question good morning from london, i'm nejra cehic and this is "bloomberg daybreak: europe." these are today's top stories. and snapping the longest losing streak in 16 years. apple launches its largest and most expensive iphones ever but with no major new features, will a clever pricing strategy when over customers and investors? and a trio of central banks announce rate decisions today. thechanges expected from boe, but will turkey deliver on a rate hike?

nejra: welcome, everybody. from hong kong to divide, from london to new york, if you just waking up in new york, it's 6:00 a.m. in new york. some news on trade that could be proposals about talk over top. you see the weakness in the dollar yesterday, holding onto losses in today's sessions. asia-pacifice msci index up .7%, snapping 10 days of losses. tonwhile the looking ahead central-bank decisions, the euro trading unchanged, may not be a market moving meeting for the ecb but want to watch nonetheless. where markets have their eyes trained is on the lira. yesterday it hit a two-week high. unchanged at the moment.

shows a by bloomberg hike of 25 basis points. expectations are high. will turkey deliver? the ceo joins us for an exclusive interview after 9:30 a.m. u.k. time so that's something to look ahead to in surveillance. let's get the bloomberg first word news from dubai. gambling onunion is theresa may making concessions the irish border issue after the annual -- at the end of conference next month. officials are starting to redraft the language of the so-called irish backstop paves the way for brexit deal in november. but the british side velocity to make concessions. sources say the u.k. team has indicated it would be ready to do so once the conservative arty conferences out of the way. spain's foreign minister has make a dealh to

won't be held up by wrangling on the future of gibraltar. will than 300,000 british citizens living and spanish companies heavily invested, the country is exposed to the risk of a no deal exit. the comments were made in an exclusive interview with bloomberg. it's a big effort and it could be the last lot in the road of the country. we tried the agreement on gibraltar, the part -- the first that. nejra: the white house has proposed another round of trade talks with beijing to avoid further escalation in donald trump's trade war with china. bloomberg has learned senior officials led by steve mnuchin recently extended the invitation to counterparts in china. the talks of agreed to buy the

chinese are likely to take place in washington. hurricane florence is set to work itself off the coast of the carolinas. swath ofng a huge coastline before making landfall . the u.s. national hurricane center says the category three storm is forecast to deliver as much as 30 inches of rain and has the potential to trigger catastrophic flooding. it's also expected to drive storm surge and resort towns that have largely been evacuated. america's likely to have overtaken russia and saudi arabia to become the world's biggest producer earlier this year, according to the energy information administration. luminary figures show you as crude output exceeded that of saudi arabia in february for the first time in more than two

decades. over to russia for the first time since 1999. 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. nejra: thank you so much. let's check in on the markets in asia with david inglis. david: it was going to come at some point. drops, value merges, so were getting some volume coming from across some markets, not all. have a look at how some of the benchmarks are trading as we approach the latter part of the trading session. the nikkei 225, 200 points to the upside the last hour of trade. we are coming out of the launch break here in hong kong. , virtually every

single sector group is on the way up right now. you might notice australia seeing a little bittersweet. china down for a fourth day. on friday, retail sales, industrial production, as far as australia is concerned, the banks and consumers staples, materials on the way up. let's talk about the movers across the region, as a group the best warming lot are the energy stocks, for obvious reasons. the 1.7% asian energy stocks, the great scoop from bloomberg, their opening up and willing to give their high risk tech secrets in that market and apple is the big story as well. apple related suppliers contract manufactures trading in the region on the back of the product release that apple unveiled three new iphones and a

lot of talk about that watch. driving the market moves, the u.s. has proposed another round of trade talks with beijing aimed to avoid further escalation in the trade war were china. is james in beijing. great to have you with us, thanks for joining us. do we have any firm details on these talks get, other than a proposal? yet, the treasury department speaking with the chinese, we have confirmation that that is going on but we don't have any of the details. we should have the chinese ministry of commerce in a couple hours at the regular press conference. fatal give us more details about what is happening and when the talks might happen. so far, all we have is some people in the treasury department and some in china are in talks about maybe having talks sometime in the future. nejra: can we read this as a

positive step that we might not get the worst-case scenario of president trump implementing tariffs on all chinese goods? james: it's hard to say at this moment. there were talks recently, ministry of commerce officials went to washington led by the vice minister for two days of talks in washington which led to nothing, although immediately after that u.s. could have written -- could have put further tariffs on china but they had not done so. but there's no signage is having talks is going to improve the situation. of course you have the treasury department and china talking about a deal, what happened in may where the vice premier went to washington and thought he had a deal and that was abandoned by president trump on twitter. that put a lot of hard feelings in beijing.

there's obviously a lot of distrust in beijing about what the u.s. is doing and who really speaks for the government in the u.s.. is it the treasury department, is that the president? who really makes the decision on any china deal? it's good that they are making efforts to try to resolve the dispute but there's a lot of issues that have to be solved. it's not just a question about the trade deficit. yet. is a long way to go nejra: definitely a long way to go, thank you to james there. is our guest. you join us on a little bit of a positive day in the market. we see weakness in the dollar yesterday, money flowing into emerging markets all because of reports on her proposal about

talks about talks. how much of a positive signal should the markets read into that? than aink it's more proposal of talks about talks. in the united states there is some movement among businesses. that in fact tariffs hurt them and trade barriers as well. , for the farming community example. the fact that the suppliers through apple go up in asia, the fact that the economies are intertwined. it's not just going to hurt china, it's becoming more obvious to american businesses it will hurt them somewhat. that's the first point. the second point, president trump does have a negotiation method. it's to go in heart and then fullback of it and give something give it you can see this is his methodology of doing

it. and there's the frustration of trying to take the essence of what president trump is trying to do and try to execute in a slightly more pragmatic way. we willo you think eventually get the imposition of tariffs not just on the $200 billion of chinese goods, but on all chinese imports? i think it would be a negative scenario. so we are in the process of negotiations and i think the fact that they call the chinese government back for negotiations means that gone to a positive stance. nejra: goldman sachs saying if we do get a scenario where the all imposed 10% tariffs on new imports, not even 25%, the s&p 500 would drop into a bear market. sethe reason he arrived that number because of

components on earnings, that more or less negates most of the good news. that has been put forth by other analysts as well. if we do have 10%, it will not be good news for u.s. companies. that's becoming more obvious now to a lot of people in the administration. if some fraud comes out of the u.s. market, does the rest of the world go down with it in terms of other equity markets, or does money flowing to other markets like europe and china? >> there is a little bit of fraud in the u.s. market but the u.s. economy is stronger than anywhere else. i think that remains still in place in the search we saw as a result of not just the tax cuts but the strengthening in the u.s. remains intact. the question is, does the market

at just a little bit if the u.s. economy goes south? money would flow back into asia because i think they would be the beneficiary of the removal of service. europe now is a little bit more uncertain, partly because the earnings forecast we think at this stage are probably overdone. in the united states, earnings have been forecast brought across the board. if the tariff issue goes away is better for the u.s. economy and that money goes right back to emerging markets. let's talk specifically on china. will that economy stay strong? how much resilience this china's economy have in the worst-case scenario? >> were debating this yesterday briefly in my office. our emerging markets manager was thatg you must remember

when we say the economy is not it's better than the rest of the world which barely makes 3%. translate into positive move for the chinese market. it should be a buying opportunity. us fori guest stays with the hour. with theresa may about to shift wethe irish border problems, will discuss that and more on brexit at the boe coming up. and the former italian prime minister joins us for an exclusive interview after 10:30 a.m. u.k. time. this is bloomberg. ♪

disappearsunding come back at happen to other institutions as well, and then you realize how interconnected we were in the financial system. all learned that things were much more interconnected and complicated than we imagined we have to what's going on in financial markets much more than perhaps some thought earlier. >> one major legacy of the crisis is that people understand you cannot just regulate individual institutions and have stable prices and think everything will be ok. clearly banks had invested in the thing they did not understand. banks had too little equity, regulators had retreated to much from regulation at the peak of a very heavy phase of deregulation. supervisors had an estimated --

underestimated elements of risk and elements of connectedness. >> we didn't understand completely the interconnectedness. i think there's a much better understanding today. banks are much safer and founder, but to say we understand all the complexity of the interconnectedness would be a bit optimistic. >> we could have gone back to repetition of the great depression of the 1930's. think who would have taken action as we did in early 2009 to try to offset the consequences of that but we wouldn't have prevented it altogether. nejra: that was some of the highlights of her interviews marking the 10th anniversary of the collapse of lehman brothers. we still have plenty more to come over the next two days, including the former ceo of deutsche bank, and a professor at nyu and former cfo of lehman brothers.

let's get the bloomberg business flash from dubai. iphone haslatest shown how even the world's largest company has to surrender to the dictates of the crucial chinese market. the new models come with a feature that supports to cellular services and easier switching between carriers, but that technology won't be available in china, hong kong, and account. macau.- and it will offer slots for sim card set identify and authenticate users phone numbers. >> it means you have both phone ,umbers there in your phone waiting for the call and whichever one gets it becomes the active line.

>> another high-ranking finance executive at tesla is leaving the company. bloomberg has learned the vice president of for a wide and operation is parting ways with the electric carmaker. tesla representatives did not respond to her request for comment. plan for a special dividend of 1.5 billion euros to sell leasing and other business lines to the parent group. the two banks said the special guest dividend is contingent on any significant acquisition project that may arise by the closing of the transaction. the plants that would also push toits common tier one ratio 11%, allowing it to meet its capital targets. and raising billions after

pricing at the top end of the market range. bloomberg has learned the chinese food review and delivery pointpriced itself at 480 27 million colors shares at 69 hong kong dollars each. that's your bloomberg business flash. nejra: thank you so much. be gamblingaid to on theresa may making concessions on the irish border in an attempt to reach a deal on quitting the e.u.. it comes as pre-brexit if these have been plotting to oust the premise or. the bank of england is back in a holding pattern according to a survey, leaving interest rates unchanged at 0.75% today. i guest is still with us. if we look at some of the

developments in the parting days of brexit, a little more positivity perhaps about a deal coming through. other risks to the upside for the pound from today's meeting in the sense that we could get some sort of hawkish signal? remainboe i think will and ast in mood tightening phase because that's position they are taking. basis, the pound is strengthened, but the other assume, i think people there must be some kind of solution, certainly the european union is moving closer toward the government having the right voices. the rebellion against prime minister may at the meeting, ,ctually met with the leaders saying we just want to change policy. .here is no other viable plan

-- thens seem to think four freedoms are not your resolved but it looks like they may be coming to some kind of agreement. we need to agree to carry on as we separate. all the other things come much later. i think it is more positive than people think. wera: does that mean continue to see pound volatility that has picked up recently? i think that's probably likely. it's not going to be clear what happens until it happened. you expect volatility to increase until we see a roadmap for what comes afterwards. brussels coming out of seems to be positive because the europeans want to try to save something. they're trying to understand

what the united kingdom wants and then trying to negotiate. nejra: i want to take you to it chart showing the u.k. economy basically over the speed limit. 1.5%, itow faster than shows the growth rate at 2.35 percent. if we look at the data we've had recently and put brexit to the site for a second, does this support further rate hikes with the market pricing in? saker: generally the tone is they would support a more diverse stance. the prediction is that in this particular meeting, there will be hawkish incentive but they will hold back, just in case the results of brexit turn out to be wrong. we should see a series of tightening coming through from here on.

it looks at other things including the growth of the economy. inflation at the is picking up. nejra: what does this mean for the way you would allocate around u.k. assets? i think one should take a neutral stance simply because it's not clear which way to go. brexit is a major economic event. will hithappens, it the u.k. economy somewhat. nejra: ubs saying the u.k. economy has already had a hit of gdp to 2%. very interesting note. we will bring you the bank of england policy decision at 12:00 p.m. u.k. time. up next, is not just the bank of england, the markets will also .e watching the ecb and turkey how will president erdogan react

if the central bank raises rates? this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." it 6:30 a.m. in london. let's check in on the broader markets. >> a looks like asian stocks are going to snap that longest losing streak in 16 years. , hong kong one of the biggest gainers, up 1.4%. reach ofe just out of bear market territory. still busting declines in australia, down .7% as the aussie strengthened.

china struggling to hold on to any of the gains we've seen earlier today. i want to take you into my terminal to show you what the sentiment indicator show for chinese stocks. i have a measure of turnover, how investors are going into the market and buying. it's at its lowest since 2016. it shows that according to analysts, investors are seeking to the sidelines, referring cash is there are so many uncertainties remaining around trade. i mentioned the strength in the aussie. it comes at a key level of resistance. it closed at its highest level -- since about over your. chart watchers say if it can close near global persistence we can see more momentum as the euro is able to eke out a few gains. nejra: thank you so much.

let's get the bloomberg first word news from dubai. >> spain's foreign minister has be held push won't about wrangling over the future of gibraltar. with more than 300,000 british citizens living in spain as spanish companies heavily invested in the u.k., country is exposed to the risk of a no deal brexit. adjust is made the comments in an exclusive interview with bloomberg. to reduce the risk and iraq could be the last rock in the road. it's the first step on the global uplift. >> the white house has proposed another round of talks with beijing to avoid further escalation in donald trump's

trade war with china. an invitation was extended to counterparts in china. the talks are likely to take place in washington. equities rose on the expectation that development could ease tension. hurricane florence seem set to target the coast of the carolinas, delivering up any punch and threatening a huge swath of coastline before picking and fall. the u.s. national hurricane a category three storm is forecast to deliver as much as 30 inches of rain and has the potential to produce catastrophic flooding. resort towns have largely been evacuated. is expected toon make landfall in the philippines, prompting authorities to play 17 areas on alert to that if activation.

it currently has maximum winds of 240 kilometers per hour. it should head to hong kong and sell china. 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. this is bloomberg. nejra: thank you so much. a big day for central bank watchers, starting with the boe decision after hiking in august. that decision at midday u.k. time. and a moment of truth for turkey . the central bank is expected to hike today but after stunning investors with no action in july, nothing is for certain. 45 minutes later, the ecb makes his first policy announcement and mario draghi is said to lower forecast for growth. let me come to you first because

this meeting is so highly anticipated from turkey's central bank, a bloomberg survey says they will give it a 325 basis point hike. what are markets expecting? >> it has the hallmarks of a historic day. the pain is being felt on the streets of istanbul and beyond. the pressure clearly and firmly on the central bank. they have to balance getting that some credibility and in salvage what economic growth is let. we had fresh data that shows the economic output is slowing in turkey. you have inflation at 15 year highs and 18%. have a political dispute with the united states that remains unresolved. you mentioned expectations from the market. let's show you that graphic in more detail. the range of expectations is as wide as the bosporus. it is as high as 25%, the banks

had indicated it would move on policy and then overshadowing all of this is mr. erdogan, the turkish president almost described interest rates as evil. that really raises the stakes. that suggests we could get some volatility in the lira following the meeting. we talked about the potential for a rate hike, but what other things could be talked about in the meeting in terms of tools for curbing inflation and also the route in the lira which has steady somewhat. we saw a two-week high yesterday. >> absolutely. the center break has been working with tools in terms of collateral management to try and stabilize the currency. it would be a mistake to look at the currently were rate as an accurate reflection of the realities of the market.

there was a terrific note that said the turkish lira has overshot in his weakness, 90% is based on fear. what happens today will have major ramifications across the emerging markets based. having said that, there are some who see a select opportunity and all this. saying the currency is 20% undervalued and that brings quite a bit of opportunity. not quite as much expected from this meeting today but always interesting, you're watching everything in frankfurt. will the focus be more on what we get out of the forecast for growth and inflation rather than suspicion itself? there's quite a lot expected out of the meeting today. first they will confirm likely that they cut their asset purchases from $30 billion a

month to $15 billion a month, starting in october. secondly, they are likely to downgrade their growth forecast for 2019, 2020. currently we are looking at 2.1% for this year, down to 1.7% in 2020. because of slowed output, that could be at risk. the question is what do they do with their inflation forecasts. they are likely to leave it unchanged and they have to because they need to justify keeping policy path for now, until as late as september of 2019 before they finally start to raise rates. in frankfurt.ller fantastic work, guys. thank you so much. our guest is still with us.

start with turkey, expectations pretty high for the central bank to deliver today. if it doesn't, what kind of reaction could we see in the lira? i would say weaker in -- weakening in the lira. it's an unusual suspicion in turkey versus other emerging market crises. companies have broden foreign currency to finance the move in turkey and that's why the market is worried because who is holding the gallery said they cannot deliver them. the central bank does have to get back some of its credibility and the best possible move would -- it would show that we are in control again. 325 i think would be taken as a negative signal. need toch more about we

see that there is independence in the central bank, and that is necessary. the fundamentals are not that bad. what happens is the fear that stops the central bank for been able to do its job. what: some say no matter hike we get it will still not be enough to support the lira in the long-run he would you are saying that fundamentals are ok. let's say we got 500 basis points and we would like to see the lira rally today. before that, we come back to where it was before the crisis unfolds? privatet of turkish companies have bought in foreign currency. just remember turkey is a large economy that is deeply pitted on things.g on the other hand, they had to

import oil, among other things. of ans a case overreaction. the currency has been oversold, i think. if the central bank does something, there has to be an that needs to come out of the system. it still remains an economy that is geared to exporting and has some strong fundamentals. nejra: in a crisis first blew up there was a lot of talk of contagion and fear around certain banks in europe. you expect the ecb to be on autopilot, but is there anything we might get beyond that that could move markets today? saker: the ecb is probably going

.o downgrade we are pulling back from the earnings ourselves. they cannot do much because a little bit like the bank of england, they will simply see what happens with the brexit negotiations. you are right to say there are led to turkish enterprise. it's not a huge problem yet but it is something we are watching. we will bring you the ecb policy decision at 12:45 p.m. u.k. time following president mario draghi's news conference 45 minutes later. will apple's iphone launches pay off? they lacked major dances but may appeal to more users. analysts have praised the apple

pricing strategy. emily chang reports from silicon valley. italy: a big day at apple headquarters in cupertino. hundreds of apple fans pouring into the theater from around the world, excited to see the unveiling of these new iphones. apple did unveil three new iphones, basically a cheaper version and upgrade to the iphone x and a big iphone x. the cheapest one will start at about $750. the middle phone about $1000. at $1100.e starts apple is really betting big on the idea of a family of iphones to reach a variety of customers and a variety of price points. keep in mind they still have the iphone 7 out there retailing in

before hundred dollars range. perhaps the biggest news was the -- retailing in the $400 range. the series for watch starting at $399. analysts and investors are excited about the health tracking features. an electric cardiogram on the watch got the thumbs up the american heart association. but the question is, can it continue to attract new customers who are skeptical about the watch? we all need a smart phone, but do we all need an apple watch? think it and analysts could be apple realizing the original vision of what the watch was supposed to be. it will take some weeks for the market to digest this but it will be interesting to watch how the products set apple up for the holiday season. italy chang, bloomberg,

cupertino. lower apple shares closed by 1.2% yesterday. turning to hurricane florence, it weakened on its course to the able tocourse but still threaten a huge swath of the carolina coastline. there's an estimate that three mean people will lose service in north and south carolina. north carolina is a countries leading producer of tobacco and hurricane florence could wreak havoc on freight networks. pathstand in the projected and could face disruptions. coming up, we can to -- continue our coverage the mark lehman

brothers and the consequences of the financial crisis. and the former italian prime minister joins us for exclusive interview at 10:30 a.m. u.k. time. this is bloomberg. ♪

bloombergt's get the business flash from dubai. >> another high-ranking finance executive at tesla is leaving the company. bloomberg has just learned the vice president of worldwide finance and operations's parting ways with electric carmaker. tesla representatives did not respond to requests for comment. the executive producer of 60 minutes has been fired in the latest fallout from sexual harassment ideations that have engulfed the network. the company said he is leaving

because he violated company policy and it is our commitment to uphold these policies at every level. it comes just days after ceo les moonves was forced out after the new yorker uncovered sources say more women came forward saying they were assaulted by him. to a special dividend bolster the french banks coffers for potential dealmaking by selling leasing and other business lines to a heritage group. contingent on any significant project that may arise by the closing up transaction. it would push up its common equities tier one ratio to 11%, allowing it to meet its capital targets. at your bloomberg business flash. nejra: thank you so much. this week marks 10 years since the collapse of lehman brothers.

the former deutsche bank ceo discusses the consequences of the meltdown. >> we had two or three on the global scale. important in investment banking. first,climate of america shouldn't europeans tried to change that into have one global investment bank? capital markets is going to dominate the future. othersare investing in are borrowing, not in the lending market going forward. u.s. originates mortgages but then they are moved to stay on equities.

secondly, we're on the road level. if you talk about leverage, there's no real comparison with the u.s. banks. of course there are starting to , and let me add one point, we are still operating in the credit environment. if it comes into a recession or , thenent credit market the banks will suffer a lot. you take the city of london out, where does that leave the european banking environment? >> we have to do everything in my view to somewhat create a single market and a european

market with the same regulatory moreonment, so we can have consolidation moves in the future. tot's the only way i see .ocus on domestic consolidation it's very challenging, given the integration in the market, unions and others are very much opposed to that. you just adding or into a competitive market and cross-border is probably a better solution. nejra: that was the former deutsche bank ceo speaking with bloomberg's guy johnson. have we learned the lessons from the financial crisis sufficiently to avoid the next one? saker: i think we've learned the lessons to avoid repeating the same crisis.

and stopep back looking at the particulars of the crisis, what went wrong? two things went wrong. first, there was the belief that the understanding was better than the previous generation. that --uestion the fact people thought they understood risk. the second point is that at the time, when you challenged the very british view of how we understood risk, this time it is different. there are some lessons -- is not going to be a banking crisis but there will be a crisis. nejra: we had an interview waserday and here is what

said. grace don't think we are in the midst of another bubble. you getlarify, when zero interest rates, you have a different type of debt crisis. you're more likely to have a depression. is similar to the 1935-1943. recession and financial crisis are not necessarily the same thing. will we see the recession first, and how soon, possibly? a time of u.s. is in growth, so we will not have a recession there. we're still not talking depression. there's no fear at that level. in europe, however, partly because of the rules surrounding -- because the growth hasn't been as strong, it would be hitting a roadblock, coming from outside the economic sphere.

that's why trade wars are so frightening and political uncertainty is so frightening. nejra: so what would cause the next crisis? something we cannot even imagine? saker: it could come from the political sphere. i worry more about what russia is doing and about the political aspirations of china. we are so dependent on with the hacking into the system, it gives you a glimpse of what could happen if people with malicious intent into the network of i.t., which controls all of our lives. that could cause a crisis. nejra: fascinating, thank you so much. theill continue conversation on bloomberg radio at 7:30 a.m. u.k. time.

later we will bring you more of our life lehman coverage with the former ceo of lehman brothers. he joins us at 11:00 a.m. u.k. time. this is bloomberg. ♪

nejra: good morning from bloomberg european headquarters. this is bloomberg daybreak europe and these are today's top stories. asian stacks -- stocks snapped the longest losing streak after the u.s. proposes talks. banks announceal rate decisions, economists predict a 325 basis points hike in turkey but no changes expected at the ecb and boe. apple launches its largest and most expect iphones but with now and your new features, willow price strategy whenever customers and investors?

-- will a priced energy win over customers and investors? centralart with our big bank decisions, matt miller is late in frankfurt for the ecb plus yousef gamal el-din standing by. let me start with you, in many ways this is judgment day for the turkish central bank. a historic day for the central bank, the pressure is on and it is a hard-line to walk because they have a credibilityaining and they have to salvage the growth that is less. the expectation is for a 3.25% rate hike but it is a wide range just theations, it is other thing to bear in mind is new data shows the stakes are higher. inflation at a 15 year high and you have economic growth slowing

in terms of the pace of expansion. last time around, central-bank in action sent shockwaves for the turkish lira and across emerging markets. we know mr. erdogan's influence. td securities say they will disappoint as usual. me bring you some making news before we get to matt miller.-- mar that is thing in line with estimates and year on year we are seeing 2% in line with estimates month on month 0.1% if we look at the number that is not eu harmonized. if we look at the ecb, no change expected in terms of the decision but what is in focus are the forecast for growth and inflation. matt: absolutely.

the ecb is expected to cut its forecast for growth while at the same time, trying to convince markets that it is still on a path to reduce asset purchases into the summer of next year and then start raising rates after that. -- all be difficult difficult argument to make. one of the things they will try productionke the steady which is still not terribly close to the 2% level and if you look at the core inflation what we are seeing in the core is not convincing that they can get to that 2% target level. at least if they hold their inflation forecasts steady it will be easier to convince markets it is the right move to reduce asset versus is from half to 15 billion and that is another plan they are expected to confirm. you so much,

keeping an eye on the two big central-bank decisions today. for markets today if we take a justat how we might open under an hour, we are past 7:00 a.m. and we have seen gains in asian equities, that seems to be on optimism we could have a move forward in the trade discussions between the u.s. and china. the msci asia-pacific index gaining after 10 days of losses. if we take a look at the futures picture we could see a little bit of weakness coming through. the ftse 100 teachers get flat but dax futures and cac 40 futures pointing a little lower. the euro unchanged on a 116 handle. if we switch up the boards and take a look at how the bond markets are looking, yesterday, the dollar was in play, we saw dollar weakness perhaps on some optimism about a move forward in the trade talks. looking at the bond markets, the 10 year treasury yield doing nothing in today's session. we are at 2.97% on the 10 year yield and that is reflected in

the futures. taking a look at bunds and o.a.t.'s, not a lot of movement as the cash market opens now. let's get the bloomberg first word news. eu is gambling on theresa may making concessions on the irish border issue after her party's annual conference next month. according to you diplomats officials are starting to redraft the language on the so-called irish backstop to pave the way for a brexit deal in november. the british side will he to make this -- concessions. the team has indicated they are ready to do so once the conservative hearty conferences out of the way. spain's foreign minister has said the push to seal an agreement over britain's departure from the eu would be held up by wrangling over the future of gibraltar. with more than 300,000 british citizens living in spain and spanish companies invested in the u.k., the country is exposed

to the risk of a no deal brexit. making the comments in an exclusive interview. click saving both parts are doing a big effort in order to rocke the risk that the could be the last rock on the road. tried living on gibraltar [indiscernible] the white house has proposed another round of trade talks with beijing to avoid further escalation and donald trump's trade war. blumberg has learned that a senior official led by treasury secretary steven mnuchin extended the invitation to counterparts in china. theyalks have agreed to -- are unlikely to take place in washington. rose, then asia development could ease tensions. bestcane florence who is delivering a rainy punch and threatening a huge swath of

coast land before making landfall. category three storm is forecast to deliver as much as 30 inches of rain and has the potential to trigger catastrophic flooding. it is expected to drive a 13 storm -- a storm surge that -- to towns that have been evacuated. you can find more stories on the bloomberg at top . nejra: let's check in on the markets in asia. a bit of risk on today. thed: as we head into latter part of the trading session at 2:00 p.m., and 4:00 p.m. in sydney. these markets are closed are entering the last few minutes of trade. there was the hint or invitation

to come back to the table and talk. it also shows how desperate we are. arguing for any good news in trade that we latch onto it. a very -- very quickly. generally a sea of green with the exception of a few weeks fox. honest really a you have the -- in australia, there is the element for what happened overnight on wall street where you had the drop in the u.s. dollar. that is a function of trade optimism and the week cpi data. when the dollar weakens and you get the yuan stable that tends to bring green across the strained -- a screens. -- across the screens. let's give you a sense of what is moving here in the region. oil in the mix up 2% for the group in asia. toyota talking about how they are now willing to share their hybrid card -- cars with some of

their partners in china and a quick look at the apple related shares as the company unveils three new iphones. and listing over in taiwan. david inglis in hong kong. we will it you brush off if you want to go and have a look at the iphones. driving the market most the u.s. has proposed another round of trade talks with beijing. that is the attempt to avoid a further escalation in the trade war with china. joining us now is our senior international editor jodi schneider. good to have you with us. do we have any details on these proposals for talks? jodi: not really. ,here has been an invitation people have talked to us and told us the secretary steven mnuchin made the invitation to chinese officials and they

accept the chinese officials say they will come, they will likely be in washington. this would be a fifth round of talks, there has been four rounds so far since spring training -- trying to lower the temperature on this emerging trade war. we have not seen much progress of late. last spring, there were serious talks that ended up in an president trump walked away from. we had some talks last month in washington but those were lower level talks, there was not any progress. there is a lot of optimism that may be such talks could lead to before another round of tariffs could take effect. president trump said days ago att he would be looking putting further tariffs on all the chinese imports to the u.s. and that he could do that pretty quickly if he sowed decided. this is in keeping with his negotiating strategy which is to lay tough and make some harsh

moves and step back and say let's talk some more. it looks like we are in the let's talk some more phase. nejra: talk about talks as well. thank you to our senior international editor jodi schneider for us in hong kong. markets today in asia and we saw it with the dollar yesterday focused on the development in the escalation or not of the trade war but it is a big day for central bank watchers starting with the boe decision, it is seen holding rates after hiking and august. the decision at midday u.k. time. the central bank is expected to hike but after stunning investors with no action in july, nothing is for certain. 45 minutes later the ecb makes its first policy announcement since the summer break. mario draghi and his team are said to be ready to lower forecasts for eurozone growth. great to have you with us. ecb andlk about the

turkey. turkey is the one that seems to have the power to move markets a little bit more. wide range in the bloomberg survey predicting a 325 paces point hike. -- basis point hike. how are the stakes, not to -- just delivering on expectations but exceeding them? ter monetary policy -- the big question that investors have is will the economy reduce some of the underlying imbalances that are causing some of those concerns that we have seen recently so the central bank is moving in that direction. it would be a step toward calming some of the europe -- they need to deliver. there is a big expectation. the hike could be enough

to calm investors but is that going to be enough if we get a hike from the central bank to address those imbalances you were referring to? they a to add a fiscal leg. there is a huge account deficit. which means they need to import a lot of capital. tot, ultimately they need accept the economy will slow a little bit and that will help calming some of the markets. punch response rather than just the central bank. nejra: what is the most interesting thing out of the ecb meeting, is it the forecasts for growth and inflation? the ecb cannot agree on what summer means. is already uncertainty there although i do not think they will change their forward guidance but growth is their biggest concern. if you look at their forecast, they were looking at the

slowdown in the first half of the year to be temporary and back [indiscernible] if you look at the recent data from yesterday, pretty poor industrial production. this is not the direction in which the economy seems to be evolving. that is a tough decision to make. they have been able to blame trade protectionism quite vaguely for the slowdown in growth but ultimately, they need to accept that there is more weakness and domestic demand as well, they happen willing to doest it before and that pose some risks in terms of their ability to hike rates in the future. that is what they will be discussing today, i think. is stayingo balboni with us. an update on some headlines, the first adjusted pretax down 98.8%.

john lewis first half revenue coming in at 5486. there's some argument that john lewis is getting squeezed by brexit and amazon. it is an employee owned company. the profit number perhaps not as key as with some other countries -- companies. we have other numbers from morrison. 8.8 billion pounds, a slight beat on the estimate of 8.4 billion pounds. a few retail numbers coming through. more from our life after lehman coverage, mervyn king shares his memories of the financial crisis. and an exclusive interview after 9:30 a.m. u.k. time this is bloomberg. ♪

nejra: this week marks the 10th anniversary of the collapse of lehman brothers. we have been speaking with key figures to look back on this historic event. theyn king discussed consequences of the financial crisis. irvin: we could have gone back to the repetition of that great depression of the 1930's. i think we would have taken action as we did take in late 2008 and early 2009 to try to offset the consequences of that but we would not have prevented it all together, it would have been a much deeper recession than the one we experienced. it was in essence potentially an enormous tail risk. what wenew exactly would have to do to prevent that

happening. which was to land a large amounts of money against collateral, against security provided by the banks to keep them afloat. it was not that we were facing tail risk but we did not know what to do about it. we did know and we did it. in many ways it was a rather straightforward thing to do. once you saw in our case the royal bank of scotland unable to get to the end of the day, our decision to lend money to it against a lot of the assets which they had was the right thing to do to prevent the british economy grinding to a halt. the money was repaid two or three months later. we -- with interest and we got all the money back. that action did help to prevent what would otherwise be an immediate collapse. the key policy difference, the thing that brought the banking collapse to an end was not just initially lending money to stave off an eminent disaster, it was trying to do with underlying

weakness of the banking system which was they had not issued enough equity capital to give confidence to the market. with the market to lend to them it was well for the central market to win two banks. we had to take steps to ensure everyone else had confidence in the banking system and that became known as the recapitalization of the banking system in which the private money or public money was put into banks to make sure they could absorb losses without imposing a risk to the various people who had lent to the banks themselves. >> you talk about the straightforward nature of that once it became apparent. here's a plan, here is what we will do. one of the things you spoke about at the time, you spoke a lot about moral hazard. and the creation of moral hazard through that process, do you with hindsight think that you would not have said that, do you

think that would not have been a focus, you bring up ben bernanke, he brings this up. you just have to get on with it at this point. >> once lehman brothers has failed you have to get on with you take anyd once public policy intervention you must ask yourself, how will the market respond? what will the banks do if we lend to them this money and you have to have some feeling for what their response is. the trouble is the words moral hazard have a technical meeting. if the government does anything or the bank of england does anything, how will people react? and if you do not think about that in advance can you make mistakes in the intervention you designed. i would not do anything differently. we do think through the consequences of what we would do and followed the precepts of insuring banks did not get money without paying an interest rate on it and we took security against the loans that we made. we did not give the money and we did not let them against no security. we took security for the loans that we made to them.

there has to be the right way to do it. otherwise banks have an incentive to get themselves into deep trouble knowing that they will be rescued in the end. the big lesson to me from all this is although banks today are safer than they were then, they are not safe. what we need to do is put in place a system in which banks have to provide the security to the central bank in advance of a crisis. that -- or so everyone knows the banks have got enough assets to provide security or collateral from the loans the central bank may have to make to them to do with the run on their deposits or in the case of 2008, a wholesale bank run on the financial system. nejra: that was former bank of england governor mervyn king. after a flurry of excitement that brought interest rates to

the highest since 2009, the bank of england is act in holding pattern. all 60 economist surveyed predicted they would leave the benchmark unchanged today. fe european economist at hsbc abio berboni is still here. could we get a unanimous vote to work today? is unusual to have a degree of unanimity for a rate hike. a couple of times it did happen before the financial crisis. in our view ultimately that reflects the huge degree of uncertainty that there is at the moment on where the u.k. economy is going with brexit and with many unforeseeable events in the future. themately as we do expect unanimity to kidney -- continue. the committee was clear about the degree of forward guidance

and that the market was a little bit too dovish and we do not expected to change but maybe there could be one or two surprises within the council. nejra: what kind? are looking for defections, that is where we would be looking. r centro cases it would be unanimous because everyone has made it clear they had an -- a hike in august. nejra: what about brexit, we have had positive news on the outcome of a potential deal, could that mean a slightly more hawkish tone to snake -- and to the signal? were expectingy already had a slightly hawkish tone. they haveation that to struggle to deliver those rate hikes in the future. we do not think that will change their view. exit brings about a huge question not just in the demand

side but the supply side of the economy which is difficult to resolve for the bank of england. much, thank you so european economist at hsbc joining us. we will bring you the bank of england's policy decision at 12:00 p.m. et time and after that we will bring you the policy decision at 12:45 p.m. u.k. time followed by mario draghi's news conference. matt miller is on the ground. let's get a check of the markets. i want to show you what is happening across some of these assets, your stoxx 50 futures have the jump in asian equities sounds.positive gaining after 10 days of losses but it looks like europe could open lower in 30 minutes time. italian yields worth watching. up four basis points, we had some reports that italy's finance minister is threatening to quit over the budget. whether that is moving yields is a question. we saw some dollar weakness moving intooney

emerging markets after the trade headlines studied -- a steadied on the bloomberg europe's -- index. the bloomberg open is -- european open is next. this is bloomberg. ♪ this isn't just any moving day.

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