pm johnson: parliament is on the brink of wrecking any deal we might be able to strike. alix: u.k. prime minister boris johnson gambled and lost as parliament votes to push back brexit. market versus central banks. recession signs mount. eric rosengren sees no immediate need to cut. incoming ecb chief christine lagarde says policy should not be guided by the market. carrie lam bows two processors -- bows to protesters. will it be enough to end the unrest? david: welcome to "bloomberg daybreak" on this wednesday, december 4. we also have a hurricane that won't go away. it is just parked there off the coast of florida right now. isx: i guess the better news that it is a not category 5 hitting florida. thes now i category 2, but winds are still incredibly

fierce. about 90 miles east of daytona is where it sits right now after really devastating the bahamas. david: i don't think we still understand the extent of it. it is really tragic what happened in the bahamas. there's a lot of rain and water coming. the storm surge they are worried about up and down the coast. alix: in the markets we are paying attention to the broader political sphere. 8/10 -- upres up by by 0.8%. the cable rate up over 1%. yields in the u.s. now up by three basis points. commodities, buy everything but the u.s. dollar. time now for the global exchange. joining us in hong kong is bloomberg's chief north asia correspondent stephen engle.

from outside westminster is bloomberg's anna edwards, and from new york is bloomberg's michael mckee. first we want to start with hong kong, where leader carrie lam announced the government will formerly -- will formally withdraw the extradition bill. m: the government will fully withdraw the bill in order to relay consent. alix: can we say the worst is over, stephen? stephen: absolutely not. in the last hour or so, we have been hearing from protest leaders. we have the pro-democracy lawmaker very harsh in her criticism of carrie lam, saying, "too little, too late from carrie lam." ,he was also quite colorful saying, "were you asleep the last three months?

you cannot put out the hurt in the fire in hong kong with a simple garden hose." she went on and on. we are just hearing from joshua wong, a high-profile protest leader from the rela movement five years ago. he is speaking -- from the umbrella movement five years ago. he is speaking from taiwan. "the protests will continue. hong kong people will never stop until hong kong is a place with democracy and freedom." right now, the initial reviews of carrie lam's speech from the protest group. david: thank you. now we want to go to brussels, where the incoming ecb president christine lagarde is being questioned by european lawmakers, signaling continuity with her predecessor mario draghi. >> the euro area economy faces some near-term risks, mainly , anded to external factors inflation remains persistently

too low, persistently and certainly below the objective. objective.e i therefore agree that highly accommodative policy is warranted for a prolonged period of time. david: let's go to our bloomberg correspondent. is this mario draghi 2.0, or is she differing at all? reporter: that is a very good point. indeed, christine lagarde is trying to stick very closely to the ecb playbook, saying that the ecb needs agility to act against too low inflation, and mentioned the fact that we have to stick with policy that is highly accommodative, as she said. to that extent, it sounds like mario draghi 2.0, but there were a couple of points where she was trying to differentiate herself.

first of all, she said we need to be mindful of the fact that there are some concerns about our negative rate policy. people are concerned, and we have to give those concerns in mind. that's one thing. tot's an important nod german criticism of the fact that the ecb policy has been a big issue here. said,cond thing is she and i think it got a lot of market attention, we should not be guided by markets. . we should try to understand markets, but our responsibility is for the people. nod towardsn a people in europe, but what she is essentially trying to save is that the ecb needs to guide its course with policy, and markets are important to that, but essentially, the economy is what is most important -- the economic situation is what is most import for the ecb.

is she is trying to raise the possibility of reviewing the monetary framework for the ecb, so clarifying the inflation target, which is now below but close to 2%. she says we should really make it clear what we mean by close to 2%. alix: thank you very much. now we want to head to westminster. the u.k. could be in for another brexit pushback and a potential for snap elections after boris johnson was defeated in the house of commons. no doubt, mr. speaker, this means that parliament is on the brink of wrecking any deal that we might be able to get. alix: joining us is anna edwards. lay out what happens in the next 12 hours. it's even difficult to

tell you what happens in the next 12 hours, such as the state of uncertainty and flux around u.k. politics, but this is how we think things will play out. we have prime minister's questions that have started in the house of commons behind me. then we have a spending review being sent out by the relatively new chancellor of the exchequer. the voteay, we see that was being built up to yesterday on whether to block no deal. it is what happens after that that is going to be of particular interest. if the government loses that vote on blocking the deal, will vote ontinue to bring a whether to hold a general election? they've already been told by the labor of the labour party and the leader of the liberal democrats that until there is legislation that passes, and that perhaps mean passing all of the houses, there won't be a general election because boris johnson can't call one all by himself. he needs 2/3 of mps to back him,

and that means relying on an opponents that won't back a general election unless they are sure that no deal is taken off the table. david: thank you for that report. back in the united states, federal reserve bank of boston president eric rosengren said the u.s. economy remains relatively strong despite heightened risk, saying in part, "if the consumer continues to spend and global conditions do not tear rate further, the economy is likely to continue -- conditions do not deteriorate further, the economy is likely to continue to grow, and no immediate policy action would be required." with us now is michael mckee. the fed is not entirely consistent, but the data aren't either. michael: the most interesting thing perhaps from rosengren, who is a voter this year, is the idea that if the data deteriorates -- and we saw bad ism numbers, and more data today on the trade war with the trade ,alance coming up this morning

and it is expected to improve a -- that is important because it affects the size of gdp. the problem for the fed is that it had gotten into this political dispute with the president over the trade balance , and he trade balance has actually gotten worse under donald trump. it is about $9 billion worse than when he came into office. alix: the other headline dealing with the fed today is former new york fed president bill dudley responded to his own op-ed last week, trying to clarify what he meant about the fed's relationship to politicians. suggesting was if the fed pushback, it would be able to achieve a better i atomic outcome -- a better economic outcome. i was not's adjusting that the fed should do so regardless of the consequences for the economy or that it should stand by and allow a recession. i was not trying to suggest that the fed to take sides on the

upcoming election." michael: a lot of people thought that bill dudley was suggesting the fed actively work against donald trump's reelection. he made it clear today that is not what he thinks, but he is afraid the fed has been unduly politicized by the president, and people who question whether they are cutting rates because the economy needs it or because the president once it, and that is an issue -- the president wants it, and that is an issue the fed should pushback on. alix: thank you very much. coming up, more on your morning trades and the analysis of the markets. this is bloomberg. ♪

david: we are watching jeremy

corbyn, the leader of the opposition labour party, asking prime ministers questions. now it is time for the bloomberg first take, where we give you the news and you get the trade analysis of the markets. here to discuss our gina martin , and, vincent cignarella jordan rochester, nomura ethics -- nomura fx strategist. on the pound in the u.k., explain the trade given what is going on in parliament. vincent: i think what we can see is a bit of a respite as it looks like things will be delayed one more time out to january. what will this accomplish, probably not a lot, if anything. i think the eu take is if we delay as long as possible, the people of the u.k. will become so fed up that eventually they will reverse the vote and remain, and this will all quietly go away. one of the rating agencies put out a report today, a little

dramatic,'s adjusting this could lead to the breakup of the united kingdom, that we would see referendums in scotland and actually even in ireland, and that the entire u.k. is just going to be so fed up and every what is going to go their separate ways. alix: didn't we already have one in scotland? vincent: yes, and they are putting together the potential for people to be so fed up that they call another. alix: this chart really made for you, jordan. if you come inside to bloomberg, it is the implied volatility of the pound, the argentine peso, and the mexican peso. talk to me. [applause] -- talk to me [laughter] -- talk to me. [laughter] jordan: but this chart is implying is a mixture of things. it is saying the pound is going to move.

we may have the eureka moment, which is, i know what brexit is. sell the pound. buy the pound. if you are a corporate, you are told is going to be a 50-50 chance of a no deal brexit and the pound is going to go down 10%. that's going to hurt the margins, so you've got to hedge yourself, so demand goes up and up. nobody wants to sell this stuff because it's a very liquid market the closer you get to know deal. if mps made their moves, if they delay it for january 31, that thing is going to collapse on the cliff because you push that date out again, but we have to bear in mind the election. we will have to think, what is the chance of jeremy corbyn? that's the next thing. brexit is a problem. a labour government is a problem for the markets as well. you are talking nationalization and high taxes. so you've got no deal on the left, corbyn on the right. what is your positive scenario? it is the bloomberg river -- it

is the liberal democrats in the middle. if there polling numbers shoot higher, that's the only shimmer of light at the end of the tunnel. if you've got a labour led government or the hard brexit tory party, it is pretty dim. weid: listening to jordan, have not narrowed the options at all. if anything, we've broadened them out. we don't even know when we will know. does that just mean you don't trade? you just sit on the sidelines? gina: i think you are seeing it reflected in u.k. stocks for sure. u.k. stocks didn't make new highs this year. u.s. stocks were the only safe haven traits that make new highs any summer months. . -- new highs in the summer months. it is interesting because the only thing the u.k. stocks have going for them is the deteriorating pound. economic surprises have been a

little bit better, but not great. expectations are already very low, and that has certainly helped a little bit as well, but the lower the pound goes, the better the prospects for some of the exporters and the giant companies within the u.k.. that is relatively elevated, so as you get more volatility and downdraft and the pound, you probably see u.k. stocks to ok. i think the worst scenario is you get a rally in the pound and u.k. stocks are still kind of stuck, and they lose their eminence. jordan: if you had a brexit alve back in 2018, you had global economy doing pretty well, expansion in the u.s., above trend in the euro zone. it is probably the worst time now. you have data in the u.k. excluding brexit. for me, it is kind of unclear how far it goes because if you've got a session in the u.s.

or the euro zone, the pound does not do well. problems in the u.k. are not going to help the european situation at all. people keep looking at the pound, and no one is looking at the euro over what that means for the european currency. have a hardou brexit, in the five days leading up to that, that's when i think that will work. say boris johnson goes for a no deal. the majority of their trade in their portfolio holdings is in the u.k.. see you are right. david: as christine lagarde decides she is going to take over the ecb, one of the things she said was interesting about the markets. this is what she said. de: the ecb needs to listen to and understand markets

. it need not be guided by markets, but it certainly needs to listen and understand. david: how do you listen to and understand the markets right now if you are christine lagarde? gina: i think the markets are telling you very clearly the deceleration and -- the deceleration in economic growth is the biggest problem for markets. i think it was really interesting that lagarde 22 fiscal policy as a potential haven, and certainly we need to lean on fiscal policy to some degree to elevate conditions in europe because monetary policy can't do anything. i think it is very clear she acknowledges a lot of the former ecb action has resulted in suppression of european banking activity. that is going to be the really big key going forward. does monetary policy impact rates and markets, and start to soothe the concerns of

the european banking sector, while also continuing to push back on fiscal policy makers who probably need to intervene to stabilize growth. trade policy is not going to be combated by monetary policy. it has created economic uncertainty that lower borrowing costs probably won't solve. alix: so how can the ecb not do anything? when i hear the fed officials switch back, i'm like, fair. you look at consumer confidence, fair growth. haven: expectations collapsed. they have to show they are willing to do something. already, rates are superlow. inflation is going to add very little. with the euro zone, it is not the supply of credit. foreign-exchange needs to keep going lower, despite heading higher today. the problems are so structural now, not just cyclical, that

they have this double slowdown, so weaker currency, lagarde's appointment, it seems like they want someone who would be able to unite the eu nations. she might be involving herself and that debate much more. when i talk to clients come of the two things that make euro-dollar go higher to the end of the year into next year is a big german fiscal stimulus, and if you do get it, it could be in green technology. the other thing would be massive stimulus from china. we seeing the credit impulse picking up. if that were to go into super positive territory, that it's your catalyst. but china is holding back. we've not seen that big bang for the time being, so this story probably continues. i'm trying to find a happy note here. sorry to be the bearer of bad news. [laughter] david: valeant try.

gina martin ash valeant -- valiant try. a reminder, you can find all of our charts by using gtv on your terminal. this is bloomberg. ♪

reporter: this is "bloomberg daybreak." its ipoill kick off roadshow as early as next week. bloomberg has learned the office rental company's meetings with companies will target a sales share of about $3 billion. ebay's ticket market place stub ab is drawing interest from number of potential buyers.

kkr and silver lake are considering bids. about $3ould fetch billion. ebay begin the sale process in recent weeks. tomorrow on "daybreak," we will talk to the founder of another big name in the ticket business at 8:40 new york time. that is your bloomberg business flash. alix: thank you so much. the other thing we are watching is former new york fed president bill dudley responding to his response in a bloomberg op-ed last week, where he talked a lot about the relationship between politics and the fed. he said, "i was adjusting the fed pushback, that it might be able to achieve a better economic outcome. i was nuts adjusting the fed should do so regardless of the upcoming election. i was not trying to suggest that the fed should take sides in the upcoming election." david: he tries to draw a line potential.wing that

alix: how do you say your actions will cause this to happen in the economy, therefore, we must react in this way, but we are not trying to choose sides in this election? david: but he did not back down over what he said initially. politicalt has consequences, and those affect the economy, and you have to take that into account. alix: i don't know if you can separate central banks from politics and a nor -- pump from politics anymore. coming up, we discuss opportunities with someone who's invested in argentina. this is bloomberg. ♪ devices are like doorways

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and if someone trys we'll let you know. xfi advanced security. if it's connected, it's protected. call, click, or visit a store today. feel like they're part of a team. my name is timothy chi and i'm the ceo of weddingwire. we're very proud customers of custom ink. we keep coming back to custom ink because of the quality of the product, the customer service, and the ease of use. that moment you walk in the office and people are wearing the same gear, you feel a sense of connectedness and belonging right away and our shirts from custom ink help bring us together. - [announcer] custom ink has hundreds of products to help you look and feel like a team. upload your logo or start your design today at customink.com alix: this is "bloomberg daybreak." you have a classic risk on rally. is it sustainable? s&p futures are up by 0.8

percent. yesterday it was about punishing cyclicals and building up defensives. today could be reversing that kind of trend. one of the out performers in new york is italian equities because it looks like italy will have its 66th government since world war ii. apparently it is good news for the equity market, and good news for the bond bulls. another the 10 year at record low, at 84 basis points. you just can't make that up. the curve is a little bit steeper out of inversion territory. are we going to be in a steepening environment as we unfold these central-bank events? the cable rate up by 1%. the next couple of months are going to be kind of crazy. david: i can't imagine why, given what we are watching in parliament right now. alix: i can't believe it is more volatile than emerging-market currencies.

david: data in the u.s. economy continues throughout the week with the trade members in about an hour from now. jobless claims and durable goods numbers tomorrow, and then u.s. jobs numbers are out on friday. through it all come of the u.s. dollar has remained stubbornly strong, particularly on a trade basis. still with us is jordan rochester of nomura. going back 25 years, we've never been this strong with the dollar against major trading partners. what is driving that? jordan: u.s. outperformance. other economies are steering from that. i think it boils down to, what are you going to buy? , tech? if you are long the dollar, you

earn interest rate. you burn that carry. if you are long on the euro, you needed to move because it is negative interest rate. the u.s. dollar is actually your safe haven when things are bad, and it is also acting like a when things are looking good as well. so when does the stress transmit it self to the u.s. and global economy? jordan: the u.s. has the least open economy, despite being a very large economy. your exports per gdpr among the lowest. when you have temps that move that felt like the way it did, you saw inflation go from 0% to 3%. for the u.s., it is a drag on

detroit having a stronger two.r, but not i agree with most of the people on the street, everything is slowing down. david: that was my point, to rain on the parade a little bit. ism numbers came in so disappointed in the u.s. yesterday. the white line is employment. over time, basically, does this give us a warning signal about what we might be expecting? bearn: the first thing to and nidec, about 15% of the .conomy is in banking so there is a way the markets react to this. you have the china slow down, three months later the european slow down, and you are now

that. the number yesterday, ironically, is where it should trough according to that analysis, because red pmi in china bounce back -- because you had pmi in china bounce back. is like 1998, if we have an insured midcycle rate adjustments, what we learned was positive ending where it is just a midcycle adjustment. for now, it keeps falling and falling. alix: supersmart. jordan rochester of nomura will be sticking with us. that strong dollar pressuring most emerging-market companies -- most past month emerging-market currencies over the past month, argentina the

most among those. joining us is hans humes, greylock capital management ceo. is this distressed enough for you to buy it? is yes.e short answer after the primary results most were quite a bit of a shock, the gap between alberto fernandez and mauricio macri. polls hadst of the him by two or 3%. sellings massive pressure by the market. bonds went from mid 70's dollar price to right now high 30. weif you are not assuming will get restructuring, it is certainly worth looking at. alix: why do you assume we won't

do broad-based restructuring? hans: the issue at this point is it is still arguably a liquidity issue. the imf stepped in. they've added a lot of debt by trying to support the economy but by most measures, this doesn't look like a solvency problem. it looks like an issue of having to reapply some of the maturities coming up in the next couple of years, and a lot of the pressure is in domestic debt. ,f the market can be reasonable if argentina can be reasonable and the transition can be smooth, this could work out in a way that argentina could resume growing. david: i think you put your finger exactly on the issue. we are not exactly sure who it is in argentina calling the .hots in the new regime

why would you agree to extend these maturities? hans: i think that's a critical point. the macri government, when i was down there, it looks like the transition could actually be smooth. macri wasinitially, in denial about the results of the election, and there was somewhat of a switch. i was there the first week after the primary. since then, it looks like he's trying to contest the election, which created a lot of turmoil because there's not going to be true this until december. i think what the market is looking for is a smooth transition passing the rains. in terms of the christine the fernandez risk, most people believe fernando albert has will be at the top of

the ticket. while the market was initially very concerned about cristina kirchner coming back income of the signal we have gotten from -- fromomic teen around the economic team around them is we don't want to waste the first two years of our administration in gauging and restructure with you guys. the damage in the last week came on behalf of the administration. alix: 100%. exactly what the market was afraid of. if you are looking at argentina and how to buy, what kind of duration? or if it is provincial debt that is less likely to default, regardless of the external threat? it's good to know.

we went through all the restructurings in argentina in 2004, 2005. we've been buyers of the .rovincial, of the sovereign you don't need to over think this. it is either a good investment or it is not at this point. iswhere you are in the curve whichf less relevant than bond is being forcibly sold. it is a tricky market. it has certainly been better the last couple of days, but i think you make an assessment that argentina is probably going to look at every opportunity, or hold off. hans humes, gray like capital management ceo, thank you for being with us today. still with us is jordan rochester of nomura.

index thatas an fx shows just how badly latin american foreign-exchange has done in recent years. is this going to turn around anytime soon? jordan: whether it takes total returns, there's always returns. because of the carried interest rate, there are opportunities, but i will stay out of argentina myself. alix: where you get kerry in -- where do you get carry in em? jordan: you have to try turkey, but you have to keep your wits about you. i think every em you get involved with, there will be .ome politics at play is the globalew

slowdown will mean em will continue to underperform more broadly. alix: did you feel like stimulus, fiscal comes to the rescue? we had the headline from a chinese tv said the government cuts.king for i think if you saw infrastructure bonds pickup i think if you saw infrastructure bonds pick up any big way, the s&p is still near the highs, so i think it needs more pain first for policy makers press those buttons. for: jordan, thank you being on set. speaking of latin america, tune in this friday for my special boom,""oil's next big

dealing with the potential for latin american growth when it comes to oil production, something that has been talked about a lot within the community, but has not been delivered. david: and a fair amount about argentina in that special, i daresay. reporting from down there was our own alix steele. -- more on its goldman's efforts to revive its trading. this is bloomberg. ♪

ritika: this is "bloomberg daybreak." coming up in the next hour, an exclusive interview with the eu trade commissioner.

this is "bloomberg daybreak." mark is --ail site's shmark is delaying its ipo until next year. it is a refill marketplace for secondhand, high-end clothing. at one point, the company hopes to go public this fall. starboard value has taken a box, a company that struggled to accelerate sales and become more profitable. star board has accumulated a 7.5% stake, according to a filing. the firm may seek charges and board memberships. a new court finding in the college admissions scandal shows the university of southern talked about

admissions decisions that were not -- they said were not influenced by money. a father faces charges in the scandal. i'm ritika gupta. that is your bloomberg business flash. alix: sure. that definitely was not taken into account. david: i wonder how many other things they discussed that had not been required. a familyeard from applying to one of those schools. i wasn't surprised by it come of it is still grossed me out. david: these schools have to get so much money in the door for endowment. where do you think they're going to get it from? school i am talking with, and they are so careful. they want to make there's no -- they want to make sure there's no information at all. we just want to know when to apply. alix: we turn now to wall street beat to cover three things wall street is buzzing about this

morning. first up, goldman sachs replacing marty chavez with an investment banking veteran. and gemini and i trust is hiring morgan stanley's financial crimes head as chief compliance officer. and ceo of the world's largest .overeign wealth fund says david: here to take us through hisdavid:'s son alec -- here to take us through it is bloomberg's sonali basak. trading atember, goldman is still more than 1/3 of revenue, so to have new to change the structure of the bank is going to be really interesting. alix: he was a tech guy, and that is the kind of person you wouldn't want. sonali: he was a tech guy.

he also started in the 1990's at j aaron, which is where blankfein and a lot of other banking executives rose up. the guy taking his spot is an investment banker that became the cohead of investment and king in 2017. so you see more bankers rising and traders looping out. piece there is a big in the new york times about him. sonali: he's not the only one to lead this division. cohn. all these people away at the top phase.ithout the next so what will he be doing? he will be teaching a class on how software ate finance. alix: fun. and it is like jamie dimon. eventually your talent is going to want to leave if you are not going to leave. david: let's get to the winkle

bus twins. osss is it -- to the winklev twins. -- the compliance guy fcc compliance guy has gone to a war of words with the winklevos s twins. . sonali: you see a lot of younger traders moving over to crypto exchanges, but this is somebody who's been at morgan stanley for 13 years. so a cruise is another that's been involved. john mack, too. david: these want approval from the sec, right? sonali: by the way, the winklevoss twins have also said compliance can hit the price -- can help the price of bitcoin. if you look on our rich go, you

can see on much they've appreciated from the price in their own network. alix: isn't that the longer-term story of if you are in college right now, you're not going to go be a banker? sonali: that's for sure. even those bankers who are leaving jobs on wall street right now are looking towards a technology community for taylor: --ifferent something different. alix: our third story is the ceo of norway's sovereign wealth fund speaking to john micklethwait. here's what he had to say. >> 3% real return is kind of what we have as a fiscal rule for the spending, but that will be challenging. all the worries we have with regard to markets, this is the one thing on top of our agenda. then he'seturn, but

like, 7% return. sonali: his neighbor couldn't hit 9% return in the year, and it was pretty sad. remember, they are thinking 7%. matching knowing that you barely hit 3%. they are buying more stocks while u.s. pensions are de-risking. david: we hear that the reaction is to buy more. that it is part of the yield. in terms of equities, they said they will move out of european equities and go into u.s. equities when we are already a hand toss away from record highs. sonali: what's depressing about the statement today is he's not the only one complaining about negative interest rates today, all week, all month. deutsche bank today also complaining about the negative

interest rate situation in europe and how that is going to punish not only banks, but the clients not willing to lend anymore, or to invest after they are able to borrow at a slow rate. bloomberg's sonali vasek, thank you. asak, thank you. big bet tobw's unseat portia. into and if you're jumping your car, tune into bloomberg --io unserious channel 119 , and ons xm channel 119 the bloomberg business app.

david: this is what i'm watching, a new car coming out from portia. they are about to announce one tomorrow, but this is electric. that's the important thing. it is an electric sports car that will cost $90,000.

you pointed this out, debuting in niagara falls, a chinese wind farm, and a solar site in wind ando catch water, fire. alix: it really gives tesla a run for its money. now you have a real carmaker making a real competitor in the market. one, it can charge really quickly, 62 miles in four minutes. and they are going to have charging stations at their dealerships, something tesla can't have because they don't have dealerships. these incremental things make a difference. david: people have said the model s from tesla is getting a twos, long and the and demand is going down for that. alix: on the one hand, it feels like the model three is trying to market to people like you and , which is morea

high-end. so where the first adoption and how could it all take place. doesn't it go real fast? david: really fast. the numbers are enormous. like 60 in under three seconds. coming up later today on "bloomberg markets," we hear from portia's cep. porsche's ceo. coming up, how to look at the trade data coming up at 8:30. this is bloomberg.

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daybreak" on this wednesday, september 4. alix: here's everything you need to know at this hour. hong kong's chief executive has made an about-face that may help ,ase several months of unrest withdrawing a bill that would allow extradition to china, but knows that is not enough. : it is obvious to many that this contentment extends far beyond the bill. it covers political, economic, and social issues. david: hurricane dorian is now threatening the u.s. east coast after wreaking havoc on the bahamas. the storm is lashing florida with wind and rain. dorian has been downgraded to a category two hurricane. pm johnson: u.k. prime minister boris johnson preparing for -- alix: u.k. prime minister boris johnson preparing

parliament as he prepares for a general election. david: and president trump's border wall. alix: in the markets, you are looking at a political relief rally. s&p futures holding onto their gains, up by 0.8 percent. reversing some of the losses you saw yesterday. in the currency market, a broadly weaker dollar story. the cable rate is jumping. euro-dollar higher, despite euro confidence continuing to sink. you see a record low yield over in italy, but otherwise you are seeing some yield continuing to move higher. british prime minister boris johnson -- david: british prime minister forrest johnson faces other -- british prime minister boris johnson prepares for another tough day in parliament. we welcome now megan greene, harvard kennedy school senior

kaiser.and howard could we end up in a world where he doesn't have a majority, but yes -- getget out get out -- get out? megan: yes. downn bring the government in the end, but i do think we are going to see a no deal brexit taken off the table. there's a question about whether you legislate not to have a no brexit exit and you also have a new election and go to the eu and say we need an extension, and the eu says we told you last time we would give you one extension, and that is about it. i think that's a bit of a risk, but especially if there's an election, you guys will be busy with your politics, so maybe would give you a bit more time. guest: i think last week,

investors said wait, i need to worry about brexit again? call me what it is two weeks away. alix: how about people onset? they have the same feeling. [laughter] guest: we had to do a bit of a refresher last week to remember what this is all about. political headlines are impossible to trade at this point, so most people are going to stay away until they have clarity on what the situation will be. alix: the issue to me is regardless of how this, brexit or no brexit, is the possibility of a jeremy corbyn government a real possibility now? labour labour --megan: is a possibility. we could get a corbyn government.

that being said, everyone is wondering whether a no deal brexit or a corbyn government is worse, and i don't know why people are making this choice. i think we could get both. if you had a no deal brexit, it would probably be a disaster. you would end up having an election, and corbyn would probably win. i think that is not the right framing. corbyn is clearly bad for business. he's got some arguably tro tsky -- some arguably trotsky-like policies. david: is there any resolution here that is good for business? not just from the british side, but also the eu side? they are trading partners. it is a major export market for the eu. alix: some kind of deal where the u.k. agrees to stay in the single market and customs union would be the best option. david: that's what labour has argued for. exactlyt's hard to know what labour is arguing for at

any point in time. they've done a lot of double speak. it is not clear they are willing to stay in the customs union or single market. that is the best option. i think it is pretty unlikely, unfortunately. i think as we are seeing with trade in the u.s., what is so bad for business is uncertainty around it. if there were a brexit and businesses could figure out what the rules of the game are, they could adapt to that. it is the endless limbo that's been really bad. in this's somewhat chart. volatility tops the argentinian peso and the mexican currency. how do you understand this? are we going to be able to say this is an idiosyncratic thing, or are developed markets going to start to keep pace with emerging-market currencies? stuart: i think you see the

volatility market accurately pricing the doublespeak megan mentioned. that is going to persistent a we have more resolution on this. obviously argentina is more volatile. the government basically collapsed there. but it is a smaller economy, and people read the u.k., a large trading partner of the u.s., so you are seeing that volatility carry premium. kind of attuned to this. they know what is going on. they know the outcomes are large. they are probably also a little callous to it at this point. they put a risk premium on it and say, call me on it later. would they have been better off on day one just getting out on whatever terms given where the global economy

was? if the global economy slows, it makes it that much more dangerous potentially for great britain. megan: they are reliant on exports to some degree for growth, so you could make an argument that if they just made a decision and made it happen by now, they would already be growing a little bit more. you would also have some kind of clarity on things like what happens to eu migrants living in the u.k. based on immigration and product of it he grows, this has been ., evenpoor in the u.k worse than in the rest of the developed world. . alix: let's pretend that the nightmare continues. what saves it? can fiscal policy, can resolution of a trade war, can anything be a positive catalyst that comes externally? stuart: for the u.k.? i think the best outcome is just certainty. let us know either way, and then the markets can price that and businesses can adjust whether they want to move workers or

change the way they manage their business. at this point, just give me some clarity. obviously there are good and bad kind iss, but any better than the uncertainty markets have faced over there. i need to move my headquarters to frankfurt or paris? can i leave it in the u.k.? these are major issues for your business in europe, so they just put a stick in the ground and you're just in the situation we are in. megan: although the u.k. is really hoping for a great trade deal with the u.s., i would say that hasn't gone too well for a lot of countries. david: it hasn't gone too well for any country. [laughter] megan: i was trying to be coy. but even if we knew the new rules, it is quite a lot for the u.k. to still negotiate. megan greene and store kaiser will be sticking with --

and stuart kaiser will be sticking with us. coming up, pressure from the markets doesn't mean the fed should cut next month, according to boston fed president eric rosengren. we will write that down next. this is bloomberg. ♪

alix: despite market pressure and mounting recession signals, the fed doesn't need to cut rates this month, according to eric rosengren, boston fed president. >> if they start slowing down the economy, we should react once we see it in the data. but i don't think we should anticipate that that is going to happen, so as long as we are growing around 2%, i don't see nearly as much of a need for taking immediate policy action. alix: still with us, megan

stuartof harvard and kaiser of ubs. this: finally, you had public admission that central banks can do a lot about anything these days. they have a really blunt tool to achieve a whole bunch of objectives, and when you are facing supply-side chocks,-- supply-side that doesn't do much. i don't think we are watching bubbles blow up because we are easing policy. i don't see that many indications we are getting massive asset bubbles. david: couldn't they do harm? particularly when you have the markets really expecting cuts. if they don't cut, you could actually drive the markets the wrong way and tighten financial conditions. stuart: i think that's true.

pushback. would markets have already responded to that. that is the market iserpretation, that the fed behind the curve. think economic data was reasonably solid. powell was not good enough consensus to cut rates 50 basis points because people are pretty company with how things have shaken out. i think the discussion of the ecb is moving in that direction. you've seen that probably the last month or so, particularly banks managers and pushing back against negative growth. in the u.s., we are priced for the next 12 months. in my view, it is going to be almost impossible for the fed to get ahead, so it just needs to communicate as clearly as possible and be pretty transparent. that's probably the best they can do, given the degree of

dovishness in the market. david: the ism numbers came out yesterday. let's put up that chart that shows an interesting relationship between employment and the ism numbers. the white number is the employment number. the blue line is the ism. over time, they seem to correlate a bit. megan: that is something to be worry about. we are almost certainly any manufacturing recession. we didn't get an a comic recession last time, so how can a manufacturing recession bleed over into an economic recession? it has to be through the u.s. consumer, given that consumption is so much of gdp. now anecdotally say they are not investing or hiring a lot because of uncertainty around trade, but they are also not pulling back. data suggests that maybe they are in contraction. that could translate through the labor market onto the consumer, and then we could see this bleed

through into an economic recession. lots of people say that employment data is backwards looking, and they are right, but it is also high-frequency data. so the employment data is a great indicator of whether we are in recession. there's a rolling average of unemployment for a couple of months in a row, and if you get a certain drop, you're probably in a recession. alix: is that i call to buy defensives and sell cyclicals? stuart: frankly, i think most people are there already. par withetty much on people back when mexico tariffs got people talking about recession fears. that's basically from the middle of july 2 middle of august. you had a large pullback in growth sensitive equities. we talked about this in the past, where even within cyclical sectors, you won the safest -- you own the safest stock you

can. if you look at hedge fund alpha, hedge funds outperform when the markets are trading off. they haven't been forced to delever portfolios, so i think what you have is already a pretty defensive positioning in the market. you could argue there's two puts out there. some folks expect trump to back andif the market sells off, whether you believe that or not, there are elements of the market putsbelieve there are two somewhere below where the market is today. alix: does europe have the put? what is interesting today, with christine lagarde coming on as ecb had, she talked about the market relationship with ecb policy. rde: the ecb needs to

listen to and understand markets. it need not be guided by markets, but it certainly needs to listen and understand. alix: does europe have a put? megan: it's a great question. i think what she is saying is marketsbvious, that provide useful signals, but central banks shouldn't let themselves be bullied by markets. growth looks so much worse in the euro zone then it does in the u.s., so the ecb has a lot to respond to that doesn't even consider what the markets are saying. david: what part of europe might have a put? she also said we need some fiscal help here. mario draghi was really early on as central banker saying that a little help here would be nice. i still don't think christine lagarde is going to get it. she's a fantastic politician. that's largely why she was chosen for this role come but -- for this role, but german

orthodox economics do not change. contacts in with my berlin, it sounds like stimulus won't be particularly big, and they are actually pretty restrained. alix: constrained by law. rt, if you're going to safety, do you have to be selling european and buying u.s.? stuart: i don't think you have to be selling european assets. one of the reasons they have done well is because they have a lack of sponsorship. gun to my head, i think i would rather be in the u.s. where you have the growth and you argue about should the fed cut rates irrefutablyfit from -- from a relatively stable growth area for not.

i don't see what the ecb is going to do in september to draw a lot of investors back in. from an investment perspective, if you tell me we are going to be negative rates, and we will be negative for the next three years because growth is so bad and uncertainty is so high, that doesn't give me a lot of confidence to put money at risk in europe. this is a conundrum the ecb is in. tot tool is also a signal investors that things are really precarious, so it is hard to get excited about taking more risk. of ubs andrt keiser megan greene of harvard will be staying with us. coming up, carrie lam backs down. the leader in hong kong formally withdraws the extradition bill. more on that next. this is bloomberg. ♪

david: a dramatic move in hong kong today when chief executive carrie lam announced she would withdraw a proposed extradition

weeks oftriggered 14 sometimes violent protests. stephen engle is reporting now from hong kong. this was a dramatic announcement. was it unexpected? stephen: well, it was long coming for sure, according to protesters demanding this from day one, when she said she would not formally withdraw this controversial extradition bill. ,nstead, she would suspend it but protesters were concerned because if she just suspended it, it could be revived in a future legislative session, which lasts until july of next year. they thought, once things calm down, perhaps it can be resurrected. today, and her words, was to fully allay public concerns. but she addressed the other four main demands of the protesters, but pretty much did not acquiesce to any of those

demands, including the setting up of an independent inquiry -- intot protesters say what protesters have said was aggressiveness by police. a pro-democracy lawmaker saying, "too little, too late." joshua wong, the umbrella movement five years ago, says the protests will continue. chan,r activist, andy says this is nothing but a ploy from carrie lam, and if protests continue, they can turn it around and say the protests have taken on a new form, and that is evolved into being anti-china, and that could be an excuse to bring out the suppressive force of possibly the chinese military. you can really see from those comments the level of distrust that has been built up by the protest community to the government here of carrie lam.

alix: thank you so much. stephen engle reporting for us there. megan greene of harvard and stuart kaiser of ubs are still with us. how does what we've seen in hong kong and the winning of the protesters feed into the trade narrative and the unrest globally? megan: i think you have to ask what exactly the protesters were protesting against. a lot of people said it was this broad idea of democracy, but i don't think it is actually true. part of it was the extradition bill. part of it is economics and hardship. i think that narrative is pretty global, actually. i think this madeley feeds through how china is going to react -- this mainly feedthrough into help china is going to into howfeed through china is going to react. that a lot of this is

about china showing its power and not backing down so that it can seem strong. the masterly, but also in the fight with the u.s. on trade. -- domestically, but also in the fight with the u.s. on trade. alix: how do you look at this and the theme of global unrest as a trader? stuart: it is very difficult. the theme of the last few years has been don't trust anything. bit uniqueas been a because the extradition obviously kicked us off. what it has become, we are not entirely sure. there's no clear leader that the government can negotiate with. from investment perspective, this can't go off the rails because of the potential knockout effects of their provinces within china. is pretty wellit contained. it is not going to be a major growth impact.

that has sort of been put aside in a box. there's a lot of political unrest, populist movements, things of that nature. ,hat can impact monetary policy it can disrupt trade. perspective, it can become a headwind. specific to hong kong, it is not clear how exactly that would affect the process. alix: stuart kaiser, thank you. megan greene will be staying with us. coming up, more on what to watch in cross-border deals with ubs' of industrial groups. this is bloomberg. ♪ ♪

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morning person. the leesa mattress is designed for every body. providing strong support, pressure relief and optimized airflow to keep you cool. hello bed of my dreams. order online, we'll build it, box it and ship it to your door - so you can try the leesa mattress at home. love it, or get a full refund. and rest assured, returns are free and easy. i love my leesa. today is gonna be great. find out why so many people love the leesa mattress, then try it in your own home. order now to get big savings - but only for a limited time. just go to leesa.com today. you need this bed. alix: this is "bloomberg daybreak." i am alix steel. we are seeing a political relief rally today. now we have to see if the data can operate. the relief rally we are seeing

the markets. if you're buying china equities, you are selling bonds and the u.s. dollar, with the exception of the 10-year gilts. you are also -- 10 year yield. you're also buying italy. yields down another 85 basis point for the 10 year. the trade balance dropping for july. a little bit wider than estimated, coming at -$54 billion. it did shrink sequentially from june but coming in at -$54 billion for the trade balance for july . david: less than june although the june numbers were revised. the one thing that is clear as far as president trump concerned about the trade deficit, it is not going in a good direction. , exportsorts fell .1% rose .6%. you had a truce in the tariff war.

it did not seem to do any good. the question is how distorted will these numbers be considering you have multiple tariffs now, october, december. david: still with us is megan greene of harvard kennedy school. how much should we be caring about this? megan: this is the one place where trade starts to be showing up. we are starting to see it in manufacturing and farm exports. it is not hitting the consumer yet. this trade data does suggest tariffs are having an impact. david: how much more tariffs yet to go into effect because we had some going to affect sunday but we have another round going in. megan: you should continue to see our trade deficit deteriorate. love yet bilateral trade deficits is economically illiterate, but as far as that will be a measure of success, it does not look good. you: if you -- david: if

look at global trade, it is going down. maybe the united states is contributing to that problem. megan: i think all of this uncertainty around trade is contributing to that. we saw a lot of trade pull forward as the u.s. started talking about imposing tariffs. that is a piece of it also global growth is slowing down. we are all growing above potential to begin with, so we should have expected it to slow down. that is not a warning sign that it does suggest growth will continue to slow. alix: i want to point out that in terms of the eu and the u.s., the next shoe to drop will be europe. eu was ait with the record $21 billion in july. an all-time high in imports. that will give president trump a lot of fodder when it comes to throwing it back at europe. megan: it does and germany will

be in the crosshairs. auto and agricultural tariffs be discussed. there was a survey asking the membership if they expected tariffs and i was shocked by how bearish they were. david: we do have a deadline, there was a 232 proceeding on the autos in your. they extended it 180 days, but as far as i can tell they have made no progress in negotiations. megan: we have been busy with china. there has not been a lot left over for europe. as we continue to see no progress in talks with china europe might be safer little bit , but as the election draws nearer president trump needs to feel like he gets a win so he might start focusing on europe. david: megan greene from harvard, great to have you with us. alix: we are now seeing the effect of the trade on dealmaking. m&a activity in the americas is up 3% but the asia-pacific

region and europe is seeing declines of 25% and 20%. joining us is bloombergs sonali vasek and charles otton. charles was one of the bankers who worked on the $40 billion china deal. charles, i want to take it off with a broad stroke. can we expect to see m&a levels in these regions continue to decline? charles: i fear so. alix: is that a trade war symptom or is there something else going on? charles: there are a lot of factors. there is this political overlay having a chilling effect on m&a, mostly in europe and aipac in terms of their ability to compete in the u.s. markets. if you look at those u.s. volumes, most of that is domestic m&a. we are seeing the emergence of

large-cap, very large deals getting done, sometimes poorly received, sometimes well-received. most of them are domestic to domestic. deals 28 large elephant over $10 billion. of those, 25 have been domestic to domestic. even of those three, one of them is canadian. we have a shy corporate america about entertaining a bid from the european. sonali: if the u.s. is the only market up on m&a, how sustainable is that? do you think they will keep propping up the m&a market? charles: we see a lot of money on the sidelines. a lot of money with private equity. long-term investors have raised a lot of money and have easy access to capital. we have very cheap money available and i think most commentators expect that to get cheaper. we see money available, we see

multiples creeping up, we have seen deals done in the , creeping up to 13 times or 14 times the current environment. that means we are seeing people stretch for deals because there's a lot of money available. not necessarily being is well-received because there is a sense we are slowing down from a growth perspective. people are trying to chase growth. we are not sure markets are giving them the benefit of the doubt. sonali: we are also seeing $30 billion of debt raised by american companies just yesterday. how are investors perceiving that? are they putting that money to work for m&a or are we hitting the end of the road? charles: it feels like people are raising money because it is available. raising money because they need to be aware of what they may be getting into at the end of the year. it feels a little defensive. clearly people will pick up

dislocated opportunities where they can, but we do have the drumbeat of share buyback rather than m&a, and that is resonating in a corporate boardroom. people have been opportunistic with respect to the financing markets, but very circumstance -- very circumstance -- very circumspect about what m&a can pull the trigger on. alix: -- charles: it is tough to see that in this environment. that was a chinese buyer for what was a swiss asset. we see the chinese buyer cautious for their own reasons and aware of the dynamic about stepping into any sort of large situation. it was a $40 billion deal. we advised on that. it was tough to see a chinese buyer stretching that way and being well-received. sonali: what about capital raising? we see these hong kong companies listing in hong kong. how much do they want to list in

the u.s. versus hong kong? charles: we were seeing large chinese companies seeing the deepest capital market in the world as a very attractive place to raise money. prepared to except some of the corporate governance environment and regulations. now we see that dial itself back. some of the capital raisings have been done closer to home. not sure we can talk specifically about hong kong being the ideal place, but it is the case that the regular through put of chinese companies to our offices and many others looking to raise money on the new york orchid or in the new york -- in the new york market or in the new york market has gotten back. sonali: what would bring chinese money back into america? charles: may a change in environment? i'm not qualified to talk too much about that.

if there was a little bit of stability, a little bit of quiet noise about tariffs, that would affect people. i do not think anyone has any doubts over the attractiveness of the market compared with the european or the asian market and the domestic to domestic nature of the m&a market which is keeping the volumes up is evidence people do believe about buying into corporate america. it is not stopping you and banks like you from entering china in a bigger way, it is just opening up the financial system even more. charles: we have a very strong domestic chinese business, but we see a lot of that being domestic china and the same way are domestic u.s. business is becoming more domestic. alix: where is the activity? charles: large-scale u.s. domestic to domestic m&a. alix: does that continue? charles: i think it does. you will see some form of

dislocation, you will see some market activity in the debt capital markets, you see people raising money to buy stuff if they can, or if they cannot they will be buying shares and waiting. alix: charles otton, thank you very much. bloombergs and alibaba, thank -- bloomberg sonali bostic, we thank you as well. david: now let's turn to riddick a group with first word news. ka: carrie lam has formally withdrawn just like in to allow extradition to china. she also announced an independent study of the government's performance. that may not be enough to end the demonstrations. withdrawing the bill was just one of the protesters five formal demands. rain and wind from hurricane dorian are lashing florida today. forecasters say the storm could make landfall in georgia or the carolinas.

dorian has been downgraded to a category 2. while it's wind speeds have fallen, it is growing in size. hurricane force winds are extending 60 miles from the eye. in the bahamas, the hurricane left many islands devastated and killed at least seven people. the u.s. and china trade war has claimed a casualty in the asian bond market. the financing arm of south -- pricing did meet the automakers expectations hyundai says it will keep monitoring the market. 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. i am ritika gupta. this is bloomberg. david: thanks so much. coming up, the eu's trading relationships. we will have an exclusive interview with the eu's trade commissioner. alix: bloomberg users can interact with the charts used route the show on gtv --

used throughout the show on gtv . this is bloomberg. ♪

ritika: this is "number daybreak. -- this is "bloomberg daybreak." this is bloomberg daybreak. chrysler is pulling its fiat 500 minicar off the u.s. market. it will quit making the 500 and the electric 500 e hatchbacks in north america. it is the automakers latest move to curb exposure to a shrinking car market. fiat chrysler will focus on its more profitable vehicles such as

jeep, suv's, and ram truck. interest fromwing a number of potential buyers including arrival and private equity firm. bloomberg has learned that vivid seats and buyout firms kkr and silverlight are considering this. stubhub could fetch $3 billion. ebay began the sale process in recent weeks. in pro football, the star running back from the dallas cowboys has ended his contract holdout. he has agreed to a six-year contract reportedly worth $90 million. coming up later, we will talk with the dallas cowboys owner. that is at 10:10 new york time on bloomberg tv. that is your bloomberg business flash. much.thanks so

. david: you are cowboys fan so i'm clear you are breathing a sigh of relief. alix: is this a football? david: it is football. lead.or follow the today we focus on european trade with looming issues with united states and united kingdom. we welcome the person responsible for european trade issues. she is commissioner cecilia malmstrom. good to have you with us. cecilia: thank you. about u.s.s talk european trade relations. there has been talk about a negotiation of a free-trade agreement. there been people assigned to that task. madeny progress been toward an agreement? cecilia: we are talking two tracks. one is a limited trade agreement focusing on industrial goods. that has not advanced so much yet. the other track is a focus on

regulatory corporations, standards, and so on, and there we are advancing to see if we can facilitate access to each other's markets by recognizing some of the standards and regulatory procedures. david: this comes against a backdrop as a section 232 proceeding in the united states where there is a finding on european auto imports that has been delayed by 180 days. it comes up in the middle of november. is there any prospect that will be extended? we hope that it will be extended because we think it is not based on facts. the european union and are exports of cars or carports to the u.s. are not a security threat to the u.s. based on normal trade. we disagree with the findings of the report and hope we can focus on a common positive agenda to facilitate trade between us and

also other trade obstacles in china and other threat, reforming the wto and so on. david: one of the issues is agriculture. the united states wants to have agriculture on the table. is that on the agenda at all? are you willing to talk about agriculture? cecilia: in order to negotiate the trade agreement, the commissioner who does that for the member states, we need to have a mandate where all of the member states agree. for a moment, there is no agreement to have agriculture in such negotiations. that is why we say let's focus on industrial goods. supportw, there is no for agriculture to be included. i cannot negotiate that. david: this comes at a challenging time for europe as well as around the world. europe is having challenges on growth.

we can look at statistics that indicate a lot of european growth has come from trade. trade is terribly important to europe. how much put -- how much pressure does that put on you to come to terms with the u.s. to make sure there's no disruption on that trade? cecilia: we trade with each other every second. the eu and the u.s. are the biggest trading our nurse. -- trading partners. there are still obstacles so we think we should focus on facilitating and making it cheaper. we are negotiating trade agreements with other countries, singaporepan, mexico, , negotiating with australia and new zealand because trade is important for the eu and we think trade agreements are good and they can be anchored in the international rules and they can be mutually beneficial for our people and our companies. david: an important part of the

trade has to do with aircraft. there has been a dispute between airbus and boeing. do you expect a settlement of that dispute? cecilia: it would be good. it is a very old conflict. -- even if we are formally entitled to put tariffs on each other, we think it is better to talk. we put the moratorium, we try to find out how to deal with this in the future and also focus on industrial subsidies because the problem today is more china, and we should find common approach vis-a-vis china and not increase tariffs from each other. we have been calling for the u.s. for a settlement and a discussion. a fair amounthas of exports to great britain. we are watching this play out in parliament in london. where are you? where is the european union and

negotiating trade deals for the eventuality that the u.k. leaves the common market? if the u.k. leaves, with or without a deal, the u.k. is a friend and a partner at ally. we will continue to cooperate and continue to trade. until we know the conditions in which they are leaving, which is subject to debate internally in london right now, we cannot start negotiating. once they have left, we will sit together and negotiate a trade agreement. it could take some time. david: what happens to the trade in that interim period, between the time they leave and when we know what the rules are? what will happen in terms of disruption of export, particularly from europe into the u.k.? cecilia: that is a question you have to put the london. we have offered a transition period where they leave but they

stay in the internal market for a time, and at that time we continue to trade with each other on the current basis and we negotiate a future trade agreement. brexit,leave in a hard meeting new deal, the 31st of october, that means u.k. becomes its own country and we will trade under the rules of wto. that will make it more complicated and more expensive. that is why we would like them to leave under a deal. that is a decision that has to be made in london. david: are there any discussions between your organization, particularly the trade commission, and the u.k. on the possibility of a hard brexit and how that would be handled? or are there no discussions at all? cecilia: the chief negotiator for the eu representing all of the 27 countries is always open for talks. there is an agreement. if mr. johnson and the british government want to change that,

he has to come up with proposals. the door is always open. right now, they are meeting, they are talking. we need to see hard proposals from the u.k. on how to avoid a hard brexit. david: thank you very much for your time. that is eu trade commissioner cecilia malmstrom coming to us from brussels. also in brussels, will be talking to the former ecb president at 11:00 this morning new york time. alix: coming up, apples return. the tech giant joins the rush to the high-grade bond market. more on what i'm watching, next. if you're jumping in your car, tuned to bloomberg radio at sirius xm channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: here is what i am watching. apple in the bond market. apple is returning to the bond market for the first time in two years.

it has $200 billion in cash equivalent, but costs are so low why not raise cash? they will issue a 30 year security that could yield 125 basis points above treasuries. this comes on yesterday when you had 21 deals, the highest deal offering of the entire year. disney was able to get a 30 year for 95 basis once. david: the price is right. alix: that came down 20 basis points. that sums it up, you have apple, you have growth, you have the bond market. that does it for us. coming up on the open, matt hornbach will be joining jonathan ferro. this is bloomberg. ♪

jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, sentiment getting a lift as hong kong's leader withdraws the controversial extradition bill. parliament moving to stop and no deal brexit. prime minister johnson looking for a general election. a slow down hitting america. fed president jim bullard saying he is open to another rate cut. here is your wednesday morning price action. futures with a nice lift. positive .9%. the dollar weaker against g10, the euro firmer to 1.1017. treasuries with a lift. yields up three basis points. the curve steeper. let's begin with the bait issue. easing tensions giving sentiment a temporary lift. prompted, events have and risk on mount.