, i'mod morning from london nejra cehic. manus: this is "bloomberg daybreak: europe." . these are today's top stories. nejra: 10 straight days of declines, the longest consecutive drop since 2002. the hang seng falls deeper into a bear market. special summit, u.k. and e.u. are said be planning a meeting in europe to sign of brexit deal . and oil and gasoline futures jump as a category four storm

hits to the united states. manus: seeking to make online

sales by pretty much all countries by 2020. this is doubling down on that strategy. credits we saying we believe there still a treasure trove nature that still better than experience off-line. 2018 can be the sixth year of margin declines, there's nothing vast about growing that sector but you're seeing a concern about margins. and a wonderful piece, building more destination flagships and complemented deeper online presence seems to no longer drive sales. and athere are conflicting views -- thehether you want to online proposition. nejra: will be talking a lot more on this.

it's just after 6:00 a.m. in london. if you're waking up in europe and you want to get caught up, msci asia-pacific index down for a 10th consecutive session. , it will be the longest losing streak since 2002 for asia, broadbase losses if you look at what we're seeing. off when it comes to equities. we've got some forecast on oil and the threat from hurricane florence. its 50 daybove moving average.

and the two-year yield is worth noting. manus: they reckon you could see average,ng the tenure there's a possibility of a further drop to come. think about the shanghai composite, think about the china market. they're just within kissing distance of the 2014 lows. the land of the brave, the land of opportunity asia, but dig a little deeper and the complex my the little more pain to take.

greg so i prices have jumped in the most powerful hurricane to

years. state in 64 at least a million people have been warned to leave the coast and local businesses have shut down. timeude -- at the same a supertype phone -- typhoon in the pacific is gaining even more string. it's been called the super typhoon.

--. and european union are on optimism about a deal. just hours after his release. it's now only available through --

global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. >> thanks so much, debra mao. much, debra mao. as quick as you and the magnitude is not as serious as in the correction. about one half of 1%.

the magnitude isn't quite as serious. other things to note. manus: from asia, let me take south korea is down to zero

imports. it's quite a bit of pressure coming in that way but the hurricane itself may not be the most important story. maybe the real story is whether or not other countries can step in to replace iran and produce more oil. if they cannot, then the oil prices will stay very high. manus: let's bring in our guest host. good to see this morning. are trying to understand the

you,nations of trade, for what is happening with flow in those bond markets? e.m.ere any blowback from in terms of flow in the bond markets for you? john: no, not really yet. we've seen a couple of significant ian countries that could potentially trigger that sort of dynamic. i think what is going on is just the outlook.t of there was a fair amount of optimism around the emerging markets and the general outlook for growth and smaller and fiscal current account deficits but that's been recalled at the moment. that is being factored into these markets alongside more general tensions about trade that you mentioned as will. nejra: in july, ubs but at that -- put out a note about a macro inflection point. has that inflection point

happened as you expected? john: we think we are at that point. part of the story has been the outperformance of the u.s. and everything that does to the relative dynamics. we think q4 will be harder work for the u.s. and at the same time there is some local stimulus coming through in china in particular. so some of the recent moves can be alleviated in the fourth quarter of this year. manus: the other dynamic we are trying to deal with is reassessed inflation. we have oil on the move a little bit higher, due to a number of exogenous issues. ofre are you in terms inflation watch? you just talked about that pivot point in the world but if you look at commodities, they are drawn down and the dollar is rising. what is the global inflation outlook for you? part of the concerns have come about because of an unfortunate, nation of disappointing growth in some

inflation upside. in the oil price aside, there are reasons to think inflation might moderate over the coming months as well. so a sort of mix of real growth and implosion -- inflation in the number growth, we're thinking inflation moderates in those economies where it's been a bit sticky because of some of those factors that you mentioned. nejra: john stays with us. and thank you to mark cranfield as well. you settle. and it their differences in time for a special summit in november? will discuss that with john next. thes: and 10 years on from lehman brothers collapse, we will assess the economic landscape with former u.s. treasury secretary larry summers. this is bloomberg. ♪

>> it was the worst-case outcome. we have expected that. e. we have expected that. >> i don't think anyone in the world was prepared for the devastation that hit the morning after lehman brothers in the chaos in the markets. grexit audit essentially for half-price only a few days later.

the hangup on the barclays deal was that people in the u.s. want to the british government to underwrite any potential losses from lehman brothers. withremember sitting down mervyn king on september 23. there's either central bank liquidity support, that's what central banks of their order, or government guarantees of the liabilities that the banks, or there is recapitalization of the banks. >> we not be heading toward a greater depression. >> when you saw contagion from the u.s. to other countries and i justworld other small countries but major financial markets around the world. that's when you realize this is no longer problem in the u.s. market, this was the global financial challenge and that completely changed the ballgame.

manus: those just some of the highlights of our interviews looking back at 10 years on since the collapse of lehman. we have a full slate of interviews today and throughout the week including the former ceo of deutsche bank and larry summers, to name just a few. let's get the bloomberg business flash with debra mao. neil has raised about a billion dollars after pricing it u.s. initial public offering your the bottom of the market. bloomberg has learned the chinese electric carmaker backed by tencent so 160 million american depository shares. $6.25ares were offered at each. a representative did not immediately answer phone calls. investors to take on as much as $2.5 billion of equity for its planned buyout of

envision health care. roughlyn finance with 3.5 and dollars of equity, about 2.5 and dollars of which will be syndicated to other co-investors. a representative declined to comment while representative for envision didn't immediately respond to requests. singapore sovereign wealth fund has expressed interest in buying general electrics plane leasing unit, according to bloomberg -- -- aberg sources, between meeting between officials in august, asking if they would consider selling all or part of ge capital aviation services. a ge representative declined to comment. other representatives did not immediately respond to requests for comment. that's your bloomberg business flash. area: the u.k. anti-e.u. said to be preparing for special

summit to sign the brexit deal in november. bloomberg sources say the meeting could be announced as , possiblyxt wednesday before. while key disagreement still need to be resolved, it's plan is to old owl divorced terms. john is still with us. we talked a long time about volatility being suppressed and here it comes. i have a chart in the library showing one month than three months implied volatility. if it gets a summit in november the pounddeal, does volatility come down? john: it's interesting because it wasn't that long ago that october was being repeatedly talked about as the deadline for this deal to be done and now we're seeing really set a summit may be happening in november, a month later. one reason volatility is picking

up is because time is getting short. mask more serious underlying problems. it seems only way we will get to this deal is by a lot of issues being pushed out into the future because they are not reconcilable at this point in time. so relief on one hand and therefore volatility in due course might die back down again, but asking more questions than it answers in many ways, i think. is theone of the things data has been that's a little bit of surprise for the market. the town being driven by brexit and by the data, but the market is still not pricing in aggressive price hikes. still 12 months away nearly. the market doesn't think are going to get a hike until nearly the end of next year. i think that is very dovish.

the risk is maybe we will get a hawkish tilt? john: i think more of a signal that the mpc is even more confident that it was in august that raising rates was the appropriate thing to do. not all the data but certainly is going as well or better than most expected. the point about interest rate expectations is an interesting one because whether it's november next year or some other point, the key here is it is after the end of the current phase of brexit negotiations, after the u.k. leaves the e.u. and either does or doesn't go into transition. there is a binary prospect, if things go well ultimately rates may well go up sooner than priced in but if they go badly,

it could go the other way. nejra: and mark carney stain on until generate 2020. how many hikes might we get before the end of his new term? for one if is a case not to hikes next year at that point it seems the governor will be leaving. it does deal with the initial -- additional months but it will come back around later in 2020 as we head to the end of the transition. having swept it all under the carpet, those issues will be even more serious and intractable as we get toward the second half of the transition. if he leaves then there will still be some serious volatility around. manus: there's a lot of things being swept under the carpet and under the table. john stays with us and you will hear more about the u.k. and brexit.

you'll hear more at 3:00 p.m. today. nejra: coming up, we continue our coverage, looking back at the collapse of lehman brothers. the former ceo of deutsche bank walks us through the moment he found out just how bad it was. this is bloomberg. ♪ this isn't just any moving day.

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manus: live pictures from the economic forum in vladivostok. what an amazing lineup you've got. russia needs a plan for far east development by 2025, the world economy is battling forces of protectionism. this is job after job against the united states of america. coming closer in the eye policy from the united states of america.

that's get you set up for your trading day head. this is what we got for you. delivers hisuncker state of the union address. shanghai-based neo will become the first major electric carmaker to have the u.s. ipo since tesla. manus: an apple is due to unveil its new iphones and watches. -- on open tohope all christmas gifts and bribery. let's get to the markets now. theiran stocks headed for 10th day of declines, that will be the longest streak in 16 years. one market that seems able to bounce back today is indonesia. we did have a solid report on retail sales growth helping equities elsewhere. china leading the declines down .5%. down near the .5% level,

hong kong down .4% after the close down 20% from the high in january, putting it solidly in bear market territory, slipping further into the red today. i want to show you the momentum picture of asian stocks. rsi,is looking at 14 day which shows would make not be ready to bounce back. it's at a level of about 50. it typically needs to hit the level of 30 before it is considered oversold. we might need to see some more pain before traders are willing to step in and by the dip. i want to show you another across asset market story just oil. it's just under $70 a barrel but it might start to get more volatile with its price because here i have charted 20 day volatility which is just hit its lowest level since january. when we have seen it hinges level in the past it has reverted and volatility by its nature is reverting.

considering the hurricane and the volatility picture right here, we might see more swings in the price of oil. nejra: let's get the bloomberg first word news with debra mao in hong kong. hurricane forex is expanding on its relentless advance toward north carolina. oil prices have jumped in the face of what might be the most powerful hurricane to hit the state in 64 years. at least a million people have been warned to leave the coast and local businesses have shut down, including boeing which has halted work at its plant in south carolina. >> hurricane florence and other tropical systems that will soon impact the united states and its territories. is my of american people absolute highest priority. we are sparing no expense, we are totally prepared and ready. we are as ready as anybody has ever been.

same time, super typhoon in the pacific is gaining more strength than his forecast to terrell through the philippines in taiwan this week before heading to hong kong and sell china. it's classified as a super tycoon and is forecast to pat maximum winds of 250 kilometers per hour by friday before gradually weakening. saudi arabia's sovereign wealth fund will sign an $11 billion loan this week, its first ever borrowing. lenderssources say include goldman sachs and jpmorgan. it said be priced at 75 basis points over libor for fees. fear is proving incredibly popular, bob will book about chaos in the white house sold out on amazon just hours after its release.

it's now only available through kindle and other audiobooks as amazon rushes to restock. website said the earliest buyers can pick up a hard copy is september 26. barnes & noble says it is available at their stores and a customers will receive orders on time. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. manus: thank you very much will be get up from here. this week marks 10 years since lehman brothers collapse, arguably a defining moment of the world financial crisis. the former deutsche bank ceo walks us through the moment he found out just how bad it really was. >> we felt it was very unlikely to happen. we really thought that at the last minute, the u.s. government would jump in. i was traveling from zürich to frankfurt when i got a phone call from our u.s. head telling

me it was over and that was really the worst-case outcome. we hadn't expected that. bank,you think deutsche or the wider system? what was going on? >> always not so much concerned about deutsche bank because we knew we had things under control, but i was concerned about systemic risk. we need a systemic answer. some thought we should play the market and not ask for government support, but the we couldas so big that not last maybe without that. >> are you were aware of the magnitude of what was happening. >> absolutely. this was a central player and it shows the liquidity problem was the most important one. funding disappears, that could happen to other

institutions as well and you realize how interconnected we were in the financial system. that was no surprise to me. >> so who was the next phone call? >> of course you call immediately the head of the bank and certainly the risk manager and you reach out to central bankers and other bankers. so it was a lot of conversation going on immediately thereafter. we talked to trichet who is very concerned. bundesbank and the bank of england as well at the time because they were a key player in the british market. so absolutely. >> in terms of that leakage that you describe, and the preparation that you put in what did the counterparty risks look like?

>> you also have to look at it an exposure to certain counterparts, but they have exposure to you. weat --pretty sure did a lot of funding before hand in order to be well prepared. to keep yours try market risk under control. i had started in 2007 and i was fully convinced this is not just something that will last for three months and then disappear. imbalances things, on the debt level and imbalances in the real estate market normally last much longer to

find equilibrium. buyers, and of course i knew that an expected that as an economist. to reduce our risk in 2007. i was also chairman of the global banks and insurance companies. i warmed that we had to get ready to change the system we were operating. nejra: that was the former deutsche bank ceo speaking to bloomberg's guy johnson. tell us of your experiences of the lehman crash. where were you and what were you doing and trading? john is still with us. you were at rbs back in. let's talk about the u.s. because 10 years on, we're seeing the u.s. economy

outperformed the rest of the world. we got that small business optimism yesterday, the latest data to push two-year and 10 year yields higher. , has that two-year yield gone too far? john: what the spread is doing is pretty normal in the hiking cycle but short-term, we think it might re-steepen a bit and that will come about through shorter yields rather than longer in yields. there is a lot priced into the front end now. thinkare some reasons to q4 might be a bit more difficult for the u.s. and the market as got a bit ahead of itself. notice is one thing i the -- for cash, it ties in with the yield curve. what we're seeing is people isrtening duration,

something i ask you quite often when you come in. is there evidence of that on the king ons cash becoming the t-bill auction? john: it certainly tells you something and it's tied to the point i made about the front in getting carried a bit away. when you look at some of the moves you were discussing before about worries in asian equity markets and so on, it's not surprising that some investors are rushing for copper. there are reasons to think that as thebe more hard work trade tariffs become more of a risk in our view and it's not a surprise to see the demand for front in paper at these young levels. say -- on theers trade story and the fat quick seen so much dollar strength on the back of that, some say the

next move for the dollar should be lower. john: there have been good reasons for it, of course, but things like the relative growth differential between the u.s. and china, which has been moving strongly in the u.s.'s favor with think we will moderate because the tariffs will be a bit more of a headwind for the u.s. at the time being and because some localized stimulus in china will improve things a bit there. so there has been a bit of one-way traffic feel and i think it's right to think there might be a bit of direction and that soon. manus: john, thank you for being with us with the latest thinking over at ubs. oncontinues his conversation radio at 7:30 a.m. u.k. time. , willre coverage all day

bring you our exclusive p.m. u.k.at 4:00 time. now to china and russia and vladivostok. bolstering ties and an escalating trade war. otherre speaking with asian leaders at the eastern economic forum. our reporter is on the ground in vladivostok. talking about closer ties, this is the team. some would say the unintended consequences of u.s. foreign-policy coalescing with two superpowers. what message are the leaders sending? >> what were seeing on stage is a similar message they've been having yesterday as well. xi talking about upholding free trade, putin saying the world is

battling global connection is him. they're not naming donald trump by name or the united states, but that clearly are calling out his policies. a feat for vladimir putin to be on stage with all these leaders come at the same time donald trump has pulled out of two very important asian summits . this seems to be a way for putin to pivot even more to the east more ties to develop and relationships with russia. moscow lasti was in week, i was reminded of the fact that for russia, china is its biggest trading partner. that is an important relationship. how are all the countries holding ties at the summit? give us more detail around that.

>> there are some interesting deals happening. the one that got the most attention was yesterday when jack ma showed up to back a deal alibaba is doing with local russian partners. he was in meetings with , who did sayin that he was far too young to retire. that is one of the ones that got the most attention. and gazprom talking about having more gas exports to china. we knew look at russian gas compared to crude, they are not exporting as much to china. they are killing it on the crude front, even beating saudi arabia and finally, on the oil front we did have novak talking for the first time officially, russia's saying the spare capacity could be 300,000 barrels a day and

weeks,in algeria in two they will discuss supply and demand concerns. and lot is happening here there seems to be a lot of talk between deals in russia. just a couple of lines coming from xi, china is willing to boost its ties with russia on tourism and energy. finding common ground whether on security or other areas is what xi and putin are there to prove, that this is a coalescing of power. this is what we have set up for you, the u.k. and the e.u. settle their differences in time for special summit in november.

a will discuss that next with ceo. ofra: and the code chairman bridgewater says it's joins us at 1:00 p.m. u.k. tie as part of her life after lehman coverage. this is bloomberg. ♪

nejra: 6:50 a.m. in london. let's get the bloomberg is in/with debra mao in hong kong. neal has raised about a billion dollars after pricing it u.s. initial public offering near the bottom of the market range. bloomberg has learned that the chinese electric carmaker sold 160 million american depositary shares, shares that were offered at $6.25 each.

answer callsid not seeking comment. interest in buying general electric's plane leasing unit. according to bloomberg sources, august, they ask if they would consider selling all services. ge aviation representatives for gic did not immediately respond to requests or comment. apple is expected to unveil its biggest and most expensive iphone later today. it's thought to be part of a line up of three new models aimed at wiping the products appeal amid slowing sales through. the technology china is expected to release a handset with minor updates to last years x model. that's your bloomberg business flash. thank you very much, debra mao in hong kong.

the u.k. and the e.u. are set to be preparing for special summit to sign a brexit deal november. this comes as three of the e.u. financial supervisory authorities say financial firms need to speed up brexit planning . who better to talk about brexit, banking, and the superrich? thank you for joining us this morning. all the brexit discussion, we just had ubs saying growth is about 2% slower. what are you seeing as a material impact from brexit on client mood? >> fortunately for us, the focus of our business today is mainly on u.k. clients. that have european clients book into the u.k.. the impact on us as a business is not great. what is probably not well-known

, we have about 23,000 entrepreneurs. they don't wait around for politicians to make decisions. that cash flows, investment decisions to make. quite a lot of them are putting their investment plans to one side until they can see with the future is. but a lot of others have exited europe. a lot of others are looking for markets outside of europe because they are entrepreneurs. nejra: there's an argument that some u.k. small businesses might be doing well because of the weaker sterling. in terms of foreign investors that you serve, are they at all freaked out by the prospect we could get a no deal brexit or that this could rumble on with a lot of uncertainty? are there any foreign investors

that are starting to reassess the u.k. and putting their money here? >> no one likes uncertainty. the top-end end of the prime property market in london. asking what is the time to buy in as well. so it is not all negative here, there are some positives. one ceo was bullish on the u.k., he's putting more boots on the ground. how are you finding the market in terms of -- is it getting tight? are you having to pay up for bankers? i'm 2.5 years into the role now and our strategy seems to be working white will.

return on equity is about 15%, triple what it was three years ago. what are we doing to achieve that? for bankingknown and lending but clients are increasingly investing with us and our assets under management have doubled what they were a few years ago. getting up toward 30 billion pounds of assets under management. we deliver that the recurrent client director. their job is to bring the best of the bank for the benefit of the client. that means they deliver through an integrated team. so we are developing our own staff. we are not big buyers of talent from the market. nejra: how do you plan to grow? heavily innvesting technology and digitals.

that's over 20 million pounds a year. the core of what we deliver will always be delivered through that client director, making sure that wealth has its intended consequences. we investing in our telephony channel, 24 hours a day, seven days a week. clients love that. and people have a choice of dealing online, on the phone, but there is always a person for them to deal with. manus: do you ever see a time could ipo outside the banks? sinceve been together 1919 and 20% of our new clients are coming from the wider bank. it's a great position to be in. nejra: thanks for joining us here in london. we have a slew of exclusive conversations you don't want to miss. at 8:30ilson joins us

a.m. u.k. time. and former u.s. fed president bill dudley joins us for an exclusive interview. this is bloomberg. ♪

manus: good morning from dubai. this is bloomberg daybreak: europe. >> these are today's top stories. >> the route rolls on. the msci asia-pacific has put 10 straight days of decline. his longest losing streak since 2002. the u.k. and european union are said to be planning a meeting in november to sign a brexit deal. it may be announced within days. gasoline futures jump. barrelefly topping $70 a

as a category four storm heads toward the east coast of the usa. nejra: good morning, everyone. let's bring you these numbers just crossing the bloomberg. operating profit, first half recurring operating profit at 985 million euros. the estimate was 981 million euros. that is a beat on that first half recurring operating profit number. confirming revenue growth. it is reporting a record recurring ops margin. that is what the street was waiting for head of these numbers. we also have the first half recurring operating margin coming in at 34.5%, beating the

estimate of 34.4%. another thing the market was looking for was any commentor on china. we have a coming through as well. the ceo seeing no change in china demands. commenting in a call with reporters right now. post recordg hermes profitability in the first half. that is the key takeaway. the maker of $10,000 plusbefiti. no signs of easing off even as we see stock prices dropping in china. we will talk about that as you look ahead to the european futures. manus: ironic that when you look at what is going on with hermes in their view of china versus the equity market, our markets have managed to resurrect. futures are higher.

what is going on in china is not necessarily trouncing our markets. watch her mays coming through on the china data. fast fashion -- the weakest sales in four years. you may see that way on the spanish market. hermes are cutting their prices. when it comes to the markets here, we are up 33

u.k.. is the run on sterling done? that is what you have to ask yourself. a big company here in the middle east, an extraordinary meeting to continue the company in existence. stock at the bottom of your screen. 10% as the train comes through. this stock is down 80% on the year to date. how is your risk radar this morning? nejra: a little bit risk off when it comes taking equities. you just should be european futures pointing higher. in asia we are looking at a 10th straight day of decline. you're seeing broad-based losses in the region below the surface. if we get through 10 straight days of declines that will be the longest losing streak since 2002. we are seeing wti march higher. well above $70 a barrel earlier. .e got that api data earlier forecasts on oil production, that's what we are talking about in terms of fundamentals. then there is the threat from hurricane florence feeding lesson to the price right now. -- less into the price right now. could we have a signal for further gains? we are keeping a close eye on the 10 year yields. we saw 10 year yields move

higher yesterday following that small business sentiment survey and also u.s. job openings. data pushing yields higher. 297 is where we trade on the 10 year yield. the two-year yield at a 10 year high. 2.74 handle. ubs talking to me earlier saying that move higher could be overdone by now. cash: it is that -- for that bloomberg opinion commentators are talking about. you will see a shift into the shorter end of the curve because it has less risk in regards to duration. that is one of the themes coming through on the bond market. well bid.y you see btp's ever so slightly softer this morning. the view from the street is futures spreads in terms of pricing, 3.8 fed hikes in 2019. the market is becoming more pronounced in terms of its view

about two more rate hikes going into the end of the year. pips.are up by 11 debra mao has your first word news. >> in the u.s., hurricane florence is expanding on its reluctance advance toward north carolina. oil prices have jumped in the face of what meet -- might be the most powerful hurricane to hit the state in 64 years. a million people have been warned to leave the coast. local businesses have shut down. they include boeing which has halted work at its plant in south carolina. pres. trump: hurricane florence and other tropical systems will soon impact the united states. the safety of american people is my highest priority. we are sparing no expense. we are totally prepared. we are ready. we are as ready as anybody has ever been.

>> at the same time, a super typhoon in the pacific is gaining strength and is forecast to barrel through the philippines and taiwan before heading to hong kong and china. typhoon.d as a super it is now forecast to pack maximum winds of 250 kilometers per hour by friday before gradually weakening. >> the u.k. and the european union are said to be preparing for a special summit in november to sign a brexit deal. bloomberg has learned several key issues have to be resolved. russells is ready to schedule a one-off gathering so leaders can formally agree on the terms of the split. plans for the summit may be officially announced at an eu meeting in austria next week. sterling has risen recently on optimism about a deal. a chief investment officer has said the next move made for the dollar may be weakening. jeffrey gunn block said

speculators on the long side my end up wrong because president donald trump want to see the greenback lower. if he is right, that could bring relief to non-us stocks such as those in emerging markets. global news, 24 hours a day on air and @tictoc 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 . manus: thank you very much for that. let's get to david inglis, trying to make sense of the longest losing streak since 2002. it has been a set of tortured markets for us. >> we have not closed higher this entire month. taking you all the way back to 2002. the magnitude if you measure it iswe are right now, about 5, 5 .5%. in terms of magnitude, february

was worse. you have negative news you get more sellers coming in and becoming more active. deborah was talking about the dollar. a lot of the people we talked to say the strong dollar has to go away. i can point to any market here and chances are that market is going to be at a multi-year low in terms of valuations. if you had listened to that advice you would selloff a lot of money. sentiment is bad when you look at hong kong. not even an emerging market here. we are deeper into bear market. shanghai is about seven points above that 2016 low. lower.ust closed 0.3% australia as well lower for the day. southeast asia is a bit mixed. the philippines stand out to be one of the worst performing markets. other things happening here, oil has helped put pressure on a lot of the airline stocks in the region.

the low-cost carriers tend to be the least hedged here. that is the state of play across markets. thank you so much. trade worries casting a shadow on asian equities. let's get the latest on the tariff battle with bloomberg's chief asian equities correspondent. great to have you with us. the wto going to ask for permission to retaliate against certain u.s. products over dumping violation. how serious is this in terms of escalation? older storyit of an when it goes back to a dispute in 2013 when china accused the u.s. of putting anti-dumping measures on imports of machinery and electronics, trying to make the more expensive versus u.s.

competitors. china won the case. america never reciprocated and made the compensation to china. that is why we are where we are now. there is no shortage of irony when you consider that we have throughrsuing the u.s. the wto, which of course the u.s. created for the global ruling trading system. who is not.s. abiding by the ruling of the wto. china is having to pursue them for compensation. it shows you how pronounced this trade spat is. there is no sign of a near-term resolution. manus: i saw you this morning when i got to this office at 5:00 a.m., there you were on the telly. the numbers in regard to the impact on china's labor market.

run the numbers by me one more time. >> there are some in terms of estimates, we have jpmorgan they goesterday that if ahead with the next round of tariffs and china response, you're talking about potential job losses. there are other scenarios where you could see job losses of up to 5 million in china. you can sit back and say that is a modest numeral when you consider the working age population in china. nonetheless, it would have a material impact on those manufacturing sectors of the economy that would be most exposed to tariffs. it will pressure the authorities to ensure that those workers are relocated to other industries, are compensated. it will put pressure on authorities to ensure they are keeping the economy on an even keel. we are starting to see now just

how this trade war is moving beyond the academic to have a real impact on the ground with workers who feel at the most. nejra: if this were to escalate, who are analysts saying stands to lose the most? >> these things are subjective. neither economy will really win. the u.s. is heading into it in strong order with strong economic growth. the stock market is doing well. china on the other hand is in something of a moderation. less to do with the trade more to do with their own policies. there is the view that perhaps china is starting to have something of a weaker footing. there is no doubt the trade war will hurt both economies and will spill over to hurt other economies in the region.

that is way continues to be considered one of the high risks for global growth heading into 2019. manus: thank you very much. that is the chief asia correspondent for the latest nuances on the tray discussion. joining us now is the portfolio manager -- he joins us now. when you listen to what we have just outlined, when you see the demolition taking place in the china stock market, the hang seng entering a bear market, is europe weathering the trade fall better than you might think? >> for now the european authorities have certainly when it comes to the u.s. done a much better job in the escalating deescalatingr -- this trade war. , who is focused on china

have run protectionist policies in their own countries. which is less true in europe. >> european equities fell out of favor with global investors. we have seen the inflow come back. when you look at the global equities aropean favorable place to put your money compared to the u.s. or asia? to avoid that question. it is very difficult to say from the bottom-up investor where europe is the right place to put your money. i think within europe there are a number of good places you can put your money and where you can find yourself well protected. quite example -- quite a good example is hermes, who reported strong numbers. what is unique about hermes, not just as a luxury goods, but in

the luxury space, it is not dependent on demand. it is dependent on supply. towth depends on the ability continue to have backs produced every year. year.s produced every nejra: we will talk more about that in just a second. with a portfolio manager at comgest, he stays with us. into -- we arep all eyes and ears. we have a little more hint and flavor from xi jinping and the team on the ground there. this week marks the 10th anniversary of the collapse of lehman brothers. we have been speaking to the key figures to look back on the historic event. the depth of the financial crisis. bloomberg's guy johnson and the former bank of england governor when he realized the scale of

what was happening. >> right through 2008, it was clear confidence in the banking system was waxing and waning. only a serious recapitalization of the banking system in the united kingdom and the united states would solve the problem. we spend a lot of time then trying to sway the government to do this, to move ahead with it. britain was the first country to do it. 2008 --the spring of after that, things looked to be improving. the next month they got worse. ofwas clear in the summer 2008 we had not solve the fundamental problem, something deeper would have to be done. absent that, we would see the failure of another institution. i think lehman brothers was the top of most people's list as to

which institution would get into trouble. it is worth adding that ben bernanke made it quite clear if the fed had not taken the dramatic actions it took, every major financial institution in the united states could have failed. that is a strong statement. i think that became clearer as we moved toward -- the idea that somehow on sunday the 14th of september we were happy with what was going on, and on the 15th we got bad news, that was not right. we knew the whole system was in trouble. we knew the banking system was in deep trouble. the week before lehman brothers failed there was a concern about lehman brothers. i think the conversations that took place over the weekend were trying to find a solution to the problem. not suddenly discovering women's was troubled -- lehman's was troubled.

>> was letting lehman brothers go a mistake? >> i do not think people consciously let it go. i think people in the united states worked very hard to find a solution to it. they took the view they were not going to put money into lehman brothers. they looked for other options. they concluded they could not lend to lehman brothers because there was not enough collateral. they concluded a deal would be -- they were hoping barclays mifi it -- might buy it. they bought it essentially for half the price a few days later. the hangup on the barclays deal was that people in the u.s. wanted the british government to underwrite any potential losses from lehman brothers. since we knew at the time we were basically underwriting barclays, we were issuing an

insurance policy to barclays by protecting the british banking system. that was the right thing to do. the events brought on another policy that might double the losses. i do not think there was any conceivable way the british government could underwrite lehman brothers. that was the responsibility of the american government. they worked hard to find a solution. they concluded they did not have one. so lehman brothers went into administration. manus: that was the former bank of england governor speaking to guy johnson on 10 years ago when lehman went bust. for coverage throughout the day. we discussed the economic landscape with the former treasury secretary ben bernanke. stay tuned for that. debra mao is standing by in hong kong.

about a billion dollars raised after pricing its ipo near the bottom of a market range. bloomberg has learned the chinese electric carmaker sold 160 million shares at 626 shares -- dollars each. did notentative for nio immediately answer phone calls seeking comment. the u.s. attorney general's during a potential investigation of social media companies. briefed byns will be republican state attorneys general for examining the firm's practices. the meeting, which will improve -- include an member of the antitrust division is intended to help sessions decide if there is a case to be made against companies such as google, facebook, and twitter for violating antitrust laws.

apple is expected to unveil its biggest and most expensive iphone later today. it is thought to be part of a line of three new models and that widening the products appeal amid sales growth. the technology giant is expected to release a handset with updates to last year's 10 model. that is your bloomberg business flash. nejra: thank you so much. picturesooking at live of shinzo abe speaking alongside leaders at the eastern economic forum in vladivostok. you have heard from vladimir putin speaking at the forum. we have also heard from xi jinping. you are looking at live pictures of shinzo abe of japan. turning to retail, we broke growth'sor -- sales slowing. looking back over one year, it has been a tale of two stories. struggling to prove resilience

on the online space. struggling to maintain profitability, weathering decline in the chinese market. athave the portfolio manager comgest still with us. andrea, let me start with you. tex has seen sales growth in the second half. is that going to reassure investors? >> i do not think so. it has had a fantastic run. it is getting tougher. manus: the analysts have their knives out. morgan stanley downgraded the stock two weeks ago. what is the key concern around and attacks? the chairman is doubling down online. is that too late? in >> it is not too late. the problem is the middle market. zahra and it's

off brands. they cannot escape the threat from primark. primark is forging into the u.s. . it has cheap prices. differently not that as all the retailers, h&m has been in the firing line. inditex cannot compete. i'm not sure i agree that primark is a big threat to zahra. they target different types of consumer. is a fast fashion operator. the have shortly times. over the course of the season they will change. primark, which is also a great business, has a very stable and much less fashion -- fast fashion element.

i'm not sure primark is the threat to inditex. the issue in the text -- inditex has had, it has the most shares of any company at a time when sales are shifting online. to thatany did adapt radically and closed about a fifth of its store base in order to move those sales online. while it has been navigating that well given the scenario, the fact is it is still a business that started with 7000 stores at a time when sales were moving online. manus: hold those thoughts. hermes,her mays -- record profits. zoomare seeing a real higher in terms of china. it really is a powerful story. >> that's right. another class act. , is it going to

continue? it comes down to whether china keeps going and chinese consumers keep snapping up those bags. nejra: looking at the retail sector, we have talked hermes, inditex, where else would you look? >> primark is a very interesting investment as well. it actually does not have any online sales. that is part of its strength. the price point means it cannot operate online. even a low-cost online operator like amazon, they struggle to compete on the price point. nejra: thank you so much. portfolio manager at comgest. andrea from bloomberg opinion. with livewill leave shots from vladivostok. xi jinping saying he would welcome a visit to china. shinzo abe would welcome a visit

to china next month. he agreed to work towards the visit in october, reaffirming to cheapen -- the been japan-china japan-china deepen relations. ♪

>> welcome to bloomberg markets, the european open. we are live from european at -- headquarters. good morning. stocks in asia falling today as investors assess global growth. no end in sight to trade tensions. oil prices jump as a devastating hurricane heads for the american east coast. cash trade is open in 30 minutes time.