>> good morning. this is bloomberg daybreak: europe and these are the top stories. impeachment inquiry. the gloves come off as democrats say president trump has violated the oath of office. offering an olive branch. china prepares to purchase ahead of high level talks. back to parliament. boris johnson flies into a crisis after the supreme court rules his suspension of parliament was unlawful. we are live in westminster.

welcome to daybreak europe. political risk is pushing its way to the front in the u.s., donald trump is to face a formal impeachment inquiry. says he has violated his oath of office. trump calls it witch hunt. after yesterday's defeat, boris johnson has restated his vow to complete brexit, defined calls to resign. he says he disagrees with the supreme court and will comply with its ruling. let's get the latest with jody .chneider who is live great to have you on the show. what are the chances the impeachment inquiry will lead to charges against the president? >> it is unclear whether there

will be charges. what nancy pelosi has done is ask six committees to look into investigate the president and his actions to see if he has violated the oath of office and report back. there will be an umbrella inquiry and there could be charges. this is a significant escalation with the democrats before the house had been reluctant to move forward on impeachment. even if they were to bring charges, it is unlikely it would end up with the president being impeached. the u.s. senate would have to vote in the end. they are highly unlikely to vote for impeachment of a republican president. nancy pelosi moving now? what is different? came about because of the allegations trump had pushed

the ukrainian president to investigate joe biden and his son. joe biden is running for president in 2020. this has escalated in the house because of these allegations and because these happened while he was in office. campaignooking at the was before he took office and some had worried there would be backlash against democrats. she is facing a push in her party on impeachment proceedings. even some democrats who are freshman and had, will have to run next year, are saying they need to take this on. she has faced pressure to move forward. to anna edwards in westminster. boris johnson has hit back at the supreme court, will he be able to deliver brexit? anna: good question.

he has had back. he says he accepted the ruling. he does not agree with it. we had similar messaging. a reminder, they said the decision to suspend parliament was illegal. the government broke the law and gave the queen unlawful advice. boris johnson flies back earlier than planned from new york. he is not resigning. he has made that point. interesting to watch the innerworkings because there have been calls for him to resign, his advisors to resign and so far the government has stood firm. the leader of the house spoke tones, according to our reporting. he suggested what happened yesterday was a coup and a

constitutional overthrowing of the constitution. we will hear more from him today. he's going to be appearing in the house of commons. usual,rn to business as as usual as it can be, in the house of commons. 11:30 a.m. u.k. time. so-called rebel alliance of opposition remain united? anna: this is the key question. happen brexit will still as boris johnson says he wants it to. the rebel alliance called the mp's, angry about his strategy. they agree on blocking a new deal brexit. is crucial. can they passed an act which was a piece of legislation when they took control of the house and

tried to take no deal off the table. that relies on parliament. to take other action. changing the date entirely or pass legislation for a second referendum. all kinds of things could be possible. they are not going to go for a vote of no-confidence. they don't trust the prime minister. of course we are looking to see if there will be resignations from the fallout of the verdict. anna edwards and jodi, thanks for joining us. some weakness in the asian sections. this news about the impeachment inquiry and also the mixed headlines. on the front foot after some declines. some strong declines study after

dropping eight basis

was negative yesterday. we bounced back today. crude ever so slightly on the back foot following some stockpile data. joining us to discuss is a member of the investment committee. welcome. let's focus on the u.s. side. we will discuss brexit later. what we've heard about the impeachment inquiry in the u.s., does this make you feel any negative about u.s. equities? >> i must've meet -- i must admit it will not be solved overnight. it has been discussed on the democratic side. this will at another uncertainty to future political events leading up to the election. we are quite favorable. not for those companies that are close to the cycle, because of where we are at the end of the , on the internet side, the communication services side, health care. the other companies where we could see solid growth. good earnings. innovation coming in and increasing market share for some of the companies. do.e's a lot to care,ning to health you've got some out there, goldman saying you should put protection on because of the rising popularity. is that something you're thinking about? sandra: absolutely.

we are quite diversified on health care. pharmacy, invested in we would be taking more action. we are involved in health care services, wanting to invest in companies for the aging population. also life-sciences. quite broad across the spectrum. we would stay away from pharma. there is some risk going forward. >> do you offset your preference for u.s. equities holding some treasuries? sandra: we have done over the last few months. we are not particularly interested in holding a lot of risk inside of our portfolios. it comes to we believe being so

close to the end of the cycle, it is hard to find the pivot point when the activity will increase. we find the bond market has move to bey and is dangerous in long-term yields. actually today there is a large position in the u.s. banking it is costing them. to be able to finance these bonds easily, with higher short-term rates. because of that, there may be some selling of tea notes in the future as they started to reduce

their holdings, the u.s. banks. that's another fear of why we would not want to be long, but rather heading in the curve steepness. >> i find that interesting because unlike some other people, you are concerned about the u.s. consumer. does that mean based on that the as aggressively as the market is pricing and be successful? fed haswe think the , that they comments cut asking at this rate a cycle adjustment. they feel theg as consumer is very strong.

so we think that is optimistic. hads the first change we've for a number of months. if we look at the pmi services, employment, it collapsed a few days back. slow down the the manufacturing recession that had been brought on from trade fears and uncertainty as fed through not only from the reduction of into, but by employers employment prospects. towardleading indicators the future of the consumers' confidence going forward. let's get to first word

news. >> thanks. upsident macron is stepping efforts to defuse tensions with iran. he met with leaders after meeting president trump. he said it would be a lost opportunity if he left new york americaneeting his counterpart. president trump used his speech to criticize iran. president trump: no responsible government should fund their bloodlust. as long as there behavior continues, sanctions will not be lifted. they will be tighten. the global economy is likely to dodge a recession. that is the view of christine lagarde. she says a recession is not her view and trade tensions remain the top threat of the global outlook. ofit is at risk because

essentially one major threat, seeh is the trade war we developing and the uncertainty it generates for investors and for anybody making economic decisions. japan's five year bond yields slipped to a record low after comments from the central bank added speculation of an interest rate cut. the governor said he was closer to adding stimulus now. he also talked about negative interest rates. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than one hundred 20 countries. this is bloomberg. nejra: thank you. coming up, the biggest names in business and government will travel to new york. we'll hear from executives, and

policymakers, including jamie and more. this is bloomberg. ♪

talked to a lot of who i and who knew the job. they all supported me and said yes, under current circumstances and given the strength of the institution, and the situation in europe, i had to say yes. preparing toould take the helm as the ecb. more highlights from our conversation throughout the morning. this is bloomberg daybreak

europe. let's check in on the markets in asia. what is your focus? what are asian traders looking at? >> we are looking backwards because we've had that news china is willing to buy more u.s. corporate. that is not affecting markets in asia which are taking their lead on wall street rather than the u.s. futures. down .6-pacific index percent. the hong kong market under pressure. the index is now on track to erase all those gains it hot in that euphoria from the extradition bill being withdrawn. japan's yield at a record low, three basis points. we had a steepening of the curve from governor kuroda suggesting as we have been indicating there could be more stimulates from the boj. watching the kiwi, just a little higher against the greenback. some wereish as

expecting. i want to show you china's economy because we had the beige book showing the economy continued to worsen in manufacturing and services in the third quarter. this shows what we have seen with the bloomberg track of the economy that we are expecting to see growth in the quarter below 6%, meaning it will be the worst quarter for the chinese economy this year as we see the effects of the trade war. nejra: thank you so much. let's go to london. >> thank you. out.k's chief is the company is replacing its chief with senior executives an attempt to salvage its ipo. the company plans to go ahead with the listing. it is unlikely to take place next month. is scandal over gucci

widening. authorities are probing executives for alleged tax avoidance. they settled the previous case this year. now documents show the focus is broadening to individuals pay. nike is at an all-time high after sales and earnings beat estimates. it puts last quarter behind the company, helping alleviate fears about the trade war. there were concerns it would hit growth in china. bloomberg business flash. nejra: more on events in westminster and what they mean. boris johnson is cutting short supreme to the u.s. wast ruled its suspension unlawful. boorse johnson vowing he's going to deliver brexit. are there more likely outcomes,

an extension or election? can't: we believe that we arrive at the 31st of october with a finite result. there should be and will be an extension. leaves boorseave johnson in a precarious situation. he will have lost all support around him. for his won't vote proposal these next few weeks. we are in a situation where as he has written his own redline on the fact he will deliver brexit on the 31st of october, eventas created a major

now. someobably will see up tore for him to resign that date. as long as the no deal brexit is , that possibility is last point, we don't think there will be any real compensation from the eu. boris johnson will come back with not much more than what misses me already negotiated -- mrs. may already negotiated. nejra: there is an argument with everything that has happened the tomight have less incentive

actually give boorse johnson what he wants. if we look at the impact on the pound, we are lower today. we have been range bound on the pound. given everything you said, do you think there is more upside momentum? sandra: a lot of risk has been priced into the pound and has been for number of months. that said, any investments we have in the u.k. we want to hedge because we are not out of the woods yet. we have no currency. we may be moving into another election. this mean about equities, for example? not seeingare still a turnaround in the u.k. economy yet. loweill see uncertainty, r levels of foreign investment.

funds, we keep investments in the u.k. they are very much foreign outwardly looking internationally exposed companies. nejra: is there a hesitance among investors and yourself to be too gung ho about european equities and eurozone equities with the brexit lingering? sandra: yeah. the brexit risk has wiped off europe,% of growth in continental europe. for sure. this goes with the fact we are investing in companies that have growth, that are not exposed to the european economy. we have low-level investment in european banks. that would be the first place where we would want to increase curves tof we saw

help the interest-rate margins. we would also potentially want to invest in some industrials. they are companies that are tonging new solutions security or are very strong innovation and transport, in railway, and breaking services. that type of very specific product. again, secular growth. nejra: ok. wl is staying with us. the biggest names in business and government will gather for the annual bloomberg business forum in new york.

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>> the decision to advise her majesty 2 -- parliament was unlawful. >> i welcome the judgment this morning. >> kit had the effect of frustrating or preventing the ability of parliament to carry out its constitutional functions without reasonable justification. >> i strongly disagree with what the justices have found. >> it demonstrates a contempt for democracy and an abuse of power by him. >> i don't think it is right, but we will go ahead and parliament will come back. >> today is not a win for any individual or cause, it is a win

for parliamentary sovereignty. of the voices from a dramatic day of u.k. politics after the supreme court ruled boris johnson's suspension of parliament unlawful. this is "bloomberg daybreak: europe." nejra: i'm nejra cehic in london. anna edwards is in london. mp's returned to parliament today. what should we watch out for later? anna: nadal today of high drama, yesterday in westminster. today we will be watching the return of mp's to the house of commons at house of lords, sitting in the palace of westminster behind me as this prorogation has never happened. they will try to do business as normal. and won't be prime minister's questions as you would normally get a wednesday, as the was sufficient time to give notice for that.

boris johnson has been at the united nations general assembly in new york. we are going to hear from the leader of the house. we know he has spoken out about what he calls the coup by this up in court yesterday. the government in general he has except that the decision but say they don't agree with it. we know there will be plenty of time for statements and urgent questions. we will see how other mps behave in the house behind me and whether the rebel alliance of mp's, x tory mps and opposition party, whether they hold together. how will they force their will or how will they try and block a no deal brexit. they've taken some steps toward that. it will be interesting to see this tragedy adopt because boris johnson has said he wants to commit to leaving the eu on the 31st of october. that means you've got to get some deal or there will be conflict with members of the

house of commons where there is no majority for no deal. nejra: the question becomes of an extension or election increasing the likely outcomes. let's get the first word news in london. >> thank you. president donald trump faces an impeachment inquiry. house speaker nancy pelosi says he has finally violated his oath of office amid allegations the president urged ukraine's leader to probe presidential hopeful joe biden. trump says he will release the transcript of the phone call today. he denies allegations of wrongdoing. president macron is stepping up efforts to defuse tensions with iran, meeting with the leader after meeting with president trump. he said it would be a missed opportunity if he left new york without meeting his counterpart. trump used his speech to condemn iran. iran's menacing

behavior continues, sanctions will not be lifted. they will be tightened. , the bank hasa reiterated it is ready to cut interest rates if needed but stopped short of flagging and imminent move next week. the governor said the economy is at a gentle turning point. the rba eased in june and july, reaffirming low rates is on the cards. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more .han 120 countries this is bloomberg. nejra: thank you so much. let's bring you more on a bloomberg scoop, china is preparing to buy more u.s. pork as negotiations are set to restart next month. this comes after president trump used his u.n. speech to complain about china's trade practices. the chinese foreign says both countries have shown goodwill with recent tariff moves. >> there's a claim in the u.s.

the country has been ripped off by china. is that really so? i'm confident our presidents here today are aware this is not the fact. nejra: another important voice, being coming ecb president christine lagarde says trade remains the main threat to global growth. she spoke to francine lacqua in new york. >> i can tell you it is not in the baseline to have a recession, that said, it is mediocre growth. because essentially, is theor threat which trade war that we see either brewing and the uncertainty it generates for investors or anyone making economic decisions, not to mention what i think mark carney

called the tragedy of the horizon, the climate change economies that requires action now but will produce effects later on. francine: do you see commonality in leaders or worry they don't have a common objective? christine: i've yet to meet a leader or prime minister or finance minister who says i don't want sustainable growth, thank you very much. that should be a common objective. how they reallocate, redistribute, deal with inequality is a matter for them to decide, but growth in and of sustainable growth, is something that should be desirable for all of them and by sustainable, i mean in theliance and respect with

survival of our planet and the respect of the environment. goal,st with that common they should move forward together on certain key opponents. francine: if we were to have a crisis, would world leaders be able to sign an accord like they did back then? when you have the biggest players at the table? we were in a late 2008 come early 2009 situation, there is no doubt leaders would come together yet again. i really hope that does not a threat as we-- had in those days should not happen again. possible we talk about trump administration intervention on the dollar. unthinkable awas couple years ago and now openly talked about. christine: i don't want to state any policy or direction in terms

of monetary policy going forward, but there are and have been changes. questioning the traditional way of thinking about monetary policy. i hope the commitment made by the g20 leaders as early as 2008 and repeated ever since, not to adopt protective measures, would be sustained and would be reaffirmed. in coming ecbs president christine lagarde speaking to bloomberg in new york. could start with the state of play with the trade war, we get positive headlines day by day. today, china said to be a to buy more u.s. pork but then we get offset by president trump at the yuan accusing china of currency manipulation, theft of intellectual property, and dumping. weigh way this up --

this up into october, how do you see this? >> from the week of the seventh october, we have a path for new negotiations. how more progressive will they be compared to periods in the past is unknown and we've seen market retracement, risk on, risk off, volatility. we are clear that every time we go to china, four or five times with the whole equity investment seen in march, there is complete uncertainty whether we are looking at households, small businesses, large businesses. there has been a retraction. we have seen lower growth in china. this is also the case in the u.s. the uncertainty has created such a significant hole in the supply chain and we are starting to see

intermediate price inflation from tariffs sneaking through. clearly it has had an important impact on global growth and continues to do that, such that we are in a very fairly well pronounced manufacturing recession. we would look forward to some relief on trade. as we get toward the election next year, we believe there will be some political benefits for mr. trump to actually finally create the environment for some conclusion here, but let's be sure. this is not going to stop just at trade negotiations. this negotiation with china ,nvolves a whole new political geopolitical relationship going forward and also involves probably still much more andussion on cybersecurity

also the intellectual property issues, so it is not just a goods and services discussion. nejra: absolutely not and on the impact of the global economy, the beige book showing the economy is struggling across all manufacturinger slowdown or recession spilling over into services which you were alluding to. yesterday, we heard from the pboc governor saying there is no rush to stimulate massively. you could have said it is him being reassuring, saying we don't need big stimulus, but you see it a different way. sandra: can they stimulate? thishey go forward in period of time to cut rates even further? keep in mind the reserve rate cuts is only more technical in keeping the equilibrium but they can allow more credit into the system which would weaken the rememb --n -- and potentially feed

her into a property market they don't want to re-stimulate. that is why they can't do it, but do they need to do it? 2008, theare to 2015, business environment, company actual margin, the overall level of inventories in business and housing, they don't necessarily need to ease. we don't today have the 30 months of inventory that needs off, so it is not as if the chinese central bank need to cut rates as much as they did in 2015 and 2008. there is no prize those comments had come out yesterday.

that is how we feel about it. preparing for dollar weakness because we were talking about the impeachment -- ify and some say with president trump gets embroiled in this, he might back off from taking a hard-line stance against china, potentially dollar negative? it is a hard point at this stage because we believe the fed is behind the curve and feel the fed will need to at least cut at least two if not another three more times, which should be dollar negative. what could be against that position is we have more middle east strife. we have safe haven quality going into the u.s. dollar, or we may well be wrong on the fed. if they do sit back and create conditions for the economy today and the u.s. surelyrises slowly but

back again against the euro, for example because of more deterioration in the european economy. that is not our central scenario. nejra: sandra crowl from carmignac staying with us. coming up, the biggest names will gather for the bloomberg business forum in new york. world leaders, and top bank executives including jamie dimon, david solomon. this is bloomberg. ♪

>> we did the best we could the time when argentinian leaders can task with a difficult situation. we really try to anticipate as much as we can and

unfortunately, the most recent developments that were triggered by a political development have proven difficult for the people and the country. nejra: that was our interview with christine lagarde, who is preparing to take the house at the ecb as the first woman in history to lead the institution. more highlights from the conversation throughout the morning. this is "bloomberg daybreak: europe." the entrepreneur who led wework has stepped down as ceo. him was aver "significant distraction" and it was in the company's best interest for him to step down. two seniors have stepped over as -- taken over as co-ceos. with more, we are joined from tokyo. is the ipo still going to happen? >> good question.

for potential investors, there have been long points of contention starting from whether the company has a viable path to profitability, how the business model will weather a potential but leadership was figuring prominently on that list and at least with this move, one point of concern being removed and as far as the replacement for adam newmann, the replacements seemed fairly reasonable qualified as well as far less eccentric. you should read the story on the terminal that describes one of them as the adult in the room but the bottom line for wework is they have to ipo. they are burning through money and have about 6 billion in debt financing contingent on a listing. it might not happen next month as planned, but something has to happen by the end of the year. nejra: what does this tell us

about softbank? is it becoming a more activist investor? pavel: that's another good question. buys into the companies, we know they have put their founders to task. suddenly, the company face accelerated schedules and a lot of screwed me. for a wife -- scrutiny. they weree, it seemed throwing bags of money around but the individuals are getting much more involved. the most prominent example was the change in management in uber when softbank came in with their while thend it shows company only takes minority stakes, when push comes to shove and there is exposure on the line, they will put their foot softbankwith wework, has almost $11 billion at stake between the group as well as the vision fund.

we have to consider the timing. moment, they are trying to convince investors to put in money and to have an ipo flop at a time where huber trades 30% below offering price is not good optics. nejra: great to catch up. our bloomberg tech reporter joining us from tokyo. president trump used his speech at the general assembly to hammer away on issues. he decried chinese trade practices and uncontrolled migration, and warned against unregulated social media but the main topic of debate in new york was iran. here is more on the showdown between between washington and the islamic republic. annmarie: president trump's america first vision was on display at the u.n., boasting about u.s. might, complaining about his adversaries and warning about uncontrolled

migration. one of his biggest complaints was directed at iran and the country's "bloodlust." >> no government should subsidize iran's bloodlust. as long as iran's menacing behavior continues, sanctions will not be lifted. they will be tightened. trump did offer iran and olive branch saying he is open to talks with iranian leaders, who the u.s. has never believed permanent enemies. the world is waiting to see how the iranian president response. we get a glimpse. we spoke to fox news last night. we bump into one another? pursue higher goals to benefit both countries, both people, it must be planned and talks must be based on those

plans but prior to that, we must create mutual trust. the trust is something mr. trump took away from this framework. we had an agreement. mr. trump executive it -- exited it without validation. president macron to try to play a mediator role. he met with both leaders and used his time at the podium to try to defuse tensions. listen to what he said. i very sincerely and profoundly believe that the time has come to resume negotiations between the u.s., iran, the signatories of the jcpoa and the regional powers which are first and foremost affected by the security and stability of iran. annmarie: macron said it would be a lost opportunity if rouhani

finished his visit without -- trip to new york without a visit but that doesn't seem to be in the cards. nejra: sandra crowl from carmignac is with us. are the oil markets correctly pricing this geopolitical risk? sandra: probably not, and we've had to start to rethink your some of the unrest in the middle east back into our investment decisions. today, what is influencing the oil market is the fact we had conflicting stories about the accidentom the drone and reduced output from saudi arabia. what thed to price in actual deficit is of the oil supply coming out of saudi arabia. 2020,ly, looking into there is a scheduled oversupply oil prices weigh on

in the first quarter at the least of 2020 and the last point, we are not really in the same situation we were 10 years ago. the u.s. is close to being self-sufficient, over 9 billion barrels a day -- 9 million barrels a day of oil. outage for a big saudi arabia, it is a big player but the world can perhaps make up for that loss by the room production. -- their own production. thee could be some risks, oil price isn't pricing that today but there is extra supply coming in. -- do you lookou at royal equities or transfer it into your view for global growth? sandra: both. growth, at around $60 a

barrel, moving up 10%, will that move the lever on reduced growth because of the increased energy costs? frankly, no. we would have to be moving over barrel for it0 a to feed into a real impact on global growth. that is not an issue today at these levels. nejra: thank you so much, member of the investment committee at carmignac. the biggest names in business and government will gather for the annual bloomberg business forum in new york. and both are from bank executives, world leaders, and policymakers. remember, bloomberg users can interact with the charts using gtv go. bounceback for u.s. futures after the s&p 500

dropped the most since august yesterday. there are concerns about the impeachment inquiry launched on president trump. theng a little weakness in asian session and in terms of european futures, we are set up negatively. this is bloomberg. ♪ bloomberg. ♪

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nejra: from bloomberg's european headquarters in london, i'm nejra cehic. this is "bloomberg daybreak: europe" and these are the top stories. the gloves come off in washington as democrats and president trump has violated his oath of office. he dismisses the move as a witchhunt. boris johnson flies into a political crisis after the supreme court rules his suspension of parliament was unlawful. we are live in westminster. china prepares to purchase more thatpork ahead of talks christine lagarde says trade remains the biggest threat to global growth. a new deal is at risk because

of essentially when major warat, which is the trade we see. nejra: welcome to matt:." -- welcome to "bloomberg daybreak: europe." political risk is pushing its way to the front. donald trump will face a formal impeachment inquiry. nancy pelosi says the president has violated his oath of office under the constitution. trump called the move witchhunt garbage. defeat,sterday's legal boris johnson has restated his about to complete brexit next month, define calls to resign, think he profoundly disagrees with the supreme court but will comply with its ruling. let's get the latest on the

trump story. live at westminster, anna edwards. great to have you both with us. talk us through the process through this inquiry and what is different this time? investigations into president trump have been going on forever but this one is different. this is a degree of magnitude bigger. takeis the first step you toward an impeachment that could possibly result in a removal from office. removal from office for president trump is very very unlikely. house eventually votes to impeach, they have to go to the republican held senate and ask them to kick out a republican president. that has never happened in the history of the united states and it is unlikely to now. however, what this will do is allow democrats in the house to them and get to the bottom of a wide range of things including most recently, this thing that

burst the dam here. the allegation that president trump had tried to pressure the country of ukraine into digging up dirt on one of his political opponents joe biden. what are the potential implications to president trump's approach to china in the trade war of this impeachment inquiry? derek: this complicates everything, i think. the white house has said nancy pelosi's move complicates the entire legislative agenda, destroys any good will that may have been there. i am skeptical they were going to do much of anything anyway. however, where it definitely hurts, it hurts the president's ability to focus on the china issue at hand. trump is going to have a meeting tomorrow at the u.n. with which is goingr,

to be very well watched but then he is also going to have a press conference at 4:00 u.s. eastern time. i would watch the very closely. askedbably going to be about his hawkish chinese rhetoric and what that means going forward. nejra: thank you, and anna edwards in westminster, let's turn to boris johnson and his response to the spring court's verdict. it was a strong one, wasn't it? anna: the supreme court, using the run strong words, finding the decision was unlawful. it broke the law and the queen was given unlawful advice. agree withon doesn't the court but will stand by the court's decision. we've heard from members of his cabinet speaking out about this, suggesting what they heard at the supreme court yesterday was a "coupm," the words of the leader -- speaker of the house.

he will appear at the dispatch box in the house of commons. 11:30, as protesters reappear in westminster, it is when we will see the comments getting back to business. it is as if prorogation never happened, we heard yesterday. there will be time for questions. boris johnson is flying back from new york and the u.n. general assembly. so-called rebel alliance remain united? anna: this is a key question because this goes to the heart of what happened at the end of october, where brexit goes next. the rebel group is a coalition of labor and others and also ex- conservative mps. together, they make up an alliance who have tried to block

a no deal brexit. that is what they agree on that they don't agree on much else. it is difficult to find a course forward. will they tried to put some legal weight behind the bill it was the recent legislation to try and stop the no deal at the end of october? that relies on parliament sitting. if they are nervous about another prorogation, all kinds of things are possible, they could try to add more legislation to the mix. might it be to change the date of brexit, a second referendum? may'sthey try to move deal back to the house of commons? bymany questions provoked the earlier than expected return of the house of commons after the prorogation the never was. nejra: anna edwards in westminster, thank you for joining us. let's check the markets. u.s. equities dropped the most since august yesterday with the news of the impeachment inquiry.

butres bounce back today perhaps european futures playing catch-up with the asian session, weaker. dax and cac not getting much of a lift after we heard about china buying u.s. pork. we move up a basis point today on a 1.66 handle in the cash trade, reflected in the futures. in the moment, steady on btp and goldmanures -- bund sachs president says the u.s. is still where you should be putting your money. >> based on the flows we see with our client base, more money into the united states, probably a safety mechanism, the united states seems to be the safest place to put capital today with the risks you highlight, the u.s. is still a strong, vibrant economy. nejra: where is our next guest putting his money? joining us for the rest of the show, peter fitzgerald aviva

investors. do you agree that u.s. is still where to put your money despite increasing risks over trade war and most recently with the impeachment inquiry and the risk rising? impeachment risk, it is a bit of a sideshow to be frank. there are bigger issues at stake in the economy and how we look at markets. and you consider the u.s. market, you got to break it into -- currency, bond, equities, credit, a sweeping statement to make. we see the u.s. as being more defensive as a broad market in an environment of increasing uncertainty and we are in one of those periods today. nejra: i like that you distinguish the assets. if you look at the u.s. as defensive, would you put your

money in treasuries and also equities? peter: our view is you need a balance in your portfolios but at the moment, our bias is the economics are deteriorating rather than improving. if you think about what happened in markets last year into this year, you got two key drivers in markets. the first-come interest-rate policy, particularly the fed and the second being trade and last year, both of those were headwinds and this year, we would say monetary policy globally is more of a tailwind for asset prices whereas the isde tensions -- a trade war quite a strong headwinds now. when you look at u.s. markets, what is attractive from a multi-asset perspective is the fact you've got 30 year materiallyyielding more than all other bond markets in the developed world and that earn an asay you can significant income from that because you need to hedge your currency exposure but it can

give you duration risk and protection in an environment with economic uncertainty increasing. 500a: in terms of the s&p and the fact we are not that far off all-time highs, do you see it has more vulnerable to downside risk rather than want to add to the exposure now? peter: i find it quite intriguing that the s&p is pretty much at its all-time high within -- when you have increasing economic deterioration. is problem you have irrespective of where the markets are and what they are pricing, you see a potential decline in the s&p 500, equity ,arkets in europe, asia emerging markets will not post positive returns. nejra: let's switch to a global view because we started talking about president trump and also brags it and boris johnson --brexit and boris johnson. given what has been said, is the

risk of a no deal brexit decreased now? sandra: we do -- peter: we do. it is impossible to predict exactly what will happen when. what is the worst potential outcome for markets? that would be a no deal brexit, effectively. what is the probability of that happening on the 31st of october? our view is given the recent actions within parliament, the probability of a no deal exit on the 31st of october is materially reduced and that is not to say it is not possible at a further date, but we see the probability of that reduced materially. all of the other things are not bebad as a no deal exit, that a remain, second referendum, exit with some deal. i put all of those other probabilities or possibilities into one bucket and that is how we think about the potential outcome. nejra: is that encourage you to

increase pound exposure? peter: i think the pound today is reflecting that high degree of uncertainty. our view is that if you don't have to take a position in certain instruments, you shouldn't do so and what we wouldn't do is take the short solution in the pound, because the possibility that has a sharp recovery if you remove some of the uncertainty we are seeing is quite material. nejra: peter fitzgerald from aviva investors. juliette saly in singapore has more. juliette: we are taking our lead from the u.s. markets and ignoring the news that has come through today that china is willing to buy more u.s. pork. that hasn't given a lift to equities. the nikkei down .4% even though we are seeing weaker yen. the hang seng is one of the worst performers today, seeing the msci hong kong index as a

whole to racing a lot of gains -- erasing gains from earlier in the month when we heard the extradition bill had been withdrawn. the csi 300, down .6% with an hour trade to go and the kiwi giving back earlier gains. the rba, leaving rates on hold today. . has dovish in the commentary as some had expected that the bank of england -- ink in new zealand expecting to cut in november and february, bringing the cash rain down -- cash rate to .5%. in jgb, yield curve has steepened, the yield on the five-year hitting a record low on the back of that commentary we heard from governor kuroda suggesting stimulus as almost effective as providing stimulus. you seen the yield curves between the two-year and 30 year up by 20 basis points already in september after kuroda told the nikkei the long bond yields have

falling too far and having this momentum. we could see stimulus from the boj at the october meeting. nejra: juliette saly in singapore, thank you. let's get the first word news. naomi: chinese companies are preparing to buy more u.s. pork as trade talks restarted washington next month. it may be about -- around 100,000 tons as president trump used his speech to hit out at china saying beijing has failed to adopt reforms to make the nation more market friendly. the global economy is likely to dodge a recession, the view of incoming christine lagarde. she says a recession isn't her baseline view but trade tensions remain the top threat for the global outlook. it's at risk because of essentially one major threat, seeh is the trade war we

either developing or brewing, and the uncertainty it generates for investors and anybody making economic decisions. naomi: the u.s. is looking at waist height heighten the tariff pain for the eu over the 14 year dispute over subsidies to airbus. year thatling this the u.s. can retaliate. considering not taking the project subject to tariffs. it means the u.s. can hit as many industries as possible. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more .han 120 countries this is bloomberg. nejra: thank you so much. the biggest names in business and government will gather for the annual bloomberg global business forum in new york. we'll hear from top bank executives, world leaders, and polity -- policymakers.

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>> i met a loss as to what is going to happen but clearly isxit uncertainty questioning many economic decisions on both sides of the

channel. nejra: that was our interview with christine lagarde. she is preparing to take the helm at the european central bank to lead the institution. more highlight throughout the morning. i'm nejra cehic in london. let's get the business flash. chief is out, replaced by two senior executives to salvage its embattled ipo. the company plans to go ahead with the listing but it will unlikely take place next month as planned. the scandal looming over guccis turnaround is widening. report the former executives related tax avoidance. they settled a previous case this year over tax payments from 2011 to 2017. documents show the broadening to individual managers pay. santander is taking a 1.5 billion euro hit tied to its u.k. operation as brexit and a

challenging regulatory environment squeeze profits. santander says it won't affect the lenders ratio. its fourth-largest unit has struggled amid geopolitical uncertainty. that is your bloomberg business flash. nejra: let's bring you more on a bloomberg scoop. china is preparing to buy more u.s. pork as negotiations between the nations are set to restart next month after president trump used his speech at the united nations to complain about china's trade practices. chinese foreign minister says both countries have shown goodwill with recent tariff moves. >> the claim in the u.s. that the country has been ripped off by china. is that really so? i'm confident our presidents here today are aware this is not the fact. nejra: speaking to bloomberg, incoming ecb president christine lagarde says trade remains the biggest threat to global growth. >> it is mediocre growth.

it is at risk because of essentially, one major threat which is the trade war that we see. nejra: peter fitzgerald from aviva investors is with us. how significantly have you de-risks around concerns over the trade war? peter: materially. it is worth reminding people this is not just about trade. trade is what gets the headlines. this is about technological supremacy. it is about a new potential cold war between china and the u.s., and it is about china made in 2025. this is much deeper than simple trade tensions. it is not going to be resolved or we buy someys agriculture products from you.

this has a longer-term fanatic finesse. our view is that is not reflected in asset prices today. strategy fromour 40% equities at the beginning of the year to 10% today. -risking ofnt de the portfolio and we have maintained government bonds in elongated u.s. treasury. -- it islk to me about not about taking directional trades, so what are you doing? peter: there is a case for having a small amount of directional positioning with inequities from time to time. -- that that was in a in a macro portfolio, you have to take a micro approach and that will involve looking at individual sectors, baskets of companies and really doing some

relative value opportunities. u.s.ow the, for example, health care pharma is getting negative publicity however those are relatively defensive areas of the market so you can go along u.s. health care and pharma against the market. there are opportunities industrial areas where a number of businesses have adjusted their models to move into a more service-based revenue approach so it is not just that we sell you the engine or the goods, we charge you a specific amount for the servicing of those goods through time. what were traditionally cyclical businesses end up having earnings that are less cyclical in the future than the have been in the past. nejra: protecting yourself against where we are in the cycle. when it comes to fixed income, you talked about lightening duration, but what about credit? peter: if you head into a that isn or a slowdown not a disaster, credit is fine. credit particularly

in europe is well supported by the ecb and the qe programs. therefore, an environment where yields are exceptionally row, risks are high, you can earn a reasonable amount from those credit positions in the business is you think will be here to stay. nejra: does that mean you don't see us headed for disaster or recession soon in the global economy? peter: when one makes predictions, you have to first probability bonus and a time frame. there is a recession and in five years, i've told you i was right. you have to from the question in terms of one. our view is probability of a recession is high, and it is probably almost a 50-50 call, to be frank, whether there will be a recession in the next 12 to 18 months. nejra: is the fed behind the curve? peter: the fed is probably behind the curve in appreciating

the death of the slowdown caused by trade issues. nejra: what about china because there was "no need to rush with massive stimulus." we could be reassured or worried because it has limited levers. peter: it is impossible to know what exactly is going on in china at any particular time. i read about five books on china in the last 12 months and the more you read, the more you realize you don't know. key to china is social stability so what they will do is the stimulus that is required to ensure the population is gainfully employed. they will not do stimulus to stimulate world growth for the benefit of others and that keeps their population employed. nejra: peter fitzgerald at aviva investors. next, the biggest names in business and government will gather for the annual bloomberg global business forum in new york. we'll hear from the world's top

bank executives, world leaders, and policymakers. that is it for daybreak: europe. the european open is next. - i think the best company's succeed as a team

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- [narrator] custom ink has hundreds of products to help you look and feel like a team. upload your logo or start your design today at customink.com i met eller and direct this morning -- i'm matt miller in zürich this morning. the leaders of the u.s. and the u.k. face chaos in the legislature. european futures are pointing lower and the cash trade starts in 30 minutes. presidential harassment, donald trump cries witchhunt again