>> good morning from berlin, this is bloomberg "daybreak: europe". these are today's top stories. no rush, the pboc governor says the central bank is not about to roll out massive stimulus. james bullard says more easy might be needed over the fed. president trump will address the u.n. general assembly today as rupp joins the united states and blame iran for last week's saudi attack. court will a verdict rule on the legality of boris johnson's dissension of parliament. will be live on the ground.

>> good morning, from berlin i am pretty impressed that allany, france, and u.k. band together with such an explicit statement blaming iran for the attacks on saudi arabia. >> absolutely, the geopolitics is something we will focus on in this hour. a really interesting story on the bloomberg today talking about how central bankers are getting more concerned about the impacts on growth or climate change, another theme with the yuan general assembly getting underway. speaking of growth, what a painful set of pmi did yesterday impacting markets. >> absolutely, especially here in germany we have a rating of 41.1 on the manufacturing pmi, the lowest level in at least one

decade and we are going to get the business confidence numbers out in just a few hours from now, throughout from now. definitely something to pay attention to appear let's take a look at what stocks are doing now. we do not have real red arrows across asia. in fact for the most part you can see the msci here is up .1% for asian stocks. we do have bigger gains concentrated in china than we do anywhere else in europe. japan opening up today for the first day the week after holiday yesterday. s&p futures are trading higher see a3% so you could positive start for trade this morning in the u.s. when that market gets underway and eight and a half hours. the dollar index is gaining a little bit of strength, after losing some yesterday. .12 as11 is -- 11211 investors slowly walking to the

greenback. >> and that headline breaking about china giving new waivers for terror free u.s. soybean purchases you wonder if that is going to affect the risk appetite per looking at the 10 year treasury yield yesterday we moved around down and up, in the end we ended up steady and we move down to basis points today, 171 handle print is more and bond markets rather than could market you are seeing that concern around global growth reflected. you sought reflected in the euro yesterday following data out of germany and france. we stay below 110 steady after two days of decline. 1.0990 and saudi ronco saying it is restoring most refineries to full capacity. -- saudi aramco. >> let's get to the federal reserve, near president john williams says last week's turmoil in money markets raises questions about the appropriate level of vanke reserves. theank reserves in financial system. he says it is important we

examine these recent martin die -- market dynamics and the indications for liquidity in relation to the overall amount of reserves at the fed. -- implications for liquidity. , williamn he replaced dudley say -- says fed officials will probably consider a new tool to contain short-term rates. he also touched on his converse op-ed last month where he suggested the fed reject rate cuts that would help president trump's prospects for reelection in 2020. what i said to be precise, one could, if you accept the notion that the fed's goals are to maximal -- maximum sustainable profit builder of the long-term and one accept the premise that this trade war it might not be good for the economic outlook, then logic would say there's a question about show the fed take this into consideration? at the end of the day, i made clear in the second piece i wrote that i do not think fed

should take this into consideration in setting policy. if the fed were to do that, they would become politicized and people would react by reducing independence of the fed. >> you think the fed has already become politicized? >> it has because of the presidents attacks on the fed. those in academic piece that came out of the last 72 hours i saw this morning. ofy lead to the study >> the effect the president. >> the effect of the presidents tweets on the federal funds markets. the tweets were causing people to reduce their expectation about the federal funds market. it is already politicized in the sense that people are not sure now, if the fed is easing because that is the appropriate policy path or because of pressure from the president. station islitical to not coming from the fed it is coming for the president. politicization is not coming from the fed but the president. saying the fedso

may need to ease monetary policy further to reduce risk. amid concerns in the manufacturing center with activity jumping to a five-month high in september according to reading from ihs market. running is now the head of global asset allocation, great to have you with us. that ihs data was light in a gloomy day in terms of global pmi. of bond -- are bond markets still to aggressively priced in terms of expectation for fed rate cuts? >> there are two ways to read your question. one is the totality, the total amount of rate cuts by the end of next year. on this, not necessarily. what we are talking really about is the second wave reading is how do you split 2019 and 2020. for the rest of the air, if you have let's say from july, you had some stabilization then u.s. economy after slowdown, we were to confirm that we are

stabilizing are better as you are mentioning, in september, then will be more 2020 unless 2019. so we are more working on the split between how much of the rate cut we expect quite a big number of rate cuts by the end of next year. but it is more moving toward 2020 than this year. >> without a lot of fed official coming out talking about the repo issues last week, assuring markets that everything is ok. really even with the size of liquidity that is the concentration they worry about job and think about the repo rates to 10% last week? this is a separate problem and one of how do you loosen the monetary policy, do you have the supported to avoid to earlier recession? here we are talking money market conditions and the lack, the

obvious lack of liquidity in u.s. money markets. for this, the fed has reacted quite late. but the responded when they understood there was a lack of liquidity supporting u.s. dollar. if you raise the level of ust which he did in the last week or so, it is supporting the usda against all types of currency temporarily. but this opens the door for earlier than previously [--]ipated so his lack of liquidity that the fed should qe, we pumping into the economy, we do not of the speed but should be earlier than excitation's. >> it is interesting you call it the restart of qe. other strategists have said whatever you do, do not call it qe. that this is an organic growth to the balance sheet and that is the distinctive. the way the fed could make the distinctness by buying short-term bills. is that what it should do or is a better to come out and say

this qe are qe like echo > >> the two. zero or the three. zero, we are talking extremely technical matters relative to u.s. and the balance sheet is stress and the short term. we all of backed that at the end of this year more stress than at the end of q3. so we are preparing in the central bank were prepared to avoid further disruptions in the money market rate on this, there will be technicalities, probably more light than full-blown qe. which could or will have had -- happen whenever the u.s. economy finally enters recession. >> although even without that happening, even if you do not want to come talk call it quantitative easing, wells fargo estimates the fed is going to out another $2 trillion to its balance sheet of the next decade and has got to anyway, replace mortgage bond holdings as they mature. you expect us to weigh on 10

year yield? if we are looking at 10 year view, whenever the u.s. goes into recession, it will happen, we have already delayed three times i think in the last two aars, what was to be recession by few features, when we go into this we will need to highlight the speed between the monetary policy in between going respond ofo rate and qe and the fiscal policy. this is the mix of the two, which will give us the total quantity of qe. in other words, if we were to use intensively the fiscal policy to come after the recession, there's less of a need for monetary policy. so that is obviously in between the federal reserve which is the and if anybody, and the people in washington coming thick of fosco policy and the presidency, and we will be dealing with the policy mix.

so on here for now it is too early to say what is the mix we are going to have because we do not know yet the nature and the amplitude of the recession. >> he recently recommended reducing exposure to bonds in the u.s.. can you talk more about that recordation. the power of the curve and how much would you recommend reducing? >> i do not regret because we printed three weeks ago. the heart of the proposal we had of not the tightening monetary policy anticipation was much too aggressive for the next quarter or so in a five-year view. and that deserved a reduction in duration. reducing the duration not to saly the exposure. definitely too aggressive in monetary anticipation for the fed and ecb. deserved that reduction. it is mainly on the treasury. as we have divided by two the level of interest rates at the

tenure for example in the last six month or so. -- at the 10-year for example in the last six months or so. we are living that now. right now we're going to get to the bloomberg first word news and hong kong. >> and the u.k. the prime minister is urging european leaders to recognize that he has compromised on brexit. boris johnson is peeling for them to meet him halfway on a divorce to print both sides say break fors are make a securing of an agreement by the brexit deadline for the prime ministers also icing for the spring court decision on his suspension of parliament. that is due at 10:30 a.m. u.k. time. notident trump says he did ask that ukraine leader to investigate joe biden in exchange for military aid. but we've learned that trump delayed former under million dollars in aid to the nation.

that at least a week before he spoke to the country's president print that phone call is a subject of a congressional investigation. the whistle lowers who flagged concerned has remained unidentified. china must avoid massive stimulus and keep debt levels sustainable. that is according to central bank governor egon. speaking at a news conference in beijing, the pboc chief said overall financial risks are contained. china's growth is on pace for the slowest expansion in 30 year spread industrial production august rising at the slowest thing a month pace since 2002. and president trump made a short unexpected appearance at the u.n. climate change summit in york. where leaders and business chiefs are discussing how to tackle climate change. that is as public anger grows is lack of action. teenage activists greta bloomberg telling the summit that ignored the issue for fall two long. -- that they have ignored the issue for far too long. >> you have stolen my childhood

with your empty words. yes, i'm one of the lucky ones. people are suffering people are dying. entire ecosystems are collapsing. we are in the beginning of a mess extinction. and all you can talk about is the money. and fairytales of eternal economic growth. how dare you. [applause] global news 24 hours a day and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. >> thank. coming up, the main event, president trump will address the u.n. assembly today as europe joins the united states and blaming iran for last week's saudi attack. inplus the biggest names business and government will gather this week for the annual bloomberg global business farm in york. we will hear from the likes of

teddy diamond, david solomon and christina lagarde. this is bloomberg. ♪

matt: this is bloomberg daybreak: europe. i'm matt miller in berlin. nejra: i'm in london.

and in singapore. afterte: resuming trade the long weekend but in japan. his higher by 1%. is zone been the red once during 12 sessions. we did have weak a little week data out of japan with soft pno -- pmi data for september. and the boj intending by units 15 years on after cutting its longer dated purchases friday. we also have the commentary from the pboc saying risks are contained. hong kong's market in the black for the first time in seven sessions. also watching the aussie ahead of a speech from a governor philip lowe in northern new south wales later today. that could put downside pressure on the aussie u.s. dollar if he starts talking about potential for further rate cuts from the rpm. at what we heard from the pboc's speaker that china's about to embark on an aggressive

easing cycle. this chart shows since the global financial crisis we have seen that you're on return for global stocks track the credit impulse you see from china. dashing those hopes could be a little bit of bad news for global investors, because that suggest the path forward may not continue on the same path. it could be less encouraging for global investors. thank you for that look at asian markets. the bloomberg business flash now and hong kong. ab invev raising $5 billion in its asian units after pricing the offering a 27 hong kong dollars. the ipo was a major boost to hong kong at a time when the city's beast set by ongoing protests. joining in budweiser bring is expected to starts some temer 30. deutsche bank top investors are approaching up a trust

perspective chairman. stakeholders and qatar are taking a step as patient runs out with the current chairman per they're also debating if they should try to force him out before his term ends in 2022. no comment from deutsche bank or qatar. credit suisse moving to contain a scandal of the former executive being followed. the board starting and inquiringly into the surveillance of its former top private banker. he defected to ubs. the drama spilled into the open when the investigators attempted to grab his mobile phone. credit suisse chairman and chief executive saying in an internal memo, the truth will emerge. that is your bloomberg business flash. so much.anks now iran's k european partners are fighting with the u.s., in blaming tehran for the strikes, saudi oil facility. france, germany and the u.k. have said quote no other excellent nations possible. the european nation also called for an expanded nuclear agreement.

details on the gulf tensions. >> the showdown between the united states and iran moves to manhattan this week. as to how to world leaders and thousands of diplomats gather in york city for the u.n. general assembly. today president drama donald trump speaks in his running counterpart behind it may be front and center. iran has second row seats although rouhani and its about sharif could avoid this emily or leave before trump takes debt just could avoid this, or lay before trump takes to put impaired tomorrow rouhani has a chance to respond. talk about historic summit between the two has died, but friends of both the administration's will attempt to shuffle back and forth -- to shuttle back and forth to broker-deal that at the very least lowers risk of conflict. this has been a key goal for france's emmanuel macron who on his way to new york said both protagonists are there. something may happen. it might be more difficult now given iran's key european allies are blaming tehran for the

strikes on saudi oil facilities. there also a few high-profile no-shows. probably the second time in a decade, is israeli prime minister benjamin netanyahu will .ot address the assembly known for his colorful and combative speeches, last week's election has put a dark cloud of risk, a future. he is surprising of the no-shows alongside russia's president vladimir putin at chennai's president xi jinping. much.thanks very talk about the u.n. meeting. the head of global asset allocation at societe generale still with us. let me ask you first what you think about your cold risk, especially considering the situation we see happening surrounding iran and the attacks on saudi arabia. is it preston? -- is it priced in? >> when we learn about the big jump in the

oil price. this could be something much bigger. at this stage what we know is that u.s. president does not want to launch a formal war against your own. his using more the weapons of -- economicd cannot diplomacy. a financial boycott against russian -- against iran go deeper than previous they. that is important. the switch from economic diplomacy into four that would send the oil price probably up over a hundred dollars a barrel. here the fact that president trump has at least at this stage formally prevented to launch a four, is something reassuring. not to destabilize the level economy and the u.s. economy because the oil price go to the roof. though here there is a barrier which is due launch a full war economic it is only

diplomacy that should be reassuring for the global economy. >> how should investors get oil exposure or not in a port folio? >> at this stage we know the oil discretion is between the two protagonists as the french president was talking, of the imaginations -- the machinations. on the tendency if we avoid war, for with military action, that remains to be, you can switch into it. but i would go away but the one thing we like is the equity oil sector because you have a 5% dividend yield and the global oil sector is particularly attractive. its value. you have marcy sure dividends if the oil prices would get higher than we thought before. so the dividend streams are good . some buyback preview have a few oil linked commodities like the russian global which can be

extremely attractive with real yields on bonds in russia which are very attractive. submenusare subways, of oil, not necessarily directly onto the oil price which is very volatile heard the equity oil sector and a few commodity linked currencies like the ruble may be the canadian dollar was can be attractive. coming up, the biggest names in business and government will gather this week for the annual bloomberg global business farm in new york. we will hear from top bank executives, world leaders and policymakers including jamie dimon, david solomon and narendra modi and christine lagarde. and when you're traveling to work tune into blumer greater live on your mobile device or on -- tuning to bloomberg on your mobile device or digital. this is bloomberg. ♪

nejra: this is bloomberg dave eric europe. -- bloomberg "daybreak: europe". matt: joining us now from mumbai , india and stocks are still high.g around a two month today's session looks muted. are the gains finally set to ?tall yucca -- to stall whereer the last two days the benchmark index gained index to 9% and the bank gained closely to 50%, we would

expect consolidations after such heavy moves. the indexes lost ground on the nifty 50 but we still close at 11,500 which is a support level. this is the expert he week for the series of september so you're going to be closely watching for volatility which is likely to peak as well. aside from that the banks have lost quite heavily in today's session at 1.5%. also have seen 50% gains of the last two days. close out on defense is well-paid i.t. stocks, farmers stocks which did not contribute today's session are doing ok. and danny, the rest of asia, growth data, and speeches. >> we are seeing china being the biggest gain when it comes to asian equity markets. if you look at your gmm screen it is up .6% which is odd because we did hear the pboc

single they are not headed for massive cuts per maybe there is optimism there and then the economy is trading within range. even so we are seeing the u.s. dollar slightly gaining after the u.s. data better than expected, really seeing the diversions between what is happening in the u.s. economy and the european economy. the aussie dollar up, we are waiting for a speech from the rba central bank governor. when it comes to sovereign bonds, japan is the interesting space to watch. we are seeing the yield curve continue to steep coming out steepest since may. they can see the front end of the 10 year 5-year at also been gaining as well. i want to talk about what is going on when it comes to pound volatility. town volatility finally picking up as we have this up in court decision -- pound volatility the supreme court decision today on whether johnson was lawful and the suspension of parliament. the way, this is a butterfly trade on volatility per it we can see that butterfly options are picking up. in other words, traders see a

wider range of movement from the pound. it is not just the parliament, this up in court decision today but also the you and starting to have discussions around brexit, so trader starting to gear up for that and starting to take out protection. matt: thank you for joining us on the market check. we have just gotten a share price for the each cutie ipo, it looks like -- you cutie ipo -- e qt the range was six to seven to 68, setting his price at the higher end of the range for the ipo. that values the whole company at that isedish krona are, 6.6 billion u.s. dollars. with an ipo price sit set at 67 swedish krona per share.

let's go to hong kong. annabelle: president trump says he do not ask ukraine's leader to investigate former vice president joe biden in extent for military aid. but we have learned that trump delayed $400 million in late aid to the nation. spokes one week before he to the country's president. that phone call is now the subject of a congressional investigation. the whistleblower who flight concerns has remained unidentified. -- you flagged concerns remains on identified. china must keep debt level sustainable according to the central bank governor. speaking at a news briefing the pboc chief said overall financial risk are contained. china's growth is on pace for the slowest expansion in 30 years. risinguction in august at the slowest sing space since 2002. -- single month pace since 2002. nissan and the former chairman fined $6.6 million by the sec to

settle claims they failed to disclose $140 million in compensation. issan will pay $50 million and remaining $1 million. he was able to set pay himself another executive. china's canceled u.s. farm visits friday that confused the markets. -- ite their confusion confused trump to p he asked the treasury secretary white the u.s. requested that china proposed meetings pac mission saying they did want confusion but saying the visits would be rescheduled. global news 24 hours a day and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. thank you so much. in a few hours the u.k. supreme court will rule on boris johnson suspension of parliament. the judges will decide whether the prime minister acted suspended thehe

ledge leisure. think about how the ruling might shape brexit could determine the power future prime ministers. meanwhile johnson is that the yuan it said generalist aa new york. he's spent time try to make progress on fining a brexit agreement and urged you leaders to meet him halfway. the head of asset allocation at societe generale is still with us. as we look ahead to the next few weeks, it seems what matters most is the shape of the deal we are going to see the supreme court decision a lot of people say not going to cause a huge amount of volatility. you agree? >> we do not know yet. the supreme court in the ok is 10 years old. it is not like in the u.s. where you have centuries and you know exactly how they judge and on what criteria. they're going to build a decision. as extreme and powerful. the uk's one of the oldest and most powerful democracies on the

planet. but that's up in court we do not know a lot about it. -- the supreme court we do not know a lot about it. it will set the stage of the palooka situation. scenariostreme wide from a continuation of the current situation which is nothing happens, discussions and stay and you go from october 31 two end of january two no deal. so there is a wide open scenarios. at this stage today we are talking about the democrat process. how do we handle it and whether parliament is going to be re-invited in the discussion or not. what are the outcomes you are looking at in terms of effects on the pound. or what are the effects of the pound you're looking at as a result of each outcome you might expect? so, if the supreme court were to tell us that we go back with

open parliament, that probably is an open discussion to delay we still haveain, prime minister acting and discussing with european counterparts which is not the case at the early stage when he became promised her. although the scenarios are wide open. if you go into a decision to come back with an open parliament that will be you havely radical or still wide open shorter gains telling. not as high as you had theresa go. shorter gains to short cover technically is bullish pretty if you stay without parliament that increases somewhat the a no deal so that is telling. would you be looking for an entry point to add to sterling positions and if so where would that be? >> fundamentally there is a discussion on brexit. the scenarios are quite wide. for global investors we can look at the longer-term, the true

discussion is the general election. the general election at the stage we have a huge impact whether it is the labour party are the conservative party making it, and under which manifesto. so the scenarios are even more open for the general election they are at least as open for the general election as the offer brexit itself for now. at this stage you may have a technical reaction on sterling but the situation overall remains extremely fragile. difficult for me as an asset allocator to recommend fundamentally that you have away away from political interference which can be extremely bad or very good. sterling can go both ways, back to the butterfly analysis you had a few minute governor colic. back is brexit for now. for today and for the next few days. with background is the general election. and that is a tricky one. matt: we're going to keep you with us and we promise not to

talk to you about brexit again. our guest cohost for the hour this morning. let's get to apple might only need to wait until this afternoon to get early clues about its chances of success in the biggest tax case in recent history. the iphone maker has been arguing his case to topple a record 13 billion euro tax order at the european union's general court today. the same panel judges will deliver a ruling on two smaller but related challenges by and a unit of fiat chrysler. they are the first in a series of cases to come to a decision as companies rail against you competition chief market -- margrethe vestager's crackdown on unfair tax deals pretty .oining us from brussels starbucks and fiat chrysler also coming under the screening of courts and to apple. what can we expect today in the decision? >> can morning.

looking at fiat chrysler and starbucks, the european commission accused both companies of paying artificially low tax in europe. they are breaching what is known as state aid. there were told to pay back 30 million euros and compensation. both starbucks and fiat chrysler deny the allegations and of take ms. back to court in an appeal. investors were keeping a close eye on this case because it could signal the way european courts and regulators are going to treat american companies going forward. you have the other case apple versus the european commission which is much bigger, much more contentious. and you're looking at 13 billion euros. the thinking here is that if the court decides to side with european commission and throw away the argan is put forth by starbucks and chrysler, it will likely to the same with apple. tensions between the american tech company and others. you may or member tim cook

called the decision total, a crop at the time. -- ymer member tim cook disparaged the decision at the time. >> for the evocations there? >> -- one of the implications? into privacyng laws. that goes back to a french regular who argued individual's do have a right to be forgotten on the web. in vigils to have right to request information -- individual have a right to request information is removed from google on demand if they feel it is outdated or no longer relevant. when this came out google said they felt concern about potential censorship and want to remain as what is known as a neutral actor on the web. they do not want to be making this kind of decisions. again is that a tricky debate in terms of the very gray fine line between a right to private life but also the right to access information on the web freely. when you look at the decision today and this is what is at stake for google it is how big

extent of it. does this just apply to french nationals and french jurisdiction or we looking at a right to be forgotten much more global. let's take a look at what coming up today. we'll get the survey data 9:00 a.m. and markets will be watching for further clues about the outlook for the german economy. the country is facing a many factoring slump and registered its worst pmi reading for seven years yesterday. at midday the resilient central bank will release minutes from their latest policy meeting. that was when they cut the benchmark policy rate by 50 basis points to 5.5%. matt: this afternoon the general debate kicks off in new york. that is main event of the un's general assembly, as is customary, brazil will start off the speeches at 2:00 p.m. u.k. time. president bolsonaro is making his first appearance in the midst of controversy over its ministrations climate policies

after the fires. later on we will get u.s. consumer confidence, not at the general assembly but in the markets. we will monitor for any sensitivity to trade tensions despite the resilient labor market. this is bloomberg. ♪

this is bloomberg "daybreak: europe".

in london, we just got headlines from the bank of japan speaking at a gathering of business leaders in osaka. that boj will not hesitate to at easing and the price momentum is essential. also saying he is aware of the challenges remain on the sustainability of easing, and too great a in superlong yields could hit the economy. you can file the rest of that speech on live go. matt: let's get to a store here in germany. deutsche bank top shareholder in qatar are taking the unusual step of directly approaching candidates to replace the chairman. some representative's of the qatar royal family have held talks with a recruiting firm and

are debating whether to try and before his term expires in 2022. that is the stock is down around 70% since he took up the role as chairman in 2012. joining us from delhi -- from how -- from doha. unusual is it to see the shareholders take an active role, i would guess without consulting the company first? exactly little unclear how these talks came about. they are certainly running in parallel and not this is really with the company's own succession. the chairman would be the person overseeing the process of finding a new chairman when his term expires in 2022. so not this is really surprising they might want to step aside and do things on their own. for a clusterual

of shareholders to come in and take such public role. mind, these -- this is not the sovereign wealth fund qia, these are two entities controlled by one shakes with the former prime minister and one controlled by the former mer, thought to be the royal family holdings. ir. maybe what is getting them to be more taking a more active vocal position. nejra: what might we expect from a stronger qatar presence at the company and what is mean to the chair? -- what does it mean for the chair? >> it is not a positive for him. expressing discontent. there have long been concerns about the discontent among shareholders. in the past we saw shareholders

step in and back him and say we support him. now not so much but it is important to note a few of the moves we have seen them taking the met past few months, really important here was the elevation of one who had been on the supervisory board of the bank but was really made an administrative officer in charge of regulatory and legal affairs. we potentially could see some influence in trying to iron out some of these legal issues, ongoing regular can -- regular toric concerns that deutsche bank has been facing to get it on a morse table track. touch on a more stable stock. go for a business flash in hong kong. raisinge: a be in bevis $5 billion in the raising of its asian unit after pricing shares

at 27 hunk on dollars apiece, the bottom of its range. a major boost to hong kong when the city is beset by ongoing protest. trading in budweiser bring expected to starts of temer 30th. credit suisse -- september 30. aedit suisse scandal of former executive being forward. the board started includes the surveillance of its top private banker after he defected to ubs. the drama spilled into the open when the investigators attempted to grab his mobile phone. credit suisse it chairman and chief executive saying in an internal memo the truth will emerge. and facebook has agreed to buy control labs. as a tech start at lets people start a digital avatar using their mind. it uses a bracelet to measure neuron activity which determines the movement the person is taking about, even if they are not moving. we have learned facebook is paying between 500 really dollars at a billion dollars for the company. that is your bloomberg business. matt: thanks very much.

draghi has come out in defense of his latest stimulus, warning public dissent from policymakers can weaken its impact. the ecb president told the european parliament, monetary parliament -- policy needs to say lose prolonged time to aid growth. the uncertainties were facing, monetary policy needs to remain highly accommodative for a long time. measures we took at our last meeting underscore our determination and readiness to provide the necessary monetary stimulus. we continue to stand ready of course to adjust all of our instruments fortune by an inflation outlook. matt: before draghi speech yesterday, new data showed the european economy deteriorating in a serious fashion. germany's factory pmi dropped to the lowest level in a decade and such ever. back in the country deeper into an industrial recession.

investors will be closely watching "e"'s survey later this morning. from soft dennis still with us per what you think of the deteriorating any factoring us.rom soft jen still with what you thing about the two grading many factoring situation germany, our headed for an all out recession? >> bad news is good news. we had for a while industrial production going south and a negative territory you are near. that is not newspaper we are going deeper into that. the new feature he had yesterday when you go inside the pmi is the fact that the service sector which has stayed very high, up to now starting to converge the industry. and that is they warning factor if you look at gdp where if you were to continue that way. numbers are going to be in negative territory. two can second quarter's a recession. it if we were to say what are the consequences of the numbers

we are reading, bad news is good news. that we know that the monetary policy can do but is limited in its power. and that fiscal policy listening is the solution. -- listening is the solution. for this we need no stress in german and stress is coming. we are having a need to scenario developing in germany and for the rest of europe that we are plan we aree fiscal dissuading for at the european level. sue have some helper on the fiscal plant or what does that mean for asset allocation. they start to look at underwriting bonds as yields might move higher, and he starts look more positively at equities? >> depending on which type of bond and which type of equities. there have been already and move toward value type equities. this happened two weeks ago. it is naughtily european but mostly european phenomenon with japan -- it is not only european.

that is to protect the global portfolio and valued assets. and some equities in europe and japan. and the switch to fiscal policy from exclusively monetary policy is indeed an indication that you need to switch away from bonds into equities. at this is what we have in proposing in the latest report we published. nejra: thank you for joining us. assetad of global allocation at societe generale. great to have you as our guest host. coming up, the biggest names in business and government will gather this week for the annual bloomberg level business forum in new york. we will hear from topic exec it is, where leaders and policy is including jamie dimon, david solomon, india's narendra modi and christine lagarde. bloomberg ember also users can interact with the bloombergshow here on television. to catch up

on analysis and he can save charts for future reference. by the way when you're traveling to work tuning into bloomberg to alive in mobile device or on dab digital if you're in the london area. any, sirius xm. this is bloomberg.

nejra: good morning from bloomberg's european headquarters in the city of london. manus: this is "number daybreak europe." these are today's top stories. no rush. the pboc governor says the central bank is not about to roll out massive stimulus. at the federal reserve, james bullard says more easing might be needed. event, president trump will address the u.n. general assembly today as europe joins the united states in blaming iran for last week's attacks on saudi arabia. and awaiting a verdict. the u.k. supreme court will rule ofthe locality -- legality

boris johnson's suspension of parliament. nejra: welcome to "daybreak europe we have heard from the pboc governor in terms of not thinking about big stimulus coming from china. also a lot of eyes on the general assembly and the interesting geopolitical comments coming out in terms of iran. matt: it was pretty astounding france, and.k., germany expressed support for the theory iran was behind or explicitly blame iran for the attacks on saudi arabia. i'm also going to be interested to see if we do get any real movement in the pound around the court decision at 10:30.

politically, it's going to be fascinating to see the decision. the question is, will it move markets. will it move the needle on brexit? nejra: absolutely. in terms ofying brexit, the supreme court decision, not as important for markets as the eventual deal we get. our markets going to shrug it off or are we going to see increased volatility? and then back to the growth data as we look ahead to the painful pmi's we saw, particularly out of germany yesterday. we saw the euro move weaker and it is holding onto yesterday's declines. bond yields as well. move aroundtart to global gloom around growth. .round equities, more perky ftse 100 futures, tack and cac 40 futures all higher after we did see losses on the stoxx 600 yesterday at 0.8%. perhaps we will see more green

on the screen with equities today. >> let's take a look at the bond futures this morning. beman bund futures will interesting to watch right now. the cash trade will be interesting. futures trading down. we could see the yield bounceback. the same is true with btp futures. you see u.s. ten-year bond filters -- futures trading lower. the yield will rise as well. we have an interesting story on the bloomberg saying don't expect a lot of people to come in to buy this market and to push these yields down again. now, for a check of the markets, we go to juliette saly in singapore. >> we are seeing asian stocks mostly higher today. japan closing up the session after the long weekend where it was closed yesterday. 0.4%.pics higher by

the boj continuing to buy bonds in the one to five year zone after cutting purchases in longer dated bonds on friday. the csi 300 is up 0.4 percent. nero was mentioning comments we saw from the pboc governor. reportedly saying risks can be contained. you have hong kong's market higher for the first time in seven sessions. a little bit of a fall back in indian stocks. you what that looks like in terms of volume. since we saw tax cuts announced in the session on friday, i've got a chart showing you how much we have seen in indian markets. on the nipsey, we saw on friday a record amount of stocks going through in terms of volumes. the second largest on record monday. when you put that into bloomberg data, it was more than 2.2 billion shares changing hands during monday and friday's

session, eight times the average today volume we normally see for indian stocks going all the way back to the year 2000, which is not on that chart. nejra.he year 2000, nejra: breaking news from total. it is to accelerate its dividend growth. you are looking at that to rise 5% to 6% per year. it has proposed a third quarter interim dividend of sta euro per share. it is reaffirming its discipline on cost. byash increase of $5 billion 2025. the board of total saying it is in profitable, sustainable growth, increasing the dividend by 5% to 6% per year, that's what you want to focus on. this is really interesting, particularly because we just spoke to socgen, our guest host saying they quite like oil

equities because if we do see any increases in the oil price, return thating to to shareholders. it is about dividend growth. total to extend its dividend growth 5% to 6% per year. let's get back to the federal reserve. john william saying last week's turmoil raises questions about the financial system. saying it is important we examine recent market dynamics and their invitation to liquidity. william hasn replaced in the job has also weighed in, speaking exclusively with bloomberg, bill dudley says fed officials will consider a new tool to contain short-term rates. he also touched on his controversial op-ed in bloomberg opinion, race adjusted the fed where hete cuts -- suggested the fed reject rate cuts.

precise, if you accept the notion that the fed's goals are maximum sustainable premise thato the this trade war might not be good for the economic outlook, logic would say there is a question, should the fed take this into consideration? at the end of the day, on the second piece of that, i don't think the fed should take this into consideration in setting policy. if the fed were to do that, it would become politicized and people would basically react by reducing the independence of the fed. >> this has already become politicized. >> it has become politicized because of the president's attacks on the fed. morning, theys basically did a study, the fact that the president tweets on the found the tweets were

causing people to reduce their expectations. the fed is already politicized in the sense that people are not sure now if the fed is easing because that's the appropriate policy path or because of pressure from the president. that politicization is not coming from the fed. it's coming from the president. matt: additionally, the saint louis fed president james bullard spoke yesterday, saying the central bank may need to ease monetary policy further to offset downside risks from trade conflict and low inflation. positive signs in the u.s. manufacturing sector. joining us now is ann-katrin petersen, investment strategist at allianz global investors area -- investors. seems they don't have the votes

for another cut right now. nejra can show us with a chart, the market is still expecting one. >> interesting point, and good morning. that market expectations are still flying high. markets are expecting another two rate cuts, while the latest dot plot is showing no rate hike in 2019 or 2020. powell was very clear at last week's fomc meeting that the fed remain data-dependent. depending on how data involved in the u.s. reminds another rate cut this year, for example, in december, which would then -- the question is, is this still a midcycle adjustment? these insurance rate cuts have totaled up to 75 basis points. this would be third rate cut.

just entering a period with more headwinds the echo -- headwinds? a key sector for this question is the outlook for trade. >> it is a lot of questions you pose. as jerome powell seemed to do as well. if you had to take a position, do you fit more in the cast that says we don't need more rate cuts, or do you think -- i know you said you do expect one or two more, but our guest in the previous hour was talking about splitting the -- 2019 and 20 being more concerned about the 2020 outlook. do you agree? >> for the time being. in the near-term, there are areas of strength, particularly when we look at the consumer side.

the fed wanted to maintain and extend what is already a late cycle in the u.s.. there could be one more rate cut to retain support for the economy. this would be an insurance rate cut. this is our base case for the time being. what we do closely watch are the medium-term possibilities on the horizon for the u.s. economy. as the cycle matures coupled with geopolitical risk. in 2020 and beyond, the probability the u.s. will be hit by downturn is more elevated than in the next six months. what do you expect for the bond price? one of our most read stories says a lot is coming back. on the other hand, people are talking about don't call it qe, but the fed getting back into the bond market in size.

what are your expectations yeah >> we think when we look at the treasuriesry market, will trade range bound. interesting given that they will stay at depressed levels even those more situations the u.s. economy had, would be to go slight overweight in u.s. treasuries when the treasury yield his 2% growth. environment of depressed yields going forward. nejra: ann-katrin petersen staying with us. let's get the bloomberg first word news. >> president trump says he did not ask ukraine's leader to investigate joe biden in exchange for military aid.

delayed $400 trump billion in military aid to the nation a week before he spoke to the countries president. that was the subject of a congressional investigation. the whistleblower has remained unidentified. china must avoid massive stimulus and keep that level sustainable according to the central bank governor. speaking at a news roofing in beijing, the pboc chief says overall financial risks are contained. fora's growth is on pace the slowest expansion in almost 30 years. industrial production rising at the slowest single month pace since 2002. president trump made a short and unexpected appearance at the yuan climate change summit in new york. world leaders and business chiefs are discussing how to tackle climate change. public anger grows at the lack of action. rgenage activist greta thunbe telling them they have avoided the issue for far too long.

>> you have stolen my dreams in my childhood. and yet i'm one of the lucky ones. people are suffering. people are dying. entire ecosystems are collapsing. we are in the beginning of a mass extinction, and all you can and about is the money fairytales of eternal economic growth. how dare you? 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. this is bloomberg. matt: thanks very much. iran's key european partners are siding with the u.s., blaming tehran for strikes on saudi arabia and oil facilities. france, germany, and the u.k. have said, no other explanation

is possible. the european nations have called for an expanded nuclear agreement at the same time. now let's go to annmarie hordern, who has all the details on the tensions in the goal. -- the gulf. >> the showdown moves to manhattan. leaders, thousands of diplomats, gather in new york city for the un's general assembly. --ald trump speaks to his speaks, his iranian counterpart maybe front row. he could choose to avoid the assembly or leave before trump takes the podium. tomorrow, rouhani has a chance to respond. talk of a historic summit between the president on the sidelines has died. friends of both administrations will attempt to shuffle back and forth to broker a deal that at the very least lowers risk of conflict. this has been the goal of emmanuel macron.

both protagonists are there. something may happen. it might be more difficult, given iran's key european allies are blaming tehran for the strikes on saudi oil facilities. they are not the only people we should be watching out for. there are high-profile no-shows. only the second time in a decade, benjamin netanyahu will not address the assembly. known for his colorful and combative speeches, last week's elections put a dark cloud over his political future. he is the most surprising of the no-shows alongside vladimir putin and xi jinping. nejra: thanks to annmarie hordern. when you're traveling to work, tune into blue bird radio on your mobile device or dab digital radio in the london area. this is bloomberg.

matt: it is 8:20 on the continent. 7:20 in the u.k.. we are 39 minutes from the start of cash trading across europe. this is "bloomberg daybreak: europe i am matt miller in berlin. nejra: let's get a check on the markets. quite a bit of green on the screen. pboc saying china is not in a rush to ease policy massively.

nonetheless, some risk on. the 10 year yield down two basis points to a 170 handle, seeing concern around global growth. painful pmi in europe yesterday. we steady up today at -58. let's take a look. you can see we are likely to get a more positive open in the u.s.. 13435.nd trading at it will be interesting to see if there is any reverberation from the decision we get at 7:30. surely some movement. how much volatility are we going to get? bit, coming down a little as germany, france, and the u.k. get together and explicitly blame iran for the attacks on saudi arabia.

now, the bloomberg business flash. >> ab inbev raising $5 billion on the listing of its asian unit. 27 hong kong dollars apiece. the ipo is a major boost to hong kong at a time when the city is upset by ongoing protests. deutsche bank's top investors are directly approaching candidates about becoming chairman. bloomberg reports shareholders in qatar are taking steps as patience runs out with the current chairman. they are debating if they should try to force him out before his term ends in 2022. orcomment from deutsche qatar. lloyd's of london is condemning what he calls shocking sexual harassment in the insurance and. --t is after a survey showed

had witnessed such behavior in the past year alone. one in five say people turn a blind eye. have requested an investigation into endemic harassment in the market. mario draghi has come out in defense of stimulus, warning public dissent can weaken its impact. the ecb president told european parliament monetary policy needs to stay week for a long time to drive growth. germany's factory pmi dropped to the lowest in a decade in september. investors will be closely watching the survey later this morning. ann-katrin petersen is still with us. the manufacturing data was certainly concerning enough. are you seeing signs to be concerned that it is also spilling over into services in the euro zone?

>> exactly. that is what investors will watch going forward, whether the sector will be affected as well. for the time being until now, what we have seen in the euro zone economy was weak manufacturing on the one hand and -- on the other after demand.ng domestic however, yesterday's pmi's have shown it might have been a harbinger of the fact this weakness in manufacturing starts spilling over into the domestic economy. this would then be a drag for growth overall. generally very different development in september. some political stumbling blocks for example have been removed, or at least lightened up.

followingn government a less expansionary fiscal course, also the possibility of no deal brexit has gone down, but let us see how the chairman overall assesses the situation today. matt: what do you make of the climate package? we got it late on a friday. i'm not sure the markets got a chance to fully assess it. $60 million climate package that merkel worked through the night to pass with her coalition partners. is it going to be stimulative at all? , you going to do more than know, help to save the earth as i guess is it's sole purpose? is it going to do more for the german economy? everyone who think -- outently calling for of germany, large-scale, maybe

stimulus, should watch. the climate deal is focused more on longer-term structural issues, and while the size is relatively big, these measures will be implemented gradually, then also boost the growth potential of the german economy. however, this is not the stimulus some are calling for, given that germany is one of the few countries in the euro zone that still has this apart from the netherlands. matt: thanks so much for joining us. investment strategist at allianz global investors joining us out of the frankfurt bureau. coming up, the biggest names for business and government are going together for the bloomberg will business forum in new york. we are going to hear from top

bank executives, world leaders, and policymakers, including jamie dimon and incoming ecb president christine lagarde. that is it for daybreak europe. "the european open" is up next.

matt: good morning. welcome to bloomberg markets. this is "the european open." europe points higher. dax futures lagger. other contracts as german data is in focus. ab inbev raises $5 billion for its asian unit in the second largest ape -- ipo this year.