>> boris johnson's deal will be tested by u.k. lawmakers, but will he find enough support? ubs pulls and $16 billion from rich clients and assets it's a record. it has been a solid quarter. companies funding runs drive for wework. welcome to surveillance, i am nejra cehic.

markets in full swing in terms of earnings season. stoxx 600 down 0.3%. optimism in equities. cable coming off for a second day. a big week for boris johnson, trying to rush through legislation through parliament. the 10 year yield got to 1.80 yesterday. we pulled back on the 10 year yield, 1.78 today. more on our conversation following third-quarter results. do not miss that interview. once -- won aeau second term, but his mandate is smaller and that will force him to rely on other parties to govern. trudeau was leading in electoral districts, but short of the

majority. four years ago they secured a majority. president trump talks trade optimism, raising expectations of the aipac meeting next month. he said in a cabinet meeting beijing negotiation's are going well. china has started buying more agricultural products. benjamin netanyahu failed in his bid to form a new coalition government. -- the new forced president plans to pass off to benny gantz. he is expected to face an equally difficult task. .srael in political deadlock thousands of protesters gathered yesterday in city squares around riots andr weekend of looting that left 11 people dead.

in the 1980's it became latin america's wealthiest nation. 1000 people have been arrested after riots and arson brought the cities to a near standstill. profits beat analyst estimates, lender had a $1 million charge to restructure its investment bank. the cost of living out of these charges, and most importantly it will give us an opportunity to refocus on our activities. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. you.: thank

let's get to our top story, the latest twist and turns in the brexit tsonga. does boris johnson have the votes? latest frome westminster. run us through the timetable for this week. where are the stumbling blocks? >> the first challenge is 7:00 p.m. tonight. the second reading of this bill. it is the first chance for mps to have their vote that would implement boris johnson's brexit deal. we think there are the numbers to get it through, but what will be difficult is what follows, the timetable. the government wants to get this quickly. there are three days to get through a complicated piece of legislation. the circus build took even more time to give you some sense of how much they are trying to

squeeze this in. there is anger in parliament for the lack of time to scrutinize this text. you could see that voted down. that would throw the government into disarray. october 31 becomes very difficult. if they get it passed, this is where amendments could come into play. mps could support the second and we are looking at a possible customs union or second referendum. you could see the bill looking quite different from what the text looks like as things stand. nejra: i am fixated on wild animals in circuses. at the end of the week, a lot of strategists updating forecasts sang eventually we will see this voted through, and that is why they are more constructive on cable. this get to the end of week to the third reading and it

does not pass, what happens then? >> then we could see a general election. boris johnson needs the numbers to get this through. that becomes a risky prospect. votecould split the tory or hold boris johnson's feet to the fire. there is also reporting that the government could pull the bill and that would take us back to stage one. that sets up the people versus parliament. boris johnson once a lame parliament and push brexit on them to get votes. argue it is a different kind of circus. nejra: i knew you would bring it back to the circus. you so much for joining

us. joining us now is patrick armstrong, cio / managing partner, plurimi wealth, our guest hosts for the half-hour. we were talking about a lot of strategy and updating the forecasts. townemoved some short position, would you like to add more or sterling longer? bit, but mosttle of the moves already happened. the worst taste scenario was crashing out, but that is off the table. forprime minister has asked an extension, but it is almost impossible. they will not do it if we do not get the bill passed. that is the only real negative scenario for sterling. , a lot of it is already in the price now. we have seen a move in sterling, but most of it has already happened. nejra: when people say they are targeting 1.36, some strategists

say if the deal goes through we could get to 1.40. patrick: that is too far. we think it is up to 1.36. if you look at the u.k. growth versus america, you have a big interest rate differential. we may hike even if we get a deal. i do not think that will happen because we already have tightening with stronger sterling. i do not think the u.k. economy will be in a strong enough position to warrant hikes. is wherehat 1.34 level we get to. nejra: you would disagree with the hike. what is your position on gilt. patrick: we think interest rates will move higher from where we got to in august. all interest rates were moving near zero and negative. i think central banks have

acknowledged, they are pushing on a string. negative interest rates, there are questions how effective they are. the want to move towards more negative or zero? you get a boost to the economy, but you have a big impact on pension fund deficit. there are consequences to the negative interest rate policies as well. there is a lot of debate between ecb and the fed. nejra: looking at equities, would you favor mid-caps and small caps because we have seen them recover with the prospect of a deal getting through, or would you look to the large caps? patrick: we own large caps because we were worried about no deal brexit being a possibility. we have not changed our position and we think global investors given the uncertainties, the mid-caps benefit a deal. large caps might be hurt by

stronger sterling because they have the multinational level, but under allocated to the u.k. if we get any resolution, they .ill not buy into the mid-caps they will buy into large caps, the global investors. mid-caps have a lot of opportunities. nejra: patrick armstrong, cio / managing partner, plurimi wealth stays with us for the hour. an update, resuming trading up 21% after the process bid. we are looking at just the shares resuming trading, up 21%. still to come, we have been speaking to the ubs ceo after the swiss bank earnings. how they achieved record assets despite market conditions. that is next. this is bloomberg. ♪\

nejra: economics, finance, politics. this is "bloomberg surveillance ." i am nejra cehic. >> softbank is looking to take a 60% stake in wework. we are told this will value the company at about $8 billion. is considering a separate package from j.p. morgan chase. earlier they were looking at an ipo worth $47 billion. the spanish bank says the first bank of puerto rico will boost

capital by as much as six basis points. theander entered marketplace in 1976. mark zuckerberg says his meeting with pete buttigieg should not be considered an endorsement. facebook recommended were hired. that is your bloomberg business flash. nejra: let's focus on banking. ubs reported earnings with a standout being the wealth management unit. which client added $16 billion? discussed the numbers earlier. focusednow we are

not on quarter on quarter, we are happy we have positive for the year. the vast majority was coming from asia. lending, butup in i am pleased to see across the neutral had positive or impact of new money. manus: i look at the clients, your clients are waiting to buy the debt. do you get a sense that if we got a good trade deal, and negotiated brexit, there is a pet up desire and clients -- pent up desire from clients to get involved? >> all these challenges, if they are clarified, i believe there is room for investors to come back selectively in the market.

the vast majority want to reinvest, 46% of the investors surveyed. deal.nt to see a it depends on how the deal will play out. last december we saw it was too for real dramatic interest for investors. we need to see an opportunity where things get resolved or any correction is somehow digestible. half fullyour glass or half empty? >> if i look in that sense, i would say half-half. manus: we talked about new money. and your know what you new banker have decided on unrealized opportunities. he is very fast and helping

us execute our current strategy. these are opportunities we want to explore and execute on. in any situation when somebody starts a new job, we expect the person to contribute to the development of the strategy and the execution of the existing ones. nejra: that was manus cranny speaking to ubs ceo sergio ermotti. patrick armstrong, cio / managing partner, plurimi wealth is still with us. is ubs a buy for you? >> we do not own it. they will have a dividend yield over the next 10 years. i would rather have ubs than pay for negative interest rates. they are focusing on wealth management which is lower roe at times, but over a cycle it is

better than investment banking. when investment banking is delivering, it is the crown jewel. they have more sustainable return on capital, 50% on equity target -- 15% on equity target. if they come in at 12% to 13%, that is very good, over the market cycle those numbers as well. they have been able to pass negative interest rates on. that is not something they did last year. there are not any negative repercussions. clients are accepting negative interest rates and taking new high net worth money. some of the issues plaguing the banks have been addressed. utilities now.s and the tier one capital they have to keep, it is hard to get those big roe's like

in the last cycle. the banks are a reasonably safe way than negative it just rates. nejra: we were looking at the u.s. earnings season and it was concerned because of the low rate environment, then we got better expected earnings across the board. banks have aobal strong driver from the u.s. consumer which has been resilient and strong. they are trading at reasonable multiples and you get a little bit of a dividend yield. they are not as cheap as european banks, but they have better balance sheets as far as debt. bestill think bnp is the positioned bank. banks is one area i would be shorting banks. very expensive. we have a liberal government

again, a minority, so i think you have policies that will not be good for the economy for big business in canada. housing prices is one region i am concerned about. nejra: patrick armstrong, cio / managing partner, plurimi wealth , coming up, the twists and turns in a trade war and what it means. this is bloomberg. ♪

nejra: this is "bloomberg

surveillance." i am nejra cehic. president trump says china has indicated trade negotiations are advancing raising expectations a deal could be found next month in chile. it was said that it is more important to get the details right. u.s. stocks climbed to a one-month high with the s&p 500 closing above 3000. patrick armstrong, cio / managing partner, plurimi wealth is still with us. you reminded me that you thought we would get a deal by the end of the year. are we going to get there? patrick: i thought we would get a deal in q1 2019, a bit optimistic. it feels like groundhog day where every few months we are 90% of the way to a deal, just about there and we are never

quite getting there. i do not think we get an all-encompassing deal. they are referring to a partial deal now. we might get to a truce. we may not have seen the last round of tariffs, and china is buying agricultural products. i do not think we get an all-encompassing deal. there are strategic issues that neither side is inclined to get an agreement on the cousin it is strategic, and anything you gain the other side loses is good for you strategically. if we get a truce, no further tariffs, that might put a floor under markets. upside. floor but not have risk assets got ahead of themselves on the prospect of a truce? patrick: possibly. we are not buying any stocks at all-time highs.

we have been buying into the laggards. japan is cheap. havesive companies performed for different reasons. the stocks that are running at all-time highs, i would be worried about. we think recession is not our base case but the u.s. recession is a 25% probability, and that would be a terrible environment. nejra: patrick armstrong, cio / managing partner, plurimi wealth stays with us. asing up, the end of an era mario draghi has his final ecb decision, and we look act on his legacy as he prepares to pack his bags in frankfurt. this is bloomberg. ♪ everyone uses their phone differently.

that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else.

it's a different kind of wireless network, designed to save you money. 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. ♪ nejra: third time lucky, boris

johnson's deal will be tested by lawmakers but will he find enough support? ubs pulled in $15 billion from rich clients. it has been a solid quarter. softbank seeks a mazor -- jordi as funding isk dry. dani burger is in london. dani: in the midst of this eaton sayingy day, at will by the company at 110 pence a share. with this 18 and some percent change -- the offer price is a 21% premium. that is the biggest gain or on the stoxx 600 and the biggest loser is chewy --tui.

we did betty -- well after the collapse of thomas cook, but there is still some uncertainty ,fter judge as to the demand and they see the 737 max 8 grounding hurting tui. loser on this stoxx 600 is reckitt benckiser. they came in with their earnings looking weak. they have a new ceo but they have lowered their sales forecasts, saying the demand for flu vaccinations and baby formula are looking weaker. issues with their health care department is a lot more troubling than many had expected. nejra: let's get the bloomberg first word news with viviana hurtado. viviana: boris johnson will find out if he has a chance of getting his brexit deal through

parliament. to second vote is scheduled take place at 7:00 p.m. u.k. time. suggestingtes johnson probably has just enough face a to win, but will more difficult on his fast timetable. a secondudeau winning term, but his mandate is smaller and that will force him to rely on other parties. won, short ofrty 170 needed for a majority. four years ago, the liberal party secured a majority. president trump raising expectations an agreement with china could be signed next month , telling the cabinet meeting beijing indicated negotiations are going well. china has already started buying more agricultural products.

benjamin netanyahu failed to form a new coalition government and has been forced to return the mandate to the president, who will pass the right to benny ganz. he is expected to face an equally difficult path to elections this year that left israel and political deadlock. protesters gathering in chile after riots that left at least 100 people dead -- 11 people dead. late 1980's, the country became latin america's most wealthy country. hundreds have been arrested after arson and riots have brought cities to stand still. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. nejra: thank you so much.

let's focus on europe. themed el-erian thinks region will be in recession next year. >> i am not sure the global economy is bottoming out. i think we will have another round of downward revisions in imf forecasts. we will have europe in recession next year and that is not priced in. year, itall speed this recession next year for the euro zone. nejra: those comments and ahead of mario draghi's final policy decision this thursday. it comes at an uncertain time for the euro zone economy. we look back over the last eight years of his 10 year -- tenure. is ready to do whatever it takes to preserve the euro.

believe me, it will be enough. isecb president mario draghi credited with saving the euro, but proved willing to take decisive action. he undid the 2011 rate hikes enacted by his predecessor and took the key deposit rate to an unprecedented zero percent to battle the greek and european debt crises. >> historic, the deposit rate has gone negative. >> i would say that for all the practical purposes, we have reached the lower bound. european economy continues to deteriorate and bond yields surge, the ecb introduced quantitative easing. not everyone supported it and opposition to the ecb was growing.

despite signs of recovery and growth in jobs, as draghi approached the end of his term it became clear europe still needed support. >> additional stimulus will be required. this outlook is getting worse and worse. fiscaltaining calls for stimulus, he cut rates again and reminding investors of his favorite mantra. >> the ecb is ready to do whatever it takes. >> christine lagarde hopes to avoid draghi's -- >> i hope i never have to face something like that. nejra: a new book looks at the european central bank's tenure and what he will have to face when he gets back to his country. ecb and euro by

zone economy reporter. what an exciting book. that mario draghi will probably be remembered for whatever it takes. has he left an easy or difficult job for christine lagarde? >> and is difficult to say. for sure, the euro is still round -- around. from that perspective, a lot easier. a lot has happened in terms of strengthening the foundation of the single currency. there are a lot of challenges ahead. heading to as crisis, and the rift among governors has probably never been deeper. mender, it will be to relationships in the council, rebuild consensus, and make sure

inflation gets where it belongs. nejra: i have been told that the two of you have no rift whatsoever. book says if the ,ou want to know what happened it is probably there. what surprised you in your research? alessandro: draghi looks like a cold and distant person, and he is very effective when he manages meetings and relations, and has managed to get his way across the governing council many times. he managed to convince germinate bring --twice and twice and bring rates lower. behind closed doors, one of the

governors told us that when he was under deep attack in his home country, that he had to move his country outside in the height of the crisis because he received death threats against his family. he was calling in everyday, not for any policy reason, just to check in and say, how is it going? is a ruthless, pragmatic person, he can show some attention to the person at risk of doing their job of saving the euro. nejra: do you think that as he steps down he will wield some influence on what happens next because he has a lot of contact? he certainly has an idea of what he wants europe and the monetary union to look like. i would expect to hear from him after his retirement. he will probably take some time off, read a few books, something

he has not had much time for in the past. i will think he will be part of the debate one way or another, whether that involves an thecial role in italy or european context, we don't know. nejra: what did you learn about his relationship with italy and germany? jana: germany is an interesting example, because it has been a problem for him since the beginning. it has a very outspoken media. the front pages have not always been flattering. one of the biggest newspapers reminded him of running stable monetary policy. the former finance minister is one of the few people who can get under draghi's skin. he is not known for losing his temper,but he was --

but he was very close. in imf meetings where the two would be locking horns and having very intense conversation, and it would be difficult to break them up and restore order. at the same time, they have the deepest respect for each other for what they have done for europe, how they have built europe. he has respect for chancellor angela merkel. they talk regularly. way, theyinteresting have challenges ahead of them in terms of economics and finance. good relationships despite what you see on the outside. nejra: will the investment community miss mario draghi? patrick: i think they will. whatever it takes, interesting how he said once we get to -40

that would be the practical lower bound. i guess now where we are moving is impractical movements and pushing on a string because we have gotten below the practical lower bound. the financial community regards him highly. he has been very positive with rhetoric, giving confidence to markets. nejra: to the point about pushing on a string, there is a quote that says it is fair to say to return to nearly returning to the cost of borrowing while providing liquidity to banks when not be in the ecb's cards. cards for be on the the ecb from here? alessandro: that is one of the biggest challenges christine lagarde will have to face. and dore deep below zero not show signs to raise. probably become a

permanent fixture of monetary policy. too the heads is of the other finance ministers in the euro area around and force them to do some fiscal stimulus, which is what they have been going on. just monetary policy is not enough and fiscal policy must do its part. nejra: great to have you both with us. patrick armstrong stays with us. up next, running out of cash, board decides. this is bloomberg. ♪

nejra: this is bloomberg "surveillance." the board of wework are weighing two rescue packages as they are expected to run out of money next month. softbank is seeking a majority stake that would value the parent company at $8 billion or the $47long way from billion valuation in january. jp morgan is patching -- pitching investors on a $5 billion junk listing. patrick armstrong is still with us. chris, great to have you here. a wework between a rock and hard place or does one of these

options look palatable? chris: this is a company that was pitching investors on a 47 billion plus ipo and now only worth perhaps 8 billion. 1,000,000,004 every year mr. newman has been alive. year for every year mr. newman has been alive. payout for the shares he holds. jp morgan option is new debt, high risk reflected in the yield. with the softbank money coming in, mr. newman would have to step away from control of the company but would receive some money. any money is probably a good thing because without jp morgan and softbank this company is worth zero. patrick: i think it will be symbolic of recent ipos with companies coming with billions

and billions and no path to earning. these companies should be skeptical. it is all about magic dreams. snap, and ifork, you do not have a pastor profitability you have to sell the dream. profitability, you have to sell the dream. if you have a malala ballistic position -- monopolistic -- iion or oligarchy, think the market got carried high.nd priced things too a healthy dose of skepticism is there now and wework is symbolic of that change. nejra: what is their path to profitability?

prospects really ipo? chris: we are a long way from that stage. wework did not have the money on hand to pay severance for its employees, so the first thing when this new money comes in as they will have to do some debt clearing and cost-cutting. a lot of people hoping wework would deliver a nice paycheck and perhaps some shares have to lose a job. they slimmed down company, perhaps there is a path to possibility. outrk did not really lay it and that was a fundamental problem investors had. resume a play, some locations are doing well and it would be well advised to focus on those and cut back on the growth. 47 billion dollars of lease liabilities, they will come in the coming years. ,ard to wriggle out of those

and softbank is putting together a plan to deal with those. nejra: thank you so much from chris bryant and patrick armstrong stays with us. earnings season in full flow. with automakers and u.s. tech higher. this is bloomberg. ♪

, and: economics, finance politics, this is bloomberg "surveillance." we have lots of companies reporting this week after u.s. banks kicked off last week. we will see how you european -- european banks are fear -- faring. for manufacturing data out of the u.s. weigh.conomic concerns andosoft, and amazon twitter report today. --rick: u.s. banks have put

posted good numbers. ceoe is a risk if you are a or a coo, you have an inbuilt risk of brexit word trade. -- or trade. -- outlook,imistic, analysts are too optimistic. consensus has about 10% earn dust earnings growth next year. scope.s no nejra: i was reading a story on the bloomberg saying analysts arc cutting their estimates -- are cutting their estimates. typical.it is

i think it is a worry that you have this phenomenon. expensesthrow all your in and the guidance will be questionable given the backdrop. the last four earnings seasons for the u.s., the s&p has fallen. has not performed well. nejra: the point you make about companies hiding behind trade seek outt, how do you the companies to buy or sell? patrick: we are looking for laggards. companies are trading on 10% to 20 per -- percent. aversion moment in yen revenues.

u.s. health care has political risk and is trading in multiples below the s&p 500. if we get a democratic president , rhetoric will be harsher than policy. forink the worst case is the health care stocks. nejra: great to have you with us for this hour. bloomberg "surveillance" continues in the next hour. guy johnson will be joining tom keene. this is bloomberg. ♪

♪ hey. hey. you must be steven's phone.

now you can take control of your home wifi and get a notification the instant someone new joins your network... only with xfinity xfi. download the xfi app today. ♪ morning, monday was

repetitive and disorderly. tuesday brings reading of the fine print. sebastian salek is in westminster as the prime minister decides what to do next. syria.till disorderly in the commander in chief manages the message but a complete withdrawal is not. consumer banking will never be the same. go digital or go home. this is bloomberg "surveillance ," from london. lacqua is guye johnson. i would love your perspective on brexit. we will get to seb salek in a moment, but what is your thought? guy: expectations are that boris johnson gets the deal through,

but the real question is whether they get the timetable through today. that would allow parliament to accelerate this process. mps are pushing back against the idea that this withdrawal agreement is being pushed through too fast. tom: complex and convoluted to say the least. these are live pictures of downing street, as the prime minister looks carefully at this withdrawal agreement. with our first word news, here is viviana hurtado. viviana: boris johnson gets a chance to put his brexit deal to the vote. twice he has been denied a vote. later today is his moment of truth. he will find out whether parliament agrees with the general -- general principles of his agreement. -- gavea, voters game term. trudeau another

his liberal party lost its majority in parliament. the most likely partner as the prolabor new democratic party. expectationssing the u.s. and china could sign next month a trade deal. china has indicated negotiations beijing hasng and begun buying american farm products. for the first time in 30 years, japan has a new emperor. but coronation was completed today. emperore first japanese to be educated in the west. the emperor has no say in government policy. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you for showing us

that window into the past in japan. equities, bonds, currencies, commodities, when was the last time i did one screen three days in around? flat range bound, flat range bound. the quiet in the markets is absolutely extraordinary. what do you have? guy: a couple of big events coming up. the trade story and brexit keeping volatility subdued. we are getting news related to m&a, just eat select -- an offer bynp prosus. an expectation in the market that we would see that rejected,

but the stock is up 18%. there have been a whole series of takeovers in this space. just eat has been the center of some of them. we are watching the cable rates. we will see what happens in parliament later on. .able reasonably flat stoxx 600 down by two tense of 1%. we are watching -- 2/10 of 1%. we are watching ubs which has had a better day. we are starting to see a turn for the european story. thelatest concerns in brexit saga, does boris johnson have the votes to push through his brexit deal and will it emerge looking anything like the agreements he brokered with the european union? these are key questions that need answering. let's join sebastian salek. sebastian: we are looking

forward to this motion. this is what is crucial today. after the vote on the second reading, which we think will pass through. boris johnson does not have the majority. we focus on the timing. there is not a lot of time to get this through. they want to push it in three days because the government staked its reputation on getting brexit done by october 30 first, just nine days away. frustrating the process for more time to scrutinize. this document only dropped last night and it is more than 200 pages long of dense legal text. it will take a lot of time and brainpower to get through, and there are some issues mps are unhappy about. tom: william hague and kenneth

clark are talking about the need for more time. what is the sign line to a late november election? does that decision await? sebastian: i think it is too late for a late november election. legislative periods that need to play out before an election. after december 12, that is written off because of christmas parties. people bucking out the rooms will be used for voting and counts. there is not the money to pay the insurance in case we have to count. soon, itsn't happen gets pushed forward to the spring. a better time to campaign because you cannot knock on doors after dark. it is a better time to campaign

properly. one party it would not play well for is labour, because their voters do not come out when it is cold and rainy. sunny today, it is sebastian salek joining us from westminster. joining us now, andreas utermann. there is this assumption we are almost over the line. is that correct? andreas: why do we have that perception? the government is telling us they want to get brexit done. it is complex and we have not even brexited. if we leave the e.u. on the 31st of october, that will be the end of the beginning. completelyard brexit off the table? we have a standstill period ramping up to the withdrawal bill. there is another potential cliff edge.

aes british business face series of rolling deadlines over the next few years? it will undermine the certainty to invest, employ people, and get the economy moving on. andreas: that is already playing out. this has been three and a half years since the referendum. tom: feels longer -- guy: feels longer. andreas: feels much longer. obviously qe has helped buffer some of that. as the hard brexit scenario completely off the table? you can never say completely, but it is likely off the table. we have a deal that could survive the october 31 deadline. pretty good authority that the european union is very minded to accept the request for an extension, what may, and that is may -- the european

union has a vested interest in not having a hard brexit and do not want to be blamed for the fallout. .om: good morning from new york the well-dressed of the mansion house dinner, let's assume they are remain. have the remainers given up now and are just looking for the best outcome, or is there a remain voice among the city? andreas: there is a strong remain voice, that is for certain. it is stronger than three and a half years ago. let's take ourselves back re-years ago. -- three years ago. if you advocated a second referendum you were basically called undemocratic and a great -- a traitor. that is no longer the case.

it is acceptable for parliament to debate whether we should have a second referendum and whether remain is an option. the mood music has changed. we have never been closer to brexit and never been closer to a second referendum. allianz suggest now is the time to buy u.k. nationals? andreas: i would not want to comment on that specifically, although multinationals in the u.k. are probably the least affected corporations by brexit because much of their earnings are foreign earnings, and the currency effect will translate that into the appropriate valuation. multinationals are traded internationally and not trading at a discount. the better question to ask would be, as at the time to buy u.k. domestics?

that has very much on the valuation not brexit related. if we get it done and we are at the end of the beginning, i think we will be facing multi-years of negotiations with potentially a hard brexit after that if negotiations fail. re-ratingve seen some of the u.k. banks over the last few days. thank you for stopping by. you will stick with us. from the, we will hear ubs ceo who spoke earlier to manus cranny. this is bloomberg. ♪

♪ are watching bloomberg "surveillance." softbank offered to take a majority stake in wework. the deal would value the company at about $8 billion or less. a stunning fall from last january's $47 billion valuation they obtained from softbank. jp morgan is offering another rescue plan involving junk that. striking general motors workers rejected a proposed contract. that is an early indication the rank-and-file could be by a rager thin margin. until friday.vote -- lowering its sales forecast because of weak demand for flu medicine in the u.s. and baby

formula in china. that is the bloomberg business flash. guy: thank you very much. addedy clients that ubs new money next -- last quarter, lifting the value to $2.5 trillion, giving a boost as they seek to reinvigorate the key wealth development division. him thisnny spoke to morning. sergio: it is challenging market conditions but i'm glad we were able to bring a solid performance in this difficult context. manus: in terms of the investment bank, profits down by 9% and restructuring. what does it look like?

sergio: market conditions are challenging and they are not the market conditions favoring our business and strategic choices. we are more skewed towards europe and asia than the u.s., and this is still a business where the u.s. is dominating in terms of calendar and business activity. client sentiment is better than outside the u.s.. manus: you will take $100 billion of a charge. what cost savings well you get an does it mean job losses? sergio: we expect $90 million a year. it will give us an opportunity to refocus our activities, for example in the markets business. we will refocus on our execution and structuring and financing businesses, leveraging all the technology investments we made

in the last few years. in banking, we will focus on fewer industries and more on a global business than original businesses. they are leveraging the expertise. cranny speaking to the ubs ceo in zurich. manus how, he feel confident? ubs has outperformed credit suisse big time this year. you know the numbers. was there anything in this set of numbers that will turn that around? manus: it is going to be a push ahead. 15% return target is on equity and they probably will make around 13%. this. very relaxed with

he still has record invested numbers. the push ahead or the reset exceptionby a tacit that a change for a many restructuring has come and the push ahead for a new banker. i don't think this is so much about reinventing the ubs wheel. it is slipping from fourth gear into fifth gear. tom: what is the urgency to move the stock price? if this was in the united states, all hell would break loose. what is the urgency of switzerland to get it going? manus: there is an urgency. on the conference call, the market focused on the changes within the investment bank, what did it mean and what would come to bear? implemented the plan to step back on fixed income and move forward with equity.

if you have those in the right place and the right geography, you should see it do well. it is accepting that the product landscape has changed, that is the bottom line. he is the new star banker they have appointed and on the call, 60 days to hand in his homework in terms of the plan for wealth management. that is by bringing wealth management and the bank together in product delivery. manus, thank you. andreas utermann is with us. we will stock about -- talk about the speed in change -- bloomberg money under covers with syngenta's ceo. this is bloomberg. ♪

♪ bloomberg "surveillance," good morning. --rea's hooter with us andreas utermann with us. i want to talk banking. we just heard from ubs. europe toe urgency in deliver shareholder return? morgan stanley, seven point something percent per year. ubs is behind. is there any board urgency to make for shareholder return on

banks in europe? andreas: i would say there is urgency. you can see in the share prices, they have been very weak. we have seen a lot of turnover in management of european banks. there is significant pressure. we have had a tough period in europe, first with the financial crisis than the euro crisis then negative rates, and more debt crisis. tom: there is a union bank of , u.s. bancorp,s this shows a dilemma. three years ago there is a huge demarcation of jp morgan outperformance and u.s. bancorp flat lines as well. they announced layoffs and a

further commitment to digital. where is europe and that? -- in that commitment? andreas: that is a great question, and it depends on what segment of the client base you were talking about. in europe, the plumbing of the banking sector is probably ahead of the u.s. when it comes to digital. they u.s. revenue sending me a check for nine dollars so that i can present that to my bankers to cash for some equalization treatment, that would not happen in europe. be ease with which may germany accepted, you can pay in digital form, that is one ahead of the united states. if you think of the more b to b segment, that is where they have a lot more work to do. banks like j.p. morgan and

goldman sachs have stolen the march on european competition. guy: is there anything you can see on the horizon that will cause a re-rating? andreas: higher interest rates will top. guy: that will not happen. andreas: secondly, an increase in lending, and that would require the european economy to stop slowing down and start to re-accelerate. evan the length of the cycle, that is unlikely -- given the length of the cycle, that is unlikely. maybe a change in the regulatory environment. guy: andreescu derman staying with us -- andreescu derman staying with us -- we will talk mario draghi. ♪

tom: good morning, tom keene in

new york. guy in for from westminster in a bit. viviana: today boris johnson will try to ram legislation on leaving the e.u. through parliament. lawmakers will vote on the principles of johnson's proposal followed by a second vote. johnson trying to get the brexit deal done by the current october 31 deadline. prime minister benjamin netanyahu failed to form a new government. he gave up his mandate before the four week negotiating window ended. .ow it is up to benny gantz he faces an equally difficult task. oasisamerica's so-called has been shaken by the worst arrest -- unrest in three decades. more than 1500 arrested in a

wave of arson and riots. thousands are protesting economic inequality, tension, health, and education. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. much indeed.u very the end of an era at the ecb. mario draghi is set to preside over his final policy decisions on thursday. he hands over the reins november 1. we look over his tenure. here are his successes and his controversies. >> the ecb is ready to do whatever it takes to preserve the euro.

and believe me, it will be enough. >> with these words, mario draghi is credited with many by saving the euro, but he already proved willing to take decisive action. in his first meetings, he undid the 2011 rate hikes and later took the key deposit rate to an unprecedented 0% to battle the greek and then european debt crisis. that was just the beginning. guy: the deposit rate has gone -- >> the deposit rate has gone negative. ,> for all practical purposes we have reached the lower bound. >> as the european economy continue to interior rate, the ecb introduced quantitative easing in early 2015. not everyone supported it and opposition was growing.

despite signs of recovery and growth in jobs, as draghi approached the end of his term, it became clear europe needed support. >> additional stimulus will be required. this outlook is getting worse and worse. cut rates again and controversially resumed qe, reminding investors of his famous mantra. mario: the ecb is ready to do whatever it takes. >> what next? christine lagarde hopes to avoid draghi's motto. >> i hope i never have to say something like that. guy: going to have an interesting time. a new look at mario draghi's legacy is out now and the expectations he will have to confront and he returns to his homeland certainly a subject of focus. we are joined by the author now.

let me start with you. did he save the euro? is it saved? >> i think those are fundamentally different questions per eight he did save the euro, the euro is around. it grew under his watch. is the euro going to be around forever? that is a different question and one the generations after him have to answer. for his legacy, i think the whatever it takes speech is probably the single most biggest moment you would want to point out. guy: absolutely and that was a critical moment in putting the euro zone back more even keel than it was. let's talk about the definition of his job. close to 2% inflation. >> below, but close to 2%.

did the needle in the compass point in the right direction? did mario draghi deliver on the ecb's mandate? >> by his narrow list of measures, he did not. inflation was below 2% throughout his mandate, but nowhere near close. then again and this is what he would say, if he had done -- rates below zero, a huge amount of liquidity, it would probably be well below zero. a wideras always had interpretation of his mandate. it was not just to ensure inflation was in check, but make sure the euro survived and that was this -- it was this existential crisis he had to deal with. guy: for many in the financial markets, draghi is a hero. for many in germany, he is a

villain. what is your assessment? >> i think he is more of a hero than a villain. i think, of course, nothing is forever. the biggest risk to the euro was always going to be the early years because there were so many doubters. look what has happened. we now have the fourth ecb president. it is becoming part of the system and the longer it goes on, i would argue the stronger and the longer-lasting, the whole construct -- that is a really important contribution he has made to the future of the euro. has he failed his mandate? let's start where this started in the 90's -- people were concerned, particularly in northern europe that if you had a common currency, there would

be runaway inflation, that was the primary concern about the euro. that absolutely has not happened. anybody who looked at the euro project would have been feeling quite good. would it have made any difference in real terms if inflation was 1% higher? i don't think it would make much difference, so what has gone wrong? i think what has gone wrong is not down to draghi and the ecb -- it is the fact monetary policy and fiscal policy in the european union and the european monetary union have worked against each other and this is lagarde comes in. inflationb to meet targets, fiscal and monetary policy need to work in tandem. that will be her challenge and i think she will succeed. tom: the single distinction with mr. draghi is american

education. it did the anglo-saxon experiment of draghi work at the ecb? is there a desire to get back to a more old world template or do they want to go back down the road with an anglo-saxon phd approach? draghi, the ecb has become one of the world's most central banks. it has changed the way he does policy. he has become much more proactive, much more creative. it has become much more open and, of course, it was a major institution -- but under draghi, it has really become the global institution and it can really steer one of the major reserve currencies of the world. tom: do we have any

understanding of what the currency will be -- it is lagarde going to do draghi version 2 or do you see a new tone? jana: i think she will have to strike a new tone. i expect her to be more accessible, a lot more outspoken, to give speeches and interviews, to be the face of the institution. draghi hasn't given a lot of interviews, he has been locked up in his office. person,is a different she reaches out, she is approachable, she likes communicating and she likes to meet people and i expect this will be something we increasingly see. tom: christine lagarde had combinerespect for the at the imf. with draghi, the image was

draghi and everyone else. are we going to see a more academic construct at the ecb as they tackled the theory of these rate dynamics at the zero bound? i would not say more. there has always been an element of really looking at this and -- in majorly academic terms. there is strong disagreements athin the governing council the ecb, but i don't think that is going to be a major change from the draghi era in the lagarde era. guy: let's wrap it up. two quick questions. what is he going to do next? i hear rumors of the italian presidency and is germany going to miss him? alessandro: in italy, when there are elections in a number of years, he could be a leading candidate if he wants.

guy: is germany going to miss him? alessandro: probably not, but i am not sure they will prefer the next option that will come to them. guy: on that note, we will wrap things that. our thanks to the authors of l'artefice.: banksl see how european are faring in this negative rate environment we currently have. trade as ithe develops, especially after we saw that poor manufacturing data out of the u.s.. microsoft, amazon, twitter reporting later this week. it is a busy week. this is bloomberg. ♪

am guy johnson in london. undress utermann is still with us. is germany already in recession? andreas: probably not, but it is giving head scratching. guy: can the ecb do anything about this? agree anit is to and external shock. we have the threat of u.s. trade sanctions against the european union's auto sector. car sales in china have slowed

dramatically over the past year. there is worse to come for the german economy, which is why i have been advocating the german finance minister needs to loosen his pursestrings to support the economy that way. guy: what kind of scale would he need to deliver in terms of a fiscal passing -- package to smooth this process? andreas: i think the german budget has been in structural years andr 6 or 7 depending on how you calculate, 1% or 2% per annum. they have ample room to loosen the pursestrings that will make a difference. guy: it will certainly make a difference to the bund market with three pricing people are looking for. n will stay with us. -- joining,

bloomberg television. the european close in london, 4:00 p.m. this is bloomberg. ♪

viviana: "bloomberg surveillance this is." u.s. banks will have several thousand workers at its branches as part of a digital push bank wide because customer behaviors have changed. the bank has about 3700 branches. facebook and amazon set federal law beating records responding to scrutiny of their business practices by the u.s. congress and regulators. amazon spending $4 million, the most the company has ever spent in a single quarter on lobbying and that is your bloomberg business flash. tom: thank you so much. andrea's older men andreas utermann with us right

now. right now, i want to talk about fees in the future of the buy side business. there it was 6 weeks ago, full-page ad, no commission squab -- fidelity, whoever. is the mutual fund business heading to the same thing where there is no visible fees? andreas: i think that depends on the distribution model. a different than the the continental europe and asia and the united states. this is the significance of the announcement schwab made and the others, i think it was sort of a latecomer to this to say we need to find a different way to get paid for advice and getting paid through -- on commission sales is not the right way, it is not transparent enough for the young

client to assess the end cost and the asset management value added. i think that is to be welcomed, but the big question is, obviously, as this competitive price war progresses is will the advisors be able to chart sufficiently to guarantee good advice in the marketplace to young customers? that is partly what has concerned the u.k. policymakers post our dr -- rdr. is inhe euro zone desperate need of figuring out a way of getting money out of bank accounts and getting them into investments. spain, italy, lots of these investor, the average puts their money into the bank account, they don't put it to work, they don't put their pension to work properly. how does europe get money to invest -- get people to invest

their money correctly so they can have decent retirement. andreas: that is particularly relevant with interest rates at zero. put it in the bank at zero, but get interest on it. over the years, you get paid interest on it. number one, it requires fundamental change in culture. in many european countries, investing in the stock market is seen not much different than speculating, buying it, waiting for capital gain and selling again, so the concept of total return which arises on the type -- all the time is sort of fairly absent. secondly, it probably needs change in legislation with respect to how the policymakers perspective, the savings available -- saving

products the asset manager produces and what is the shape of the third pillar? mistakenly, many european consumers believe ultimately the state pension will bail them out. we know the democratic situation and projected deficits and the debate. the debate instead of being let's increase the pension age, is suggesting to young saver let's reduce the pension age. it somehow, the european consumer is wise to that and that is probably one of the reasons they are saving more and more money in bank accounts at zero interest rates because they are worried about the future. tom: this is something i mentioned before. i said on twitter the high-yield foreign ownership of high-yield was the single biggest thing at imf. mike byrd writing in the wall street journal today next to the victorious houston astros over the new york yankees, this is the topics in andreas utermann's

world as well and that is simply the imf nailed in five pages in their green book. the u.s. high-yield ownership by foreign countries leading with taiwan. is this the shadow banking? is this the hidden thing to calm? abroad, when paper price goes down and yield comes up? andreas: that is a difficult question to answer. thinky, i probably don't firstpresiding the financial crisis. a lot of this is just owned by pension funds -- savings, mutual funds and so on and so forth. is there -- if there is a price collapse and rise in yield, i don't think it will have a systemic influence.

it does remind one a little bit of what happened with mortgage scandals in europe where borrowers in lithuania were borrowing and swiss franc's had issue with currency and had to be bailed out by the state. foreigners investing in u.s. high-yield from currencies that are fluctuating, and we have seen this play out with emerging-market borrowers as well, has always been a very risky trade and that is what the imf's right to point out it is something of concern. how do youllianz do imf the next two years? there has got to be a cost to that. how do you unwind negative years at alliant -- negative yields at allianz? andreas: we don't really have negative yields -- real yields at negative yields, but we have a challenge in investing and the way we tackled it the last few

changedd it hasn't since we are operating in the same environment -- firstly, look at harvesting premia outside the traditional space. liquidity premia, term premia. secondly, creating strategies that generate regular income, dividend stocks come to mind and that is the way to handle that at the moment. tom: this has been brilliant. thank you so much. valuable.nn, very we will look at pound sterling, and tom- guy johnson keene, stay with us, this is bloomberg. ♪

tom: this morning, monday was

repetitive and disorderly. tuesday brings a reading of the fine print. sebastian salek at westminster as the prime minister decides what to do next on brexit. still disorderly in syria. the commander-in-chief manages to message a complete withdrawal. .t will not be disorderly consumer banking will never be the same. go digital or go home. good morning, this is "bloomberg surveillance." guy johnson in london for francine lacqua. and a going to go to seb bit. give me a brexit update. is today a big deal or a day of rest? guy: definitely a big deal. does boris johnson have the numbers to get his withdrawal agreement over the line? does he have the numbers to get the timetable bill over the line? that looks like a much closer call. that is required to get this

done by october 31. they need to accelerate the business in the house of commons. tom: let's get to our first word news in new york city. viviana: force johnson finally gets a chance to put his brexit deal to a vote. twice the british-born -- british foreign minister -- prime minister has been denied a vote for it he will find out weather parliament agrees with the general principle of his proposal. canada, voters gave justin trudeau a second term. trudeau overcoming a number of scandals clearing -- claiming a clear mandate. his liberal party lost the majority in parliament. the most likely partner for a coalition government, the prolabor democratic party. president donald trump is raising expectations the u.s. and china could sign an initial trade deal. china indicated negotiations

over an agreement and -- are advancing. they have already begun buying american foreign products and for the first time in 30 years, japan has a new emperor. the months long coronation was completed in tokyo. the first japanese emperor to be educated in the west. he spent two years at the university of oxford. the emperor has no say in government policy. global news --global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: equities, bonds, currencies, commodities. when was the last time three days in a row, one screen? nada. i am asleep. nada oil. thank god guy johnson is following pound sterling. guy: that has been pretty flat as well. european stocks absolutely flat

today. we have a slight risk on field within the stocks in europe. the bond proxies are being sold, cyclicals being bought. ubs up by 1.7%. tom: great interview with mr. mati -- ermotti. another stock with a three year fail. uf bank core keeping up with j.p. morgan and then going nowhere for three years. our chief financial correspondent to join us here later in the hour. guy: let's talk about this 3000 line in the s&p. what is it going to take to get us through it and threw it convincingly -- through it convincingly?

the blue line is the trailing eps. in order to get to 3000 convincingly done, we need earnings to pick up. the problem with that is we are already seeing numbers being slashed for next year. it will be tough to pick that up. are we going to see this earnings russia soon -- earnings recession coming to an end? let's get to the brexit story, the latest twists and turns. it does boris johnson have the votes? and does he have the votes to accelerate the timeline to get it done by october 31? it is going to be a very, very tough process. we are joined by sebastian salek from westminster. does he have the numbers, seb? sebastian: it looks like he might just eke out the numbers.

this is the first time mp's get a vote on the withdrawal agreement. if you look at the program, the timetable is looking less certain. here is the thing you have to know about the withdrawal long, more than 400 pages long if you includes the notes. and the only get three days to scrutinize and pass it. even the wild animals in circuses bill got more time in parliament. there are a lot of mp's who aren't happy about that because this is the whole of the future or the departure arrangement between the u.k. and the e.u. this is a massive deal, so we need to have this time, they say, to look at it properly and make sure we go through this line by line and make a sensible decision. guy: this bill is amendable.

will the labour party try to amend it and if they want a significant basis, what does the prime minister do then? sebastian: we are hearing signaling's from don mcdonald -- john mcdonald -- require the prime minister to go to brussels and amend that because they cannot amend the agreement reached between the u.k. and the e.u. and we are potentially looking at one for a second referendum as well. this could be where you see mp's and then boris johnson is in trouble if one of these passes, he could pull this bill, go to a general election, but you still have the brexit party in place. you could actually get mp's doing this, getting to this stage so they can do this. there are some mp's who don't want brexit and that is what they are trying to enact by

putting these amendments forward. tom: we are going to go to the quiet of the market. the head of foreign-exchange strategy writing piecing notes within the quantitative heritage of bnp paribas. what does the quiet signal right now, everything is range bound, everything is dampened. when it isil thicken quiet or does it mean security and safety? >> we have known all year there is massive uncertainty from markets and if you wrote the script ahead of time, you would uncertaintyed around that. --is forcing people to the has piercingson questions, i don't. i will go to principles 101. is this about capital flow

dynamics or interest differentials? dan: they are two sides of the same thing. the u.s. has been on one side of capital flow for a lot -- for years. as interest rate differentials shrink, the risk is that flow goes the other direction and you see the dollar weaken. it has been elusive in terms of getting in momentum or trend. guy: let's look at what the spread is between treasuries and bunds. it will go below 200 basis points. the effect should be negative for the dollar. however, the dollar has been trading rich to rich -- rate differentials versus the euro

for a while and that will reflect uncertainty related to trade relations between the u.s. and europe. brexit has been part of it. we are learning how important brexit has been for the chain -- the exchange rate. models are based on what has happened in the past, so the market struggles a bit to price them. .uy: let's talk about brexit where do you expect the pound to go near-term? people are talking about 1.25. there is still uncertainty about the long-term relationship between the u.k. and the you -- e.u. dan: when we did our estimates of what would be fair value on anything other than a no deal brexit, we came up with numbers 1.35 is.33 in cable and within range. that is a reasonable target if the uncertainty gets locked down further. for example, if votes go in favor of the prime minister

today, that is a reasonable target. alert?n we do an adverb you are stating flat out dollar is extremely out of whack. how does that unfold? the president is jawboning weaker -- what is the process that gets you away from the word weaker? dan: interest rate differentials are going to do a lot of the work and momentum can start to build. we know there is a lot of exposure to dollar risk that investors have accumulated over the last few years, very high u.s. yields. if that gets pared back, you can get momentum pretty quickly. look at sterling. 1.30 seemedgo,

impossibly far away. things can move quickly if they ever do. guy: things move fast around here. stick around, thanks for joining us today, dan katz i've will -- dan katzive will stay with us. we have heard from ubs this morning. poor manufacturing data out of the u.s. microsoft is a big one. amazon and twitter reporting later this week. this is bloomberg. ♪

viviana: this is "bloomberg

surveillance." softbank office to take a majority stake in wework. bloomberg learned the deal is about $8 billion or less. that is a stunning fall from last january's $47 billion valuation. jp morgan is offering another rescue plan, it involves junk debt. striking general motor workers rejected a proposed contract. that is an early indication rank-and-file approval could be by a razor thin margin. most members will not vote until friday. goodsish consumer lowering their forecast. they gained the baby formula business in a takeover two years ago. tom: already one month on from

pelosi and impeachment. a lot of people doing a 30 day look back. we are going to look forward. max has been all over the president, most people writing scathing. the president retreated to a safe space, claiming -- president obama was much worse. he finally hit upon a successful policy when in 2015 he sent u.s. airpower and advisors to help the kurds in the battle over the islamic state. president trump is allowing ethnic cleansing, risking a revival of the islamic state and sending a signal the u.s. will not fight for freedom. kevin cirilli joins us. in the next 48 hours, how does this nested get managed by the white house or is it the president alone? kevin: i think it is the president alone and when you look at how the president has

responded with regards to the impeachment inquiry, you have seen he has really been in a vacuum pushing back forcefully on his own terms and with his own strategy. bolton -- thejohn idea of a new book from john bolton and john bolton has something to say. kevin: it is interesting because there are many similarities in terms of how john bolton lost clout -- there are parallels with steve bannon. steve bana never really wrote a book. go this route, i think it would be different in the sense that it would lay out his foreign policy vision at a time in which there is open debate not just in the republican party, but the democratic party as well about america's clout in the middle

east. tom: can we go to politics and guess about something that is interesting? what is senator warren doing this week? it is so off-topic. kevin: she is in iowa and what is interesting about the warren campaign is you saw over the weekend, bernie sanders sees a lot of living -- 27,000 people in that rally -- it must've been a nightmare for traffic. all joking aside, senator sanders has catapulted himself and essentially said i am still a top-tier candidate and elizabeth warren facing pressure for that medicare for all plan to release specifics of that, this is the crux of her candidacy. tom: to be serious, kevin, and you are an expert -- do you assume when the senator of vermont steps aside, the vast majority of that support migrates to the senator from massachusetts? , i don't buried bernie

sanders -- i don't assume he will step aside. his supporters are actually really divided between warren and biden. i don't think you can look at -- elizabeth warren voters are a different type of voter than biden and sanders and you can bet every democrat behind this team's pollsters is trying to figure out the nuance on that. is: so really cirilli wearing the losing green eagles ti or maybe the losing jetse green tie. i don't know which it is, but it is very green. kevin: i am going to be careful not to say anything about carson --e, but i am dissipated disappointed about how the season is going. our footballs coverage worldwide. guy: yeah, except you play with

your hands. up rugby semifinal is coming this weekend. the labour party will vote against the withdrawal bill in the second reading and vote against the program motion designed to accelerate in the house of commons to allow boris johnson to get everything done by october 31. that is the pound. this is bloomberg. ♪

tom: in the early evening of tokyo, a banquet for a new emperor in japan. mr. abe, the prime minister, says we, the people, look up to his majesty, the emperor as a symbol of japan and with a renewed spirit, will put our best efforts into creating an era where new culture will hopeful,as a peaceful, and proud japan realizes a bright future and the people come together in beautiful harmony. apolitical appointment. the dignitaries arrived for narihito. --will keep our eye on that the important pageantry in japan. on a more prosaic idea of the

yen is daniel katzive. you lead with what the pros follow, which is dollar-yen. you are suggesting we have seen the run of strong euro and we will reverse to strong yen. how many big figures are we going to see here? what size of move can we get? dan: i think we could see 4%, 5% easily. dollar-yen, we see a fair amount of room. tom: give us a price point. dan: 104. we have a target point for next year, 102. you have japanese investors with a lot of international exposure and foreign-exchange exposure, if they protect themselves, the yen can strengthen quickly. tom: the symbolism of a new emperor taking over with all the emotion of japan with its adjacent neighbors as well, does

bnp paribas look at this as a diversified and empowered japan or is it still a closed system? dan: from my perspective, what is notable is he really is independent of what is happening in japan at this point. it has become a funding currency, where the central bank doesn't have a lot of scope to ease policy further. i think the euro could move that direction as well. policy.is all in on the euro becomes -- more like the opposite side of a risk trade currency that does well when things go badly in the world and better when things go badly. guy: the latest batch of cnbc data shows the market is short yen for the first time since july. there is a meeting for october 31 and an expectation we are either going to get more cuts or hints at more cuts.

is that going to happen? dan: our view is the boj will not move policy at the end of the month. it seems like the market is moving in the direction of expecting them to do something. our view is they will keep their powder dry so they have something to respond to. there can be a little bit of scope for disappointment in the market if they don't move, which would be in line with our expectations. you mentioned the short position, that shows you markets scaled the yen holdings which it had held as what folio insurance. tom: we have to go. we will have more when mr. katzive is back. ceo.g up later, -- this is bloomberg. ♪ is bloomberg. ♪

guy: i'm guy johnson in new

york. >> today boris johnson will try to ram legislation on leaving the eu through parliament in just three days. lawmakers will vote on johnson's proposal followed by a second vote enacting his timetable. he is still trying to get the deal done by the october 31 deadline. benjamin netanyahu again newrmed -- failed to form a government. to -- in argentina, bondholders are expecting steep losses. according to the financial times, bondholders have met with the imf and associates of the presidential front runner. to takes are expecting a big haircut instead of a

smaller one. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. its canadian politics, exciting is the last time the toronto maple leafs won the stanley cup. joining us is john ehrlichman from toronto. did mr. trudeau win or did the conservatives lose? >> that's a great question. either way you slice it we've got a divided nation this morning. the liberal party wakes up this morning and power so that is a positive for them. him, whenather before there are big battles there can be casualties. he begins his second term with a minority government.

you mentioned the conservatives. they kept the liberals out of the providence -- province of alberta. we know there has been trudeau mania. he has become a star and there was a lot of excitement. scandals,me, ethical broken promises left the liberals in a tough spot on the campaign trail. they did incredibly well in alberta and ontario. quebec was fascinating because found thequebecois vote overnight. tom: that's right where i wanted to go to go back to mr. trudeau senior and the tensions between english-speaking canada and the french of quebec as well. how did quebec and the entire emotion of quebecois fit into the forming of this minority

system? >> i think right now in this country the reality is the canadian economy is still driven heavily by the energy sector which has had challenges. we are talking about on some levels of very healthy canadian economy. anyone who has been out to alberta over the last couple years knows it has been challenging to that sector. that's where you start to see the economic divide. within quebec specifically it's complicated. a company that was at the center of the firestorm surrounding justin trudeau is a quebec-based company. from the west that was viewed as favoritism towards quebec. thein quebec, it felt like star power we saw, all the selfies in the first year of the trudeau government had kind of washed away and then you saw this resurgence for the block quebecois.

this is a party that did not campaign on the idea of separatism. this was a party that was about just getting back to quebec issues. argument that the when we are talking about separatism, there's a lot more of that on twitter tied to alberta than quebec. now the challenge from justin trudeau who for the most part because he had a majority government chose to go it alone is going to have to find friends in parliament. some of those could come from the new seats that the block quebecois have. could come from the ndp party. their leader had an encouraging campaign better off than where some thought they would be eight weeks ago. find thehave to balance of party with those parties who have been very against pipelines so there's going to be a very interesting economic story playing out here.

the conservatives lost. what is the new in administration going to mean for the oil sector, the carbon tax, the environmental policies that trudeau has been pushing? >> i think this is at the center of what we are going to be watching very closely right now. with respect to that carbon tax have feltare many who like that has been a competitive disadvantage for canada even though it does help to offset some of those concerns about climate change which were very real. under a conservative leader, andrew scheer, they had talked about wiping away the carbon tax within 100 days of office. we are no longer talking about that. i think the balancing act because justin trudeau has already committed to trying to find the balance between climate change in the energy sector -- and the energy sector, we saw the government literally by a

pipeline. that was a difficult story for him to sell with investors. he's going to try to continue to push that agenda at the same time that his best allies could be the parties that are against pipelines in the first place. erlichman, thank you for your work. right now one of my favorite , daniel katz with the np parable -- bnp paribas. we have the miracle of the alberta, the hydrocarbon, excess of canada and then a redo into a very tight pennant. withdoes bnp paribas do the technical construction of dollar canada? >> the range has been remarkably tight. economies which are more or less in sync. obviously the fed has a bit more

easing to do. u.s. activity seems to be slowing. canada activity has been strong. likely to slow and the second half of the year in line with what the u.s. is doing. tom: should our viewers and listeners look at loonie as a commodity currency? >> it is a commodity currency but unless you get really big -- small movest less so. for us long-term fair value in dollar canada is around 1.29. don't see a lot of deviation from where we are right now. tom: bring up this chart. you are going to tear up over this chart.

there it is. long-term canadian strength against pound sterling. guy: you would probably say that about a lot of charts unfortunately. wayertainly feels that particularly when you have to leave the country. you were talking about maybe a turn in that. have significant will it be? we are up 4% plus so far this year. >> there is still a lot of headwinds for currencies like the euro. there's still a lot of headwinds. we think we can get into the 114 by nextatively easily year. we have scaled back our ambitions and thought we could get back to long-term fair value. that now seems very difficult.

tom: jon erlichman out of toronto. thank you. jonathan: we are watching a big day unfold. we are expecting the withdrawal bill to be voted on a second reading. we are expecting a timeline vote to accelerate the business of the house to allow to meet the deadline of october 31. the labour party says it will vote against both of them. does boris johnson have the numbers? we are going to watch with keen interest throughout the day. this is bloomberg. >> of those who start --ry-level work, only 15% ♪

jonathan: biogen expending early gains. we now look at a potential 12% plus open on biogen. this is the highest since november. this on the back of an alzheimer's treatment which potentially could be looking at an early biogenic's license application process that we pushed through by the fda. basically the market liking what it's hearing from biogen and potential fda approval. not unheard of. tom: we moved up to 21%. certainly this captures the emotion of so many of our view confronting alzheimer's within their family. i want to go back to first principles. trade-weighted broad dollar. this includes everything else in

the basket. the rubin dollar here with dollar strength and the president all worked up about this recent dollar strength. how strong is strong? we need a big move to get the trumpian angst. >> the dollar it doesn't look as strong as in the past but from a valuation standpoint it's hard to get a big move. once the move starts to happen you can get a lot of momentum. our long-term fair value estimate is 133. we don't think we are going to get there soon but that's the kind of target you could have. is it now time for emerging markets to do better? clearclear brexit, if we trade, is it time to get away from the u.s. only focus that's out there? there's a lot of

emerging-market currencies that are cheap versus the dollar particularly in latin america. we keep having these idiosyncratic stories popping up which make it difficult for investors to feel comfortable exposing themselves aggressively to em currencies. i think there is room for some big moves. guy: the fed is priced to cut twice this year. are we done with one? october looks like a lock. is december a lock as well? think you have to have a view on the data. it's likely to be fairly soft in q4, then a december cut looks pretty likely. next week they could do a hawkish cut in other words cut rates put say they are kind of done.

we think that would be a bit self-defeating. more importantly we think they think it would be self-defeating. so we don't expect that. has a featureth article on argentina. they got together with on holders at the imf. it did not a well. imfcan you have a liberal with a director who has to by definition show she's tough? i don't know why anyone is looking for an easy road with the imf. global architecture is in a situation where people are got theing that we rights across central banks. challengesnk the should work. argentina you mentioned currency is weak. is there a rebound opportunity in argentina? >> we see currency staying week.

some of the other currencies, or still, mexican peso. for some scope recovery. coming up later today, is going to join bloomberg television 11:00 a.m. in new york 4:00 p.m. in london. his take on the lfc refitted of deal. this is bloomberg. ♪

>> near watching bloomberg surveillance. let's get to bloomberg business flash. gulfstream -- will take the lead for the world's largest event is making plans to make a roomier -- flagshipts flags g6 50. it will cruise at just under the speed of sound. price $76 million.

shares of biogen searching this morning after consulting with the fda. the drugmaker says it will seek regulatory approval for new treatment for alzheimer's disease. guy: ubs wealth management assets reaching a record high. the ceo struck an up tone after the banks results. he spoke in zurich. >> i would try to do something else with my money before i buy negative rates bond. definitely the real issue is to say how to address that while staying diversified. myselfy have a hard time to reconcile this concept. of 19ect in the region million a year cost savings and

most importantly i think it's going to give us an opportunity to refocus our activities. still very challenging market conditions. i'm glad we were able to bring a solid performance in this difficult context. performance just doesn't get it done. what are they going to do about the share price at the union bank of switzerland? right now our chief financial correspondent. we will get to the success of that effort in a moment. i want to show a chart which goes to wonderful reporting today on u.s. bancorp. this is a major bank and they've gone nowhere for three years. morganeen flat versus jp up as well. it seems we are at a moment where they've got to go digital or die. is that the right analysis? >> that's what they said last night. it was a great scoop overnight.

jamie dimon is spending $12 billion a year on technology. even if the bank had done that, they are still not going to catch up to jamie dimon. tom: what is there strategic goal then? suntrust.s. bancorp or , they are just trying to survive digitally? >> if they are investing in digital they are also cutting jobs. this is a cost cuts story as much as an expenditure story. if you are cutting your way to growth, is it something investors want to invest in? they are looking at bank technology sectors before deciding if they want to bet on the bank. guy: let's talk about what's happening with we work. it looks like they are going with softbank. my question to you is is the softbank solution affix for we

work or is this just kicking the can down the road? is hoping to work go into a more patient solution and if they go with softbank they are hoping for patients. if they miss out on this jp morgan deal, jp morgan might also have a lot of money to lose. they actually have marginal to adam neumann who has pledged stock against that loan and if it goes the softbank option then newman gets diluted and jp morgan might ask for a greater option. guy: how are the saudi's going to deal with this? >> the valuation is down to less than $8 billion so they are not going to love the vision fund exposure. the investment we are seeing now is supposed to come from softbank instead. tom: let's get to the reality here. we work.

this has been the litmus paper. in these kind of transactions, what they want is the comfort of an asset and it's called recourse or nonrecourse. i'm using real estate language. is there anything for jp morgan to attach to if they give them a pile of money? is there anything for them to grab onto as an asset? >> people are looking at the value of these leases. tom: it's a piece of paper. >> the value of adam neumann is lost. value.at was a hell of a >> there was a dream behind these highflying companies and a valuation attached to that dream. it wasn't attached to hard assets. when you look at what's left it's whatever they have across

the world in terms of leases and current customers. tom: is jp morgan if they get this deal, do they own lord & taylor where no one wants to be? >> no. softbank will be a majority shareholder but there will be others as well. an interesting name to throw out ofe is marcello chlorate softbank. tom: he played defense for the rangers? >> he's going to become the chairman. could this be a systemic event for new york and london commercial property? >> that is something people are wondering. there are other big competitive is -- competitors to we work. there's this hope that others will pour into the market.

they just haven't liked we work as of yet. tom: why isn't brookfield bidding? >> they have their own business. i think they like there's better. on. this story really can i get a brexit update? it's been 20 minutes since we talked about exit i feel alone. -- brexit. i feel alone. talk about the withdrawal agreement and this key timeline vote. johnson, thank you so much. important debate in the house of commons. this is bloomberg. ♪ here, it all starts with a simple...

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

how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today.

alix: u.k. prime minister boris johnson finally gets his vote in a brexit plan and plans to push through the bill in parliament at right next be. speed.reakneck fromntentious departure credit suisse. heavyweights like lockheed martin and mcdonald's. welcome to bloomberg daybreak. i'm alix steel. we spend so much time talking about the macro that the micro went under the radar. we have united technologies. that's get to the broader board. you have s&p futures above the three set -- 3000 level. you are seeing a little bit of buying in the bond market so a little bit of risk and a little drove safety at the same time.

i want to break some earnings as well as some headlines.