>> china allows tariff free imports for soybeans. could this ease negotiations in washington? britain's most senior justices rule on boris johnson's suspension of parliament, we are live at the supreme court. and with factory activity, europe's economy shrinking at the fastest pace in 10 years. we get the first interview of the day. get the numbers

now out of germany. i have my screen here on the bloomberg terminal. we can see the number coming in a little bit better than expected. the business number at 94.6, the survey was for 94.5, and that is better than the 94.3 that was the prior meeting. the expectations worse than expected, this is where we thought we might see the disappointment. indeed we got it. we were looking for 92 and we got 91.3. course lower. this is better than the estimate of 96.9. but bottom line is the is atations down at 90.8

disappointing reading. let's look at what is going on in markets, a little data check, the stoxx 600 is up 0.2%. it has been up all morning long. we even have the dax showing gains, 0.1%. the cac is up as well as the .tse, 0.2% we see the individual indexes rising. the euro falling a little bit in dollar terms. down $.48 a barrel. crude coming down as we see the u.n. general assembly get ready to hear donald trump's speech later today. the u.s. 10 year yield also coming down as investors buy the debt. later today we will speak to the incoming ecb president,

christine lagarde joins us. do not miss that interview at 4:30 p.m. london time, it will be fascinating to get her take on what we see in the german economy. and what we see going on in europe and the world as the u.n. gathers for the general assembly . speaking of that general assembly, let's go to new york and get our first word news. >> we begin with the distance between iran and european partners. germany and france say the islamic republic was clearly to blame for the strike on saudi arabia. prime minister boris johnson telling nbc nightly news he is not backing military intervention. >> it is not something that will help the situation. andink there is logic having some kind of deal with the iranians to stop them from getting nuclear weapons in

exchange for participation in the wider economy. be here today at the u.s. had withdrawn? >> the reality is president trump thought it was a bad deal. >> the prime minister of u.k. is urging leaders to recognize compromise on brexit. he is asking them to meet him halfway. minister is bracing for the supreme court decision on his suspension of parliament, that is do it 10:30 a.m. u.k. time. president trump says he did not ask ukraine's leader to investigate joe biden in exchange for military aid, but we learned trump delayed $480 million a week for he spoke to the country. that phone call is the subject of the congressional investigation. the whistleblower remains

unidentified. bloomberg reports the chinese government gave new waivers to several companies to buy u.s. soybeans without being subject to retaliatory tariffs. has commerce -- china's commerce industry did not respond to requests for interviews. matt: thank you very much for that. and new yorkeserve president john williams says last week's turmoil in the money markets in repo markets raises questions about the appropriate levels of bank reserves in the financial systems. williams saying, "it is important we recognize these on thes and that impact

liquidity to the overall amount of reserve at the fed." the man williams replaced has also weighed in. speaking to bloomberg, bill dudley has said officials will consider a new tool to -- last month he suggested the fed rejected rates because they would help president trump's prospects for reelection in 2020. precise, said, to be if you accept the fed's goals are price sustainability over the long-term, and the premise that the trade war might not be good for the economic outlook, then logic would say there is a question if the fed should take this into consideration. i made it clear that i do not

this the fed should take into consideration in setting policy. if they were to do that, they would become politicized, and people would react to the reduction of the independence of the fed. it has become politicized because of the president's attacks. oute was a piece that came that i saw this morning where they did a study of the effect of the president's tweets on the federal funds market. what they found is that tweets were reducing expectations. the fed is already politicized in the sense that people are not sure the fed is easing because that is the appropriate policy path, or pressure from the president. that politicize asian is coming tion is comingciza from the president. spokejames bullard also

he is a noted dove, it should be no surprise to hear he said the central bank may need to ease monetary policy further in order to offset downside risks from trade conflicts and too low inflation. his comments came amid positive signs in the u.s. manufacturing sector, activity jumping to a five-month high. let's pivot to the latest on europe's biggest economy, germany, which is suffering its worst downturn in seven years in industrial terms. the manufacturing slump has deepened read data from the depot survey added to what comes a day after emi shows factory activity is shrinking at its fastest pace in a decade. for the first interview of the day, clemens

fuest. the number missed the mark, how important is this aspect of your survey? is half of the survey and half of the index. wellnies know the markets and the negative readings due to something about the concentration, meaning in this case the downturn is likely to continue. concern waysnd of on animal spirit. we have had a real slowdown in industrial recession in germany over the last few months. is it resulting in firings because it looks like berlin is watching employment numbers but factories are not letting people

go. are not letting people go yet, but there is short time work and factories have stopped hiring. we still have a strong construction industry and strength so that the overall labor market employment numbers are at record levels. this is covering the weakness which is substantial in the manufacturing sector. matt: do you hear the specific concerns of business leaders? that isit especially making them so pessimistic about their outlook? it is various factors. the ongoing trade war between the u.s. and china. it is the hard brexit. it is the uncertain chinese

situation, where the domestic factors have uncertainty about future energy policy and climate policies in germany. we do have the climate package, but there is uncertainty about energy policy and prices in germany, and this combination of factors makes it difficult. matt: we got the climate package friday, and started getting the details of this $60 billion package, 55 billion euro package. i was thinking it might be stimulative, maybe infrastructure build out, may be a bonus for the german industry. it seems like a package nobody likes very much. dr. fuest: the critique is that it is not ambitious enough and the carbon price is too low.

think this time, i could be a good start to a climate policy that makes sense and has an overall objective in -baseducing certificate system in 2026, and integrating it into the european system. the overall package is not so bad i'm about people were disappointed about the lack of ambition in the low carbon price. programs, not short-term, they would kick in over time. this is nothing to stop the current downturn, but it has the potential of stabilizing and bringing more certainty about future energy policies, which is an improvement. matt: is there any possibility that we get a real stimulus package out of berlin? --ast spoke to all of schulz

olaf schulz, and he pointed to the employment levels. do we have to wait for people to get fired before germany has stimulus programs? -- fuest: the governing has the government has started spending more. this has been a salient problem. it is the accumulation of smaller measures, but fiscal policy is expensive. we do have a downturn in industry, but strength in other sectors. are in a that we strong overall downturn that could lead to a massive recession, i guess that is why the government waits. ,f it continues to deteriorate i imagine more stimulus will come next year. standpointa consumer and a personal standpoint living

in berlin, and from an american, i constantly find it amazing how much bureaucracy i have to wade through. cashany vendors will take in 2019? how often stores are closed, or people do not want to make money . how much of an issue is this on a business level? the infamous german bureaucracy. dr. fuest: it is a problem. progressalso a lack of in areas of government, the financial sector. like cash and dislike the cards. -- dislike credit cards. and ais a bureaucracy, lot of planning competitions when it comes to infrastructure

investment. it would be necessary to do something on this front to get the economy going. we have to see businesses facing hiring constraints. they are finding it hard to hire people. very interesting. i appreciate your time. dr. clemens fuest, president, ifo institut fuer wirtschaftsforschung. we got the all-important survey numbers. let's bring my cohost for the hour, dr. burkhard p. varnholt, deputy cio, credit suisse group. let me ask you what you make of this declining economic situation in germany, and important engine for european growth and global growth. you forholt: thank having me, good morning. germany is the detroit to the world, the biggest car manufacturer that produces a

third of the world's premium cars. it's a guest market has gone hibernation. the chinese car market is the world's largest. in chinage age of cars is 4.5 years, and there are many . it turns out the average age of cars on german roads is 7.5 years compared to 11.5 in the u.s. it is not complicated to make sense of this. chinese consumers need time to digest, and this is a problem in germany, who makes most of the cars that they like. on top of the car manufacturers, there are 800 supply companies who are equally affected by this. adding insult to injury, the global infrastructure investment boom that operations were initiating out of the u.s. turns out to have been a sugar high

caused by an unsustainable stimulus in the u.s. which expended across the world and got a lot of residents from the german manufacturing system. that is the bad news, which i agree must be put into proportions. the economy and the world we live in, 70% are services, and they are doing fine as far as i can see. consumers are doing well. unemployment is low and inflation is nowhere to be seen. christmas will be in december and consumers will do what they do when they have money to spend. matt: i am sure it will be as well, but maybe we wait for the u.s. and chinese to negotiate the exact date of the holiday. plenty more from dr. burkhard p. varnholt, deputy cio, credit suisse group. aboutl talk to him a lot

what this trade war means for the global economy. also coming up, it is judgment day in london. britain's senior justices rule on boris johnson's suspension of parliament. we will be live at the supreme court. this is bloomberg. ♪

matt: economics, finance, politics. this is "bloomberg surveillance ." in berlin.iller let's get the business flash. is raising about $5 billion. that is the bottom of its market

range. the ipo is a major boost to hong kong. deutsche bank top investors are reportsing -- bloomberg ar areolders in qat debating if they should work them out before the term and in 2022. that is your bloomberg business flash. matt: let's get to trade. the chinese government has given new wavers to several companies to buy u.s. soybeans without being subject to retaliatory tariffs. we have dr. burkhard p. varnholt , deputy cio, credit suisse group with us on set. we have had these tiny pieces of progress here and there from the u.s. and china that has not

resulted in any forward movement. what do you make of this latest news that they will give wavers for people to buy more soybeans? dr. varnholt: i think the term trade war is a misnomer. this has always been a , wheretical rivalry donald trump is rival as president and will stay with us for the next several years. in the meantime, i expect multiple compromises, most being figure leaf compromises to move from one resolution to the next with differing purposes. that is how i interpret this one. matt: what do you expect in -- if you do not use the word trade war, i do not know what you would prefer. dr. varnholt: let's keep using

it, i just want to specify how i look at it. matt: what you expect in terms of the effects of a trade dispute on global growth? one of the geniuses of german bmw wass, in the 1980's s, andg so many 3 serie taking a huge hit on the currency, and a brilliant manager in munich said let's build them in south carolina instead. it was like one of the greatest -- i am sure there is a harvard business case, but now it does not look so smart as they have to export suv's from south carolina to china amid this trade dispute. that part of the slowdown of the global trade machinery, how bad will he get before we get a solution? blamernholt: i would not the trade war overly for the wounds of the german car industry. it has massive plants in china.

i just went to see some of them including the showrooms. the chinese market is saturated. the second thing, the german car industry missed the first phase of the shift from combustion engine to ev ability. the game is between u.s. and china, and they missed the rise of uber which dilutes demand for new cars. aree are problems which more immediate to the german car industry. there is no quick fix. to getct car industry through this for the coming months and quarters. neveris a silver lining, can't out the engineering capabilities of german carmakers, they are

entrepreneurial. game,ill get back in that and the chinese car market will rise again, but not now or not right around the corner. matt: it is excellent to get this insight. you have been there firsthand. a lot of people do not realize the market is saturated, that is a huge point. i8, the germansd did not push ahead with e-cars. and you have car sharing and ride-hailing muddling the picture for people who want to sell every person in individual car. dr. burkhard p. varnholt, will stay with us, the deputy cio, credit suisse group. i want to shift to a survey by lloyds of london. it reveals sexual harassment in the insurance industry is worst than many expected. this the members witnessed

behavior in the last year, but only 41% who raised a concern said they were taken seriously. it follows a bloomberg businessweek investigation that uncovered endemic sexual harassment at the world's oldest insurance market. joining us is our investigation reporter. talk us through some of the result of this survey. 8% of thepoint out, 6000 people who responded said they have seen acts of sexual harassment in the last 12 months. 8% may not seem high, but that is only the last year. imagine over many years the proportion would be higher. the other shocking thing was the level of drunkenness. 25% of respondents said they had seen excessive consumption of

alcohol in the past 12 months. there is a history of people at and getting to bars drunk at lunch, then coming back to work. there is a large number of people who reported that over the last year that drunks are coming back to work. surprising in 2019. matt: not surprising if you are talking about lloyds of london which is famous are this, and forand which is also famous where you go for lunch and have a few pints or martinis. that is how it has been. 70% i would be surprised. on the sexual harassment, this is an issue that is more surprising because you would expect them to take that seriously, especially at work.

how many people who see this are recording it? we have given a number that is alarming, when they do record it, they are not taken seriously. >> fewer than half of respondents thought they would be taken seriously if they reported an issue. in the story bloomberg published in march when we spoke with 18 people at lloyds who had witnessed sexual harassment, very few of them had gone to any hr officers or whistleblower hotlines. and those who had were talk out a pursuing it does it would be detrimental to their career. up until now it has been unaddressed. lloyds claims they are trying to address it. they have suspended the passes of two people.

lloyds is an exchange, and people come there to buy and sell insurance contract. says he expects there to be more progress in the coming year, though he has not put numbers on it yet. matt: thank you for joining us, bloomberg's financial investigation reporter, alan this talking to us about lloyds of london story. we will continue to follow it to see what the results of the story are. let's look at the markets. in terms of equity indexes, the stoxx 600 is rising, 0.2%. the dax treading water, putting up slight gains. up 0.2%.and ftse the euro very little change. with holding under $1.10

these weak numbers coming out. yesterday the pmi's were incredibly disappointing. if you look at the european stock indexes, you can see the of is the worst performing the all gaining indexes crossed europe and in the u.k. let's get first word news from new york. >> good morning. he did notrump says ask ukraine's leader to investigate joe biden in exchange for military aid. we have learned trump delayed $400 million in aid to the nation a week before he spoke to the ukrainian president. that phone call is the subject of a congressional investigation. the whistleblower who flagged concerns has remained unidentified. ,hina avoids massive stimulus

according to the central bank governor, speaking at a briefing in beijing. the pboc chief says risks are istained in china's growth on track. an unexpected appearance from donald trump at the climate --world leaders discussing how to tackle climate change. geenage activist greta thunber admonishing leaders for ignoring this issue at great expense. >> you have stolen my dreams, my childhood. i am one of the lucky ones. people are suffering. people are dying. are collecting, we are in the beginning of a mass extinction. all you can talk about is money and fairytales of economic growth. how dare you?

>> global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt: thank you very much. it is judgment day for boris johnson. the supreme court will rule whether the prime minister's suspension of parliament was legal. whatever the outcome, the decision will shape the course of brexit and determine the power of future prime ministers . one of the possible outcomes in terms of rulings? are the possible outcomes in terms of rulings? ,> the job of the supreme court they found this is not a judicial issue and said we should not get involved.

there is the issue of was this unlawful. the scottish court said yes. .hey said this cannot go then we get a third consideration, whether they should get involved and say parliament can sit again. we have indications the court is worried about intervening. we will have to see what happens at 10:30. what happens here if the government loses? we do not expect to see a lot of movement in the pound, but we could expect parliament to reconvene and pass further measures that hinder boris johnson's possibilities? yes, it depends on the

judgment. you could see parliament reconvening. boris johnson's lawyer says he will obey the law, but boris johnson says he is refusing to -- or he would not go for another prorogation. it depends what we get, and what elements are lawful. the court could say it was the duration or timing. there could be legal loopholes that would allow another prorogation. boris johnson will take every ere, and he isth boxed in. he is already in a difficult position. he is using every weapon at his

disposal to deliver brexit as he promised. matt: thank you very much. let's get back to dr. burkhard p. varnholt, deputy cio, credit suisse group. he is in studio. what do you make of the current situation in terms of brexit, and how important is this court case? it is going to be a critical decision that will have a disproportionate impact on the future, not only of britain but also europe. matt: how important is it for europe? weakening euro, even the pound has dropped a lot from last month. will it be a big problem for europe as well if there is a no

deal brexit? dr. varnholt: the way i look at the world economy, it is thenated by the u.s. and chinese economy. what benefit can there be with europe going on their own like david against goliath to negotiate and navigate in this bipolar world economy? only two win economically speaking from being together, and because economic strength is that essentially political strength -- .att: let me switch we are getting headlines out of berlin that peter ohlmeyer says the government will propose a ut for listed companies,

and they have agreed for corporate tax cuts with olaf schulz. schulz told me that was not under discussion. suggestions ine , berlin couldlus take without making a politically unpopular decision to spend more money. what do you think about the possibility of corporate tax cuts for the german economy? more aboutt: i know it than you do at this point, but about eight principal point of view, i am surprised by the announcement he does giving tax cuts to corporate's is a fraugh exercise. people,ive cash to the

it has a bigger multiplier because most people will spend the cash they are given, especially before christmas. to wealthy tax cuts or corporate's, they can save most of it, and the multiplier can converge to nil. matt: we have heard a lot of talk from economists and market participants, ray dalio for , as well as stanley fischer about the possibility of some kind of helicopter money. talking about fiscal monetary cooperation. is that what you expect, or think would be a better idea for stimulus? dr. varnholt: i would say two things, the world economy and the german economy are not in

such a dire place. unemployment is record low, inflation is nowhere to be seen. there is one angle you may challenge the necessity for such urgent measures. having said that, if you want fiscal spending, i take the pragmatic route and i would not call it helicopter money because that is one of those misnomers which creates the wrong type of discussion. giving money to the people, and the united states did that under that was a junior, powerful political decision, but more importantly that money was spent in the next month, and multiplied through the usual consumption cycles. that is the power of fiscal spending on demand. any: absolutely, given

fiscal stimulus, i promise i would spend it immediately. you'll spend more time with us. dr. burkhard p. varnholt is our guest cohost for the hour. president trump will address you when general assembly -- u.n. general assembly. and, a european tax showdown. could give usfiat faces itsapple as it biggest tax case in recent history. we will have all the details for you. this is bloomberg. ♪

matt: you are watching "bloomberg surveillance." i am matt miller in berlin. let's get the bloomberg business flash from new york. >> we begin in germany where the outlook of the economy is continuing its downward slide. the current situation is

slightly rising, also a day after manufacturing fell to a deeper slump. credit suisse contained a scandal, an investigation into the surveillance of its former top private banker after he defected to ubs. the drama spilled into the open when investec eight to grab his mobile phone. the chief executive says, the truth will emerge. startup allows people to control a digital avatar using their minds. facebook is paying up to $1 billion for the company. that is the bloomberg business flash. 's key european partners are siding with the for the blaming tehran

strikes on the saudi oil facilities. they say no other explanation is possible. they have also called for an expanded nuclear agreement. the showdown between the toted states and iran moves manhattan as 200 world leaders and thousands of diplomats gather in new york city for the u.n. general assembly. today president trump speaks, and the iranian counterpart has second row seats. avoid the choose to assembly or leave before trump takes the podium. tomorrow he has a chance to respond. friends of both administrations will attempt to shuffle back and forth to broker a deal that at least lowers the chance of

conflict. this is a goal of emmanuel macron. it might be more difficult given iran's key european allies are blaming them for the strike on the saudi oil facility. there are high-profile no-shows. the second time in a decade, israeli prime minister benjamin netanyahu will not address the assembly. last week's election has put a dark cloud on his political future. he is the most surprising of the no-shows alongside vladimir putin and xi jinping. ,att: thank you very much talking us through what is going on in new york. i want to get back to dr. burkhard p. varnholt, deputy cio, credit suisse group. he still joins us from our london studio. i want to talk to you about stock.

there is a further upside in equities, and the u.s. is your preferred region. why is that? dr. varnholt: because it simply is the market where liquidity comes together. it also is the economy, there is no other economy in the world has as many world-class companies. likeer or not we quantitive easing and low interest rates, the reality is declining yields are bullish for equities because they raise the equity risk rhenium, which also in the united states and the rest of the world is at a record high. the short-term view is this market is driven by investors who have been sidelined and on the sidelines for much of this bull market. i have said this many times, bull markets do not die of old age, they die of euphoria. this market is as different from a euphoric market as i can tell.

the u.s. market is the most attractive to us. , what doave to ask you you make of the repo situation last week? are you concerned about liquidity in the u.s.? not, itholt: no, i am showed the fundamental strength of the federal reserve being able to step up at times of liquidity need. i was at jerome powell's speech in direct -- in zurich, and powell talked about such instances and the ability of the federal reserve to buffer liquidity needs, and that is what happened. matt: we appreciate your time. dr. burkhard p. varnholt, deputy cio, credit suisse group. coming up on "bloomberg surveillance," the biggest names

in business and government are gathering for the bloomberg business forum in new york. we will hear all day long from the top bank executives, world leaders, policymakers. we will hear from mark carney, christine lagarde. this is bloomberg. ♪

matt: economics, finance, politics. this is "bloomberg surveillance ." . am matt miller in berlin there have been decisions in european court cases, fights over european tax order and the conflicting decision. starbucks won, and fiat-chrysler lost. meanwhile, google won a battle making it harder to be forgotten online. is the latest landmark ruling over where to draw the line between privacy and freedom of speech. joining us is maria tadeo

covering these courses for us. take us through these diverse decisions. there are many decisions and these are high profile cases. so much was at stake. was accused by the european commission of receiving a special tax deal. they were told they would have to pay back. the court decided are is no evidence to prove this, so it is a blow to the competition. they say there is no evidence to suggest starbucks got any special treatment. the up-chrysler has been -- the chrysler will have to pay back compensation. more tricky debate has to do with privacy. also the right to access

information freely. the court has sided with google and believe there is no need to apply european legislation at a global scale. google will not have to remove information globally on request from individuals. impact will the split judgment in the tax cases have on the all-important apple case that everybody is watching? why everyone was keeping a close eye on the signal has to what way european regulators are leaning. and it results are split is difficult to say what will happen with apple. it is the most political and contentious case, there is a lot at stake. here.regulators go from this is politics, and

they are the biggest corporate tax payer in the world. what is interesting is the court did side with the corporations, so if you are thinking there is an un-american bias when it comes to regulators, i do not think you can conclude that based on the decisions today. matt: thank you very much. tadeo covering a ton of court cases this morning. let's look quickly as we go into the third hour of trading in europe, what we are looking at in terms of the data. we still seeing gains on the stoxx 600. the index up 0.2%, and all indexes are gaining regardless of the disappointing german academic -- german economic data.

nymex crude falling $.43 a barrel. the u.s. 10-year, one of the ,ost stories on the 10-year don't expect anyone to be buying the u.s. 10-year any time soon. if you are prepping for the u.s. .pen, u.s. futures gaining 0.3% we could see green on the screen. "bloomberg surveillance" continues in the next hour with francine lacqua and tom keene. this is bloomberg. ♪

beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity.

every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. francine: this hour, britain's most senior justices will rule

on the prime minister's suspension of parliament. worse, the day after date it shows german manufacturing slumping, business expectations touched the lowest in more than a decade. europe joins the united states in blaming iran for last week's saudi attack. president trump is expected to address world leaders today. this is "bloomberg surveillance." lacqua at our global headquarters with london. -- tom keene. geopoliticsl the and tension in new york city. be: the prime minister will a little bit outside, a new , whoopment as steve ross owns the miami dolphins.

it is a bit removed on the west side of the hudson river. francine: we are expecting the prime minister of the u.k. to say he is in for a lower taxation economy. if you are a u.k. leader, you are negotiating grexit. you see the u.k. saying they will compete against you, and regulation will diverge. i don't know if we will get a deal on brexit. lagarde, she will become ecb president on november 1. we have a lengthy conversation coming up today. we will hear what she learned dealing with business leaders. first, let's get straight to bloomberg first word news. >> bloomberg has learned the chinese government gave new waivers to several domestic

state and private companies to buy soybeans without being subject to tariffs. the u.s. federal aviation administration under fire yet again for its role in the 737 max controversy. many inspectors were not qualified to certify pilots. the calling these allegations misleading. the trump administration has turned 3000 pages of documents over to the manhattan district attorney as part of a court fight over whether president trump must surrender his personal and company tax returns. new york state investigators are investigating allegations the company falsified business records related to hush money

payments made to two women, including stormy daniels. discussing how to address climate change as public anger grows over the lack of action. greta hamburg admonishing world leaders for ignoring this issue. greta: you have stolen my dreams in my childhood with your empty words, and yet i am 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 fairybout is money and tales eternal economic growth. how dare you! unexpected 15 minute appearance by president trump at

the u.n., change -- u.n. climate change panel. 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. tom: thank you so much. greatly appreciate that. lots going on in new york city. let's do the data check. we have quiet markets overall. we can look more at the geopolitics. the euro was weaker. dollar stronger overall and breaking out of a tight recent range. the vix 14.58. there is that dollar strength, not record strength, but elevated. crude. point out i would say it is a calm her brent crude. francine: if you look at european stocks, they are up. investors are trying to figure out this overture of high-level trade talks between america and

china. datad mixed economic because we had good u.s. data, bolstering confidence that recession fears have been overdone, but we had gloomy recession factors from japan. south want to go to korea, linked closely to the japan trade issues and germany. it is an overlay of the korean datastream going back 13 years. the yellow is germany more recent pmi numbers. that factor is very sporting indicating the effects of a trade war. now to give ust new york city perspective is stephanie baker, bloomberg senior writer. it is the nexus of all, as marvin maule said, the elite

meeting to greet. what will you listen for among the posturing in new york city? >> obviously all eyes are on trump's speech later today. i expect he will hit the common themes of america first, countries tourging pay for their own defense, and he will probably call on leaders to isolate iran after iran's attack on those saudi facilities. this meeting only highlights how trump is with many of the world leaders. they are focused on climate change. by contrast him he made a brief appearance at that climate meeting. he has been focused on this religious freedom of at, which

-- event, which plays into his evangelical base at home as he gears up for his 2020 reelection campaign. aloneness was identified last year and the year before. how does he speak given the recent economic data, which clearly shows a global slowdown off of export and import dynamics? he is ignoring the warning signs that are flashing, piling pressure on the fed to do more. he wants to head off an economic slowdown that would hurt his chances for reelection. the one thing that would help them do that would be to end the trade war with china. china is not present at this meeting. there are many people who did not show up. to focus on that will be whether

or not he can and this global trade war. how will he address ukraine and how will democrats handle this? it appears they want to pursue this program despite risk -- probe despite risks for joe biden. there is an increasing furor over this whistleblower complaint about trump pressuring the ukrainian president to investigate joe biden for alleged corruption in ukraine and withholding military aid to ukraine as a way of pressuring him to do that. i think this has only increased calls by democrats to pursue impeachment, saying it is clear he has abused his office and

bypardized national security trying to withhold aid in this way. there will be eyes on that meeting come increased pressure by the white house to release the transcript of the call at the end of july. all these allegations that trump are pushing against biden are unsubstantiated. there is no evidence that has come to light that shows biden acted in favor of his son. francine: thank you. greg, bnps now is paribas u.s. head of equity and strategies. u.n.ere anything at the where boris johnson lays out a

u.s. thatt tie to the bolsters markets? >> unfortunately not. i don't think this is good to provide the breakthrough of clarity the market is looking for. this is going to be focused on trade progress in the incoming data, which globally remains mixed. we had signs last week that the data was getting better. that that is going to drive the market over the next coming weeks. your research sticks out like a sore thumb. bnp is really cautious on this market. what will be the catalyst to affect the caution that you see? >> i think the u.s. equities. we'll have one eye on the politics. a more sustained move for equities can be the deterioration in the macro data.

francine: thank you both. both of you stay with us. coming up, we speak with christine lagarde, the incoming ecb president. we will talk about her time speaking to world leaders as head of the imf. this is bloomberg. ♪

>> you are watching "bloomberg surveillance." pg&e cutting power to more than 27,000 customers in northern california. the company says the move is to stop electrical equipment from sparking wildfires during the

current dry and windy weather. the outage could impact as many as 120,000 customers. a $4.6d martin has won billion contract to build six or ryan spacecraft to carry astronauts to the moon. the first spacecraft from the deal is designed to be ready in 2024, the year asset has targeted for returning astronauts to the moon. gohsn havecarlos been fined by the fcc.

deutsche bank's top investors are directly approaching candidates about the coming chairman. runs outs patience with the current chair. no comments from deutsche's or qatar. francine: german business confidence is falling to its lowest level in almost seven years. negative readings are due to something about the current situation, meaning in this case that the downturn is likely to continue. we have a slight uptick today. francine: let's get back to enter sheets and -- andrew sheets and greg. we were seeing mixed signals from german businesses the day

after we had some pretty bad manufacturing data. what does it mean for what germany does next? on twoink we are focused issues. the first is the german data suggests a global economy that is still very weak and getting weaker, which we think is a bad thing for the market overall and a reason to remain cautious. it draws attention to the fiscal side. todon't think you're going get the type of fiscal easing the market really wants to turn around the economic data fast enough to make the market happy. at the moment, i think it confirms a pretty poor and decelerating global economy. what do you .2 that points to optimism?

that could point to severe concerns in the mechanism. >> the data globally has been disappointing. that gives one thing us all a little optimism in the u.s. would be the strength of the consumer. if we start to see malaise in the manufacturing side of the economy trickle through to the consumer side, that is what we are looking for. down 25% on a moving average study. is it a value trap where you look at german manufacturing as the mother of all bargains. i think the data tell you it is a value trap. there may be a lot of value in some of these value stocks, but we need to see an inflection in the economic data to prove that.

tom: i know they are not going to talk ecb, so we are going to talk it with you right now. what is the urgency to fix negative interest rates? what is the urgency to reverse the chronic nature of european finance? >> i think this is a fundamental challenge europe faces. it has leaned heavily on these tools of lower rates and quantitatively easing. moment theire effectiveness has been dramatically reduced. we are near the point of negative interest rates where further cuts tighten monetary policy. because theyse it further burden the financial system and make it difficult for banks and pension funds to operate. i'm sure the ecb would like for

fiscal policy to carry more of the load, but unfortunately all of the signs point to that being some ways away. this is a challenge. we think the markets priced for too much easing out of the ecb over the next 12 months. some of the ambiguities there. we heard that from bill dudley yesterday. we will come back with anders sheets and greg. huge news flow in new york city, headlined by francine's conversation with christine lagarde. there will be further conversations etc. and around tomorrow and the bloomberg global business forum. mr. modi front and center. the leadership of news england, among the manyin voices we are speaking to.

stay with us. this is bloomberg. ♪ this is bloomberg. ♪

>> we are in a good place. back down where they should be. mission accomplished as far as i'm concerned. there was a structural underlying issue, which was the fed shrunk its balance sheet over the time. fed is growing now that the debt limit issue is resolved.

a number of reserves in the banking system has been shrinking. tom: thank you for the worldwide response to the conversation with a micro economist from berkeley. london.heets in greg from bnp paribas. is it all clear on the institutional line? do you buy it? >> we certainly think so. we have seen pressure coming out to the funding markets. we have another interesting benchmark to see if things do remain calm. tom: the morgan stanley view on this. you have some smart people monitoring this. is it all clear for the new york fed? >> we don't think it is quite clear yet. we have quarter and coming up. this is an issue that will continue to be with the market because currency in circulation will continue to grow. when i a bigger issue is

talk to investors that are more optimistic on the market, the idea is that continues to be an enormous amount of liquidity in the system from central banks. here you have the largest, most important central bank in the world clearly having a liquidity challenge as it relates to keeping this front and rate within the target zone. i think it is a sign that liquidity globally is not as abundant as we have been led to believe, which is a concerning sign. francine: how difficult or easy is it for the fed to have a permanent fix to repo? >> we think there is a more permanent fix available to move towards permanent open market operations. there is a challenge there. that is a new program. does that get interpreted as en the fedpe of qe wh

views it as a maintenance operation? we think that could eventually be where the fed is going, but it is clear they are not ready to do that yet. francine: we are back with andrew and greg shortly. let's get a quick check on what else is going on around the world. the supreme court in the u.k., we should expect the ruling or starting to hear the judgment in a couple minutes. if the supreme court finds boris johnson broke the law by suspending parliament, he could be forced to recall the legislators, giving time for opponents to no deal to oppose his threat to leave the eu with no deal. this is bloomberg. ♪ here, it all starts with a simple...

hello! -hi! how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out.

that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today.

♪ francine: the biggest names in business and government will gather for the annual bloomberg global business forum. we will hear from top executives, world leaders, and policymakers including jamie dimon and christine lagarde. we arened for that expecting the u.k. supreme court ruling on whether it was lawful for george -- for boris johnson to suspend parliament. britain's judges have been more reluctant than u.s. counterparts to intervene in an overtly political question.

if they say this is unlawful but do not ask boris johnson to reopen parliament, it is unclear what they will do. is outsideb salek the court building. in all thetten up media, the five options the court has which center around the london court, the english ruled the british court for boris johnson and the scottish court ruled against him, that is the arch tension. francine: the london court saying they do not want to weigh on matters that are political, which is why there was a difference between what happened in scotland. volatility at market , we had pound being choppy. the main market conduit for any

kind of shock would be in pound, but any rolling in jonathan's favor, whether that represents the status quo, so courtesy moves will probably be smaller. tom: all the different news sources say they start delivering historic ruling. in the united states, usually with an abrupt nature, they release the ruling and then we start from there. from 1.2457.ng up francine: we have a great live blog on the bloomberg terminal. tony aarons reminds everyone that the last big brexit ruling about three years ago on whether parliament needed a vote on article 50 lasted about three minutes. let's go outside the u.k. supreme court.

when you look at the main unknown that could swing markets , how boris johnson and government will react to the ruling. sebastian: that is really what we don't know. there are different options. the lawyer for boris johnson has said he will obey the law but the prime minister has refueled to rule out proroguing parliament. it is the second phase. is this ahurdle is, matter for the english -- for the court? the supreme court's have reconciled the two for an outcome. what do welawful and count as unlawful, the length of the prorogation, the timing? we have brexit coming up. there is a lot to reconcile and there will be a focus to see how

the government responds because they are in a tricky position. the government is boxed in. has staked his whole political reputation on getting brexit done on that key date october 31. tom: is the nation riveted by this moment, or are they more focused on the future of manchester united? sebastian: let me tell you this -- this is the most-watched european court ruling. 4 million server request hit the supreme court website. it is unprecedented in terms of the public response and the gravity of the case. this will shape what prime minister's can do. this is a case of the u.s. constitution which is written but not codified some would

argue -- codified. some would argue it is being tested to its limit. we are getting some answers on what can and cannot be done in this country. francine: let's bring in some of the pictures we are seeing. let's listen in. r centuries, as long as 1611, the court held that "the king hath no prerogative but that which the law of the land allows him." however, in considering prerogative powers, it is necessary to distinguish between two different questions. the first is whether a prerogative power exists and if so, it's extent. the second is whether the exercise of that power within its limits is open to legal challenge.

this second question may depend upon what the power is all about. some powers are not amenable to judicial review while others are. however, there is no doubt the courts have jurisdiction to decide upon the extent and limit of a prerogative power. all the parties to this case except that. this course has -- concluded that this case is about the limits of the power for her majesty to prorogue parliament. thequestion is, what are limits to that power? provisions are relevant. the first is parliamentary sovereignty, that parliament can make laws which everyone must obey. this will be undefined. if the executive could prevent

parliament from exercising its powers to make law for as long as it is the executive pleased. the second fundamental principle is parliamentary accountability. in the words of lord bingham, "the conduct of government by a prime minister and cabinet collectively responsible and accountable to parliament lies at the heart of westminster democracy." limitedr to prorogue is by the constitutional principles with which it would otherwise conflict. for present purposes, the relevant limit on the power to prorogue is this -- that the decision to prorogue or advise the monarch to prorogue will be looked unlawful -- will be unlawful if it has the effect of frustrating or preventing without region a ball justification -- reasonable

justification the ability of parliament to carry out its functions as a legislature and the body responsible. in judging any justification which might be put forward, the court must of course be sensitive to the responsibilities and experience of the prime minister and proceed with appropriate caution. if the prorogation does have that effect without reasonable justification, there is no need for the court to consider whether the prime minister's motive or purpose was unlawful. the third question therefore, is whether this prorogation did have the effect of frustrating or preventing the ability of parliament to carry out its constitutional functions without reasonable justification. this was not a normal prorogation in the run-up to a queen's speech.

it prevented parliament from carrying out its constitutional role for five out of the possible eight weeks between the end of the summer recess and exit day on the 31st of october. proroguing parliament is quite different from parliament going into recess. while parliament is prorogue, neither house can meet, debate, or pass legislation. neither house can debate government policy, nor may members ask written or oral questions of ministers, or meet and take evidence in committees. in general, bills which have not completed all their stages are lost and will have to start from scratch after the queen's speech. during a recess, the house does not sit but parliamentary business can continue as usual. this prolonged suspension of parliamentary democracy took place in quite exceptional

circumstances. the fundamental change which was due to take place in the constitution of the united kingdom on the 31st of october, parliament and in particular the house of commons and the elected representatives of the people has a right to a voice in how that change comes about. the effect on the fundamentals of our democracy was extreme. no justification for taking action with such an extreme effect has been put for the court. the only evidence of light was taken is the memorandum of the 15th of august. this explains why holding the queen's speech to open a new session of parliament on the 14th of october would be desirable. it does not explain why was necessary to bring parliamentary business to a halt for five weeks before that, when the normal period necessary to

prepare for a queen's speech is four to six days. it does not discuss the difference between prorogation and recess, does not discuss the impact of prorogation for delegating legislation necessary to achieve alien orderly withdrawal from the european union.nt -- european it does not discuss what parliamentary time would be -- as requiredve by section 13 of the european union withdrawal act 2018. the court is bound to conclude therefore that the decision to advise her majesty to prorogue our lament was unlawful -- prorogue parliament was unlawful because it had the effect of frustrating or preventing the ability of parliament to carry out its constitutional functions

without reasonable justification. the next and final question, therefore, is what the legal effect of that finding is, and therefore what remedies the court should grant. declaret can certainly that the advice was unlawful. the inner house went further and declared that any prorogation resulting from it was noel and of no effect. -- null and of no effect. the innerhouse argues house cannot do that because the prorogation was a "proceeding and parliament" which under the bill of rights cannot be impugned or questioned in any court. theit is quite clear that prorogation is not a proceeding in parliament. it takes place in the house of lords chamber in the presence of members of both houses but it is not their decision. it has been imposed upon them from outside.

it is not something on which members can speak or vote. it is not a court or essential business of parliament the bill of rights or text. quite -- protects. quite the reverse, it brings that business to an end. concluded has already that the prime minister's advice concluded that the prime minister's advice to her majesty was unlawful, void, and of no effect. this means the order in council to which it led was also unlawful, void, and of no effect, and should be quashed. this means that when the royal commissioners walked into the house of lords, it was as if they walked in with a blank sheet of paper. the prorogation was void and of no effect. parliament has not been prorogue. judgmenthe unanimous of all 11 justices. it is for parliament, and in

particular speaker and the lord speaker to decide what to do next. unless there is some parliamentary rule of which we are unaware, they can take immediate steps to enable each house to meet as soon as possible. it is not clear to us that any step is needed from the prime minister, but if it is, the court is pleased his counsel has told the court he will take all necessary steps to comply with the terms of any declaration made by this court. it follows that the advocate general's appeal is dismissed and ms. miller's appeal is allowed the same declarations and orders should be allowed in each case. copies of our full judgment explaining these conclusions, and a transcript of this summary will be available immediately after the court rises, and i urge you all to read them with care.

the court will now adjourn. madeine: history being with the supreme court president brenda hale delivering that judgment, saying prorogation was void and have no effect, parliament has not been prorogue. constitutional argument, boris johnson does not have anything to do now because prorogation was unlawful. they could meet as soon as possible. whos get to sebastian salek is following that decision. does that mean parliament is reopened? yes,tian: it essentially, it is for parliament to decide what to do. it is in the hand of the speaker , a man who has been forgiving to the anti-brexit and

pro-democracy side of things. he has allowed motions and amendments to be heard that would make locking no deal difficult. perhaps we will see parliament sitting again. it is not clear there is any step needed from the prime minister, and this was a stage where it could have gotten quickly resolved or messy from the prime minister. cheers around us. so many people gathered both from the side he won and those opposing it. -- a very soggy day in london. come outmiller may after her successful appeal to the supreme court. what i find fascinating is the size of this really, unanimous -- victory, unanimous here and there. the court turns to the speaker and lord speaker. there was very little discussion

about the place of the prime minister forward. were you surprised? downtian: this all comes to that fundamental constitutional principle of separation of powers. the judiciary has handed things back to the legislature and it is in the hands of parliament to decide what to do. becausee speculating only seven of the 11 supreme court judges are in there, there might be some levels of discord. we have seen the most senior judges come to a completely unanimous decision today. from their perspective, there can be no room for discussion. an to say there will not be element of wriggling from the prime minister because he has tried all kinds of things to deliver on his pledge of brexit by october 31. we would be naive to think this

is the end. they said they will obey the law, but chances are they will try to come out with another trick to get brexit done as policy -- promised. when you look at the judgment that was just delivered by the supreme court, and the pound reaction, there seems to be of belief -- be a belief that parliament can stop a no deal. are they wrong? tim: i don't think they are. i am not sure this judgment makes it harder or easier for parliament. parliament was already in paul position. -- pole position. it cast doubt on boris johnson's behavior over the last couple of weeks, and on dominic cummings. version thatnimous

the government acted unlawfully, it is a damming indictment of the government itself. tom: i am not keeping score. i believe the prime minister is , 0-8.ing like 0-6, 0-7 does this get us closer to a general election? tim: it may do, but a general election is likely to occur in november rather than sooner. -- i think the prime minister will miss his october 31 deadline unless he has some incredible way of changing the mathematics and parliament. -- in parliament. he is faced with having to ask for the extension and if he does not want to do that, he will have to resign or face a no-confidence motion in parliament. i think the next move will

probably see parliament come back, and they do not come back automatically. there will be more discussion of brexit, but i don't think that will change the situation we have, which is parliament has blocked a no deal. boris johnson will have to ask for an extension, or someone will have to do it in his place. francine: let's go back to the u.k. supreme court where we are hearing from joanna cherry, the s&p lawmaker. -- smp lawmaker. there are still a lot of loopholes that boris johnson could foods -- force through no deal. tim: there are loopholes, there always are, but those can be blocked by parliament. if there is some new trick up

their sleeve, parliament at the -- at has a no deal majority against no deal and if it is sitting, will be able to do anything about that trick. if thisry likely judgment makes a difference to the no deal scenario, there is not much boris johnson can do is -- that parliament can undo. francine: let's bring in andrew sheets and greg poodle -- boodle -- boutle. anthere a bias toward extension that could be wrong? what are the chances of a no deal brexit? it is still a significant risk. 31 is the risk of october going down a little bit, but you still have a key question that is unresolved.

this was a striking and unanimous decision, and across assets there is more negativity around a brexit outcome priced into the pound rather than -- pricing in far less then a no deal probability. this is a notable statement and we will see more pound volatility ahead. tom: as we see the representative from scotland speaking, did all this occur because of the courage or decision of the eden borough court? -- edinboro court? did scotland drive this? tim: it is a bit of both. is surfing its independence from england. mp's getting together and breeding the case. we have to come back to gina miller, the woman who brought the case in the english courts,

who lost in the high court, but has won today. she has played an enormous role since the referendum. she insisted parliament got a vote over article 50 and she insisted the prorogation was unlawful. she has played an incredibly important part and brave part, given the criticism she faced. tom: i assume the nation would like to hear from the prime minister. does he rip up the script on the hudson river and instead of talking about taxes and trade, that he has to directly address the nation? well, it is a moot point as to how long he can stay in new york. he will have to fly back pretty soon. he will have to have parliament reconvenes, presumably make some kind of statement there if he

does not do it before then. we do not have a tradition of the p.m. facing the nation over live tv the way your presidents do in the united states, so that might not happen. he will have to face the music and parliament. francine: we are just getting a bloomberg headline saying that baker of the house john burke out will urgently consult over when parliament can return. when parliament returns, what will they focus on? tim: they will want to statement from the prime minister as to his reaction to their government acted unlawfully. that will be a field day for their opponent. they may well be trying to find out about the negotiations boris johnson is supposedly conducting with the e.u. 27, and that is something he perhaps won't want

to talk about but may be forced to do. there is the question that the leading and conservative party, which is in government at the moment, is holding its annual conference at the weekend and next week. will that be canceled because of the fact that parliament will be coming back or not? there are so many questions to ask. francine: thank you all for this pretty comprehensive coverage. e and sebastian salic. -- sebastian salek. because of the judgment and the commentary, it is unclear what boris johnson will do or say. there is nothing he can do to hang onto anything and parliament could reopen. tom: let's go to andrew sheets holding court at queen victoria

we see sterling advanced in the time of boris johnson. what say you foreign investment analyst? andrew: we think we could see near-term strength. -- itains volatile remains volatile and we probably get back closer to the lows. tom: andrew sheets of morgan thanky and greg boutle, you for being with us later today -- thank you for being with us. later today, francie conversation with christine lagarde. ♪

devices are like doorways that could allow hackers into your home. and like all doors, they're safer when locked. that's why you need xfinity xfi. with the xfi gateway, devices connected to your homes wifi are protected. which helps keep people outside from accessing your passwords, credit cards and cameras. and people inside from accidentally visiting sites that aren't secure. 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. ♪ tom: this morning, new york city the center of the geopolitical world.

the president will speak. the prime minister must have a response to the supreme court decision. christine lagarde will speak to francine. beijing and washington progressed to october 7. the data check is tepid. it speaks volumes about the effect of the trump trade war. it is a historic moment for the united kingdom, a resounding defeat, no other way to put it, for prime minister johnson. we have been talking about it. lostve images -- we just gina miller speaking outside parliament. particularibe this -- spectacular victory. francine: gina miller was the person who brought cases to the judiciary to make sure that article 50, after it was triggered, that parliament would

have a say on whether they left the e.u. that was one of the first things. through the last three years and a half she had wins and losses, but today is a huge win for everyone who is pro-remain. it was an incredible hearing with justice brenda hale reading out the ruling, saying it is not up to the prime minister to decide what comes next, but the speaker of the house and parliament to decide what they want to do. joining us as sebastian salek. the question people want to know, and we saw some big pound reaction, is how quickly can parliament meet? sebastian: gina miller speaking outside court, saying mps can get back to work tomorrow and sort out the situation. wants it to happen as soon as possible, without delay.

the will ofn saying parliament is immediately recalled. there is urgency to get right back in. we have not got long until october 31, although the bill demands that johnson delay brexit the on that. ,e will see anti-no deal anti-brexit no deals -- brexit step aheadering one of the prime minister to avoid a misstep for brexit to be delivered. francine: we have prime minister questions and boris johnson will have to address them. he is currently in new york city. when will we hear from him? sebastian: we have not heard anything from the prime minister yet. accordrying to get an

from u.n. leaders, but it seems parliament would convene as normal. hale,e heard from brenda it is as if that prorogation piece of paper was blank. theory,tally void so in tomorrow there will be prime minister's questions. there will have to be some element of deputization when the prime minister is a broad. the message from the judge is this is business as usual tomorrow and it will be as if nothing happened. tom: bloomberg bloombergnce," -- "surveillance," we cannot emphasize enough the crushing do vite for prime minister -- crushing defeat for prime minister johnson. the miller has defeated camp twice.

why isn't she a liberal politician? sebastian: this is a question she gets asked all the time. politics does not seem appetizing. if you look at the level of ,hreats these people have had there have been all sorts of horrible threats against these people. it is a really toxic time to be in parliament and gina miller has had no shortage of that. i presume that will be a strong factor into why she does not want to get involved as a politician, but she is doing a strong job as an activist. they have altered the course of brexit. you do not have to be in the house of commons to make a difference in this saga. tom: you are the only one who has read the united kingdom constitution -- that is a joke,

there isn't one. and touch back to 1688 1611. is this an equivalent moment to the time after the tutor rain? -- tudor reign? have seen what we today is an altering of what the executive can do. the prime minister has prerogative powers in theory, but given that we are andiamentary, they are used executed by the prime minister. the question is, what are the limits on his powers? we have had greater elements on legal certainty. this is a watershed moment of what the prime minister can do without the permission of parliament. it has taken brexit to push the parliament -- constitution to its limit. it is a different landscape than

even just a few years ago, and many people watching are making parallels with previous occurrences where we have seen push through. salek, thank you so much. truly a historic moment. sterling elevated and oscillating at 1.2462. what does boris johnson do in a few hours on the island of manhattan, hudson river overlooking new jersey? what does he do when he steps up to the microphone? francine: i am not sure he will stay. do you get on a plane immediately and fly back? if parliament opens tomorrow, it is 12:00 wednesday london time. the house of commons has started

issuing headlines saying they are looking at what they need to do to ensure the smooth running of parliamentary business. we need to spend a little bit of time looking at pound because we saw pound strengthening and the rally fading away. i don't know what the market is seeing that some commentators aren't. we are in for months of brexit uncertainty. parliament is unclear what i want. maybe that is why the initial pound strength faded. tom: as the prime minister goes back to london, maybe you and i ought to jet off to london. we have two guests on wall street watching this. we are thrilled to have with us amoa.n watson and diana

it has been a geopolitical moment, a constitutional moment, and we are here to talk investment. let's begin with the confidence in the global business community. his confidence wavering within the investment community? diana: it certainly is, and that has come across in a number of surveys we have seen. businesses are citing uncertain tea around trade in the u.k., brexit is a constant headwind. we are seeing this in the data. when you look at global capex, it is declining. tom: jeffrey rosenberg joining us for our fed coverage a few days ago. anlip hildebrand with important interview with francine a couple of weeks ago. have we worn out negative interest rates?

onthe blackrock statement the united kingdom and europe, have we come to an end of this experiment? diana: when you think about where we are in the business cycle, we are in the last legs of this business cycle and getting to the end, if you look at the ecb, there is a lot more space to cut rates. -- clarifiedlatt that recently. the fed has said clearly they think forward guidance and asset purchases would be the way to go first. in terms of negative rates in is morend japan, there space for yields to go more negative. the brexithat does conundrum mean for global markets? pound initially rallied, almost thinking there would be some

kind of concession or the 31st of october deadline was taken off the table. then the rally faded. what are the markets nervous about? diana: they are looking past the knee-jerk reaction and what the indications are going forward. more likely than not, if we do not get a resignation the u.k. is likely to ask for an extension. if that plays out, you have e.u.nged negotiations with -- with the e.u. and we don't know what the u.k. can ask for. the bank of england alluded to it. all of this uncertainty is becoming negative for economic prospects. tom: we still don't know how the -- francine: we still don't know how the government will react in their platform could be unknown until brexit. diana: we saw this reaction from

the pound and it is basically down again. t are in heightened uncertain around the potential for a general election and the outcome of brexit. there is a huge amount of political risk. the market saw it as a sign that intentionally it could be an extension or a smoother brexit outcome. the prospects of a general election are very high. francine: thank you very much. ,n the last couple of minutes another piece of breaking news. the vw ceo charging and chairman over market and epilation, saying they manipulation,- saying they deliberately informed the markets too late. chart, down to's

167. you have the manufacturing ousrlay and these ginorm german companies with serious legal action. these are directly against these three executives. here is a chart of vw and the decline. that is the short-term chart. well,-term chart of vw as the move down for some 10%. a malaise of manufacturing back three plus years. francine: coming up later today, a conversation with christine lagarde on whether she will have a thing or two to say about europe, and maybe brexit. that conversation later today. this is bloomberg. ♪

♪ you are watching bloomberg "surveillance." bloomberg news has learned donald trump is ordering his acting chief of staff to avoid sending $400 million in military aid to ukraine. democrats are investigating whether he used the withholding -- the chinese government gave new waivers to several domestic state and private companies to soybeans without being subject to retaliatory tariffs, after the u.s. government canceled the visitation of the chinese delegation to the u.s.

prime minister boris johnson's suspension of parliament was unlawful. that is the opinion of the supreme court. his advice to the queen is null and void, and parliament should meet as soon as possible. the decision was unanimous. 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 viviana hurtado. tom: truly a historic moment outside westminster. all the elite in new york city waiting for president trump's speech. we will hear what prime minister johnson will do. francine speculating on the exit back to london. with cirilli, let's begin this mess as usual and then i

will take a different tact. what will the president say today and how well he -- kevin: the focus will be on a ron. he has to build international -- iran. he has to build international coalition around iran. would argue this is an opportunity for the president to build a coalition to get everyone on the same page. the decision to withdraw from the iranian disarmament deal puts him at odds with key allies, but the events over the past two weeks have caught everyone by surprise. tom: i spoke with the admiral of the former -- formal supreme commander of nato and he said there has to be something taped out on the ukraine conversation with the president. when do we know that?

thursday, there is a hearing with the deputy director of national intelligence before a house committee chaired by adam schiff. there is a key focus of that hearing, with regard to this whistleblower issue. when i talked to republicans, they do not view this as something that puts the president at risk and also with the focus being on the whistleblower from the department of justice which is not disclosing the details of the whistleblower, they also view this in the long-term is a political risk or joe biden, given the questions surrounding the relationship with his son being on the board of a ukraine based energy company. francine: we understand president trump and the ukrainian president will meet. what will they tell each other?

kevin: there is a lot of focus on what they are going to be talking about, given the dynamics of the domestic politics in the united states. it is anyone's guess. when you look at their relationship with russia and with the energy sector, national security, there is a host of different topics. no doubt there will be added attention given the questioning -- questions surrounding the president. tom: kevin cirilli, thank you so much. able to getl be through the security in midtown from bergdorf goodman on down. new york city is remarkably shut down. in germany, stunning breaking news. theecutors will go after three senior officers of vw on diesel-gate. they charged the ceo chairman

over market manipulation. this is bloomberg. ♪

♪ francine: this is bloomberg "surveillance," tom and francine from new york as we covered the united nations general assembly, with boris johnson expected to deliver a speech. we are back with marilyn watson and diana amoa.

when you look at the concerns in the markets, i would point to tom's interview with bill dudley, but the repo market, what does that mean for liquidity in the market? should we worry? marilyn: if you go back before the financial crisis a decade or more ago, it used to be more common to have open market operations. this is a sign there is an issue around liquidity. when you saw the issues in the repo market, it was comfortable with the factors. there has been a build up our reserves -- of reserves. we have had the debt budget ceiling resolved. there has been a confluence of factors, but it definitely fact thatoward the

the federal reserve basically draining reserves will come to an end and they are looking at options to build it back up. francine: well they fix it permanently? diana: they well. they have committed -- they will. they have committed, and the chairman mentioned they would be discussing longer-term solutions , possibly increasing the size of the balance sheet. tom: i want to talk about the basic mathematics of the moment. both of you focus on portfolio management. the interest rate comes down, you flip it, and the reciprocal is a higher equity valuation. is that math broken? diana: i can speak from a fixed

income point of view that we see the disconnect between what rate markets are seeing and equities does not boil down to growth. it is expectations of support from policymakers, so while you have a lower rate environment, there has been a lot of focus on equities looking attractive. francine: thank you both. both are staying with us. the biggest names in business and government gather tomorrow for the bloomberg annual business forum. we will hear from narendra modi and greece's prime minister. this is bloomberg. ' ♪

beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity.

every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. ♪ tom: it is a beautiful washington. kevin cirilli says all eyes will

be on new york city. donald trump will speak. will be given with a great focus on iran. ,egal history made this morning absolutely extraordinary to see the story unfold. francine: it is early hours, 6:30 in new york. as the u.k.d rise supreme court's said the suspension of parliament is unlawful. what does boris johnson do when he returns to london? a possibility is that he resigns or tries to call for an early election, or a vote of no-confidence in his government? let's look at the data, equities, bonds, currencies, and british pound.

under 1.10. the vix, 14.56. dollar has been stronger. this is not a record dollar. we are elevated at the high-end of the recent range. renminbi has been weaker. highere: asian equities because of hopes in the market and on trading floors that high level trade talks between america and china against the mixed economic data from around us something to hang onto. we look at yen, 107.70. we talked a little bit about negative rates but let's get to the risk of a recession with marilyn watson and diana amoa.

when you look at germany, we had some difficult any fracturing data. -- manufacturing data. how close are they to a recession? marilyn: they will be in a technical recession within the next two quarters. weak thisas been very week and last week. if you look at manufacturing, it is concerning. it points to the fact, when the ecb announced a package of monetary policy changes including cutting the deposit rate, including the tiering and restarting the asset purchase program, the ecb are very cognizant of the fact that growth in europe is weak bank. -- is weak. francine: spain is cutting their 2019 forecast to 2% from 2.4%.

if you look at the trade concerns and deteriorating data in the euro zone and with the bank of spain cutting the growth forecast, is europe disproportionately affected by the trade war? initially, that was the sentiment, but what is important at this place is we are moving onto the next phase of weakness where the demand side is starting to look weak. some of the supply-side issues that were cited on equipment and low skill labor availability, those are fading because the demand side is weak bank and that is -- is weak and ed's spilling into's -- it is spilling into services. tom: i want to talk about the germanic thrust on fiscal policy. i see no understanding

culturally of fiscal stimulus. it is just not within the fabric. sense wekrock have any could see fiscal stimulus with german leadership? the automatic stabilizers kick in and you could see a modern amount -- moderate amount of stimulus but not to the extent the market would like to see. we could see fiscal stimulus coming through from germany, and the euro zone as a whole. i think it would be moderate. tom: we have a lot more to talk to hear. ,iana amoa and marilyn watson we need three hours with them this morning. in new york city with our first word news, viviana hurtado. viviana: china must avoid massive stimulus and keep debt

stable. the pboc chief says overall financial risks are contained and china's growth is on pace for the smallest expansion in 30 years. the trump administration has turned over 3000 pages to the manhattan district attorney as part of a court fight over whether his a town -- accountant give tax returns. there are allegations the company falsified business records related to hush money payments. the u.s. faa under fire yes again -- yet again according to a new report, the faa misled congress about a whistleblower's allegations that those performing safety assessments were not qualified. the faa calling the allegations

misleading. 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 viviana hurtado. this is bloomberg. io'svery carefully, ask pop -- axios publishing about the immediacy of moving the impeachment conversation forward as the president speaks at the u.n., it is all speculation, but they talk about the coalescing of all the emotions around the president speaking on the ukraine. francine: if you take a step back at the against political stories, ukraine and joe biden, and the other is what we saw in the u.k. the conservative party are due to meet this sunday in manchester for their party conference. the prime minister for the moment is here because of the

united nations general assembly. parliament could reopen tomorrow and we will see if they shorten the conservative party or not. this is all speculation, we know nothing, but we should be hearing from the government. coming up, a conversation with christine lagarde, the incoming ecb president. we will ask about what she thought about her time at the imf, the world economy, and maybe a couple questions on brexit. ♪

♪ francine: this is bloomberg "surveillance." about 10 minutes

news about thehe legal challenges against the vw chairs and chief executive. we are hearing from the other -- thee legal chief other side. the legal chief is saying it is groundless. this is the first time three -- were charged with market manipulation. the legal chief of volkswagen is saying the allegations are groundless. tom: we will focus on prime minister johnson and his history being made in the united kingdom. yesterday, we spoke with william dudley, former fed president. william: there was a structural underlying issue which is the fed has shrunk its balance sheet, currency is growing.

the debt issuance is being resolved, so as a consequence, the number of reserves has been shrinking. tom: bill dudley, really interesting. i encourage you to look at that interview, and we have a podcast as well. single best chart, marilyn watson and dumb i -- diana amoa with us. it is a choice set available on qe. no, that is a different chart. there is the single best chart that marilyn watson would love. here's the conservative view, bring the balance sheet down and get us back to the nostalgia of the past. as dr. dudley and many others suggest, this is the new glide path for the fed balance sheet. should we fear and

ever-increasing balance sheet for the fed? marilyn: i don't think it is something we should fear. the building up of the balance sheet was done for good reason. the fed has been drawing it down slightly, but it is not going sideways and you can expect it to build up. , if you see the continuation of the open market operations, you will see a gradual buildup of reserves. it is nothing to fear. andave seen currency expand we have seen a range of different issues, that it makes sense for the balance sheet to increase. guesshe u.s. is so big, i we can carry a balance sheet. is that the basic thrust? equal,if all else being if the economy is growing, you

should see an automatic organic growth in the balance sheet. that is the language the markets need to be careful. this would be happening without too much focus if we did not have qe. it is part of being in a system where the government guarantees circulation and that has to keep up with the pace of growth. francine: should we worry more about how much debt the countries around the world are? diana: at what be a disaster if you were concerned about yield levels arising -- rising. ,ith yields at such low levels it is inviting governments to issue debt and spend what is constraining -- and spend. what is constraining governments is the fiscal space. debt will not be in the forefront of the market. tom: diana amoa and marilyn

watson, thank you so much this morning. we have much more coming up. at the bloomberg mobile business -- globalew york, business forum in new york, mr. modi will attend. speakinging forward to to the former vice chairman of andfed, roger ferguson, christine lagarde with francine lacqua today. ♪

♪ the court is bound to conclude, therefore, that the decision to advise her majesty to prorogue parliament was unlawful. francine: this is bloomberg "surveillance," tom and francine from new york. johnson,here boris prime minister of the u.k., speculation on whether he will stay in your. -- in new york. to the u.k.raight shadow attorney general from the

labour party conference. we were listening to that hearing together. your main takeaway now is that parliament should open tomorrow and what comes next? >> absolutely, parliament should reconvene because that was shot down unlawfully. extraordinary thing to happen in a great, mature democracy like the u.k. i am embarrassed, not just as a lawyer, but as a person in britain to have boris johnson representing us. he is an embarrassment. whether people vote to leave or remain in our referendum three years ago, this case was about shutting down parliament and he did it unlawfully. tinpot the behavior of a dictator, not appropriate for the prime minister of the united

kingdom. , hee had a shred of honor probably would have resigned by now and maybe he wants to do that at the general assembly. extraordinary times and a powerful judgment from our supreme court. francine: if the prime minister calls for an election, well labour -- will labour support it? i could not hear you. francine: if the prime minister calls for an election, will the labour party support it? shami: we definitely want a general election, but the priority in the hours and days that is to make sure during an election campaign we do not crash out of the european union without a deal and relationship with our closest neighbors. that has been a priority, and as soon as that is locked down,

that could be done in days or weeks, then obviously we want the general election. tom: baroness, thank you so much for joining us. i am fascinated by this extraordinary legal decision and the city of london versus the rest of the country. the urban-rural divide on leave and remain, how do you propose that gap will be closed in the coming days? shami: i think what has been important about the judgment today is it has been about the rights of millions of people, whatever their politics, to be represented in their parliament. there were many demonstrations all over the country when boris johnson shut down parliament, and there were people who had voted to leave, brexit. boris johnson's appalling behavior is uniting people

against him. i think that we do have to heal this country. it has been sad to watch the country i love, over the last three years, people falling out of her brexit, families falling out, communities falling out. country isheal the to probably have another referendum where a deal is put to the people alongside the choice to remain. to be forward, we have talking about the environment and how to save our message loved -- our much loved national health service, affordable housing for our young people, it is those issues that would be focus of mind of the british people and bring them together again. baroness, thank you so much.

we greatly appreciate it. shadow attorney general from the labour conference in brighton. let's bring in our next guest, tom raines with chatham house. let me go to the immediate question, what do the conservatives do in their conference in a couple of days, and what does prime minister johnson do in manhattan? tom r.: p may have to fly home early to deal with the political outlook -- he may have to fly home early to deal with the result around the prorogation, which has only served to unite their political opponents and lead to a damming judgment. issue. tricky

parliament has not been prorogued. i imagine they will be sitting as soon as possible. in effect, many of the other parties have enjoyed their party conferences one normally parliament would be in recess -- when normally parliament would be in recess. they will have to persuade their colleagues in parliament to have a brief recess to allow them to hold their conference, or they will be caught between manchester and london. tom: you have written about the political tribes of europe. tell me about the linkage of --nson, disaffected lorries tories, and this brexit party of mr. farage. tom r.: what has happened in u.k. politics over the past few years is to transform our

traditional party system, which used to have two major parties, and transformed it into one that is divided between people who voted leave and remain. that is why we have seen the success for the other parties including the liberal democrats who are most opposed to brexit, , which wasxit party created deliberately to deliver brexit at all costs. boris johnson strategy has been to absorb those who have left the conservatives, who use to vote for labour and now vote for the brexit party. strong, aggressive rhetoric from boris johnson about leaving at the end of january, what may. what may.

francine: does it point toward a softer brexit or not at all because we could have a general election and no deal could be on the table? tom r.: the legal judgment is clear and decisive, boris johnson act did unlawfully. a judgment from the supreme court, you might expect a prime minister to resign. i don't think anyone expects boris johnson to do that now. this breaks the impasse in westminster. billament has passed a which compels him to seek an extension if there is no deal. what is likely is we will have another political showdown. i suspect the government may try to move another vote of no-confidence, but as you heard

earlier, the opposition do not trust boris johnson to act in compliance with the law until we are past the 31st of october deadline. they want to make sure there is no way the u.k. can leave with no deal. therovides clarity in short-term about the effect of the prorogation but does not break the logjam. francine: thomas raines, thank you so much. what is very significant as we have not heard from the u.k. government. we have not heard from boris johnson, which will give an indication if he wants go down fighting or if he will resign. ♪ here, it all starts with a simple...

hello! -hi! how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out.

that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. ♪ alix: work -- back to work.

the u.k. court says boris johnson's suspension of parliament is unlawful. soybeans to the rescue. china will start buying more beans from the u.s. pboc throws cold water on stimulus. china isn't in a rush to ease monetary policy massively, and must maintain a prudent policy stance. welcome to "bloomberg daybreak" on this tuesday, set number 24th. i'm alix steel -- this tuesday, september 24. i'm alix steel. the highlight in the last hour has to be what is happening in the u.k. a truly tremendous time for the country. that currency up by 0.1%. other than that, will we had new record highs in the s&p, and what will lead that? is the bond rally running out of steam? crude taking a leg lower just in the last hour or so.