculation, based on the assumption of an additional 10% in tariffs on the $200 billion suggested cost to chinese gdp, potentially around 1.5%. at the same time, in the context of an economy still growing at 6.57%, it will not be great for china. joe: we've seen the chinese again -- yuan stabilize after several week months. what might the currency managers do from here? tom: what we saw is a slide in the yuan in the first part of

2018 and into the summer. that was beneficial, helped offset tariffs, helped support export competitiveness, drive the reflation agenda, which is critical to dealing with the debt program. at a certain point, as the yuan approached seven to the dollar, they said enough is enough and concerned about capital flight mounted. we saw the central bank coming back into the market and introducing what they called the sick local -- cyclical factor and saying market, we are back, we will take control. joe: you are talking about the impact of the tariffs on canada -- on china, getting my trade agreements mixed up her, what , whatthe u.s. -- up here about the u.s.? how do you see and where do you expect to see it play out for the domestic economy here? tom: there's no winners in a

trade war. especially with the global supply chains being so integrated. the first 50 billion in tariffs, which they did, they were able to carefully target them to try hit the u.s. consumer categories like smart phones and textiles. the bigger you gone the tariffs, if you go to 250 billion higher than that, it is much harder to insulate the supply chain and insulate the u.s. customers. if they get $250 billion or higher, certainly we expect to see a bigger pocketbook impact on the u.s. consumer. caroline: i want to ask about the impact on chinese stocks. interestingly enough, we have seen chinese etf's out and money coming from u.s. investors into the area. we are going to see more - osure creep into the sei

-msci. have the tariffs now started to be pushed out by the global investor base in terms on whether or not china is a good investment? tom: i think there is a good narrative around trade war and china stocks underperforming. is the the reality reason chinese stocks have not done well this year is not really related to trade. it is much more related to the domestic deleveraging agenda. if we look at the stoxx on the shanghai index in the big heavyweights in the chinese equity markets, we're not looking at trade in companies. we are looking at big industrial firms, banks, real estate development. very much domestic place. the companies doing most of the exporting is -- a private

companies typically listed. equity markets have not performed well in china so far this year, but no, that is not being driven, we think, by the tariffs. that is clearly a positive. this'll will be a long-term, positive driver. is that going to be something that outweighs the deleveraging agenda? i think we will have to see. joe: bloomberg's chief anonymous -- give economist, thank you. -- chief economist, thank you. arousing ian curtsies is getting worse -- a rows in em currencies in emting worse -- rouse currencies is getting worse. this is bloomberg. ♪ is bloomberg. ♪

caroline: we are awaiting a news conference with canada's foreign minister at the canadian embassy in washington. she has yet to arrive. was going tothis happen at 4:30 local time. "what'd you miss?" august was an ugly month for emerging markets. there are fields of global contagion in the peso tumbled to a record low profit policymakers to boost bench markets to 60%. in turkey, the central governor was set to revise the lira further. there's one more wildcard. president trump a set to move ahead with tariffs on china as soon as next week. we talked to bloomberg's

currency reporter, lana. that there could be further pain on the debt investment side of the equation while we are in high-yield bumptory, could we see the off of lows as we saw today? lana: for argentina, a lot of people say the fundamentals are poor. i don't think anyone thinks the fundamentals for argentina are going to turn around soon. what is important is that they are the spark or fire for emerging markets and it is triggering this broader selloff. if we take a step back and think about what happened to em over the last few months, we are on a five month losing streak. that is the longest streak since 2015. we're starting to think, are argentina and turkey really kicking off something bigger here. joe: you notice a significant change in recent weeks where

people talk less about idiosyncratic risk and more about bigger systemic risk? lananh: definitely contagion risk is on the top of everyone's mind. i don't think there is a decision in terms of whether we are at that risk or. it some't mean that factor spreading from country to country, or does it mean people start to see pockets of weakness and say i don't want anything. lananh: i think it is the latter . the fact that people say, let's paint allianz with the same brush and think the dollar is a , move back into the dollar, and iselle e.m.'s. will cooler heads -- and iselle e.m.'s.- and sell joe: i mention there has to be a lot of career riskier. whowants to be the idiot might have a bunch of e.m. when

it blows up over the place. caroline: precisely, but there are more people talking to us about the moments of opportunity we are something to see in emerging markets. how are we seeing the fx market play that out? saying if i was not going to put my career on the line i would get into this? the mexican peso has been the outperform or so far. lananh: we have definitely seen people talking about this on the wire and we have pimco's blackrock asset management all talking about e.m.'s are supercheap. there is huge selloff and red across the screen. when you get back in is the tricky part. if you do see a lot of inexpensive currencies, -- caroline: who catches that falling knife? joe: is everyone looking for what will break the dollar strength or cause the fed to tap on the brakes? is that sort of the signal people are looking for? lananh: i think that is the big

question going into the rest of the year. analysts say the dollar is probably going to be modestly weaker to the end of the year. the question is, is donald trump owing to ratchet up the trade war? is he going to impose new tariffs? the haven forease the dollar? caroline: what was striking to me was the domestic fire it wasath trump and as getting hotter, as we saw the ohen and news on c manafort, he started looking at south africa. we start to see tweets about their and china in focus. how much is it easier to sit on the sidelines when you have this risk coming from the united states from a twitter trump policy? lananh: investors are talking to me about the possibility of even

u.s. potentially intervening in the currency market to sell the dollar. months ago, that would be a far-fetched possibility. even now, it is seen as a small tell risk, but it's something people are talking about because trump has blasted our trading partners. he's criticized them for minute currency so you cannot rule that out. joe: the peso is ending the month with a 25.6 climb and the libra is 25.2 decline. the country where they are doing things by the book is the worst-performing currency. hard to know what the turnaround looks like. caroline: thank you lananh nguyen, the insight. we're waiting on the news conference from the canadian embassy in washington. we will bring you that when it begins. we have more breaking news saying a full renegotiation of nafta according to officials as u.s. and canada works toward trade deals. that's according to a u.s. official.

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>> i'm jenna dagenhart, let's get to first word news. argentina's credit rating may be cut further as he jumps by s&p global rating. amid a plunge in the peso, s&p is lower than its current d+ grade which is below investment grade and on par with turkey, greece, and fiji. the european union is promising britain and on prominent did -- and on prominent did -- an unprominented trade deal.

there's a debate on whose court should have the final say in civic the butte -- civic dispute. >> the relationship we have created over 20, 30 years through various countries, we see what the heads of state of government is proposing. if we achieve it, you have a partnership with no precedent. deadlockedes are amid the island border. police in amsterdam say terrorism is a possible motive at a real race station this morning. -- at a railway station this morning. two people were stabbed. the victim -- the suspect is being questioned at the hospital where he is being treated for gunshot wound. it's washington's turn to say goodbye to john mccain. he lived and worked in the nation's capital for more than four decades. he's now lying in state under

the u.s. capitol rotunda for a ceremony and public visitation. family friends, and guests gathered for memorial service. paul ryan called mccain one of the greatest sold our nation has produced. global news, 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jenna dagenhart. this is bloomberg. caroline: let's get agree cap of today's -- a recap of today's market action. it was a mute response to some of the nafta headlines. the s&p 500 is just picking into the green as we ended. tech's leading the charge in the downside is the energy players. the dow jones had been a negative territory but managed to push up the concern a deal had not been struck with canada and was pushed back until wednesday. "what'd you miss?" michelle barnier said this week the block is ready to offer

britain a unique dealership. you are not sweltering in the heat. i will make a few remarks and happy to take questions. you are not sweltering in the french]g caroline: we're listening to her speak in french and canada speaks both english and french and she is speaking to reporters after the nafta talks and we are likely to be understanding a little bit about the nuances of where the optimism is dissipating and why it is taking longer than today's deadline. joe: absolutely.

we're still listening to her and we will go to her audio as soon as -- caroline: she speaks english of course. we have seen the canadian dollar showing weakness throughout today. and shakingof 1% off a little bit of the initial disappointment. joe: and we have a headline here, so there are people at bloomberg who speak french. she is saying a win, win, win agreement is within reach. that is significant. she's also saying she wants to ensure the beneficial -- the deal is beneficial for canada. we would expect that. let's listen in. objective in, our these talks is to update and modernize nafta in a way that is good for canadians, americans, and mexicans. we know a win, win, win agreement is within reach. that is what we're working

toward. with goodwill and flexibility on all sides, i know we can get but, as certainly the canadians your have heard me say dollars --canadian i'm paid in canadians dollar. i want to make sure this works for canadian families and canadian business. we will not fund an agreement unless it is good for canada and canadians. thank ambassador lighthizer and his team. they have worked hard and in good faith with us for more than a year, including very intense days this week. we have made good progress, but there is still work to be done. >> please identify yourself and we will do the questions from the line here. one question, no follow-ups, and if you want follow-up, get back in line. [laughter] --josh would bloomberg news

with bloomberg news. i want to ask you what the message to u.s. congress is now whether canada believes president trump would have the authority to proceed with the bilateral deal or if you would need canada to proceed. >> when it comes to the u.s. legislative process, that is a question for the americans in our american counterparts to answer into. that's the message and a question for the americans, and that is their issue. gordon. 19 and the chapter another are the two main sticking points, are there any other sticking points or things you can tell us about? >> as i said to the hardy reporters who are camped outside

ustr earlier this week, ambassador lighthizer and i agreed that given the absolute intensity of negotiations now, we would be negotiating in public. i will not talk about specific issues. president trump has said today was a deadline for the net the negotiations -- for the nafta negotiations. are there any deadlines to make sure there is a nafta deal? >> for canada? the focus is on getting a good deal. once we have a good deal, we will be done. >> hi, minister. donald trump confirmed he made comments off of the record suggesting the u.s. would not compromise when it came to negotiating with canada. i know you're not going to get

into detail, have you seen any movement from the americans that would suggest that donald trump's characterization of the american negotiating tactics that the characterization is not accurate? week fromid, these the negotiations, ambassador lighthizer and his team have been negotiating in good faith and with good well. -- will. this is a process that began more than a year ago. we have made progress. we have done work together. mention theect to startingorigin and our point was a place where the u.s. was quite far apart in their proposal. what we found, as the

negotiation went on, canada and the u.s. share the concern for our workers in the car sector who are high wage workers who have found a can be disadvantaged by trade agreements. one of the things i think we are come pushing in this agreement workers in deal for canada and u.s. in the auto sector. that is important. that will come to canada and the united states working together and mexico showing significant flex ability. >> you mentioned the auto sector, how difficult is the pharmaceutical sector and the provisions that would cause canadian drug prices to rise? is that a key sticking point? >> again, we will not negotiate in public. when it comes to the canadian position on issues, i think our positions are pretty clear and well known. how can you possibly

negotiate with a guy like donald trump who said he will not give any ground? counterpartyting is ambassador lighthizer, and as i said, he is brought good faith and goodwill to the table. as i also said, it is going to take flexibility on all sides to get to a deal in the end. when i can speak to is the canadian position. i really want to assure canadians we are working hard to get a good deal. we are confident that a win, win, win deal is possible. and, we will always stand up for the national interest and canadian values. [speaking in french] caroline: she has been negotiating on behalf of canada for a revamped nafta. joe, it has been interesting we have heard once again and again reiteration's of robert lighthizer bringing good faith,

goodwill to the table. they are close to a deal and want to win, win, win eventually. joe: i thought that was interesting. the very blunt question, how could you negotiate with someone like donald trump. >> she said she is negotiating with ambassador like kaiser and the negotiations have been positive and in good faith. that is because -- ambassador ighthizer and- l the negotiations have been positive and in good faith. caroline: she did not want to go into the nitty-gritty of what is still clogging the auto deal and there are still sticking points to do with dairy but, it it sounds like -- dairy, but it's like she wants a deal. >> they have wanted us to have a deal for quite some time and now mexico is chiming in on

trilateral issues. one might assume that encompasses the chapter 19 portion. she is basically signing off on the other negotiations and everyone thought going into this they would find that acceptable. there were bilateral issues, dairy being one, chapter 19 a major sticking point. dairies bilateral between u.s. and canada, but not part of nafta right now. 19, if you impose antidumping duties on the other country, they can protest that to an arbitration panel instead of taking it to the wto or adjudicated in u.s. courts. canada find that important. that's a nafta so it would be negotiated in a three-way deal. it does seem like they made enough progress on other issues that they feel they can get it done. the administration has gone ahead, file the notification with congress, and we had a sort of artificial deadline today.

this sets in place, if congress accepts the notification, a real deadline. they have 30 days to get it done because they have to submit the text of the agreement to congress. joe: one of the terms you hear reporters use when talking and negotiating is new music -- mood music. when you listen to her, do you get a sense of optimism that when they resume next week something is within reach? caroline: we're going to go back to the english-speaking side now. >> lets me be clear, yet again. , and theortant importance of reiterating this is underscored by a question. canada will only sign a deal which is a good deal for canada. we are very clear about that. the prime minister has said that

on the number of occasions including this week that we want a good deal, not just any deal. a good deal is one which is good for canada, canadians, and one that reflects the canadian national interest, and in which canadian values are defended. we are absolutely clear about that. i also want to say, as i said in my opening remarks, i've now been working with ambassador lighthizer and his team for more than a year. we have had very intense periods of working together. ambassador lighthizer and his team are very experienced professionals and they absolutely do bring good faith and goodwill to the negotiating table. this week, really over the course of the year, we now understand each other's positions very well and clearly.

we are working hard to find the win-win compromises that we will need. question.e the next >> good afternoon. us -- bueno dias. >> you said you were encouraged by the progress of mexico being made in these weeks and that would help your negotiation, could you elaborate a little bit? that waspresent now not present before that made you think that now a negotiation or agreement was possible and not before? >> that is a good question. , one, probably for people following this negotiation over the whole year, i think you will remember the

many, many days we spent focusing on rules of origin in the car sector. . fiendishly complex issue. which really is at the heart of the nafta itotiations, and in a way, in the nafta relationship of the integrated car sector. than a spent, for more year, all three countries have focused a lot of attention on the rule of origin, and i want to take an opportunity to think the canadian negotiating team particularly around the time of the montreal round. rules of origin are really compensated, and in order to achieve the landing zone which wereund, big changes

required to be made my mexico in this healer -- in particular. the important progress, the most was in therogress, rules of origin and the car sector. achieving a deal which required flexibility from mexico, and thank you for that, that has now put us in a place where we can to the other issues. the rules of origin agreement achieved i think has particular value for my government because our priority has always been middle-class canadians and people working hard to join the middle class. we understand the pressures on working canadians in the 20% three -- 21st century's economy.

working canadians have sometimes felt to trade agreements have hurt their interest. what is really significant about the rule of origin agreement is that it will be good for canadian workers and for american workers. that is an essential part of this modernization. >> time for two more questions. >> minister, thank you. were you surprised at the scope of the agreement signed including other industries like digital trade? and what is your field on international -- intellectual property. >> as i said, i will not negotiate in public. is thewill say though negotiations with canada are not complete and we continue to negotiate with the united states. that's why we're coming back next wednesday and we'll continue talking until we reach an agreement. >> phil thompson here.

you say canada will only accept a good deal. >> that's right. i hope you wouldn't imagine canada would be looking for a not good deal. >> can't imagine that, not. >> good -- no. >> good. >> can you see any deal that does not continue the dairy supply management issue? i used to be a reporter >> and i understand the extreme -- issue? >> i used to be a reporter and i understand the extreme frustration everyone is feeling and it hurts me to be imposing that frustration on all the hard-working reporters here. that theiterate canadian national interest and canadian values are at the core of our negotiating approach and negotiating priority. the court canadian positions are well known -- court canadian

positions are well known by everyone and our negotiating partners. that, as we are in this intense. convinced period, i'm that ambassador light had are decided and agreed -- light heiser -- ambassador light heiser had decided and agreed negotiate ind not public. >> i wanted to ask about the steel and aluminum tariffs. will canada except a deal that does not include listing those tariffs and would you except sums kind of -- except some kind of quota for that? >> on that tariffs, canada has said from the very outset of the 232 consideration that this is an issue entirely separate from nafta.

that is not an opinion, that is a matter of fact. section 232 is a national security consideration. it is not one of the nafta negotiating chapters. that, we very much are opposed to these tariffs. they are unjustified and you legal -- and illegal. canadian'sthat steel or aluminum could pose a national security threat to the united states is absurd. >> that's all the time we have, think everyone. >> i imagine i will see quite a few of you next week. caroline: you have been watching the canadian prime minister's begun trade and she was there -- canadian prime minister on trade and she was there taking questions.

mckee from in mike the d.c. bureau. close your key takeaway? she kept saying she would not negotiate in public but you give us clear areas where she sees there has been progress. mike m.: that was always the big sticking point in the agreement, with a good deal because the president was upset that many auto plants had moved to mexico. that i suppose his progress. she suggested they made progress on other issues. this is a 30 chapter agreement so there are many things in bulk. auto is just 1 -- there are many things involved. auto is just one. the dispute resolution over anti-dumping sanctions and dairy, not in the nafta agreement, but the white house would be like it to be included, those were the two issues along

with intellectual property that have not been negotiated on. christopher egeland is going out of her way to praise the professionalism and good faith effort put by ambassador ightheiser.r -- l is that a shared view that there is progress in good faith on all sides? >> the view in the white house had been that things were going well and that they were sticking points. they have an optimistic heading into the end of next week and it is telling that the white heist -- white house wants to keep negotiations. they set the deadline and could have said no to missing the deadline, but they, like the canadians, are signaling that they are making progress and are continuing talks. caroline: it is hard to find a win, win, win compromise and many are having to compromise on

this read where you feel -- this. where do you feel effort needs to be made. we heard her talking about the derry, sunset clauses, are there any inklings off the record we have been able to understand or have you understood from the mood music as joe is calling it of what is still needing to be done? mike d.: it is no different than mike's view. darius something trump has taken up quite a bit. he talks about it in a lot in front of audiences, nt, in general,- and he, in he feels like he should have more authority to take on foreign trade that he feels like is dumping or unfair. something heally , even withdrawing

from the wto because the hindrance that displays on him. those are areas we have seen very passionate statements from president trump. said, the as someone real sort of true core issue for the president here is the national -- is the industrial midwest industry. that is where his true energy on trade often comes from. they have already handled the thing he is most passionate about. caroline: let's get to joshua joins us from the canadian industry. you had the first question. what is the sentiment like their? is it optimistic for wednesday or disappointing the deal could knock it done today? josh: first question, but not much of a first answer. she is pretty tightlipped here. what they are trying to do is give an impression that there is progress being made and it is not the end of the world.

canada thinks it is spreading a bit of a needle. they don't want to look like they were being railroaded into a deal. they say they have made progress and they are coming back x wednesday. she did not say with the key outstanding issues were, but includes a few panels including cultural protections in these have been issued since they won. it's no surprise there are issues now and a source told me a deal was always a long shot and frankly, today was good news and they are still coming by to talk. joe: the ongoing message that her negotiating partner was ambassador lighthizer and not president trump, is that a message aimed at the domestic canadian media and voters? josh: she has been saying that for a while. she said once she does not want any drama in talks. that is her way of trying to minimize the drama in talks. gottenzer enter have

along pretty well. they are moving. the fear was that there would be an announcement from the u.s. the truth ended up somewhere in the middle. i think they will keep talking. it's not clear that canada is guaranteed a spot in the new nafta. she declined to say what her new view is on whether they u.s. can proceed without canada -- whether the u.s. can proceed without canada. caroline: we've only got about a minute left, mike, but your take on the deal having to be done is this was a soft deadline. the needs to be something done by the 30 day marker. mike d.: now that they have done this, it does not need to be done next week. you usually set the deadline in washington and that is when things happen.

my guess is that, since it is not done now, people will not make the hard choices until 30 days from now. that is the next interim deadline and you could argue way the u.s. goes all the you want to but it gets harder to argue past 30 days. caroline: glad to have your expertise and reporting for us during the next 30 days. and josh, thank you for being with us. that's all for "what'd you miss?" we will be live on 9 a.m. eastern on september the third. no rest for the wicked for me, sadly. we wish you all the very best from your labor day weekday -- weekend. this is bloomberg. ♪ s is bloomberg. ♪

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