there could be as we learn is france agrees to the january 31 extension and bitcoin on an absolute tear. china especially looking at events with blockchain technology. futures a bit of a mixed event this morning. just 8:00 in the city of london. u.k. get to your market ftse opened up relatively flat but in the green. the foreign exchange market we could note trading around 110 .89 -- 110.89. huge movesseeing any in either direction, a huge week for the market. pmi, and a slew of earnings here in europe. we will the rest of the week.

especially big oil and big attack. we will have the likes of credit suisse. it's very much so a mixed fixture -- mixed picture. are mixed financials this morning. also interested to see how retailers will do today given the fact lvmh looking to make a bid for the blue box, tiffany's. staples and industrials are in the red, looking to be a risk off here in europe. what are you seeing across individual names? winners butrs and lvmh is at the top of your list as far as companies adding index points or holding us back from further losses.

adding points to the index, you shall in second place there. luxurygot some other stocks there carrying specifically. if you look at the losers here, onc is the biggest weight the stoxx 600. taking out about 2/10 of a point from the stoxx 600 down half a point right now. unilever are also losers today. you do see two of the biggest newsmakers, louis vuitton making an offer for tiffany is the biggest gainer. asc earnings disappointed the biggest loser. the index that's not moving so much. it's only down half a percent

right now. you take a look across european equity indexes, the biggest losers in terms of the index in cacon right now, but the and the dax are holding up. not a lot of change and european equity indexes. let's get the latest on what's going on in terms of brexit, french officials tell bloomberg france will delay the split until january 31. joining us from brussels is maria. his emmanuel macron backing a longer extension -- is emmanuel macron backing a longer extension? maria: that is a big departure from the tone french president has taken a few days ago. exit,s not going to fix time for time's sake is no longer good enough.

of what is aerms goal, what is a purpose of it. the french government will also decide whether the rest of the eu to provide a three-month extension. will take the u.k. until the end of january. only if it's able to ratify the deal. insisting the fact the extension will be granted does not mean there is any room for renegotiation and the europeans don't want to go back there and they expect the u.k. to behave in good faith. anna: thank you. let's get some further analysis on the brexit story.

catherine, good to see you this morning. give us your strategy around u.k. assets at this point, domestic versus international exposure, it's one of the ways you can slice this. we certainly feel there is so little visibility with this whole brexit story so we have chosen to have quite a neutral with our brexit exposure. we got some exposure to multinationals, which have international earning streams that should do quite well if the brexit outcome proves more challenging. we've also balance that out with some domestic names that should benefit from a softer brexit. even boris johnson has no particular -- on the outcome of this. we are playing a neutral and balancing our exposure. >> where do you look for the domestic names? in what kind of industries, what

kind of segments do you think will hold up domestically no matter what kind of brexit we get? catherine: we have some u.k. banks but we have looked right across the spectrum. there is an sort of a particularly broad way you can play this pure domestics. there certainly are some opportunities. how does the role of the bat -- >> how does the role of the bank of england playing here , what kind of deal do we get in and they set policy accordingly. and then others instantly said well hang on, the world has changed, the economy globally is slowing. . >> i think they have gotten quite a difficult role to play because at this point in the

cycle, rates should have been going up, but because of brexit they had to stall on that so i think it's going to be a balancing act. the problem is you have had data slowing on a global level and i think it's important to appreciate that no economy is in a silo. we are all interdependent. chinaer happens as far as , the u.s. will have repercussions on the domestic economy. brexit has created a huge amount of uncertainty. >> catherine, you will stay with us. catherine doyle, investment specialist real return at newton investment analyst. up next we will bring you the stocks to watch so far on the move this morning including hsbc, the biggest point loser still on the stoxx 600 now, down about 3%.

we will give you all the details you need to know. this is bloomberg. ♪ ♪

anna: welcome back to the european 11 minutes into your trading day. investors feeling divided across the european equity markets. some are fairly unchanged and others at the flatline.

individual stock movers because it's a fascinating stories out there. this monday it's all about earnings and potential m&a and that's where i want to start. lvmh up 1%. this is louis vuitton confirming interesting tiffany's. the iconic american jeweler known for those blue boxes. bloomberg had reported the was $14.5f their billion. that would bring the closing price and market value up 22% from friday's closing price for the american company. downgraded which said the investment case was softened by third-quarter todaygs and hsbc is down more than 3% and profits just missed expectations and on top of that it abandoned a key target for returns so a big downer for europe's biggest bank.

hsbc,let's stick with bloomberg spoke to the cfo, we started by asking him about the bank's future plans. you can see within the results a mix of the good and less good. we've done i think a very resilient performance with profits up, but behind that you also see some significant in the u.k. and continued underperformance in the u.s.. so the restructuring we are looking at is very much focused on those two businesses together with quite a complex group structure and group cost structure over the years. i'm not going to speculate on what that means, i think we intend to come back as part of -- as part of results in february. >> in terms of guidance you

might be able to give can you give us any guidance on how much you expect the central project oak charge will be for the full year? previously guarded to that being around 650 two $700 million to produce a similar saving for 2020, i don't think those numbers have changed. but in addition to that i think what we are signaling is we do expect some incremental restructuring on top of that, which would result i think in costs going to 2020. longer expects to have the 11% return on equity for 2020, when is it reasonable, are you going to stick with the target and when is it reasonable to expect you might get there? what's changed over the

course of the year i think is a fundamentally different position on a few things. the interest rate out movers has changed a lot from previously our expectations were and particularly for the dollar bloc. we now expect them to fall quite materially. secondly i think the markets continue to be choppy which is impacting wholesale banking business particularly here in europe and thirdly, issues like brexit and some of the issues around hong kong like trade tensions and the current protests we haven't anticipated at this point. we do think we have parts of the portfolio, particularly in the u.k. that are capable of producing some very good returns. -- not going to explain speculate on what the new returns are. was the hsbc cfo

speaking to our bloomberg colleagues earlier on today. investmentoyle, and specialist is still with us. do you see any light at the end of the tunnel for anybody exposed to the banking sector looking for some kind of turn in the rate cycle? catherine: i think it's a tough environment. you heard it now from hsbc, they have to contend with so many different issues, obviously we are in an environment where rates have been incredibly low even ifng time and central banks do continue to cuts, it won't make a whole lot of difference, it seems like the fomc meeting this week will harold yet another -- will herald another interest rate cut.

draghist week you had once again in his farewell speech talking about the possibility of fiscal because clearly central banks will need to think about other ways and governments will have to think about how they will implement that in a politically palatable way. its stimulus continues to be the order of the day in some shape or form and banking will feel that clearly. they have also ratcheted down some of the expectations, so whilst they are in some cases beating expectations, those expectations have progressively been lowered. do you think we see the line drawn in terms of cuts? a lot of these banks have to

seriously cut costs. i think investors don't believe many of them have really come to terms with the amount of headcount reduction they need in spendto pay for the i.t. that's also necessary. how does that shake out for you? be --ine: it's going to they will have to calibrate, they don't want to cut into the fat, they want to shave off any additional costs that can easily be shed, but clearly they have a business they need to expand and grow, so it tends to be a balancing act of not tempering their longer-term plans, but still managing to survive in the near term and certainly tech is , probably an industry financial services is somewhat behind the curve if you take out the big tech players which is a different avenue.

when you look at the earnings more broadly, do you have any reason to be concerned about the u.s. consumer? for as long as the u.s. consumer seems to hold up, a lot of investors point to resilience in the u.s. economy despite a sluggish manufacturing picture. we are notso far seeing many cracks in the consumer and that is the thing we are watching closely because i think once you do see contagion there and equally, contagion in the service sector, that would give us cause for concern, but so far speaking generally, the earnings season has probably been better than we would've feared. caterpillar in the u.s. have held up well, so it's a question of seeing what the

going tocompanies are be reporting this week come out with in terms of their outlook. the interesting part is to hear what they have to say about the future. matt: catherine will stay with us. next, miracle coalition takes a battering in -- and their junior partners lose out in a state election. we will shift away from the mainstream next. this is bloomberg. ♪ rg. ♪

>> welcome back to bloomberg markets. 22 minutes into the trading day and we are looking at losses. is down 4/10 of 1%. the dax is up to tenths of 1% -- of 1%. outside of sweden, already arrows. nontraumatic losses. let's stick to germany because the centrist parties here have suffered another big setback. angela merkel faced a resounding defeat in the state election. her junior coalition partners also lost ground, highlighting the fractured political landscape in germany. catherine doyle is still with

us. here we had for the first time in modern postwar germany, none of the centrists winning. the left wing, really the former communists, and the afd on the radical right, both did better than any centrist party, is this a concerning development to you or do you think it is just a one-off and the former east german state? catherine: i think it's in line with the trend we see in many countries. if you look at what's happened in the u.s., if you look at france, it's been -- what would have been perceived as more of the underdog, the less that have parties come to the fall -- and these absent parties have struggled.

line with thisin trend we are seeing and of course that's going to have longer-term repercussions because it feels like globally there is this move to kind of turn inwards and that will have all sorts of repercussions and equally on the investment side the kind of opportunities that will become attractive because we've been so used to the past to the idea of globalization being the dominant force, but it feels like the balance is now shifting and i would interpret this as much another expression of that. the problem for europe i suppose for certain parts of europe then is if your economies aren't geared towards -- are geared towards globalization and benefit for which trade and national corporation is to that, that leaves europe exposed.

catherine: you are already seeing that. in manufacturing weakness in countries like germany which is so dependent on china for demand and the slowdown you see in ,hina is quite concerning their because as i said earlier, no economy is in a silo. there will be ripple effects. and economy like china you are seeing various stresses particularly in the banking sector where there has been a rise in nonperforming loans, the household sector is becoming increasingly indented. a spike in credit card defaults and you've seen the failure of a bank just in recent months and another two banks coming under severe pressure. rosy in thet garden. and of course the rest of the world isn't immune to that. the more export driven economies will be feeling

that. matt: i wonder when you look -- wake up in the morning and try to look at your best ideas, what can you bring to clients and offer them to get excited about now in this stage of uncertainty? catherine: one particular aspect we have found attractive for some time, certainly we've been adding to our exposure to the beginning of the year is gold and the reason we like gold these in this uncertain backdrop, gold has a lot of appeal and a -- as a real asset that can store a value and can't be manipulated by central banks. and of course it also has that function of being a hedge against tail risks and of course if we work to see some sort of fiscal activity by government, we could see more inflation and gold is a great hedge against that historically.

thanks so much, catherine. we continue back, our conversation about interest rates and turns of the fed. will it be three and done. this is bloomberg. ♪ s is bloomberg. ♪ whether you're out here on lte.

or here on a wifi hotspot. xfinity mobile has more coverage to keep you connected to what matters most. that's because it's the only wireless network that automatically connects you to millions of secure wifi hotspots and the best lte everywhere else. switch now and see how you could save up to $400 a year. and get 50% off when you buy any new lg phone. xfinity mobile. click, call or visit a store today.

>> let's get your top headlines for you. managing expectations, hsbc drops a key target for returns after profit misses estimates. the finance chief tells us it's a difficult environment. >> the market is choppy, which is impacting banking business particularly here in europe. matt: third time lucky? boris johnson tries for another vote on the general election. the eu considers a three-month delay for brexit. ring on it.s a the luxury maker confirms it's in talks to buy tiffany and a

deal worth $14.5 billion. markets." "bloomberg: anna, you are at the u.k. headquarters in westminster. anna: yes. parliamentary headquarters, let's call them back. we see boris johnson coming in later on today to ask the house of commons to back him in an early election bid. he wants to hold election early december. it seems not likely to get there. he needs two thirds of the house with him on this move and they are reluctant certainly from the major opposition party, we've heard a little bit more over the weekend about what their opposition really comes down to. for a long time they were saying they need to take no deal off the table and got an extension from the eu and now we have that and the focus is very much on

the taking no deal off the table. so we got a little bit more insight into what that means. it seems they might even want boris to say i'm never going to do no deal. , focusingre we are back in on the market. at what's going on in terms of the individual movers on the stoxx 600, the broader european index benchmark index. if you take a look at the split between winners and losers you can see 327 stocks up. 251 down. that's a bit of a swap from what we saw earlier in the session at the top of the hour. the biggest winner still is lvmh after the story it is bidding for tiffany. we see lvmh up more than 1% and the weight of that is adding the stoxxoints of any to the 600 index. we see another -- a number of

, you seempanies there these in second place, you also saw earlier up they are still gaining 1%. welly stocks are doing while hsbc is a big weight on the index. as the biggest6% loser or point reduction on the stoxx 600 and then you see nestle's off, unilever is off, it looks like i believe i saw diageo down. a lot of the very defensive stocks are helping to take points away from the stoxx 600. look at the bloomberg first word news. >> good morning. let's start in south america. argentina's tightening currency

control after opposition candidate won the nation's presidential election. there will be limited to purchase of $200 a month but much lower than the previous limit of 10,000. the victory signals a return to -- for south american nations. he will take over from the incumbent on december the 10th. bakric state leader abu al-baghdadi is dead. he --w york times reports his likely successor was killed in an airstrike the following day. renewed optimism for a trade pact between the u.s. and china. says -- for beijing an interim deal are basically completed including agricultural

standards. jinpingt trump and xi aim to find an agreement in chile next month. firefighters are working to contain blazes across the northern california. the fires forced the evacuations of nearly 200,000 people, the governor has declared a state of emergency, meanwhile pg&e is your sport -- restoring power to almost 3 million people after the largest ever deliberate back -- deliberate blackout. --lunder costing the co-coo ceos their jobs. a massive cost overrun at the project in louisiana has tarnished the whole company. a probe has found project mismanagement as incompetent. the company is looking to draw a line under the whole saga. 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. thanks very much. let's talk about the fed. federal reserve chairman jerome powell expected to deliver the third straight u.s. interest rate cut this week, but the real news will be around expectations for future cuts whether he drops any hints or clues as to the future course of central bank policy. will it be what you call a hawkish cut from the fed. for more we are joined from our bloomberg studios by daniel, chief economist. good to speak to you this morning. whate ask you a bit about you are expecting from the fed this morning. cut, quitecting a likely we see a cut and i think

the messages need to be on one side about the economy being these aredon't think warranted given the actual macro data. however they are more of a response to what the ecb and the pboc are doing. i think what's likely as we will see the fed be on one side quite bullish i would say, even optimistic about the economy with talking a little bit about headwinds, but generally optimistic tone. however continuing with this sort of slightly dovish tone they have implemented for the past three quarters. matt: how do you feel about the european economy especially in light of the changing of the

guard we see going on at the european central bank. daniel: i think the european economy is stuck between a rock and a hard place. countries have abandoned old structural reforms and what we see is an economy that goes driven into stagnation, by numerous factors that go beyond what governments are doing like demographics, technology and other structural factors. what i think is it's very unlikely the euro zone economy is going to improve significantly, furthermore i don't think the stimulus package from germany would make any discernible change on the european economy so i think we still continue to see quite i

would say prudent about growth product. there are too many people talking about sounds into 2020 of the growth, i don't think that is quite likely considering what we see in growth capital formation and credit demand and also in consumer spending. matt: taking that in mind and looking at valuations, where do you think your best opportunities are as an investor right now? believewe continue to it is better to be in u.s. dollar-based assets and i think 2021,move into 2020 and were emerging markets face a massive wall of maturities in u.s. dollar denominated debt, it's a good opportunity to see even with a dovish fed, the

relative performance of the u.s. dollar is likely to remain strong. as such, we like dollar-denominated assets. we like companies that are more exposed to the u.s. than to emerging economies or to europe and we think if you look at the pallets of investments out there, it is still an environment in which the allegedly expensive but quality names will outperform those that appear more value driven or cheaper. but remain cheap for a reason. you: let me ask you what make of the situation we have in germany the first time in the postwar federal republic we have a state voting the extreme parties over the centrist parties, the left former

,ommunists win the most followed up by the afd, radical right-wing party certainly viewed as such by a lot of people here. what does that mean to you? daniel: i think what we are seeing over europe and in many the general that vote -- voter is looking at the economy, looking at the situation of the euro zone itself and some of the challenges we are including immigration for example and the lack of technology leadership. polarizing theis voter base very impressively. so what we are seeing is this rise of populist extreme movements that seem to provide new or radical solutions to big and complex problems when what

they are basically doing is not providing any new or radical solutions, just looking at the past. zoneows that what the euro and european union have done in order to sort of maintain at all model, aery directed top-down model in which government spending is at the pillar of the economic position ends up generating a lot more discontent and unfortunately generates this rise in radical and extreme movements that take advantage of things that worry the population yet don't solve anything. matt: thanks for coming in, is.ef economist at tress

stocks on the move including aston martin. this is bloomberg. ♪

>> the time here, 46 minutes into the trading day essentially on european equity markets.

big week for central banks. waiting to hear from the fed later on. let's talk about what's going on in argentina. that's after opposition candidate alberto fernandez one the nation -- one the presidential election. lower than the previous limit of 10,000. ,he victory signals the return he will take over from the incumbent on december the 10th. joining us from dubai, good to see you. how was the market taking this result? as we headed into the open the consensus was this result was pretty much baked in. everyone expected he would get in. although the margin was slightly less than some people expected. takenaid, the market has

it somewhat badly you might say. of the bonds already falling in european trading. they are off considerably about 100 basis points jump on the yield. butt could have been worse this is a thumbs down from the market and it will be interesting to see how the -- how would trades when markets open in latin america. matt: interesting to watch how investors take this in the coming days and weeks. what do you think the key milestones to watch for are going to be? : the fact the fernandez victory was not as pronounced as some had expected means that that make up in congress will be a lot more diluted. he won't have the side of the majority that some feared he might. so that might keep if you like

some of his more extreme policies and it could go the other way and decide he needs to really keep the populace on his side, the electorate on his side and introduce much more populist type policy. what type ofe -- plan he draws up in particular to the restructuring of the debt and also the makeup of his cabinet. matt: thanks for joining us. joining us on the argentina developing story postelection. global emerging markets managing , we areas he said already looking at a yield of that is up one basis points. let's get to the movers right now in this sort of mixed european market, anne-marie standing by. annmarie: some of the big names

are moving off of earnings and some of these companies have a lot of analysts notes. first talk about aston martin down 6%. ons is come to underperform bank of america merrill lynch. they are setting the balance sheet and near-term demand concerns. rbc is a company needs to restore credibility to investors and do this by cutting the medium-term guidance to an achievable level as well as cutting the dividends. energy -- cairn energy's well ended up being dry so the need to abandon the project altogether. taking a hit this morning. anna: thanks very much. you could'ves picked today, lvmh. making a bid for tiffany. woulds say the deal

expand the french luxury groups asset to the u.s. market. 'sining us now from paris robert williams, or luxury reporter. what would this deal mean for lvmh if it goes there? it's all about the u.s. consumer them. >> the u.s. consumer used to be the driving force in the luxury market. lately, china has taken the lead. you seen a lot of rapid growth from the chinese consumer and this move could kind of rebalance the exposure. they do have other large exposure, mainly sephora which is very dominant in the u.s.. this could move the needle for them. what it could also do is help them compete in the luxury sector and this subcategory is going to make a much more substantial. handbags the lead in and in fashion for a long time and now as well in champagne and

cognac, who will add the new category for them. jewelry why is the sector so attractive at the moment? >> it has been growing this quickly. one reason is you don't have a lot of global risk. a lot of people don't know who made their wedding ring or diamond necklace that their significant other bought for them for a present. where is in handbags or fashion you really have a brand dominating. so they are seeing a real opportunity there and even though watches hasn't been doing so well, jewelry, brands like cartier are doing great. what is special about -- what is special about tiffany's then apart from the iconic and theg you think of movie associations it brings to mind.

one thing that makes tiffany really strong is how scarce it is in the sector. you really only have a handful of names and jewelry that everybody has heard of and tiffany is up there and it's very precise branding that is extremely recognizable. when someone pulls out that packaging, people know what it is. they have also got the kind of spread and the price point that's attractive for a luxury company. a very high-end product customer rings with diamonds and platinum. they also have a more accessible offer for gifting occasions with their 150, $250 charm silver earrings. thanks -- matt: thanks for joining us, robert williams out of paris on this big bloomberg scoop now been confirmed. louis vuitton making a $14.5 billion bid for the iconic jeweler tiffany. faang dispersion.

earnings from some of the biggest names in tech. danny has the details next. this is bloomberg. ♪ is is bloomberg. ♪

anna: welcome back to the european open. let's think about various sectors on the move right now.

danny has a look at faang stocks. and theyweek of fangs usually work together in tandem but what we've been seeing is an increasing dispersion, these are very important for the markets. top five companies in the s&p 500 comprise 1/6 of the overall index. let's look at the performance over the past three months because it happened all been the same. some of it has to do with idiosyncratic issues. facebook regulation but we've seen apple do well. 50% year to date and some of this has to do with the fact -- with the rotation. looking at the overall index, you can see the faang stocks that outperformed the s&p 500 so far this year but still they haven't been able to reach their peak like the rest of the s&p 500 has. annmarie: thanks very much -- matt: thanks very much. looking at the faang stocks. stay with bloomberg television surveillanceberg

is up next with francine and tom. this is bloomberg. ♪ ♪ when it comes to using data,

everyone is different. which is why xfinity mobile is a different kind of wireless network that lets you design your own data. choose unlimited, shared data, or mix lines of each and switch any line, anytime. giving you more choice and control compared to other top wireless carriers.

save up to $400 a year when you switch. plus, get 50% off when you buy any new lg phone. xfinity mobile. click, call or visit a store today. francine: hsbc earnings miss

and under paring back form -- underperforming areas. brexit extension. delays pave the way for a flexible three month extension. u.k. parliament votes on an early general election. voters rebuff the austerity plan. , this is bloomberg surveillance. i'm francine lacqua in london. will find out later whether boris johnson gets a general election, there are various ways he could get this but if you look at the two thirds majority he needs, it looks unlikely, let's see how the markets react. tom: the market reacting on friday without near record high. we will show that later and moving to the fed today on wednesday and then jobs day on friday, it is an eventful week.

it certainly is. let's get straight to first word news in new york city. by u.s.e the attack special forces, the islamic state leader was under surveillance for weeks after being cornered in northern syria, president trump said he blew himself up. saturday morning the president approved the attack based on what was called actionable intelligence. he spoke openly about coordination with russia and turkey. in the u.k., boris johnson ramping up the pressure for an early election. this to break the impasse over brexit. today the house of commons votes on his proposal. johnson is unlikely to get the two thirds majority he needs. in brussels, diplomats are urging -- edging closer to an extension to brexit. france agreed to drop its opposition. the to argentina where opposition leader will be the next president. he won 48% of the vote.

voters said no to the austerity program. win brings a move back to -- back here in the united states in northern california, wildfires blazing out of control , almost 200,000 people have been forced to leave their homes. pg nd slowly restoring power after the biggest deliberate blackout ever. about two .7 million people had their electricity shut off. it was aimed at keeping power from starting more fires. 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. equities, bonds, currencies, commodities. you don't want to make too much 3024, it nevertheless,

will show that again. curve a little bit steeper. do much.il doesn't on friday. and spxe is the friday close on just below record high, yen shows near 10870. and sterling has a life of its own. francine: looking at stocks in europe, they are struggling for a little bit of traction. a lot to do with the federal reserve will do with respect to interest rates. the 10 year treasury yield climbing to a six week high. and it's having an impact on europe. the pound gaining after france agreed to an extension easing the risk of the u.k. leaving the eu on october 1. if you look at european bonds, they are dropping. tom: let me show the argentinian

soo showing the story, not much the imf and the challenges devaluation massive and this is a long charge. to see this curve is not good. here are the kershner years. line thanks toue our team in buenos aires, this is an unofficial approximation of the black market and you can see the black market here and then it comes back here in the last couple of weeks as well and bonds. the black market, 16% or more even off of that official rate of 59 pesos per dollar. francine: let's get back, the eu proposing to extend the deadline for brexit by three months to january 31. according to the regulations --

draft declaration that will be discussed today. u.k. wouldroposal to be able to leave on november 30 or december 31 if it ratifies the divorce deal in time. joined by edward evans, no longer opinion but more facts. give me an update on the likelihood boris johnson will get his general election, he needs two thirds of parliament to vote for it, will he get it? edward: almost certainly not with labor blocking. it is more likely he will have to come back with a one line bill notwithstanding the terms under which you would call an election. that piece of legislation would only need a simple majority and

it appears with the scottish national party and the liberal democrats he could get that. it may not happen today. is it a done deal we get a three-month extension because france has now said they are backing three months. >> it does seem to be a done deal here and significant the french government now backs the plan to put forward a three-month extension until the end of january 2020 because macron a few days ago said he did not want this and felt time won't solve brexit and if anything they needed pressure and he also made sure to put an idea forward the fact of the justification is sometimes needed when you need more time but i would point to the french european minister who said one of the reasons perhaps change the thinking behind the french is the fact they do believe the

prime minister will eventually get that election and that could see the government and parliament now speak with the same voice and could make approving this deal easier. tom: i was fascinated as the ugly american to read about the fractured labour party. is this party, is it anything to do with tony blair and gordon brown? it just seems surreal versus any history i know of the west in the united kingdom -- left in the united kingdom. edward: you have to go back before them. it's a much older strain in the labour party and really has to go back and that generation to understand where corbyn comes from and that's a position of deep skepticism towards the eu, for them it's a capitalist project designed to be less than helpful to workers. and what happened in the 80's when labor became the pro-european party much more so under blair and brown in the

90's. what you see is that division playing out. you have corbyn who is a deep euro skeptic and a party that is much more pro-europe than he is. balancing that is a political calculation. at one point to they swing behind a referendum, that really is the debate we are seeing play out in labor. willine: will vote -- tom: the liberal piece of that party go to the liberal democrats? edward: part of it already has though. you see people like that leave -- leave labor. we talk about one or two of the margins, you haven't seen a big split like the founding of the sdp in the early 80's. it's been remarkable how labor still stuck together throughout this process. francine: thank you so much maria in brussels and edward

evans in london. let's get back to your markets. joining us now is a global head of fundamental credit subsidy at deutsche bank. jim, how is brexit playing on the markets, is a just prolonged in stash uncertainty -- is it just prolonged uncertainty? jim: the thing that upset the markets, that seems to be taking -- taken off the table. francine: -- gone tod expect having the lengths of the deal that the tories will campaign on the deal they've got. tom: we agree to the monday morning here with the news flow as well. how critical is it to get to the december 12 election. the election december 12, january 12, who cares?

jim: the big problem is we don't have an election -- if we don't have one, what next? europe is going to offer an extension today it seems to january 31, will they have the tolerance or patience to offer another one. macron was rumored to be against such a long extension so we can't get an election there will be heads wrapped about what to do next. is the bond market and opportunity right now? jim: there's a lot of different thoughts. i think we would say pressure is slightly on yields going up at the moment with the trade deal between the u.s. and china albeit in the first stage looking slightly more comfortable than a couple of weeks ago. with no deal brexit supposedly being taken off the table i

think pressure is slightly on yields. it's noticeable -- noticeable the bund yields about 25 basis metts since boris johnson in north england, so i think you can see how much premium was and bond markets for a risk of a no deal and that's been taken off the table. we will have plenty coming up and talk about banks managing expectations, a key target for returns after profit misses estimates. officer chief financial -- more from that, this is bloomberg. ♪

>> let's get your bloomberg business flash. bloomberg has learned the french owner of louis vuitton offered to buy tiffany, the price about $14.5 billion. lvmh confirmed they held elementary discussions with the chain. tiffany is evaluating the bid. logistics company is buying liberty property trust. specializes in warehouses and logistic facilities, that has become part of the real estate market. as more shopping moves online. that your bloomberg business flash. tom: what would monday be without a banking story. the hong kong and shanghai ,anking corporation in asia they are looking for some major

changes. let's listen to their chief financial. >> everything you would have inspected -- expected they would have been impacted has been impacted. seenr our business has very modest deposit outflow and some inflows. overall deposits on the quarter were flat, lending growth was up and on the credit side we had taking some additional provisions, part of the credit portfolio we are focused on in hong kong at the moment is this business and, but overall we are pretty pleased with what we see. obviously the longer this goes on, the more it will impact our business. >> i want to come back to the cost-cutting as well on for longer it will be another headwind. when do you think the drop just job reduction program will be over?

reduction in that will flow from the restructuring we do, i would hope in terms of what we are signaling today in relation to the u.s. group central costs that would typically take a couple of years to restructure, but we will accelerate get into those plans and then talk to her people internally. >> when we look at the various decisions within the bank, where is the greatest and most rapid impact for the bottom line? generating returns of less than 1%, where is the top objective to restructure in terms of business divisions? >> i think if you look across the u.s. you see a few things. about 85% of the capital is

invested in global banking and markets and commercial banking, we have a lossmaking retail business, so it is a pretty broad-based review we are doing, so i wouldn't single out any particular area as something that will move quicker than others. for mr. stevenson of hsbc. harry wilson is watching this working with bloomberg finance. i am struck by the bluntness of the failure of the john flint years. is that all this is about is pulling back from the last 10 years? >> i think it is in part. obviously john flint was forced out in august. that was clearly a sign the bank did not regard his tenure as being particularly successful but we don't really know yet what they will be undoing.

what they are doing here is telling us they will kitchen sink the balance sheet. we just don't know what they will do. the cfo has used the term deliberately vague to describe the plan. you have them putting the markets on notice that something big will happen won't say what it will be. francine: what could it be? is a job cuts? -- is it job cuts? undoubtedly job cuts will be part of it but what i think you are talking about is far broader than that. talking about a simplification of the business and so what that means, we don't know precisely but you get a sense when they are talking about the focus on global banking and markets that it probably has to do with the banking arm. probably we could see something around some kind of reorganization within that. you are also looking at probably

asset sales as well so we know the french retail bank is under and other businesses could be, you've got a lot of smaller banks across europe, it's possible some of those could start coming out of the spotlight and then also the u.s. business, and a lot of tension there over what people will do. tom: harry wilson with a brief from london on hsbc. an amazing story moving at a speed. let's talk about speed and gloom. it's terrible. poor's the standard & 500 without good bank 20.57% intraday vix , 12.62. ♪

tom: bloomberg surveillance, francine lacqua in london, and eventful day on the brexit debate. right now i want to go to the technology revolution that is part of this new record spx hig h. in the middle is the huge 17%,perform or, amazon up they haven't gotten it done.

well, but there is a --ed bag, you better go to it has been a complete terrible failure this year on apple. jim read with francine looking at credit as well. i want you to address, you are the perfect guy to do this, the idea the dividend and dividend ,rowth is a yield alternative you and i were taught in our textbooks all the radar goes up when we hear that. should our radar the up on dividend growth as a yield proxy? i think dividend growth has been something that has been invoked. high dividends have been less so. it is dividend growth that is what the market is looking for. it is growth, not actually the high level. tom: we've got breaking news.

let me pick up on you, francine, we have to go to it on the european union agreeing to a brexit delay and of course francine, almeria is in brussels. our maria. macron -- is in brussels. this is mr. macron capitulating isn't it? francine: he wanted something much shorter to put pressure on parliament to try and patch something over. boris johnson said he wanted elections and so three months we understand from the european side that actually is just the right way to give them enough time to do what they want to do without sounding too political. that noou're pretty -- deal is on the table. what is priced in the market. jeremy corbyn said he wants to give him an election if there is

no cliffhanger. is playing aorbyn delicate balance in his own labor in thee of polls. i wouldn't necessarily take the words on face value of no deal. for the market, i suppose the big problem with the withdrawal agreement though is if trade negotiations aren't successful after this deal is implemented -- even when it's passed, there could be a secondary no deal in the middle of next year. this isfrancine: bloomberg. ♪ ♪

headlines coming up. louis vuitton will speak to tiffany's. mr. ermotti of ubs is obsessed

with cost-cutting. and at the eu, saying a brexit delay until the end january as well. francine, the december 12 election, is that off the calendar? francine: this is irrespective of what the eu chooses. what we understand is the eu has given an extension, but if this deal they negotiated with boris johnson gets to parliament, they could leave earlier. we go to the vote and the house of commons to see if boris johnson gets his election because of fixed term parliament about which is largely untested. boris johnson get two thirds of the men turns to vote for an election, which he said would happen december 12. looking at the numbers, it is unlikely gets it. tom: we will continue on this story, following it moment by moment. right now the story of the weekend, the presidential tweet in the announcement on a sunday morning. we go to dubai.

when we look at the big news of all this, there is a follow on afterward. ofm focused on mr.assad damascus. tell me over the weekend and into the november, frankly, what --part of that he has to do with the islamic state correct? >> everyone in the region will have to deal with the islamic state because there are reports regroupingp, maybe right now in the region with the vacuum that is being created by the pullout by american troops. but at the same time, the death of mr. baghdadi, the leader of the group, also a commander of the group, gives a boost to the forces fighting them such as the

kurds, the turks, and others in the region. the admiral wrote a beautiful essay and we will talk about this in about 30 minutes with marty schenker. we all remember sri lanka were the islamic state reaches out and attacks at a distance. is that the terror alert this morning? are we worried about not another sri lanka, but are we worried about the fury of the remains of the isil? >> the thing is, anytime you target a person who is the leader of a terrorist group, you would imagine that they would be attacks toonduct show themselves still there. that they have not been heard, to prove they are there to their supporters and followers. in definitely, the region there operating in right now has a lot to offer in terms of vacuum.

in terms of whether there is specific intelligence, we don't know about but i would imagine all intelligence agencies would be looking for something like that for some kind of attack to show they are still on the scene, that they have not been broken by the death of their leader. what does the uterine and foreign policy for the u.s. to the middle east mean longer-term? what are you hearing on the ground? implications.t of on one hand, you would have leaders in the region and a lot of regimes looking at their alliance with the u.s. with a lot more skepticism after they saw the u.s. abate in the kurds. at the same time, others would definitely be looking for opportunities to maximize their gains in a vacuum where the u.s. is living right now -- leaving

right now and you have more turkeyy iran, russia, for an area at some point was kind of quiet. there are different parties in this region, and all will be looking to see how can they make the most of the pullout of the u.s., at the same time u.s. allies will be looking with dread at the fact that they may not be able to count on the u.s. so much in the future. francine: thank you so much for the updates. now let's get straight to new york city with the bloomberg first word news. before those deadly 737 max 8 crashes, boeing reportedly lobbied for a law, it undercut government oversight of airplane designs. the law lets companies challenge regulators over safety disputes and makes it hard for the government to usurp company's authority. u.s. energy secretary rick perry

says u.s. shale production has turned the world on its head. he is speaking to bloomberg in dubai. awash, if you will, and the united states happens to be the ones that developed the technology, put the technology into place, and we are reaping the benefits. the world is reaping the benefits of this. cheap energy is a good thing for the world. viviana: oil and natural gas from shale fields have made the u.s. one of the world's largest energy producers. after more than a week, today lifting the state of emergency as the president plans to shake up his government in response to a wave of civil unrest across the nation including a march that drew more than one million people, with a hike and subway fares prompting to protesters to take to the streets. thatour is provoking increase. 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: thank you so much. we're just getting headlines with the extension granted until january 31, 2020. joining us now is stephanie kelly. still with us, jim reed from deutsche bank. stephanie, what is the likely that boris johnson gets a general election. jeremy corbyn wants to take the next cliffhanger off the table. do we need a lot more legislation to make sure that is laid to rest? to be honest, it is interesting because the labour party that the demands in terms of removing that no deal risk have become increasingly higher and higher. however, something crucial over the weekend, the liberal democrats and s&p put forward a bill that essentially changed

the parliament act to set a general election on december 9 and only require a simple majority. if the conservative government can get around a bill like that, they can get the general election. maybe not on the date they talk about, but in the spirit of this is that what a general election to pass their deal, that i think this would be appealing. meanine: what would that for the deal? doors -- what would boris johnson campaign on? >> the liberal democrats bill actually rules out the idea of passing that withdrawal agreement before having the election. obviously, the reason for them is there campaigning on a remained agenda. the conservative government has to make a decision, which is are they willing to do that in order to get the increased majority they believed they could get to pass the deal? the ideal thing for the conservatives, they pass the withdrawal agreement before

going to a general election and they get that brexit boost. however, the evidence suggests they could get a brexit boost even if the withdrawal itself has not passed so that might be quite appealing to them, i think. tom: you have the castle behind you. you are up in scotland. the theory here is boris johnson is doing better in the polls. is he doing better in remains scotland? >> no, i think the conservative two big hurdles. generally speaking, there are a lot of remain constituencies that appear in edinburgh and more broadly there is a lot of support for remain in scotland. beenf the arguments has that scotland voted by majority to remain so they don't want to go along with her brexit. the second crucial thing is ruth davidson, a popular conservative

leader, stepped down this year. in scotland, they could face additional issues from that because there were many conservative voters in scotland who liked ruth davidson specifically and believed in her relationship -- leadership, which is very different from boris johnson. tom: what does remain eu want out of jeremy corbyn? a you're talking about historical issue that the labour party has had in scotland where they really lost sight of the s&p. in the general election space, the challenge you have got is labour party does not have a clear-cut strategy on whether they remain orly. they are trying to thread the needle. the feedback coming from voters is that threading the needle is not getting them the solution they want. as voters are polarized on the issue of brexit, that means the labour party strategy is increasingly under pressure. kelly,ank you, stephanie aberdeen standard investments.

jim reed of deutsche bank with us. we will continue here on the better than good markets as well. it is always entertaining and informative quest to richard will join us with the virgin group. look for that later today. this is "bloomberg." ♪

viviana: you are watching "bloomberg surveillance." is obsessed with cost. he told bloomberg he will take a close look at spending in every corner of the swiss bank. he also said he is not pleased with the investment banks performance this year but he made it clear before a strategy update in january, all of ubs's

businesses will be scrutinized. contest the cloud computing contract to microsoft. amazon was seen to have the upper hand in the competition. president donald trump has been at odds with the ceo jeff bezos come the world's richest man owns "the washington post" and the president claims the paper has treated him unfairly. singer taylor swift will help alibaba promote the world's biggest shopping spree. she will headlines next month single day in shanghai, just month after she performed similar duties for amazon's prime day last year alibaba took in more than $30 billion over the 24 hour single day event. that is your bloomberg's newsflash. tom: thank you. jim reed with us. it has been a sterling fundamental strategist of fixed years. well on 15 and 20

jim, i want to go to the ecb and the challenges of madame lagarde. do you perceive negative rates as a permanent condition? i don't think so. i think it is a choice at the moment, a political and monetary choice. i think europe is perhaps too politically energized to run a very long period of low negative rates for a long period of time. i think accidents could happen. i don't think this will last forever. last forever is playing spread markets right now. what is the spread to watch that would be most advantageous for christine lagarde to observe day-to-day? think to give her the most comfort, it is probably italy over buns. over the last eight years mr.

draghi's tenure, i think he has probably done too much for europe. just about enough for italy to area.ithin the euro maybe italy spread to germany is the thing that lagarde needs to watch most. francine: how much political navigation can lagarde do? will she be able to convince politicians it is time to do some real fiscal spending? >> i think her appointment is probably a good one in the sense that i am not convinced the ecb needs a top-notch phd economist in that role at the moment. i think i probably need someone with a good political antenna who can actually correspond with the major leaders across europe and actually try to find a better combined strategy between fiscal and monetary in europe. francine: what does europe need right now apart from structural reforms and dealing with brexit?

think for europe to prosper, probably needs a fiscal policy more loosely. i think the interest rates of -- our once and universe type levels -- once in a universe type level. one has to be disciplined in how one does that, but i think a debate needs to be had on how fiscal policy could be used more alongside monetary policy. is: one thing we have seen corporate with low rates. have we seen it sustain in europe and will it increase -- will corporate issuance increase into next year? >> you had a fair amount of corporate issuance in september after the holidays, probably coinciding a little with the ecb announcing their going to do more purchases of corporate bonds. companies don't necessarily need to borrow a lot of the moment. they are not that incentivized

to borrow a lot. those on the opportunity and the window at september took advantage of it any refinance. i would expected to be a bit higher but i would not think companies are going to go crazy at these low yields. francine: we had some votes. up what does it mean? >> germany is going through huge internal political maneuvers at the moment. see, itmbination we still feels to us that germany probably needs to go through a deeper -- deep recession to be on the agenda in the short-term. i think medium-term, it will be but in the next six to 12 months it is going to be difficult to move the dial fiscally in germany. francine: jim reed, thank you. coming up, plenty more on some of your main movers. we also look at luxury. confirms theyh

were looking at tiffany's. we will have plenty more on that shortly. this is "bloomberg." ♪

tom: good morning, everyone. i am tom keene. over the weekend, bloomberg reporting on tiffany and lvmh. let me show you the chart, what we're talking about, relative underperformance of tiffany as well. the success of tiffany that we saw from 1987 to 2007, and then it flattens a little bit. that here is where lvmh is $120 a share, while the presumed the press this morning that number would work i. -- work higher. deborah, it is not bogart. it is not been clear. what is tiffany to the fence european conglomerates? certainly tiffany can

be positioned as lvmh from the u.s. but also offers an entry point for luxury to the millennial generations. it is gifting. it is diamonds. it is sentimental. it offers slots in addition to what lvmh has on its plate. tom: i've not done the mathematics, but you go out two standard deviations up on the latest long-term trend. one dollar 20 -- $120 a share is nowhere near that price point. do you just presume that this is the first bid in lvmh or others will come up? >> it is quite interesting because if we look at what lvmh is rumored to offer at the moment, it would equate to around 14 times ebit. if tiffany was a very high operating margin. if i compare against what lvmh has paid in the past for

bulgary, 20 times this watch, 23 , for harry winston diamonds. there is scope. going back to your question, if we look at the balance sheet of lvmh, we could see them moving over $20 billion on deals a year and not being stretched. francine, that says you. francine: unfortunately, i cannot see it because of the sun but anything with diamonds. when you look at what is left to buy, there are very few independent companies. if they don't get their hands on tiffany's, will they go for someone else? isi think tiffany's for them -- it doubles their size, gives them a number one position in the u.s., and really helps tiffany and asia where it was 26% market lvmh to

share. it catapults the both against -- nothing else really does that. tiffany is- i think the one they certainly are after and i know there has been talk now for a while. much, thank you so deborah aiken. we are back with jim reed from deutsche bank. i have to say, when you look at treasuries, look at the dollar, it could be a big week to see exactly what happens with them. what is the asset class to make sure we are not in stability -- in a recession? toi think the asset class look at is probably treasuries. curve inening of the august was a pretty bad sign. any signs the curve steepen is up is probably a sign the market thinks the fed is not making as big a policy era.

i think it is a sign the market is getting more relaxed on the economy. francine: is the fed being led by the markets on how many cuts they will do? >> the fed is in a difficult position. every time powell speaks, he gives the impression that it is one more cut and then data dependent, but i think the market probably realizes the fed are little more worried than that and they will do more cuts than that. we're going for three cuts over the next few months, so that is more aggressive than the fed speak at the moment. tom: jim reid, thank you so much. you're saying there will be an extension -- europe sign will be an extension. we will see how that unfolds. a vote today on the election. a lot of presumption of an edwards and our brexiteer that that vote won't go that well. then on to the next boat to see about december 12 -- next vote

to see that to summer 12. in the next hour, we will look essay.edi marc chandler will join us with bannockburn, chief market strategist. really showing that risk on field as well. also moving forward, wednesday, fed day, friday, the american jobs day early, early this month. we considered new york after watching the giants and the jets highlights. ♪

tom: this morning with the s&p 500 index near a record high,

stayen weaker, and a job upon us, we consider our countless wall of worry in the next year. speaking of worry, the brexit of worry for the labour party. they agree to this split, pry minister johnson to manson election december 12, eu says extend. the parents, don't cry for me and the imf argentina with a big shift. peso this morning will be fascinating. good morning, this is "bloomberg surveillance." sun going in her eyes, a blind francine lacqua joins us. with the time change, does the sun go down at noon? are you on the edge of helsinki? francine: 2:00. i'm kidding, 4:00. today is on focus the dark hours of renegotiation. we are not talking about

renegotiation, but we're talking about a possible general election. there are two or three ways boris johnson could get it. there is a vote in the house of commons later today. tom: it will be interesting. it is the story that never ends. with first word news in new york city, here is viviana. leader: islamic state bug bounty was under surveillance -- baghdadi was under surveillance. president donald trump says bug bounty blew himself up. -- baghdadi blew himself up. spoke openly about coronation with russia and turkey. european union agreed to give the u.k. at three-month brexit delay to january 31. that will prolong the uncertainty for businesses and citizens, but also ends the risk of a damaging no deal exit this thursday. boris johnson is pushing his own

plan to resolve the deadlock today house of commons notes on his call for an election in december. fernandes willer be the next president. he won 40% of the vote. this is enough to avoid a runoff next month. voters say no to the austerity program premarket president macquarie. win is a movement that traditionally favored workers over business owners. slashing the amount of u.s. dollars its citizens may buy. u.s. energy secretary rick perry says u.s. shale production is turning the world on its head. speaking to bloomberg in dubai. are awash, if you will come and the united states happens to be the ones that developed the technology, put the technology into place, and were reaping the benefits -- the world is reaping the benefits of this. cheap energy is a good thing for the world. viviana: the u.s. has become one

of the world's largest energy producers because of oil and natural gas from shale fields. 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. tom: spotify out with earnings cfo shift as well. i don't want to say it is a negative thing. more this later. anytime you see a cfo move, it gets your attention. they talk about 39% podcast growth. you can see the bloomberg surveillance podcast available on spotify. is that good how i got the plug in there? thank you. spotify out with earnings and we will see how it moves. now to the data check come equities, bonds, currencies, commodities we follow. bull market vix. on friday, back to 13.03.

yen weaker. francine? i am looking at your futures are rising. here the picture is a little .ore nuanced a lot of markets are trading sideways. treasuries dropping to six week i. what i'm focused on is pound. steady versus the euro after the e.u. agreed to a brexit deadline extension. tom: thank you so much. the week, joining us was supreme commander of nato, formally now with carlyle group and out with an important book. he wrote a blistering essay for bloomberg opinion this morning. i will put it out on social. it is required worldwide read. joining us right now is marc chandler, with bannockburn, and

marty schenker. , islamic state, it is not dead. we get the lead to guy and they have a tendency to come back. we need to be on extralight right now? >> that is a narrative coming out of most media organizations that yes, we got the leader, but the organization still lives on. the lead point of the editorial in "the wall street journal" this morning. it is true, i do think it is interesting to me that narrative is sort of different than when in 2011 osama bin laden was killed. even though the presidents, obama and trump, were given the same choices and made the same decision. tom: the president comes out and everyone gives him a victory lap, but, i'm sorry, it is boots on the ground. it is seals on the ground. it is cia on the ground. the reaffirmation here is we need some form of presence in

these territories. >> that is the narrative coming out of this great victory. tom: is it coming out of the administration? >> there are people in the administration who are trying to make a point that this roots we need who's on the ground in that area. it doesn't have to be 2000 or 3000. but a number of people think we need to have a deployed forces in syria for just such circumstances as this weekend. pushback onw much the decision on foreign policy is a president getting from within his party? >> well, there are a number of republican senators -- lindsey graham been probably the most prominent -- who are severely critical of donald trump's decision to unilaterally pull out of syria. so there is a lot of pushback. the killing of baghdadi this weekend will lower the

shrillness of that narrative, but it is still there. the republicans and democrats both feel donald trump's plans in syria are ill considered and need to be reconsidered. marty, when you look at foreign policy of the u.s., is there an update on the koreas? is there an update on what president trump to do next? think the pivot is definitely going to be toward the election. don't think there is the backdrop of impeachment. the democrats are going to bring in more witnesses this week. there will be more negative headlines. and you're going to have to compartmentalize the foreign with the domestic politics, which is sometimes very difficult to do but the democrats are doing it. they will praise donald trump or what happened in syria this weekend, but they're going full bore on impeachment. , marcn the politic side

chandler's is with us. not only has he written about the global financial system, but linking it to our global politics. your book on the astronomy at the greatest initial was exceptional -- financial was exceptional. what is the astronomy right now in the u.s. dollar given everything he is talking about? >> the dollar is not so much affected by geopolitics, letters from policy -- tom: confidence issue. >> this idea that the u.s., many feel it is moving toward an isolationist, not only in politics, but in economics. i don't see that. tom: does that risk are dominant currency? >> i think the biggest risk is weaponizing what

used to be a public good, dollar funding, access to the deepest, broadest capital market in the world stop this used to be a public good utility given to everybody. the u.s. is using it as a weapon to punish our enemies and reward our friends. see --e: when do you when you look at the possible downturn in the world economy, where do you see it first, dollars or treasuries? >> with treasuries above 180 on the yield on the tenure, last month we peaked at 190. many think the bond yields are bottoming out. looking at the german bund, we bottomed at -72 basis points. today we had like -35. camp.ot in that i think we get this global economic slowdown and i think i agree with your previous guest jm reid talking about three more cuts in the coming months. you get a cut this week, be two in the first of next week. tom: really? >> i think the economy is

rolling over. tom: extraordinary. mardy, the consensus is -- >> slightly more than 25% chance of recession in the u.s. and the 12 months. tom: i don't know about a recession. i think the economics slows down in the federal reserve makes it straight up between low-inflation and trying to extend this expansion. tom: what you heard is really nuanced and important in 2020, recession. negative quarters of gdp, maybe some ideas around unemployment and other dynamics. what marc chandler is talking about is maybe a positive but lousy gdp as well. marty, thank you so much. we have a lot more coming up. one of the good discussions today, david westin simulcast noon with ian2:00 bremmer. this is "bloomberg." ♪

this is "bloomberg surveillance." shares of hsbc falling. the british bank posted profits that missed estimates and abandoned a key target for returns. the bank warning of significant restructuring charges. hsbccting ceo is equating is getting ready to make steep cuts in underperforming as nurses. bloomberg has learned the french owner of louis vuitton offered to buy tiffany for about $14.5 billion. lvmh confirms it helper luminary discussions with the luxury jewelry chain. tiffany is evaluating the bid.

logistics company prologis is eyeing liberty property trust. 9.7deal is valued at billion dollars. liberty specializes in warehouses and adjusted facilities. that has become a hot part of the real estate market, this as more shopping moves online. that is your bloomberg business flash. thank you so much. let's go back to brexit. announcing the european union has agreed to grab crash grant the delay to generate 31st just hours before the prime minister faces a vote in the house of commons to trigger an early election. by tim.oined until januaryis 31. if they get the agreement and parliament before they leave the eu before. what happens on the u.k. side? boris johnson once an election. there couple of ways he can get it. >> the first route is to try to use something called a fixed

term act, which is quite a difficult hurdle he has to overcome. he needs two thirds of all of the mps in the house of commons devote to hold an early election. in order for that to take place. it doesn't look like he is going to get that today because the labour party won't back it. there are two other ways and that would mean a possible general election december 9. if we get one, does the conservative party when? >> you're asking me to predict an extremely difficult -- francine: of course. >> it is incredibly hard to predict elections. with no brexit done, it is difficult for johnson. he will face a big challenge from the brexit party, which is campaigning for an even harder brexit than he is after, and it could cost him votes. i don't necessarily think johnson will win big. why will you explain politicians are avoiding the franchise of democracy? it is ludicrous to say we are battling about when they will be

an election. why is this? well, the fact is under the law as it exists at the moment come the election won't happen until 2022. johnson is doing his best to try to bring therefore to december but he needs support from mps to go there as well. people don't want to put themselves up for election if they don't think they're going to win. johnson is at in the polls, corbyn is behind and corbyn doesn't want the election right now. tom: what is the response of the public? just over the weekend within the firmament of the united kingdom, what is the response of the public to the fact labor doesn't want to give them a vote? think that will play out in the course of the campaign. i think we will have that election at some point over the next couple of months. that no doubt will be one of force johnson's -- he will say, here's the guy who did not want you to get this vote, of jeremy corbyn, wanted to keep this off

the table. don't forget, in the u.k., this will be our third election in four years. people are kind of weary of voting i think. that is something to factor in as well. francine: so the possibility of a no-deal brexit, right? it is not going to happen in 2019, but couldn't happen january 31, 2020 or when we come down to negotiating her future relationship with the eu? >> that is the question jeremy corbyn has been trying to raise. it is a legitimate one because this extension from today from brussels does delay potential post until the end of january, but then what? will it be extended again? re is a transition period, don't forget. francine: i am being attacked by bees. when are we going to find the answers to this? >> i think we will get a drip

feed, i'm afraid. more of the same. francine: many more days here at westminster. tom: francine, thank you. tim ross, thank you. with sir, conversation richard, richard branson of virgin. it will be a timely conversation. stay with us. this is "bloomberg." ♪

tom: "bloomberg surveillance."

francine lacqua, an eventful day with another brexit vote. joining us in new york, marc chandler with bannockburn, chief market strategist. look at argentine and peso in a minute. let's look at british peso -- i mean, it has got the ability with economic slowdown not to be a banana republic, not to be a third world nation, but it's on frontier economy. how fragile is the u.k. experiment as indicated by pound sterling? >> we had a good rally. we began the month around 120. we rallied a little above 130, finding support around 128. i think people are a bit nervous about how these votes are going to go. i think some people think there will be some sort of closure and somehow a nondisruptive brexit could take place. tom: i don't have a chart, but the key thing is sterling is at levels of john major 1992 and

blended all in trade levels of the lien in moment. we forget how weak sterling has become. am i right? >> we dip in the 120 briefly at the month. i think the fear of a hard brexit was a big weight. as that weight has been slowly lifted, sterling has come back. biased ands there a sterling? is there a bias and a lot of the u.k. assets because there is a belief amongst money managers that may be brexit will be water down? >> i'm not so sure. is water down.it i think the danger is there is no resolution. even if there is a resolution of some kind this year, this begins a new phase of negotiations. this is the divorce agreement they're fighting about. the next phase is the new relationship with the eu and that will last all of next year.

i think people might be tighter brexit, but this is a gift that keeps on giving from cameron, just like the fix parliament recessions. the reason they can't have another election so easily, they tied the hands to prevent these kinds of elections like three and four years. francine: would you be looking at cable or eurosterling? >> both. the eurosterling has come off as the pound against the dollar -- i think it is a pound a story can say euro and the dollar and people position themselves about brexit. how disruptive is it going to be? how soon is it going to be? tom: let's digress the euro. what is the deck of cards madame lagarde has been handed in terms of needing to give euro confidence or stability? >> i think the euro is trying to bottom. we dip briefly below 109 and got a little bit above 111.

i think we are consolidating. i'm worried about what happened in the german elections, not the state election, but the social democrats. they had a leadership challenge. that leadership challenge will continue, a nether round of it, and possibly the spd, junior partner in coalition, they could pull out. the big faction that does not want to be in the coalition anymore because they have lost identity. tom: it is extraordinary the populism. what has that done to your currency analysis, particularly in eastern europe? how do you pull in all of that populism and politics into not losing money? >> it is a hard play because the euro has been strong relative to the east european currency and strong compared to this candies. i try to focus on the signal. i think what happened on the periphery tends to be more noise for the special investors as opposed to just plain the exchanging, which is really $1.5 trillion.

, thank you so much, marc chandler a bannockburn. we will have plenty more throughout the day and focus on argentina, coming up. tom has a great chart looking at the argentina and the peso. we will take a deep dive into the elections after the leading candidate pulls out a win. and rick perry sat down with manus cranny on his visit to saudi arabia. that is coming up next. this is "bloomberg." ♪

francine: this is bloomberg surveillance from london and new york. i'm watching every development

at westminster. u.s. oila surge in output. rick perry told bloomberg tv that shale production would drive the u.s. energy. technology is irrefutable from the standpoint that it works. the world to have access to lng in particular that they never had before. hear, here is the message i hear if i am a european. there is an individual, a group of individuals who are saying we are not going to allow you access to a fuel that can free you potentially from other sources. we are going to make your energy more expensive.

i am not sure that's a good insage to try to be running a political process where people are supposed to like what you are saying. >> in terms of the structure in the u.s., there has been flourishing, d you think consolidation is the next thing in terms of scale? market always addresses supply and demand. manus: d you think consolidation is part of that? >> it's been part of it always. consolidation always happens. people say i can make all of this money and maybe not as good as i thought. tweet we saw mr. trump his disdain for what opec was

doing. later, do you think we are just pushing uphill? there is so much american crude hitting the market? >> i don't have a problem with that. the world has changed. it has been turned on its head. they told us we found all the oil and gas there was in the world. now, we are awash and the united states developed the technology, put it in the place, we are reaping the benefits. energy is a good thing for the world, find me the right balance were those who produce it can make a go of it and keep it at prices the consumer enjoys. manus: if i look at the , it's not thepec

1970's. he has extended a formal invitation to the u.s., can you envision the u.s. participating or joining opec at any level? >> not really. i don't think that is part of the future. think that is part of the future. tom: rick perry, the energy secretary at least for now. he has been in the news. this is the the on a. trump got a political boost when he needed. a daring raid killed the government's most wanted terrorist. after being cornered by special forces, the islamic state leader blew himself up. group measured praise from congressional democrats. california,hern

fires are blazing out of control. 200,000 people have left their homes. e.g. any is slowly restoring power. about 2.7 million people had their electricity shut off. power lines were not starting more fires. crashes,e 737 max boeing wanted to undercut government oversight of airplane design. overchallenge regulators safety procedures. week, cuba isn a lifting its state of emergency. they plan to shake up the government. it's in response to a wave of civil unrest, that includes a march that drew more than one million people this weekend. i hike in subway fares opted people to take to the streets.

global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. tom: thank you so much. francine: the opposition candidate has slept the residential election. the win tilts the nation back toward populism at a time of economic crisis. argentina announced it is tightening currency controls. first of all, how much do we know about the new president? how much do we know about what he wants to implement and what he wants to change? jonathan: we don't know that much. he did a victory speech last night.

, the vice sidekicks president and the governor took a big part in the victory speech. fernandez came on after them. he may not have the power he wants. factions --ft when left-wing factions and his party that have more power than people want. we are not clear on politics yet. he will announce a transition team today. more.l have there is a stunning restriction on foreign-exchange. what will the black market pay so do? jonathan: the clampdown on currency, it's a big restriction.

market payhe black so, they are likely to rocket. thank you so much for your reporting from buenos aires. day onerview of the argentina, we are bringing in mark chandler. joining us now from miami, he is with lack rock where he is che if strategist for latin america. he understands the fabric of argentina. thank you so much for joining us. paris, it's a new kind of left. what kind of left will this be in argentina? >> good morning. the market is about to find out. we don't see a lot of new faces.

fernandezd president was very close to the former president, who happens to be the late husband of his teammate on the ballot. his vice president. things seem very familiar. the argentine political scene has not changed that much. investors will see if there is a change given the dire situation the economy is facing. tom: i spoke to the managing director of the international monetary fund, this was an exceptionally delicate topic. how delicate is this for the imf? it's a very contingent issue for the imf. argentina is its largest debt issuer.

time, they have been in radio silence until yesterday. they wanted to see how the election wait out. they have a clear winner. an announcement will be made this morning in terms of who will be the economic team backing president fernandez. on decembert this 10. simply,: just to put it the imf will not have much appetite to give more cash. he is under pressure from the far left to spend more and do more on social spending. the do we find out what line and he chose? -- tows. >> if we look at this as a

direction where things might be going, there is a restructuring of debt. bonds,look at argentine markets already have been pricing in a restructuring of that debt. that restructuring goes, that will be a very critical factor in the andersation between the imf the incoming governor. that possible outcome is factored in prices already. francine: if the imf does not give you more money, what happens? is it already priced in? results of the august preliminary election,

prices have adjusted vastly. if we look at yesterday's results, the incumbent president did better in the past election. if we look at the congress incoming government was backing the president. it is very balanced. the incoming president will have negotiate for structural changes. that may surprise a tight election result. that might be reflected in prices adjusting someone upward. for a more adjusted critical situation in argentina. tom: thank you so much this morning. we continue with mark chandler. withis the long-term chart

depreciation of the argentine peso. they give up the ghost in 2002. new vicener years, the president, what fascinating is the approximation of black-market blended rate. that is the blue line it, weaker than the existing peso. we see that black-market rate break away. jonathan gilbert says we will see it again. do you care about black-market argentinian pesos. bond,n they issued that the international community got excited about. those days are gone. investors won't find any 401(k) funding. it's more of a marginal issue.

it reflects this populism. the people had a choice. there was massive depreciation and loss of credibility. they could stick to austerity. they voted against the yesterday yes -- austerity. tom: there were serious protests and riots. south america, is it fulminated at the end of the year? >> populism is part of the latin american culture. think is theing i populism is why we can't go back to the good old days? they are going back. thank you so much. we will get back to mark chandler. thank you so much there.

we will have plenty more. first, we have a look at the pound. we have a vote later today in the house of commons. the central bank will take the spotlight. that's on wednesday. on boeing after the devastating crashes. the chief executive will testify on capitol hill. germany could point to lingering weakness in the german economy. of and much more coming up. ♪

tom: good morning. francine lacqua is at westminster. the eu said extension, yes. this is the single best chart. we've got to go back to the all-time great. i am doing this just to aggravate him on a monday. i am sorry, on a proportional basis we saw that strength. it is just simple with the dollar. do you have a dollar call all in? >> this is what the fed uses. this is a broad trading partner. you can see where the third big dollar rally occurred. , intereste things ine differentials, they keep the u.s. favor a year ago. on can get the sun wcrs

bloomberg. this is a table to give shoe purchasing power. i see os cd currency not getting a stretch for fair value. the euro is 23% undervalued. brexit, whate had is your big figure move in a year or two? >> i think the euro is going to go back up next year. it's not a big move. we really need some good things in europe. they are not really getting any traction yet. great piece have a looking at the dollar. we have a higher dollar. what does that mean for the world economy? borrow dollarso

because they are cheap and up having to pay back more expensive dollars. this is the original sin of countries borrowing in foreign currencies. lower interest rates help on one hand, a strong dollar punishes on the other. francine: thank you so much. now we will have more on your markets throughout the day. , we will talk about $14.5y in a deal worth billion. we will talk about the luxury industry next. this is bloomberg. ♪

>> the market is jumpy. that is affecting the wholesale banking business in europe. modest, somevery inflows in the quarter were flat. overall, we are pleased with what we have seen. the longer this goes on, the longer it will impact business. francine: that was the chief

financial officer. he was speaking to manus cranny. they are trying to figure out what they will become, focusing on the restructuring overall. tom: we have been looking tiffany's, 57th street and fifth avenue. we are looking at the giant taking out tiffany's of new york. robert williams is with us. tell us about this. a lot of americans know louis vuitton. what does tiffany's bring to the hugely successful lvmh? >> it's the dominant player in luxury goods. it's larger than cartier.

while it dominates in areas like champagne and fashion where it has louis vuitton, jewelry is a lot smaller. if they were to acquire tiffany, that would double their income. is the lvmh method when they take out a brand? >> i think it's a really for tiffanyidea going forward in terms of the fact that lvmh specializes in this idea of maximum class. they make the brand bigger than people thought possible, they were small and exclusive. they make them global powerhouses while keeping the perception very high. what is the chance of this actually going through? is it a good fit? robert: we are not sure yet. we have some reports of pushback

on the price. there is an all-time high price this summer. what the offer is reportedly based on, there is also a test. tiffany was not seeking a buyer. the deala chance that could go through, some other bidders could arise. they already have a current ceo who moved there after a long career. it was previously their largest acquisition for years. they've been trying to move upmarket. what tiffany has is a high-end business with high-end creations made out of platinum and jewels.

there is a successful gifting business. they have a lot of silver jewelry and pendant necklaces in the $300 range. i think maintaining that range would be important for them moving forward. how can they do so without cheapening the brand and maintaining that exclusivity? tom: robert, thank you so much. tiffany, that is the plan at least. at&t finally released the voluminous announcement that they will pay off the acquisition that of the time warner deal. ♪ 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. >> the bank misses estimates and

accelerate plans to move into higher growth areas. thentina, they reject market incumbent until back toward left wing populism. delay, this helps the u.k. crash out of the union on thursday. welcome to daybreak. happy monday. we closed at a record for the s&p on friday. it was driven by the cyclical stock. 3026 has already sent futures. .he fed meeting is in focus the weaker dollar is coming right before that. we had a bond selloff here in the u.s. we still