>> a handshake seals a partial china trade deal. not good enough. the eu says a brexit breakthrough is still a long way off. respondsa's president to the turkish incursion by sending troops to the region. ♪ >> welcome to "bloomberg surveillance." i am francine lacqua in london.

looking at the european stoxx 600, some downward pressure. the focus is on the trade deal. it is a partial trade deal. will not round tariffs go into effect. a lot of focus on the chinese economy. the other big story is brexit. 125.66 is where we are seeing cable at the negotiations are ongoing. and there is a brexit summit as we like to call it with eu leaders in brussels on thursday. coming up on "bloomberg surveillance" we speak to the former fed governor. nobel also expecting the prize in economics to be announced later today. let us get straight to the bloomberg first word news from new york. says he ist trump ready to go with more tariffs on

turkey. this comes after the u.s. withdrew troops from the north of the country but the move has pushed kurdish fighters into the arms of president assad. forces from the syrian government are returning to the northeast for the first time in years. and spain's top court sentenced cut elan separatists -- catalan separatists to 13 years. former catalan vice president was handed the stiffest sentence. the regional president at the time -- he remains in exile in belgium. in the sun of joe biden has broken his silence. unsubstantiated accusations.

he is promising to forgo all foreign work if his father becomes president. he reiterated that he never discussed his business activities with his father. over to hong kong, a police officer is in the hospital after the neck aftern another weekend of violence. coming despite some protest groups discussing using back worried that the violence is alienating people. and in poland, nationalists are headed to another four years in power. itsparty is known for vilification of the gay population. and over to japan, the country recovering after the typhoon left a trail of destruction. the house is flipped like a soda can. the destruction across the

country has killed at least 40 people. troops were sent to the affected areas to fight flooding and rescue residents. this is the most powerful storm to hit japan in decades. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is blmb francine: thank you. we are also getting pictures of the turkish president ree briefing in istanbul. this is after president assad sent troops to the northeast in response to the turkish offensive raising the risk of an escalation. we are keeping a close eye on the situation as it could escalate quickly or it could deescalate. we are trying to figure out exactly what the end game is for president erdogan.

lira.rkish trade with china is set to more than double purchases of american agricultural products. washington has pledged to delay a tariff hike. the one in december remains on the table. chinese imports and exports shrunk more in september as existing u.s. tariffs and a slowdown in global trade combined to undercut demand. selina wang joins us. great to have you on the program as always. break down the latest china data for us. >> we are continuing to see the impact of the global growth slowed down as well as a trade war the chinese economy. exports fell 3.2% and exports fell a whopping 8.5%. this puts pressure on china's

already weakening economy. expectations for third order gdp was that a group at 6.1%. the slowest pace in nearly three decades. phasehough we had this one agreement, it is not expected to change the growth picture for china given that existing tariffs are still in place and there is the threat for more tariffs in december. the view in beijing around the agreement has been decidedly cautious. we do not even have state media calling this a deal at all. they have been highlighting the fact that it has not been signed. a lot can change between now and later. it makes sense that they are having this cautious view given that in the past china has made some concessions only for donald trump to turn around and add more tariffs in hopes for a broader deal. positionfrom chinese

is that this is a phase one and not much more. francine: pau morilla giner joins us as well as brunello rosa. we have a handshake between the u.s. and china. they are pledging to keep the prospects alive for a future trade deal but what does it mean for the growth outlook? pau: i do not think much. irrespective of of wha what samens, growth will be the . and the relative bargaining position is still stronger on the chinese side. donald trump has elections in a year's time and key battleground states -- the manufacturing is affected by the threat of future trade war escalation. donald trump knows he still has to be seen as the stronger

leader who is fighting the injustice provided by china. there aree time, families in the key battleground states feeling the pinch. that suggests that timing is on the chinese side. china does not have any incentive to accelerate the talks were to get to an agreement. donald trump wants to be seen as diminishing the rhetoric which means we will continue for about a year with ups and downs. the levers will go up and down depending on what the polls tell donald trump. overall, the markets will continue to shrug it off. francine: china is taking the why theich may be country gave the u.s. what it wanted. brunello: china has some

incentive to move. paulonger-term incentive as said is waiting for the elections to see how they go. they may find themselves with a democrat in the white house, slightly easier to negotiate with. that is the reason why they are cautious and why they are not agreeing to a full-scale deal. toally, donald trump wants keep some pressure on the economy to squeeze as much as he can from the chinese economy between now and the end of the year. as we get into next year, the campaign really begins and he does not want any impediments. he has a window of a couple of months to squeeze as much as he can and provide a double positive to the u.s. economy with a deal with china and the fed giving a couple of rate cuts. francine: the interaction

between the fed and what donald trump is trying to force them to do. let us go to our live question of the day. a pretty good question as always. how far can stocks rally after u.s. and chinese negotiators seal a trade agreement with no more than a handshake? pau: a handshake means nothing in this day and age. there is so -- there are so many handshakes and so much rhetoric -- it goes beyond trade. let us not forget that it goes beyond trade. think the work between china and the u.s. is being played on the technology exchange, intellectual property.

things that affect the national security. francine: thank you, pau morilla giner and brunello rosa. the eu says the uk's plan is not good enough to reach a deal. we are live in westminster for all of the latest ahead of the queen's speech today. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomberg surveillance" and i am francine lacqua in london. the eu says the uk's plans for the irish border is leaving the single market open to fraud. and boris johnson faces trouble at home.

today sees talks continue in brussels ahead of thursday's crucial summit. the queen's speech is later. more on all of this, bloomberg anchor anna edwards joins us now from westminster. numerous sticking point but what is the chance of a brexit deal by thursday or friday? anna: this is the crucial questions. a number of sticking points in deed surrounding customs checks on the island of ireland. and what consent will be groups in ireland give to the brexit plan. both of those remain sticking points. they were sticking points in dublin last week and they remain sticking points here in westminster and brussels. the news from the last 24 hours has not been positive. the irish foreign minister talking about a need for caution

and that tough issues remain. we also heard from eu sources saying that not as much progress was made over the weekend as what was wanted. some of the u.k. proposals are untested and leave the single market vulnerable to fraud. a lot of complexity being introduced at this late stage by the u.k. government to avoid customs checks on the island of ireland. they do not want to go back to the backstop. that is the key question as we had to the eu leaders meeting in brussels at the end of the week. francine: what happens -- the next 48 hours are crucial. if we do not have an agreement or blueprint why wednesday, will there be an extension or can't the eu leaders give them a second emergency summit? anna: that is something they will consider we understand.

we are this week focused on getting to the eu leader meeting. get aeans we need to brexit dea by wednesday. details'sall of the own up ahead of time so we understand there has to be a deal by wednesday. the talks continue today. of issuescomplexity that are very sensitive -- even if a deal is achieved, getting it through the house of commons will be difficult. it could happen on saturday. it will be difficult because of the pushback on the part of the party that has been supportive of johnson's government but have not supported the brexit plan so far. getting their support is crucial. johnson is also facing pushback from the labour party. they say they have not seen the not feelut they do

they are in the mindset of backing that plan. getting through the house of commons will be a difficult matter. today we focus on the pageantry of the speech from the queen but this is still a government that does not have a majority here at westminster. francine: thank you, anna. giner from the london and capital group and brunello rosa stays with us. on saying it is crunch time. i feel i have been saying that for the last three years. what are the chances for a delay? brunello: i think they are quite high at this date simply because last week there was a glimmer of discussed ahnson pathway to the deal. aboutne was a bit excited the seeming breakthrough but the

reality is that it is quite hard to finalize the deal along the that was highlighted at the meeting. if you do create a special economic zone in northern ireland which belongs at the same time to the eu customs union, that could be a potential solution but then the problem is you would have to deal with the irish sea and then what would be the reaction of scotland to such a great innovation in europe? where you can be part of two customs unions at the same time -- they may also want to be a part of that. result, it will be extremely hard in our opinion to finalize a deal between now and the end of the week. and the chances of a delay are quite high. francine: what does this mean

for the pound? pau: it means the pound gets weaker. probably we will not get a deal this week. i would be surprised if we do. the pound will react because there was a bit of hope and wishful thinking embedded in the value for the last few days. and of course, the moment we have on saturday potentially an extension, and i think that would give the pound a bit of a breather so i think it will get weaker until early next week. that boris will go cap in hand to request an extension, then there will be a bit of a rally. francine: what happens in those three months? brunello: we do not know if it will be three months. it could be longer in fact. last time it was longer than the

u.k. initially requested and is actually a threat from the eu. if you want an extension, it will not be on your terms. we cannot keep meeting every three months. they can threaten to give one --r, perhaps two and say make up your mind and decide what you want to do. and then you come back and tell us what you really want. we have not understood that yet. if they go for a shorter extension, that means the deal is almost finalized. it is just about the technical details. i do not think we are there yet. francine: thank you to you both. pau morilla giner and brunello rosa. 90% of the world is experiencing weakening demand. we talk about the threat to the world economy. we discussed the imf next. this is bloomberg. ♪

francine: this is "bloomberg surveillance" i am francine lacqua. let us focus on the slowdown in the global economy. the imf managing director has hinted they will cut projections for global gdp. we are back with pau morilla giner from london and capital group and brunello rosa from rosa roubini. you can have a global slowdown but as long as monetary policy is still there to keep thanks ok, that should be fine but are they running out of firepower?

are they doing more harm than good? pau: they have distorted prices. they have created a precedent that makes us have to rely structurally on --. i don't see how this is a repeat of 2010 and 2012 and even 2016 and the world decelerated authorities were able to reactivate the economy. of morecy in absence extraordinary measures, more extraordinary than qe, you could give money straight to the consumers. i think you are pulling on a string. you have to depend on governments deciding to activate fiscal stimulus and of course there is not a lot of room to do that. it is a bit more serious. it is not a repeat of 2016 when you can all of a sudden lower

the cost of capital and get on with things. i suspect we are in stagnation closer to what japan has been going through for many decades. as opposed to the recovery that we are used to. francine: what is the chance of a recession in the next 18 months? not our baseline but it is something very high. close to 50%. this is because we see the impact of the various, not just macroeconomic but also geopolitical events, and what they are having on the world economy. francine: we will be back with pau and brunello. coming up, more on brexit. this is bloomberg. ♪

francine: i handshake fuels a partial u.s. china deal.

data from beijing highlights the risk i a full agreement is not reached. the pound drift lower as talks continue ahead of this week's crucial summit. syria cost president responds by sending troops to the region. the u.s. and eu threaten erdogan with sanctions. good afternoon if you're watching from asia. this is bloomberg surveillance. i'm francine laqua in london. the biggest stock movers. >> we have to kick it to the upside this morning. up nearly 37%. fromting a takeover bid bravos, u.s. private equity firm of $3.6 billion. neste down 3% this morning. failures on multiple i.t. systems affecting their

operations in finland and the baltics. a spokeswoman says they are not there is a there is a malfunctn or a larger cyber attack. bic down 4%. they were expecting a slight increase and now they say sales -- an evolution of sales either flat or -2%. francine: thank you so much. let's get to bloomberg first word news with viviana hurtado. viviana: up to 13 years in jail for a catalan separate tests after he tried to rake away from madrid in 2015. an unprecedented ruling from spain's top court. -- the regional president at the time. he remains in exile in belgium. to the u.k., prime minister boris johnson brexit plans are not good enough according to eu

negotiators are the u.k. leader told his cabinet a deal can still be reached by the end of the month. this comes as both sides hope to finalize a deal before the eu summit on thursday. the u.k. government will lay out its policy agenda in the queens speech. the u.s. and china reaching a partial trade deal. a handshake agreement. washington will hold this will hold schedule increase -- beijing more than double its purchases of u.s. farm goods to $50 billion. a more conference of agreement remains elusive. prime minister victor or von lost control of budapest and for the country's biggest cities since the local elections after the opposition managed to capitalize on a sex scandal involving one of his allies. a disappointment for the self-styled proponent of liberal democracy and it comes after seven consecutive victories in nationwide ballots. global news 24 hours a day on air and on tic tok at twitter powered by more than 2700 journalists and analysts in more this is countries.

bloomberg. francine: thank you so much. what will the future of u.k. trade look like after brexit? our next guest's role is to invest in ties with africa. she is based in johannesburg and has led the department or international trades pan-african trade team since april 2018. what opportunities are there and how can business here and on the continent benefit from increased trade ties? u.k.'s trade commissioner for africa joins us . think you for giving us a little of your time. are we ifurther along and when brexit happens in the u.k.? how quickly can we sign agreements with africa? emma: we've been working really hard over the last two years to make sure we are in a strong position at that brexit stay. we had really good news recently. just last week i was at the signing for the transitional

andement between the u.k. the southern africa customs unit . mozambique. the largest of the trade deals we have across africa. not the only one we managed to get over the line so far. we find continuity agreements there. a few days ago and with the eastern and southern african states as well. all sorts of other work in terms of transitional protection measures that we are looking to put in place to protect that continuity of trade arrangement. francine: what are the signs of these deals? emma: the southern african one is of course the largest. somewhere in the region of 9.7 billion pounds of trade between that block and the u.k. good milestone for us to get over the line. with two knees yet, we are talking -- with tunisia we are talking -- these things are

significant and it all adds up. the global picture of continuity and trading arrangements in the billions, around 100 billion pounds of trade maintained. francine: in which sectors does the u.k. plan to put the bulk of the investments in? traditionally, we've had a lot of investment around oil and gas, mining, extracting peace. we've seen all sorts of opportunity around infrastructure and how we invest clean smart growth for the future. one of the things we have said publicly is the u.k. was to become the largest g-7 investor in africa. we are already thereabouts, depending on when you take that slice of statistics. it's important to us that we double down on investment focus. we know how important it is to african government to receive that foreign investment. francine: which regions without be the focus of?

emma: the whole of the african continent. we are seeing some impressive growth rates in different parts of the african continent, whether that's east africa simulate -- stimulated by integration within the east african community, north africa as well. the key thing really is we are seeing some of the fastest growing economies in africa, really leaning in as the u.k. to maintain stronger long-term partnerships with our african partners. francine: there are a number of werean companies that actually ipo in coming months. this is on top of a number of other companies. how important is that for longer trade agreements? emma: it is important. we see the power in the influence from the city of london is a really important aspect for our relationship with companies and countries across africa.

the lord mayor of london is himself in south africa today and will be heading to kenya later in the week, as a demonstration of the importance that we place in building those relationships between the city of london and some of those economies in africa. francine: i think last time you are on we were talking about the future of south africa. we will have a better idea of what happens -- is it a good deal for private investors to come in? >> i would say so. the basis is low. on that press particular country for such a long time, political uncertainty be becoming a little better. it is time for some of us to have a look at it. francine: how often do look at emerging markets outside the link to dollar strength?

>> i would say within emerging markets, we can look at the others if you want. maybe the one that we want to look at most closely is brazil and see whether reform goes through. that is something that could be an opportunity. the one that is better looking at this stage. we talked about china. difficult positions. outside the bricks region, a couple of interesting countries to look at. one is argentina, going through a complicated transition now. restructuring that is occurring. this is done in the right way even with the new government, it is not completely populist. there could be opportunities. we talked about africa, ethiopia. i would suggest having a look at that. there prime minister just won a nobel prize.

francine: that is a good angle. how will the africa free trade agreement affect trade with africa? emma: we know when you take we know when you take companies are looking at prospective market -- more and more about integration across the african continent. that is a positive thing for u.k. investors, looking to expand their portfolios. one of the things we are doing is hosting a u.k. africa investment summit in london in january as a way to stimulate and capitalize more investment flow into some of these fast-growing economies. francine: thank you so much. smith, brunello --

president trump warns the u.s. is ready to go with sanctions on turkey over its military incursion in syria. asset forces push north to confront turkish troops. we get you all the details, next. this is bloomberg. ♪

francine: this is bloomberg surveillance. i'm francine laqua in london. let's get to the bloomberg is in his flash in new york city. wework -- we learned it's one of the main options to rescue the co-working giant.

the japanese conglomerate is convinced it can turn around the cash-strapped company. board is examining another option. jp morgan leading discussions about a $5 billion debt deal. volkswagen plans to review options for its lamborghini supercar unit. a step in the carmakers planned to more than double its market value. the world's biggest automaker is mulling a potential sale or soft listing for the italian brand area any decision is likely way off. vw saying it has no plans for a sale or ipo of lamborghini. india'sillion stake in adani gas. this as the french energy giant looks at expanded presence in one of the world largest growing -- fastest-growing natural gas markets. that is your bloomberg business flash. francine: thank you so much. onto a fast developing

geopolitical story. turkeys incursion into northern syria faces the risk of escalation as bashar al-assad sends troops to the area. president trump and the eu have warned turkey of sanctions over the offensive. we are joined by our turkey bureau chief. bring us up-to-date with exactly what is going on in turkey. we are hearing from president erdogan. >> president erdogan has just spoken about the issue of syrian advanced to the north of the country. reports last night suggested there could be a confrontation between the turkish and syrian syria.in the northeast president erdogan seem to have played down that threat of immediate confrontation between two armies.

wants to provide security, in his own words. community is resettled he does not seem to think it is eminent to see a confrontation between the syrian army and turkish army which seems to be moving when compared to reports from last night. wencine: asset forces -- are seeing an escalation of the syrian side against the turkish moves? onur: the syrian side seems to be moving north and that is where turkish army is located -- is operating as part of the cross-border military operations. it's not good for two big armies to come close to each other but it seems judging by what erdogan said, there is not much risk of an immediate confrontation between the two and that is partly thanks to putin's mediation role. francine: thank you so much. our turkey bureau chief.

brunello, we were talking about geopolitical concerns. what is happening in the middle east rigow? many.prised many, shocked what does it mean for how we look at geopolitics in the region? brunello: the region is on the move at this stage. distinctions between u.s., iran and saudi arabia increasing. attacks on supertankers and facilities recently. --ing more toward the region turkey and syria. a pretty serious situation , effectively caused by the decision of the u.s. to withdraw from the region. u.s. wants to disengage from

the middle east. the role the region had been supplying oil is diminishing over time as they have developed their own shale oil and gas facilities. therefore, they need to be involved so heavily in the region -- the need to be involved so heavily in the region has diminished. he started to pull out of the region already, obama, but this is a bit of an escalation in the strategy and opening up a number of difficult situations. of course, this one is the most serious in our opinion. francine: how do you view this? pau: there is a vacuum which the u.s. has left. vacuums tend to be filled and filled by countries that feel a little more engaged. investors,eans for all of a sudden we have to apply higher premium in general to

risk assets geopolitics are difficult to predict, binary in nature. i would suggest that there is bit cautious going into the next year where you got lower earnings, u.s. elections, politicald now uncertainty flagging up. francine: how bad can this become? we look at u.s. sanctions on turkey that would actually undermine the economy of the region. how quickly can it escalate? pau: it can escalate very quickly. there's many different angles in which it can escalate. turkey, syria, u.s., sort of triangle. you got the saudi arabia, yemen, u.s. triangle. iran, yemen, so many crosscurrents the potential for something to go wrong is high.

if it happens you just have to look at what happened when saudi arabia's refining facilities were hit. that has the potential to take it from a pretty subdued global growth environment to something else. francine: geopolitical concern could flare up out of nowhere. we weren't expecting what the u.s. and president trump announced last week. when does it impact to the consumer? that would be the thing to start global recession. typically that tends to happen through a spike in oil prices, therefore headline inflation. this is something sometime central banks look through. the impact on inflation can be , that eventually impacts the consumer. that can translate a geopolitical event into a potential recession risk.

one of the many factors dragging down the global economy. a macroeconomic situation including the trade war and so on, but also tech war. the geopolitics -- we saw geopolitics entering the beenion -- the ecb has mentioning geopolitics for a number of months now, more than a year for sure. even the fed has mentioned brexit and other situations as one of the reasons why they needed to adopt this precautionary cuts back in july. francine: thank you both. next, finance chief heads to washington for the imf meeting. new leaders get ready for their summit in brussels. there crucial week for the global economy. this is bloomberg. ♪

francine: economics, finance, politics, this is bloomberg surveillance. here's a look at what's coming

up this week and what you should be watching out for. russian president vladimir putin and sai arabia building ties with the kingdom. tomorrow, you will have explicit -- an exclusive interview with .he st. louis fed president the chief executive carrie lam is do to her annual policy address. thursday sees the start of a two day summit in brussels were eu leaders are meeting to discuss possible brexit deal with britain. on friday, is day two of the imf annual meeting. key figures across the global economy including eu commissioner valdez the brusque -- you most what are nervous about as we get into the week? twoello: i would say geopolitical events we have discussed during this program. one is of course brexit and see whether there can be a brexit.

the decision does not seem likely but we will see. fingers crossed. theourse the escalation of war in syria with turkey. a credible threat erdogan is making of opening the gates of refugee camps and potentially floong existential threat for the eu as we saw in 2015. there will not be the ability and willingness by countries in europe to host so many. pau: earnings season is going to be the worst earnings season in a long time. third consecutive quarter. central banks will not be there to cushion the fall. i suspect we will see the kind of volatility we have not seen in some time. francine: thank you for joining us for a great hour. in the meantime, this is what i'm looking at in your markets. let's get the board up for you. for euro-dollar, the u.s. 10

year yield. investors trying to figure out what the signs of progress in this u.s. china trade negotiation really mean. .ooking at european bonds looking at some of the emerging market assets. they did sustain a rally after president trump said the two sides, u.s. and china, agreed on the outlines of a partial deal that could be assigned as early as next month. eye on crude oil, 54.29. bloomberg surveillance continues in the next hour. scarlet fu joins us. talking to the former fed governor, randy croson are. this is bloomberg. ♪

francine: i and shake seals a

partial u.s. trade deal that u.s. china trade deal. not good enough, the eu says a brexit breakthrough is still a long way off. the pound drifts lower as talks continue ahead of this week's crucial summit. syria's president assad sends troops to the region. the u.s. and eu threaten erdogan with sanctions. good morning everyone. this is bloomberg surveillance. lot going on. we are looking at the markets. a little bithile n trying to figure out what this u.s. china trade deal actually means. we look at your markets, brexit and we look at the week that will be with imf later this week. scarlet: china economic data as well. there's a lot of excitement on friday. the knee-jerk reaction was to go long on risky access -- risky assets. people taking a closer look at what was agreed to.

it was all done on a handshake deal and even china itself says it was substantial progress, not calling it much more. it's probably the earnings season that will -- let's go to the bloomberg. first word news. here's viviana hurtado. viviana: president donald trump says the u.s. is ready to go with more sanctions on turkey over its incursion into syria. the administration warns that could include shutting down all u.s. dollar transactions with the turkish government. the u.s. is holding all of its troops out of northern syria to keep them from harm. kurdish forces who were once u.s. allies may cut a deal with syria and russia. , weary about that trade deal reached with the u.s.. the handshake agreement gives beijing only a little relief from u.s. tariffs. china did not have to give up much. it agreed to buy more american farm products it needs anyway. the chinese making of a

commitment on currency and intellectual property practices. problems for boris johnson and his brexit proposal your the talks arenion warns still a long way from a breakthrough. johnson's political allies are distancing themselves. talks are still a long waythe eu saying tl for breaking the deadlock over -- irish border global news 24 hours a day on air and on tic tok at twitter powered by more than 2700 journalists and analysts in more than 120 countries.

scarlet: let's get a check on where the markets stand right now. it is columbus day in new york and that means the bond market is closed. we are keeping a close eye on s&p 500 futures. they turned negative when european markets opened. so much for any carry through from the optimism generated by that phase one handshake deal. the csi 300 and china had its biggest rally in one day. the yen strengthened as well. viviana told us about the cop locations with the brexit talks. you see it reflected in -- the complications with brexit talks. gold is higher up for tens of 1%. it has yet to regain that $1500 price level. francine: i'm looking at treasuries. the markets were cash bonds closed were american and japanese so that will have an impact on market movement today. equities climbing. they were -- they're down 0.7%.

we did have a rally in emerging market assets after president trump said china and the u.s. agreed on the outlines. not that optimism in europe. the focus is on geopolitics with syria. the focus is on brexit. that meeting on thursday and friday in brussels. scarlet: i want to go back to china because we did get concrete data that really shows the extent of the chinese economies damage from their trade war. we saw beijing released september trade data. people usually focus on exports because of what the u.s. buys from china. but imports are particularly worrying. red bars show chinese imports in yen, the blue bars show chinese imports in dollar terms. those measures matched or exceeded the biggest contraction in three years. it cements expectations that the third quarter the worst for 2019. especially as we get ready for that third-quarter gdp report on

friday. francine: great chart. ast looking at pound hitting 200 day moving average. this is a great way, way we often look at brexit. a great way to look at some of the movements. you can see the rally late last rate toes exchange w nearly overbought territory. the possibility of brexit deal as it ran into trouble after talks were still a long way from a breakthrough. china set to more than double purchases of american agricultural products in agreement with certain ip measures. washington has pledged to delay a tariff hike by the threat of bigger increase in december remains on the table. anding us, neil blaine jeremy stretch. thank you both for joining us. , how muchook at trade

does the handshake go in terms of giving a boost to stocks? neil: quite a long way at the end of last week. a lot of pent-up optimism that we would see some common sense emerge. i think we think it's a handshake. we don't see much attraction behind for many details. as we know from a chinese perspective with the new nafta deal still awaiting approval in congress, even if there is a deal, we have to see the devil in the details. we are still a long way away from the outlook for investors changing. jeremy: indeed. i would have great sympathies with what neil has said. the good news is the fact that those tariffs, word they to be imposed tomorrow they would be postponed. from a dollars perspective, we can see it dialing down a trade tensions and i think that does help to validate mr. trump same to try and -- if you think about which areas and which jurisdictions have been hindered

or harmed by trade tensions, you can come back and conclude it is europe and germany by the manufactured -- if there will be a material dialing

seeingsame time, we are pretty awful data points out of china. jeremy: i think in the context of what we are seeing from the chinese macro story, if we are going to see the consideration used, the impact into the gdp data at the end of the week, if we are going to see further headwinds for the macroeconomy, it would be normal to assume the

renminbi will depreciate. i think that will be the story which will be extended into the end of the year. if we see these further rounds of tariffs imposed and we don't see this paring back of tensions, i think that would extend and we could be seeing 720 or 725. it depends on the degree of additional tariffs that comes through and the s of the deceleration. in the short-term, the currency is likely to remain somewhat under pressure. francine: thank you so much. in meantime, we are looking at live pictures of buckingham palace as we await the opening of parliament and the queen's speech. what can we expect? the queens 56 -- 65th queen speech to parliament. the withdrawal agreement bill, maybe a bill proposing scrapping the franchise system.

we are also hearing the justice secretary, robert buckland, pledged to increase time served -- we willor those have more on the queen's speech. ♪

viviana: you're watching bloomberg surveillance. wework is considering a bailout. bloomberg has learned the japanese investment giant is convinced it can turn around the one's highflying start up. company is on the verge of running out of cash. --vate equity firms tell

british cybersecurity company. the price $3.8 billion. at 37% premium for friday's close. thank you so much. it is a critical week for a prime minister boris johnson, whose attempts to secure a brexit deal is running into trouble ahead of a summit that starts on thursday. willie unit stu negotiators worn the latest plan lacks detail. her majesty, the queen delivers a statement for the opening of parliament in an hour. joining us from westminster is anna edwards. you've been reporting on this from the beginning. what are the chances that we actually get a deal by the time eu leaders meet in brussels on thursday? anna: so many options remain on the table. so many years after the vote.

2016, june of that year, is when we voted on brexit. in october 2019 we cannot say definitively what will happen from here. i'm going to refer to the goldman sachs probability. looking at those this morning, they still say 60%hae of a deal. 15% chance of no deal and 25% chance of no brexit. all of those things remain on the table. two weeks away from the current deadline. have gone.ines today is about the pump and ceremony of the queen speech where she sets out what the government wants to do in the next 12 months or so. and ceremonial event. this time around, very different because this is a government does not have a majority. so whether they can even pass the ings the queen will be talking about today -- this is oscar before her by the government. whether the government can get through these policies on crime or financial services or whatever remains a question

because this is a government that thanks to falling out does not have a majority. scarlet:scarlet: how much are people looking at what happened with theresa may and how the brexit deal happened or did not ablen insofar as she was to get it past the eu but parliament would not approve it. anna: many people making that point. the focus this week, ough w are here in westminster this week, the focus for the end of this week is very much in brussels and what happens with eu leaders and whether boris johnson manages to get a deal agreed with them. even if he does manage to get a deal, there will still be the same problem that theresa may faced in getting a deal through parliament. he has a couple of aces up his sleeve if you like. one of them is he has managed to cast himself as the brexiteer in chief. he perhaps has more support from the brexiteer wing of his party.

maybe that is something to carry that side of the house along. he's managed to expel a host of mps from his party. he has lost their support, and the deal he's hammering out in brussels might alienate the dup. he's trying to balance a lot of interest when it comes to northern ireland. when we were there in dublin in the republic of ireland last week, sticking points remained around how you avoid customs checks on the island and how you get consent of the northern ireland community to whatever is proposed. though sticking points remain, despite progress made over the weekend. will havee: francine: plenty more from anna edwards over at westminster. in the meantime hundreds of activists on the climate protest movement extension rebellion -- extinction rebellion have blocked roads near the bank of england. calling out the financial sectors funding of fossil fuels around the world. the action marks the start of

the second week of disruption around london. many commuters and people that tried to get into work this morning probably realized that. the bank of england governor has been at the forefront in a push to force companies to be more transparent about climate risks. this is bloomberg. ♪

francine: this is breaking news. a bloomberg red hot, we

highlight the new stories that should be important to you. china says they want more talks before signing trumps phase one deal. we understand president trump had said it will morph into something bigger. he suggested it could be signed as early as next week. i'm not sure whether it's having an impact on your markets. we are looking at dollar-yen. it is considered a haven. 108.5.g to china says it wants more talks. that is one of the litmus test we are watching out for. s&p futures, 0.4% lower. scarlet: session lows for s&p futures. it is not huge surprise given that china described the phase one trade deal as the two sides making substantial progress. let's go back to the brexit story. as anna was telling us, goldman sachs says the so-called tunnel negotiations between the u.k. and e.u. over brexit could

sustain the pounds rally. if more progress is made, cable could reach one dollar 30. over the past five days it's made progress. i want to bring back jeremy and neil. does the market continue to underpriced the potential for brexit deal in october as goldman sachs asserts? jeremy: i think the market is skeptical that a deal can be agreed in time for that october 31 deadline. the move that we saw in the last two sessions of last week, the strongest rally in a decade reflects the fact that the market was not anticipating was not anticipatingward a immediate progress toward a deal. if the two sides -- maybe trading -- one has to be very careful in assuming that those

two sides can come together quite so quickly. there is that issue of the u.k. parliament. i will be wary of buying into sellings rally at this juncture. scarlet: a somewhat minor issue. to what extent does boris johnson, the eu negotiators, look at what we monitor constantly? sterling, u.k. assets. do they look at these moves as they negotiate? i wonder how much market moves dictate their willingness or refusal to cede any ground. neil: we know the president of the united states is monitoring the level of the s&p. i would guess boris johnson has too many things on his plate to be monitoring what's happening to the ftse 100 on one day or not. where i would add to the question you asked jeremy, there longer-termfor many valuation for sterling. it is probably worth 150. we know sterling is cheap for a reason. he only thing i would add to the

debate is even if we wertoet something that looks like a deal , we will have a general election probably between now and christmas. i think for a lot of particularly international investors who stayed away from sterling in the short term, i think they're going to say you know what, i'm not going to necessarily -- i've got jeremy corbyn. i think we've got other risks around the sterling in the short term. francine: another risk is the u.s. china trade deal. wantserstand china further talks to hammer out the details even from phase one. what does it mean for the actual deal? is it like a 50% probability that we get something concrete or will it be tit-for-tat? jeremy: i honestly don't know. it is for certain that china would like to buy more agricultural products. no doubt of country is now short of resources in that area. therefore they need to feed

their population. that deal is good from a trump -- good from trump and his base cost perspective. perspective. they have been saying consistently since may that china is not treating america with respect. we have to wait to see the devil in the detail and that could take some time to agree. francine: neil and jeremy will stay with us. back to that news story. china, we understand, saying it wants more talks before signing trumps phase one deal -- trump's phase one deal. we will have more on what the impact will be on earnings. this is bloomberg. ♪ everyone uses their phone differently.

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switch and save up to $400 a year on your wireless bill. plus, get $250 back when you buy an eligible phone. that's simple. easy. awesome. call, click, or visit a store today. scarlet: this is "bloomberg surveillance." the day off. what a day he is missing because

on friday, president trump touted the phase one of a trade deal between u.s. and china. just now in the last 10 minutes or so, we have headlines that china once further talks before signing this phase i trade deal. they want more to trade -- talks before the trade deal to hammer out the details. this is according to people familiar with the matter. you can see the impact on markets. lower. poking into the red. oil as well extending losses, concerns about demand front and center for wti now off by 1.8%. we will continue to monitor all of this. in the meantime, let's get you to first word news. >> president donald trump

ordering a withdrawal of all u.s. troops in northern syria. the turkish incursion cut supply lines and put american forces in harm's way. the president saying the u.s. is ready to impose more sanctions on turkey if the turks do anything in syria the u.s. considers off-limits. more violence in hong kong over the weekend. a police officer was slashed in the neck by protester. police said they found in improvised slows of device. another demonstration is planned for today. protesters will show their support for a bill of u.s. congress that could potentially sanction some chinese officials. at least 43 are dead after the most powerful typhoon to hit japan in decades. more than 110 thousand military civilian personnel are engaged in rescue and cleanup operations. you can see the force of this typhoon. heavy rain but to flooding and muslims in central and northern japan. the son of joe biden is moving to quell the controversy over his business activities.

hunter biden stepping down from the board about chinese equity firm. he is promising to give up all foreign work if the former vice president is elected president next year. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more 120 countries. this is bloomberg. francine: the trade wars are putting on aluminum prices. demand looks to be shrinking. the second largest producer things the trend could continue. joining us now is lord gregory barker. he is the former u.k. minister for state and climate change. .he russian aluminum producer lord barker, thank you for giving us a little of your time. first, to china. day in and day out, news we have a deal, we don't have a deal. it's a go china segment probably what more talks before they even

signed up to phase one. what does that mean for demand of aluminum? >> clearly, we're sick reaction in the markets. this ongoing trade war is having an effect, particularly on manufacturing. that is why you are seeing their price continuing to bump around the low $1700 mark. i don't think we're going to get an uplift to where aluminum should be, which is much closer to $2000 until we get some sort of resolution. francine: is this because china is demanding less aluminum? do they need less to build things and consume things? >> the global impact on growth per se. manufacturers around the world, certainly in china, but also developed countries and emerging economies, this trade war is bad for the global economy. it is having a dampening effect on demand. aluminum is one of the key ingredients not just the old economy, but the new glow carbon

low carbon economy. scarlet: lord barker, thank you for taking the time to speak with us. you are in charge of resolve. you were executive chairman of ian plus at the time that you negotiated the removal of the sanctions. you know what it is like at the negotiating table, how hard it is to get the fine details down. how much higher is the bar to remove something like sanctions versus just not escalating it further? be smart. you have to you have to know your subject. in any negotiation, also need an element of emotional intelligence as well. you have to be able to read the room and read your opposition. you have to have a will to come together, not just a stick by your own redlines. i hope both sides will come together in the spirit of reconciliation and get this trade war sorted because nobody benefits from it. scarlet: a will to come

together. do you see that right now on both sides, especially if you look at the commodities picture and how much of a beating china's economy has taken so far? we have been showing the imports data and how much it has fallen in the month of september, setting up the third-quarter to be very painful for china. >> i am no expert on this, but it is clearly in everybody's interest that they come together. they will be reading exactly the same economic and financial data you have been giving this morning. i hope that will be another reason why both sides should get around the table and sort this out. francine: we are trying to figure out canaries in the coal mine. if there is mobile downturn or global recession, where do you see it first? do you see it in aluminum? >> it is one of the key critical elements of the global manufacturing economy. aluminum is as mental and transition. we are going from the old manufacturing economy to the future low carbon economy. we are going to see growth for

aluminum increase year on year on year because of the shift to electric cars, lightweight airplanes, anything energy-efficient. francine: but at the same time, given the poor environmental record of aluminum, does it create a dent in aluminum's in it -- image? >> we are at a pivot point. aluminum to produce just one ton

of aluminum. on the other hand, there are environment with progressive producers like my group, not 22 tons of carbon, but 3.7 and going lower. i think today in the city of london, we have the climate protest literally outside the doors of your studio. we have to wake up and smell the climate crisis coffee. the aluminum industry has to address its own carbon footprint and the first step to that is to be honest, friends, and transparent about the carbon content of the metals it produces. francine: what kind of cost is it incur -- scarlet: what kind of cost is it incur to really push ahead with that idea that the new way of producing aluminum and a low carbon economy, global economy is better for the overall environment? honestly, it incurs some cost at some point that will be passed along. >> but i think this is a level of misunderstanding. for my group, we are not only the largest outside china in terms of production of aluminum, not only the greenest in terms of having the lowest carbon content, but we are also amongst the cheapest and most efficient. so providing your using clean energy and not using dirty, polluting coal-fired electricity, you can actually be efficient, be cost-effective, and you can be low carbon. but you have to be transparent. that is my message to the sector. francine: are consumers ready to play a premium for this? >> some are.

they are demanding it. the idea we can carry on with business as usual is for the birds. there will be some market disruption and those who are polluting will go out of business. that will require some destruction. francine: are you producing -- pursuing esg financing options? >> absolutely. we have just issued a 750 million pre-finance export facility, one of the largest of its type. certainly, as time goes by, next year we will continue to actively evaluate the possibly of the green bond. francine: thank you so much, gregory barker, former u.k. minister for state and energy climate change. scarlet: live shots once again a buckingham palace as we await the state of opening of parliament and the speech. you can see the pomp and circumstance taking place. the queen's space to be taking place shortly. this is "bloomberg." ♪

scarlet: >> let's get your bloomberg business flash. the clock is ticking for dennis muilenburg will stop the board stripped him of the term's title to give him more time to focus on returning the granted 737 max

8 to service. directors expressed their support for him but they also pledged to engage in active oversight. bloomberg has learned volkswagen is considering a sale or stoppers lamborghini unit. that would be another step in the ceos long-term plans for the world's largest automaker. he wants to more than double vw's market value. use channeling resources to the main vw audi and porsche units. that is the bloomberg business flash. francine: thank you. let's get a little bit more about markets and what is worrying economists. we have that stark warning from the imf last week with tom keene and the imf meets with central bankers and finance ministers from around the world. let's get back to jeremy stretch annual wayne. first of all, if you look at holistic approach to the world

withmy, what would you do central banks? are they doing more harm than good? >> i think they are doing more harm than good. there's no doubt negative interest rates are causing a lot of pain in europe and in japan and ironically in germany. negative interest rates are causing the germans to save more rather than to spend. counterintuitive to most of us anglo-saxons would probably have spent more the germans are saying this is not sending a good signal. i think inevitably, mario draghi, as he heads to retirement, is pleading for more fiscal stimulus. where is he going to get the money from? he will print it and they will spend it. i think we all know the governments are bad spenders of money. i argue it would not solve the structural lack of productivity we have in our economy. francine: does that to put aside a worldwide recession? >> i'm not sure we would say that, but i think we are having to get used to the fact we are going to have a much slower economic cycle then we have

become accustomed to. in a sense, only think about the economic expansion, in most instances we have seen on mr. decades worth of growth -- almost a decade's worth of growth. i think the difficulty that policymakers are going up to deal with and investors as well, that the potential rates of return and the rates of growth are going to be lower than we have seen in previous cycles. scarlet: is the slowing of global growth we keep talking about more than just a reflection of the trade issues? how much is just a cyclical slowdown versus something that is exacerbated by trade? question., good i think at the heart of the last five or 10 years of economic growth has been china. we have been telling our clients for the last five years, china is rebalancing. the business model it has used to grow, which has been great for the global economy, great for a lot of the exporting countries like australia, is now

changing as it rebalances it is trying to internalize more of the growth demand in the same way as america, argued look, with make america great again is trying to internalize more of its own demand. it means the big exporting companies have to look for another market because the big guys are going to be a lot -- be buying less of their kids moving forward. looking morets are recessionary. i would argue some of the big sectors like autos come anyone he wanted to buy a car around the world has been able to use free money to do it for the last two or three years. we are now running up against the constraints of demand. plenty of supply, not a lot of people who want to borrow to spend. currencyjeremy, which looks to be the most is priced right now? >> that is a very interesting question. in the context of the bigger picture story, i think there are obvious headwinds for those exporting nations that neil was touching upon. but i think there is, despite

the uncertainties on the export side, still the prospects for growth in places like the euro zone and the japanese yen overall. i think if you're looking for mispricing, the degree of uncertainty and negativity we have seen priced into some of the skin and avian currencies is relevant and also -- scandinavian currencies is relevant and also new zealand. something like new zealand in terms of the new zealand dollar because of the markets interpretation also implies that currency is perhaps a little oversold. francine: what would you do with the first frank? there like a haven but grappling with negative rates. will beusly, the s&p effectively changing their regulations to leave open the possibility of additional monetary easing to try and limit the strength of the currency. the market is also mindful the ability of the s&p to continue to contain swiss franc is going to be rather more challenging. ultimately, this swiss franc is

going to appreciate. i think that will be more pain for the domestic economy. francine: thank you both for joining us. we will have plenty more on this shortly. jeremy stretch and neil dwane. in the meantime, we are keeping an eye outside the bank of england. there are protests outside that marks the second week of disruption around london by the groups who have targeted government buildings, bridges, but also key produce markets. that was smithfield market last week to raise the alarm that governments and businesses are not moving fast enough to contain climate change. scarlet: we want to take you over to oslo, norway, because the nobel prize will be announced soon. this is for economics. 50 prizes have been awarded to a total of 81 people through 2018. 30 of those have been associated with the university of chicago. we will keep you posted on this development. shortly and a couple of minutes,

we will be hearing who wins the nobel prize in economics. from london and new york, this is "bloomberg surveillance." ♪

scarlet: what is one word of advice you will take with you? >> learn how to listen. that is something that has served me well and hope wilken tearney to serve the imf as well. -- hope to learn to serve the imf as well.

>> the prize in economic sciences is about alleviating quibble poverty. francine: breaking news, this is the nobel prize in economics, which is just being read out in stockholm. we understand banerjee has one economic's nobel prize and remer and duflo have one -- won the nobel prize. we're trying to figure out exactly what it means. one of them was a french , eslopment aid economist ther duflo. scarlet: as you mentioned, she is a french development aid economist. she becomes, i believe, the second woman to win the prize

into thousandck nine. has really been that long since another woman one economic's nobel prize? kind of a sad state of affairs, francine. francine: so we will have plenty more on this. joining us now, randall , professor of economics at chicago. great to have you on such a momentous day. finally, we have another winter, three winners for the economic prize. >> it is really exciting. energy was a friend from graduate school, so i've known him for 30 years. i think this is a superb prize. the second woman to get a nobel prize in economics. we are little bit behind on that score so at least we are making up, we have gone from one to two and hopefully we will have be -- be having more soon. this is a great price on development. i think all three are super deserving of it and it made

really important contributions. francine: do you see a shift, more of a development consciousness when you choose a lot of these prices? made such they have important contributions that it is really valuable to have that but many, many years ago, another university of chicago prize in won the nobel economics for work he had done on development in agriculture. there is long history of this but this is sort of modern development and these are great people to represent that. scarlet: i want to go back to a moment your former classmate banerjee. he won one of the prizes for economics. talk about his area of expertise. >> he has done in a norma's amount. it would take a lot to get through all of it but one of the things that he and his colleagues have been innovators in is using a certain way of trying to tease data out from

the real world. the traditional scientists have a look they can put things in a petri dish or a jar and do different experiments on it. it is difficult for economist to do that. but abhijit banerjee and others came up with something called randomized controlled experiments that they have done a lot of in emerging markets to be able to test, well, what if we change this policy? what if we provide this subsidy? what if we give this incentive to see how that operates in the real world? this has been super valuable, not only in development economics, but the interpretation. scarlet: we are also showing pictures in stockholm, talking about this experimental approach to alleviating global poverty. why is the fact this is an experiment all approach so significant, especially when it comes to developing economies and fixing big picture problems? >> it is using real data and real people to try to look at

these things. before that, before they had these innovations, you could use data and you could do the traditional approaches that data are do, but the never perfect. that both iofessor had and abhijit banerjee had, a great person who did a lot of work in economy, said try not to use the metrics and spent all of your time trying to get the data better. that is what abhijit banerjee and colleagues are doing, getting better data about what people actually do, how they respond in different circumstances. that is been super helpful. francine: why do economists get recessions so wrong? >> one, they don't happen that often. we need a lot of data in order to be able to estimate things precisely. the macroeconomy has so many different pieces in it. so the particular things that

abhijit banerjee and his colleagues focus on, are very, very specific. so it might be responding to a particular incentive, providing insurance or not providing insurance and a very specific market. if you think about the macroeconomy, that has millions of those pieces and it becomes more difficult. that is one of the challenges for macro forecasting. francine: professor randy , thank you. shortly, the queen's speech. it is written by parliament or written by the government, but read by the queen. live pictures from the house of lords. this is "bloomberg." ♪

francine: china wants further

before signing president trump phase one traded. the brexit deal is still a long way off. the pound drips lower as talks continue at of this week's summit. byia's's president respond sending troops to the region. the u.s. and the eu threatened erdogan with sanctions. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york with scarlet fu and i am in london. final negotiation phase before we think boris johnson or someone from the u.k. government will have to offer an extension. we look at trade with china pushing back, saying they want talks on more before they commit to the phase one. scarlet: i think it is hard to be surprised china wants further talks because this was a hand shield -- handshake deal at best. they got the market excited, perhaps relief it resulted in

something somewhat positive. the devil is in the detail and we will wait to see what happens next. you see markets responding as a result, pulling back from friday's rally. francine: i think the markets seem to be surprised. we will also look at the queen's speech shortly in the u.k.. first, let's get to first word news in new york city. begin, let'se we take a little bit more of a look at these developments between china and the u.s. as they try to hammer out the details at the handshake trade deal had a by president donald trump. beijing may send a high-level delegation to finalize that written deal. it could be signed by the presidents next month. some of the negotiating points include the u.s. scrapping planned tariff hikes said to come in this week as well as some in december. the handshake deal from the week and includes agricultural purchases from china but only vague commitment on intellectual property and currency. president donald trump sang the u.s. is ready to go with more sanctions on turkey over its

incursion into syria. the administraon warns that could include shutting down all u.s. dollar transactions with the turkish government. the u.s. is pulling all of its troops out of northern syria to keep them from harm. kurdish forces, who were once u.s. allies, may now could a deal with syria and russia. problems for british prime minister boris johnson and his brexit proposal. the european union once talks are long way away from a breakthrough. johnson's political allies are distancing themselves from his plan. the eu says the u.k. proposal for breaking the deadlock over the irish border doesn't have enough details. over to spain, an unprecedented court ruling, leader given a 13 year prison term for trying to break away from spain in 2017. the former vice president was handed the stiffest sentence. eight other activists received between nine to 12 years. illegal referendum triggered a month of -- a legal referendum

triggered a month of unrest. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more 120 countries. this is bloomberg. francine: scarlet: looking at u.s. futures at their session after china indicated it once more talks before signing phase one of that u.s.-china trade deal. we can see right now futures indicating the lower open. this is on columbus day, so the bond market in the u.s. is closed. japan also has a holiday as well. look for perhaps lower than average volume. chinese stocks did rally stop the biggest one-day gain for the csi 300 in one month as the u.n. strength -- yuan strengthened as well. pound under pressure as the eu and u.k. brexit talks hit the 11th hour. gold futures up. there is demand for a haven right now with all of this

uncertainty percolating. table, 125.60 after warning the planes from worst johnson are not quite good enough. this seems to be the similar story out of china with china pouring cold water on the partial trade deals touted by president donald trump. looking at european stocks down 1%. i am also looking at remember you. to the latest with trade deal, learning china wants further talks as soon as the end of october to hammer out the details of the phase one trade deal touted by donald trump something they were ready to trade. as ansor kroszner with mardy. president trump seems to be a little more optimistic than china that he will get a deal. we are also looking -- marty, i'm distracted because there are gold carriages, the dream of any princess.

that is the queen leaving buckingham palace to go to deliver her queen's speech. this for our global audience is an audit speech because it is written by the prime minister, the government, delivered by the queen. we understand that we will hear from policies on crime, immigration, brexit. this is the new legislative the majority.has many of the bills may actually has no majority. many of the bills may not become law. calls forigger a new general elections. this is a very, very u.k. quirk. scarlet: i'm confused because i thought there was a previous carriage, horse drawn carriage earlier, and it clearly was not the queen. this one the carriage looks a lot more guilded. the previous carriage of elite had maybe prince philip or one of the other princes, but this

is the real deal. she is going over to set the u.k. government agenda. it is curious, though, boris johnson's government wrote this speech for her. it is not like you can really get a read on how the queen feels about brexit or what she thinks about the late stage of discussions and the urgency with which something needs to get done. francine: what is also odd about this queen's speech -- there you go, get a glimpse of the queen, her majesty the queen, together with her son and his bride. the government says that it can strike a deal with the eu. what is odd about this queen's speech, he lays out what the u.k. will do over the next 12 months but there's so much brexit uncertainty that it is unclear exactly what they would be able to push through. the government and boris johnson has said they are determined to press ahead with these plans, announcing its intention to hold a budget on november 6. scarlet: it is more like a wish

list. if you're going to lay out what you want for the next 12 months but you don't know what will happen at the in of this week, let alone at the end of this month, it is what boris johnson's government intends to see take place over the course of a year but all of this is up in the air. that was a great zoom shot of queen elizabeth and her son and daughter-in-law as we await for them to make their way over to parliament. how far back carriage ride is it to go to parliament from buckingham palace? far,'t imagine it is that but usually it is by car, isn't it? francine: in new york terms come about 12 blocks away. it is amazing to see the pageantry. the occasion is famous for with the monarch arriving at the palace and this carriage per and delivering her speech from the throne and house of lords, no less. i don't know if we brought the throne after marty schenker, but he deserves one. he is here with me with

from the kroszner university of chicago. mardy, let's go back to trade. i don't know if president chi and trump are looking at what is going on them westminster, but president trump was pretty clear they would find a deal but china pouring cold water on it. how far are the two sides from reaching some sort of phase one deal on trade? >> this is the whole point. donald trump loves grain gestures and he made one on friday, declaring he had a phase one deal. official chinese media and the rest of the chinese government said nothing about a deal. look, the reality of trade negotiations is they are very complex. you can say you have a handshake, but as scarlett said, the devil is in the details and that can take a long, long time. mean for what does it the markets, professor kroszner? when you look at trade -- i don't know if this is a

political statement or an economic statement, and how. >>. >> president trump views it from the markets perspective, they react quite a bit to news about what is likely to be a trade agreement or not a trade agreement. it is important from the markets perspective. if you look at it from a broader economic perspective, it is a very big impact on a country like china and a small impact on a country like the u.s. trade is a smaller percentage of overlong dish overall activity in the u.s. as china so that china is not as dependent. i think that is one of the reasons why president trump has used this because as a differential effect, it is not helpful to the u.s., at least in the short run, but it will be more problematic for china. he is looking at longer run issues like intellectual property rights. this is not just about soybeans and cars. the big picture is about enforcement of intellectual property, concerns about theft of intellectual property

transfer as well. scarlet: all we know is both sides have agreed to take steps, however vague that wording is. mardy, i was reading a column this morning and it was pointed out in no point in the last 18 months has the u.s. or china actually removed a tariff once it is been imposed. at this point marcus were celebrating the fact the october 15 tariffs were not going to go in place, go into effect, but the december 15 tariffs are still on the table. >> they are still there. the prospect that they may not be imposed is heightened by the agreement, the handshake agreement last week. but let's remember, this is in the middle of a political campaign in the u.s. donald trump has said he does not need a china deal to get reelected. he is going to play that card as long as it seems to benefit his political campaign. francine: how much does china need a deal? we had some data today that was

pretty unconvincing. >> donald trump has hammered on the fact that china is doing terrible. they are not doing terrible, but they do have some challenges as a result of the tariffs imposed and domestic demand. but look, everybody knows china has a very long-term view, not just weeks and months, but years and generations. i think they can wait this out. that is the danger of a trade war is that it only escalates, it never d escalates when both sides think they have an advantage. francine: professor kroszner, the status quo in a holding pattern or a little bit better but nothing much happening, if we stay that way will it to the world in a global recession? >> i don't think this by itself is a key thing. it certainly has an impact and it is not positive, but i think their bigger forces happening in europe and other countries that

we are starting to see just slowing of economic activity, even outside of the trade area. francine: marti, final question before we let you go. how much pushback is there from the trumpet administration, from those around president trump about what they did with turkey and syria? >> there is a considerable amount of actual silence from the people around donald trump. donald trump has his own foreign policy. it is decided by him. there are people who may give him advice like mike pompeo, but ultimately, donald trump decided to do the withdrawal and syria. it is his policy. basically, he has surrounded himself with people who agree with that whether they like it or not. scarlet: marty schenker, bloombergs chief content officer. we want to thank randy kroszner, professor, who will be sticking

with us. we have been keeping an eye over what is going on in london. this is the side of queen elizabeth's approaching parliament and her horse drawn carriage. she is accompanied by her send the prince of wales and his will w --ales and his wife. this as she gets ready to deliver the queen's speech. francine reminds us it is a speech written by the government that lays out the plane over the next 12 months. it will be interesting to hear what she has to say. this is "bloomberg." ♪

withet: i am scarlet fu francine lacqua. we are joined by andrew

islenhorst, randy kroszner still with us. i want to go back to the big story of the day, which is china saying it wants to hold more talks before agreeing to sign anything with regard to that phase one trade deal that president trump talked up on ay afr got markets so excited over. in terms of what was actually agreed upon, let me get this straight. beijing will double farm good purchases debt to $50 billion in the two sides will take steps on the really intractable issues of ip, and u.s. will not move forward with raising tariffs october 15, although the december tariffs are still in the picture. who ends up winning or can both sides claim victory? >> in some ways, this is a victory for both sides. but a small victory. i think that is what we're trying to emphasize. it is certainly a marginal positive, but maybe if it has a more of the argent unless of the positive in the sense that these

issues come agricultural purchases are a good example where the u.s. would like to sell agricultural goods, china has need to buy agricultural goods. it is not you are to come to an agreement on that. what markets are looking for and i think what corpus are looking for is necking decisions can have we change the tone in these negotiations? are we going in a direction of de-escalation instead of these cycles of escalation, de-escalation, escalation? i think we are seeing the headlines this morning maybe we are in this back and forth whereas markets on friday and last week were looking more for this we are on more of a positive trajectory overall. scarlet: and the president is keeping his base in mind, making a dipper what because our great patriot farmers, the red states. does it move the needle for china to be buying agricultural products from to $50 billion? >> it is certainly a positive for the u.s. economy. this is the time of year when the u.s. is typically selling

significant quantities of soybeans into china. that is certainly all a positive. but it is a positive on this limited issue around trade and even within trade, the limited issue of agriculture. there are all of these other issues that need to be dealt with. francine: andrew, we does this impact consumers in the u.s.? the bastion of holding the fort in the u.s. economy? >> we think pretty small effects on consumer so far. if you look at what this means for something like core inflation rates, maybe 1/10 of a percentage point. it is a pretty small rise in prices due to the tariffs that have been put into effect. that is not going to have a large negative effect on consumers. what we are concerned about is, is there something that negatively affects consumers sentiment? last month we saw some of the surveys of consumer sentiment dipping. but they have bounced back. as long as consumers remain positive on the outlook come the

fundamental economic effects of these are relatively small in the u.s. francine: randy kroszner, how would you describe the strength or weakness in the u.s. economy? >> the labor market is still very strong. we are at 50 year record low employment rates. the labor force participation rate has come up. it is not as high as it was before the crisis, but also the population has aged. older people just don't work as much as younger people do. we have done pretty well on that post of the consumers has been the key that has powered us through the growth for the last 10 years. investment has not been nearly as strong as i think anyone would have hoped. but that has been true in the u.k., europe, and throughout the world. ofrlet: randy kroszner chicago booth sticking with this, andrew hollenhorst c ofiti staying with us as well. we want to show you what is happening outside our offices in london and the bank of england here. there is a protest, extinction rebellion protest.

entersironmental protest the second week. bringing disruption to london during this period, calling for urgent action on climate change and wildlife losses. more coverage on all of this and the financial markets for you. this is "bloomberg." ♪

francine: this is "bloomberg

surveillance." the nobel prize in economics has been awarded to abhijit banerjee , esther duflo, and michael kremer for their approach to alleviating global poverty. let's get back to andrew hollenhorst and kroszner kroszner randy. i imagine, and i don't know if you have any insight into this, but want to win a nobel prize, does it result in greater influence? in this case, does it result in more government policy and investment strategy because of the work they have done? >> one of the great things about what this trio of laureates have done is they are already having an impact on policy and this is only going to get the more impact. there are a lot of ideas about how to do good, but you want to do that well. that is the theme of one of the centers at university of chicago . this is exactly what they do. their ideas about trying to help

education in emerging market countrs, is it better to give free textbooks or better to give -- have tutors because they're only a limited amount of resources? they have done these experiments, we tried more textbooks and we tried more tutors and the answer is, text books don't seem to hamper -- help much but tutors do. the same thing in health. subsidizing different medicines has a very big effect because low-income people are very price-sensitive. there is a new norm is pale from that. that is where private sector should go when non-governmental organization's give subsidies as well as when the government gives bsies. scarlet: i love that, doing good and doing well. andrew, we were talking about the nobel prize in how this is something very concrete as opposed to what usually happens. how much intersection, overlap is there between development economics and what you look at, macro economics for the u.s.? >> they are closely related at a

high level. i think what is great about this kind of work being recognized here is that this is really using some of their traditional tools of economics along with creating new tools to study these issues. the award is being given for something that is very concrete, whereas we usually think of economics as a reticle, maybe an .ward going for solutions like randy was talking about, this is directly applicable. francine: andrew hollenhorst and randy kroszner staying with us. we await the queen's speech. there they are. they are waiting for her majesty the queen to deliver her speech from the throne. this is "bloomberg." ♪ from the couldn't be prouders

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of what is happening in the house of lords. for regular listeners, you see it every time the queen gives a speech. -- the pageantry as all the house of lords are dressed in red. new legislative agenda should be unveiled shortly. the queen will deliver a statement. also a lot of political machinations behind the scenes. joining us now from westminster is anna edwards. the queen's speech is nice, but we do not know what will happen in the brexit negotiations. last week come after boris johnson met with his irish counterpart, we got a deal. today, we seem like we are further away from it. what will be the crucial point? anna: still the same sticking

points, despite the pomp and ceremony of the queen's speech taking place in the house of lords on our screen. despite all of this, little certainty as to whether boris johnson can pass his legislative agenda. that is with the queen's speech is all about current written for her by the government. it is about the government presenting what it wants to do for the next 12 months. very difficult to see how the government can pass a lot of it given they do not have a majority in the house of commons. have heardto say we a lot of skeptical views in the last few -- last 24 hours suggesting we need to be careful in expecting too much from the brexit process. friday looks hopeful. today looks difficult. the deal has to come by wednesday to pass the european leaders summit this week. francine: if the u.k. asks for an extension, do we think the eu will automatically give it to them? will they be three months or does it need to be longer? anna: we have heard from

jean-claude juncker that there is an expectation that the eu would look favorably on a request for an extension. that extension must be at least until the end of january, but the eu could come back with a different date. i remember this happening last time the government went for an extension under theresa may. at that point, people were saying the eu might just decide we are fed up of talking about this every five or six months. we want to put a two year extension on this. that might be unlikely. they could change the game considerably from the eu's side by deciding to go with an extension that is longer than requested with a view to allowing other things to take place here, for allowing clarity to emerge on the u.k. side. it is currently without clarity. scarlet: do we have any sense of what happened over the weekend? things looked optimistic on friday.

suddenly, we are hearing from the eu that the negotiations that have been put in place were not enough to form the basis of the deal. a deal thatway to was being talked about on friday , whether we were entering the negotiations, there was talk about that. things do look different, but not to suggest things have fallen apart at all. they do not look quite as promising today. we have heard from the eu that the -- what the london government is putting on the table would lead to single market vulnerable. there seems to be a lack of detail. that is with the eu is saying and there is a great deal of complexity. if the u.k. is trying to get over these key hurdles, which consent from the northern irish, both of those are complex to solve and will require complex solutions, whether they are in time to delve -- complex solutions card whether there is time to delve

into those complex solutions is difficult to say. francine: anna edwards there at westminster. we are keeping an eye on westminster and the house of commons. let's get straight to bloomberg first word news. trumpsident donald ordering a withdrawal of all u.s. troops in northern syria. the turkish military operation cut supply lines and puts american forces in harm's way. the president says the u.s. is ready to impose more sanctions on turkey if the turks do anything in syria the u.s. considers off limits. more violence over the weekend in hong kong. slashed inficer was the neck by a protester. police say they found and it provides explosive device. another demonstration is planned for today. protesters will show their support for a bill in the u.s. congress that could densely sanction chinese officials. the son of joe biden is moving to quell controversy over his business activities. hunter biden is stepping down

from the board of a chinese backed five equity firm. he is promising to give up all former -- foreign work if the former vice president is elected president in 2020. global news 24 hours a day, on the air at tiktok, on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. bloomberg. we are looking at life pictures of the house of lords, where the chamber -- where her majesty the queen has just walked into the -- to deliver her speech. from all sides of the political spectrum, a lot of people saying that because of the difficult talks of the eu continuing -- with the eu continuing, the queen's speech will not make much difference. there are a numof bills that her majesty the queen will lay out come on crime come on immigration, on health, on the environment. out, on crime, on immigration, on health, on the

environment. a lot of people are saying it is farcical to look at this when we do not know what will happen in the next couple weeks. scarlet: as we wait for the queen to begin speaking, walk us through where she is. is she in the house of commons or house of lords? bercow, who place such a big role in these negotiations and debate in parliament -- what is his role here in starting the queen's speech or asking the queen to begin speaking? francine: this is the start of the parliamentary year with the queen's speech setting out the government's agenda. traditions surrounding the opening can be traced back to the 16th century. the three parts which make up sovereign, thehe house of lords, and the house of commons -- come together. everyone is in the chamber now. you can see it is starting.

the ceremony -- i need to check the date. i am sure tom keene can correct us. the ceremony has existed in its current form since 1852. the palace of westminster was rebuilt after the great fire in 1834. the event begins with the procession. we are looking at that. then she enters westminster through the sovereign's entrance. she is wearing an imperial state crown and the robe of state. she leaves the procession through the royal gallery to the house of lords and then it is a little more unusual. you can see the house of commons breaking off to go to the house of lords. scarlet: when you said she delivers the speech to open up parliament, it is kind of to set the tone and explain what the government wants to pursue over the next 12 months. this is a speech written by the

government for her. we do not have a sense of what the queen believes in. it is in support of her government. francine: right. more than setting the tone, it is really bills. this is basically legislation. we understand there should be 22 bills expected to be included in from 2020, which would be a points-based immigration. we are expecting tougher and all t's for foreign nationals who try to return to the u.k. -- former nationals who try to work turn to the -- try to return to the u.k.. there is a razor thin majority in the house of commons. the mp's could vote down the queen's speech. let's go back to westminster, to anna edwards. it is odd looking at the proceedings when negotiations are so tense with the eu. how much do we know about the bills surrounding brexit that

the queen will read out today? anna: there will be a heavy dose of brexit, but there will be other things come more domestic matters. that is amazing given the uncertainty that hangs over the u.k. this spectacle, trying to look as normal as possible. as we have said a number of times, this is going to contain brexit legislation and other more domestic bills to do with health care, investment, tackling crime, increasing wages , perhaps financial services. perhaps some protections for the city because of the brexit threat. what is also interesting politically is whether this could pass through the house of commons but also how this is being dubbed by opposition parties. opposition parties are saying this is part of the government trying to bring the queen into their general election campaigning. they say this should not be happening now.

typically, you see the queen's speech taking place after an election. we have a new prime minister, but this is not a new government. they usually set out their legislative agenda. the government would argue we try to do that. we tried to call a general election, but we cannot because the opposition parties will not agree and now we find ourselves in this strange situation of the government giving the speech to the queen that she has to read out. there is no certainty as to whether any of the bills she is going to announce are going to get enough support in the house of commons to be passed. scarlet: i am looking at a history of the queen's speech. the longest she ever gave was in november 1999. it took more than 15 minutes to read out. that was the third queen's speech of tony blair's labor government. the shortest was in november 2009. let's listen into the queen's speech. >> based on free and friendly

cooperation, my ministers will work to implement new regimes. my ministers will work to implement w regimes for fisheries, agriculture, and opportunities the that arise from leaving the european union. endingmmigration bill free movement will lay the foundation for a fair, modern, and global immigration system. my government remains committed to ensuring that resident european citizens who contribute so much to the united kingdom have the right to remain. the bill will include measures that reinforce this commitment. steps will be taken to provide certainty, stability, and new opportunities for financial and legal sectors -- financial

services and legal sectors. my government's new economic plan will be underpinned by a fiscal strategy investing in economic growth while maintaining the sustainability of the public finances. measures will be brought forward to support and strengthen the national health service, its workforce, and resources, enabling it to deliver the highest quality care. new laws will be taken forward to help implement the national long-term plans in england and establish an independent body to investigate various health care incidents. my government will bring forward proposals to reform adult social care in england to ensure in old and old age -- age carry my ministers will work to reform the mental health act to improve respect for and care

of those receiving treatment. my government is committed to addressing violent crime and to strengthening public confidence in the criminal justice system. seesentencing laws will that the most serious offenders spend longer in custody to reflect better the severity of their crimes. improve the justice system's response to foreign national offenders. my government will work to strengthen the rehabilitation of offenders. proposals will be brought forward to ensure victims receive the support they need and the justice they deserve. laws will be introduced to ensure that the parole system recognizes the pain of victims

and their families caused by offenders refusing to disclose information relating to their crimes. will be placed on public sector bodies ensuring they work together to address serious violence. police officers will be provided with the protections they need to keep the population safe. they will also be awarded the power to arrest individuals who are wanted by trusted international partners. my government will bring forward measures to protect individuals, families, and their homes. legislation will transform the approach of the justice system and other agencies to victims of domestic abuse and minimize the impact of divorce, particularly on children. my ministers will continue to develop proposals to improve

internet safety and will bring forward laws to implement new building safety standards. ensure that will all young people -- francine: we will continue following the queen's speech at westminster. anna edwards is just outside on westminster green. it almost feels like an election campaign. is this the government's election manifesto? anna: that is exactly what the opposition party has been saying thisis country, that normally -- this event normally follows a general election. generalnot had a election here for various reasons. the government is trying to bring about a new session in parliament, the opening of parliament. that is what the queen's speech is about.

the opposition is saying this is just an election campaign using the queen to put forward a manifesto. this is what the party would do if it has -- had the majority to do it. it does not have the majority at the moment. there is no clarity as to whether any of this will get passed. scarlet: anna edwards -- francine: anna edwards live from westminster. if you want to continue to watch the queen's speech, it is .vailable on bloomberg.live.go let's return to the markets with andrew hollenhorst. thank you for being so patient as we sat through the queen's speech. i want to come back to something a little bit less full of pageantry, which is the yield curve. one of our columnists points out that the u.s. yield curves are no longer inverted. the three month and two year yields are lower than the 10 year. the white line on this chart is

the 2-10 spread. before we get to how we read this, why the inversion? andrew: a few things have played into this. the biggest is the general risk we have had in markets, related to what is going on in brexit, with the trade negotiation. you have also had smaller technical factors. you have the fed that has announced they will dund treasury bills. that is going to increase the price of those treasuries so the yield goes down at the front end and steepeners the curve. scarlet: that brings me to my next question. the fed has announced it is expanding its balance sheet, buying up treasuries to resolve funding issues in the repo market. how does treasury respond to this? how it responds determines whether it will have a stimulative effect on the economy. andrew: it is an important question that has not been worked out yet through the various qe programs. if the fed is doing something a

terms of buying, treasury can offset that by issuing. you have different mandates. if the fed is trying to implement monetary policy, on the other hand the treasury is trying to fund the u.s. government at the lowest possible cost. if you think about how you would do that, if the fed is buying treasury should be issuing in the same maturities because that is where the demand is. there will be a little bit of that through the qe programs. we have seen some amount of treasury offsetting what the fed is doing. for the most part, the fed is trying to move more tactically in terms of their purchases, whereas treasury issuance tends to be slow moving over time. i do not think you will have this fully offset. francine: where does dollar go from here? does it strengthen? andrew: the interesting thing

with the dollar is if you have a negative economic outcome you tend to get a stronger dollar because there is risk off. if you have a positive economic outcome in the u.s., the dollar can strengthen because of strong growth in the u.s. and capital flows here. are we going to get one of those two extremes or end up somewhere in the middle where the u.s. plods along? right now, the chance of either you can goere either into a scenario where the u.s. growth continues to hold up and that will be positive for the dollar or a likely scenario but possible is u.s. goes into recession. world economy goes into recession. that would also be dollar positive. there is a heightened chance of extreme scenarios that would be dollar positive. francine: thank you, andrew. andrew hollenhorst there. we are also looking at the queen's speech. she was just talking about her new economic plan. she basilly was saying my

government's new economic plan will have responsible fiscal strategy and economic growth as foreign secretary -- this very. ♪

francine: this is bloomberg surveillance. tom with a day off. the startup may run out of cash as soon as next month. joining us is an authority on wework and bloomberg's tech opinion columnist. what are we looking at? right now, according to reporting we are seeing in the last one he four hours, wework's board is weighing two options. one is what it would look like if softbank takes over the company. they would buy into wework deeper than they are already in and effectively have control of the company, probably even a majority of the company. an alternative offer they are looking at is more of a debt

financing that is basically being led by j.p. morgan. they come along with other investors, bring in new cash into the company. the deal would be new cash into the company allowing wework to survive longer as they keep burning cash. the way i view that is essentially buying time for whoever runs the company, the new management, to essentially aal back spending and find path to profitability to keep the company going as long as possible. francine: what does this mean for others waiting to list? i ask you every couple weeks, but does this have huge repercussions or is it more of a wework story? tim: it is both. it is a terrible answer to your question, but we are seeing a long period of time. we have seen a lot of these unicorns go to market, listed usually in the u.s..

s e most famous example. most have not been profitable up to the time in which they have listed and they have to have crazy valuations because companies like softbank have been funding them, pouring kerosene onto the fire, giving the money to burn, giving them cash they can keep spending without the need to be profitable. and it comes to an end, looks like we are seeing more the startupin ecosystem, that is not necessarily good for the move to go to ipo. if we see some kind of rationalism and more focus on profit, as they do come to ipo, other unicorns come to ipo level, they may have good -- better chances of seeing a good debut and getting a wrap up of this approach quickly. scarlet: you laid out two scenarios.

the softbank takeover scenario -- what is softbank's track record in taking over a company? i think back to sprint. that has not necessarily worked out well for softbank. tim: if i was an investor in the vision fund, i would not be keen on seeing the vision fund taking over any of the portfolio companies, especially wework. francine: thank you. coming up on friday during our coverage of the imf in washington, we will speak to a number of governors and central bankers and finance ministers and the european commission vice president. a lot to talk about. this is bloomberg. ♪

♪ >> china throws cold water on

trade optimism. the country wants more talks before signing trump's phase one deal. and the queen's speech and brexit countdown. the queen lays out the government's legislative agenda while the brexit deal runs into problems and the e.u. says breaktrue is a long way off. the company is weighing bailout options from a takeover by softbank to a a $billion debt package from j.p. morgan. welcome to "bloomberg daybreak." you woke up, it's the hardest part of monday, congratulations. reality check is what i'm calling today within the markets. whether it come from a brexit deal or a trade deal. eality now setting in. alix: a nice bill big rally in the u.k. market. outperformer over in europe and crew getting wiped out -- crude getting wiped out. time now for the global exchange.