nejra: good morning from london. this is bloomberg daybreak: europe, and these are today's top stories. it is a mixed picture for equities as investors mow the stalemate in stimulus talks. china's industry led recovery continues, but weak retail sales undercut the rebound. says he was arrested on trumped up charges. his stock is climbing

anyway. u.k. minister boris johnson england can resume it using of lockdown rolerules. welcome to daybreak europe. we saw a risk appetite shaking a little bit yesterday in terms of global equities. global equities are still heading for a weekly gain. in china, the data shows the recovery led by industry rather than the consumer. concern.t cause some initial jobless claims below one million, but you focus on the decline or the fact that the number that th remains elevated? does that mean there is less pressure amid the stimulus talks? not getting any direction from asian equities today. we did see a drop in the s&p 500, and that drop was led by the more cyclical sectors, where we sawtek outperform. -- where we saw tech outperform.

futures posting slightly positive, different to europe, where it looks like we could see another day of declines. the 10 year yield rose to an eight week high. we certainly have seen a little repricing around that, and around the real yield, which is pulled back from -1%. the 10 year yield continuing or resuming its decline, around 70 basis points. the dollar is steady. dollar is steady, but heading for its first weekly drop in 10 weeks. in the u.s., the house speaker and president donald trump are putting down opposing wages on where the economy is heading. the sides are at least $1 trillion apart on another stimulus deal. policy says when negotiations are ready to me in the middle, democrats will discuss a package. >> perhaps we mistook them for someone who gave a damn. that is not the case.

reality of see the the lives of the american people, what good is it for us to agree to something that has no relationship to meeting the needs of the american people? nejra: meanwhile, new u.s. jobless claims fell below one million for the first time since march. still, there are more americans seeking work now down in the peak of the 2008 financial crisis. high-frequency data such as credit card spending suggests the rebound remains gradual. joining us is our guest. great to have you on the show. thank you for joining us. if you look at the initial and continuing claims data in terms of the jobless data out of the u.s., do the latest numbers in any way -- will the market interpret them as putting less pressure to reach a stimulus

deal really quickly in washington? guest: good morning. i would say the market is not focusing on the longer-term unemployment in the u.s. these initial jobless claims are interesting and can influence the short-term sentiment. but what is far more important is what the long-term employment is going to do, and it has been grossing higher. expectations that there is the need for another stimulus package. it is a bit uncertain whether that is up. nejra: that makes sense. see a long-term background of a weakening dollar. what drives that view of yours? guest: that is true. if you look at the numbers on it is a large fiscal

deficit. when you get the packages, it will be even larger. at the same time, you have the monetary stimulus. this combination is not positive for the dollar. not for any currency, but especially not for the dollar. when you have an environment that is relatively obstructive on risk and you see the dollar also seeling, you will that going forward. this story onhave the negative real yields. it has been recovering the last couple days, but long-term atlook overall if you look fiscal deficit and monetary stimulus in the whole environment, that is not looking great. and you have the technical picture, which has been also

negative. it has been on none upturn for quite some time. would say you get investors preferring other currencies. in terms ofo say the technical picture for the dollar, it will be less negative if the dollar index rises above 94. right now we are at 93.26. in terms of performance on a weekly basis, we are headed for a weekly loss on the bloomberg oflar index of a six out seven. you see any prospect for a short-term recovery in the dollar, particularly given some of the risk off we are starting to see in equity markets in the last couple days? some: yes, i do see recovery, but this will be a recovery that is not a change in trends.

the long-term outlook is still negative. but if this rises above 94, it eases the pressure somewhat. there is also another side of the coin. the euro has been moving up for quite some time. sentiment in the euro zone improved. we think that has been a bit too optimistic. if you look at positioning on the euro side, it is extremely high. have not seen a speculative position this long. have quite a rally in sterling and the euro. they have done extremely well. we have a positioning issue in the euro. if you have this sentiment from the euro and at the same time more concerns about a second lockdown developing going forward, and they get maybe a

bit nervous about the sustainability of the equity rally. up, thisd this all could point in the direction of a recovery on the dollar in terms of levels in euro-dollar, which means you could go back to 1.15, especially if the dollar index breaks 94. it could go back to 96. long-term, i would say there is room for the dollar to recover. for goldat about room to recover as it is now heading for its first weekly drop in 10 weeks? what is your outlook for gold? guest: on gold, i would say it has an extremely good run in july because of the dollar weakness. on top of the other positive things, the guidance for gold. this correction was at the time

that it would start to recover somewhat. from a psychological point of the all-time high has been taken out. we have taken out the 2000 level, which was in 2011 not possible one way or another. the next crucial level is still far away. also, positioning is an issue on the gold side. the dollar will be recovering somewhat, but there will be some buying opportunity. go to arounduld 1800 before it starts bouncing higher again. markets,ok at the gold all stars are aligning for higher prices on the

positioning. it is extremely large. boele staysiettte with us. now we get to the first word news. laura: israel and the united arab emirates have agreed to begin normalizing diplomatic relations. the deal brokered by the u.s. is hailed as a key step toward peace in the region. the two sides will hold a range of talks in the coming week. in the meantime, israel has agreed to suspend its assets in the west bank. officials in palestine criticize the move, calling it a betrayal. from certainng countries up to isolate for 14 days as the u.k. is easing more lockdown measures and issuing tougher penalties for ignoring roles. fines will now double. with each repeated offense, to a maximum of 3200 pounds. president hopeful joe biden is calling on governors to require masks for the next months.

he said that approach could save 40,000 lives, adding it is not about your rights, it is about your responsibilities. president donald trump countered, saying it would be unenforceable. -- yale university discriminated against students, according to the justice department. race asd that yale uses the determining factor in hundreds of emissions each year. yale categorically denied claims of discrimination. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. nejra: laura wright, thank you. coming up, jimmy lai says he was arrested on trumped up charges. we bring you the interview next. this is bloomberg. ♪

this is bloomberg daybreak. media tycoon and pro-democracy activist jimmy lai says he was arrested on trumped up charges. in an interview with bloomberg, he says he has been overwhelmed by the outpouring of popular support. he says he thinks the national security law has already had an intimidating effect. >> i don't know what they are trying to do. it is an expression of support for the company. that becauseknew the rally was not there. people want to support us and show support by buying up the stock.

i first camee when out of the police station, i said, don't buy because you will lose the money. but they showed support. they bought our newspaper at 1:00 in the morning, lined up in the newspaper stands to await the publication of it. the hong kong people support the newspaper and expression of the anger of the raid. be a bitlly seems to short-term. did you ever consider in the last couple days -- i know you're preoccupied -- but possibly issuing more shares to take advantage of this? do you have any plans given the uncertainties surrounding your future of divesting? according to the latest data, of next digital. >> people suggest that i issue

new shares. i think this is a very dishonest way to do it. i tell them that cheating is not our business. >> what is the future of apple daily? we will be overseas, there is no doubt. >> you serve a role in the community. many people say you need to send to media, you need 8 -- you need dissenting media, you need a platform. are you practicing since the national security law self-censorship and monitoring what you are saying on your next digital platforms? >> we cannot do that because the national security law is very general. people want to hold the line. and we cannot change what we have been doing.

think what they have been doing is wrong. we are practicing freedom of speech, and that is it. we are just letting the community to the voices, and that is what we have done. if that is the crime, we can't do anything else. >> do you have plans at all to divest any of your holdings? like i said, at least from march 2019, which is the latest data we have on your shareholdings, 71% and change. do you have contingency plans to divest and sell those shares? >> no. my holdings in apple daily. we have unrest. in apple daily, we have our persons in taiwan. we are the biggest newspaper in taiwan and online, the paper and

online. we are the biggest. that is what we have divested. what are the contingency plans? say, for example, if you are convicted, we have to talk about that prospect. >> yes. if i am convicted, i think the business will go on without me. that was hong kong democracy activist and founder and chairman of next digital jimmy lai talking to bloomberg tv. asia speak to our north correspondent, stephen engle in hong kong. great work on the interview. what did he say about the charges against him? lothen: he couldn't say a about the charges, but he did say that they were in his estimation trumped up, and he had never, ever supported hong kong independents. he says all along he has

supported what has been pledged in the basic law. that is the ultimate aim, those are the exact words in the basic law. the ultimate aim is universal suffrage. theaid that should be ultimate aim of the protesters, not necessarily independence. he believes that was used as an law toto impose the bring best national security law about to hong kong -- to bring this national security law to hong kong. his most animated answer was when i asked about the statement office, macao affairs which said that jimmy lai was responsible for fostering support for their protests, including the violent protests, and hong kong independence supporters. been tried and found guilty by them before i

have even gone to court or before there has been any evidence. he says the golden thread of british common law is resumption of innocence until proven guilty. that is his most animated comment on that. that last interview that you ran was all about the stock run-up. the stock ran up this week 1300% at the peak. a lot of protesters had bought small lot sales in a show of solidarity to jimmy lai. jimmy lai today actually said in my interview, don't but my my stock.on't buy i reported in asia 30 years. i have been in bloomberg for 17 years. never have i heard the head of a company, the chairman of a company, tell me don't buy my stock. it was a fascinating interview. nejra: it really was, and thank you for bringing it to us. china's economic recovery continues in july.

industrials growth remains steady as weak retail sales undercut the rebound. data shows the recovery is still uneven. georgette boele is still with us. it is a theme we have talked about for a while in terms of consumption lagging the industrial recovery. do you see it turning around anytime soon? guest: i think if we look at china, we are seeing that. the impact of the pandemic, it takes time. this is a whole process. we think china is coming out relatively ok. other countries are still struggling with the pandemic and the second wave. constructive are on china, does that mean you are constructive on the yuan?

guest: we are relatively neutral on the yuan. it is a trade-off between two things. we have theand, weaker dollar, which is pushing the dollar-won down. we also think the tensions between the u.s. and china will continue and probably escalate a bit further ahead of the u.s. elections. going't think it is terrible, but the tensions will be there. i think it will keep dollar-won around seven. we don't expect that strong direction. a strongt expecting direction on dollar-yuan. georgette boele stays with us.

after 50 years, one of the hang seng's founding members is at risk of losing its status. we discussed changes coming to the hong kong index next. this is bloomberg. ♪

this is bloomberg daybreak: europe. i'm nejra cehic in london. big changes are coming to hong kong's benchmark index. swipe pacific was a founding member on the hang seng. now they are at risk of losing its membership. joining us to discuss is dani burger. great to see you. why is one of the founding members losing its status in the benchmark? dani: the reasoning is really uniquely a story of 2020. adds members based

on turnover and mark richt cap. swire has seen the market value plunge. you think of the sectors that have been hurt the most from the protests and the coronavirus, it is things like retail, real estate, and aviation. those are all things that swire is involved in. they own shopping malls and cathay pacific. shares have fallen more than 40%. the market cap is the lowest of any member on the hang seng index. the benchmark will decide at the end of trading today, but we are likely to see one of these founding members for five decades it has been on the index lose its spot. likely to bere is kicked out of the benchmark, what would we see take its place? dani: the hong kong benchmark has made a push to include tech. they have done things like allow dual class shares, allow uneven

voting rights. a lot of the hong kong listed tech companies have a form like that that has previously prevented them from getting into the hang seng. at the same time, a lot of chinese tech companies have had listings in the u.s. and preferred to get a listing closer to home because of the tensions. companies like alibaba, listed in hong kong, are likely to be moved into the benchmark. there is an idea that the hang seng was outdated. they have had a lot of companies do poorly while tech has done strongly. don't be surprised if we see some of these tech companies on the screen right now be included in the hang seng when companies like swire lose their place. burger.hank you to dani coming up, countries are spending billions on a vaccine, but novartis is warning a vaccine on its own is not enough. our interview next, as we learned overnight at the u.k. is quarantining all countries from europe, including france, while continuing to ease the lockdown

in the u.k. european futures slightly negative, down 0.2%. u.s. futures in the green. this is bloomberg. ♪

neijra: good morning from london. i am nench jra. these are today as top stories. it is a mixed picture for equities as investors mull the stalemate in u.s. stimulus stalks. china's industry led recovery continues, but weak retail sales undercut the rebound. ley ley says investors shouldn't buy shares in his

investor group. the stock kleined. england can resume easing of lock-down rules. it adds france and netherlands to his quarantine list. welcome to day break europe where we end with a cautious time in risk assets. we have seen global equities heading for a weekly game. yesterday the s&p 500 closed lower. earlier in the week it touched its february record. futures slightly positive right now. initial jobless claims in the u.s. below 1 million for the first time since march. dow focus on that or the fact at joblessness remains elevated? european futures on the back foot. what is interesting in the u.s. was what underperformed yesterday was sicklyal sectors. the rotation we saw at the beginning of the week didn't last long. the dollar is fairly steady in

today's session. we saw the 10-year treasury yield touch a two-month high. we are slipping slightly but a 70 handle. that move up has feaninged the the real yield and pulling back from that negative 1% level, still in negative territory. gold steady but heading for its first weekly lost in 10 weeks. french authorities are demanding tougher enforcement of rules to stem the spread of coronavirus as the nation battles rising cases. he said a resurgence would hamper the return of the country. five more countries have been added to the quarantine list. from 4:00 a.m. sardinha people i have gone will have to self isolate for 14 days. the global push for vaccine is his accelerating, with russia pushing. more than 160 immunizations are still under development around the world. giant o. of pharma

novartis talked about how far off a treatment is. >> i see this as shades of gray. we will likely have a vaccine that is vinyl sometime before the mid of next year. it could be as fast as the end of this year. but i expect that vaccine may not have the optimal efficacy, may not have the full safety data. won't be fully characterized and won't have large scale manufacturing capacity. what i believe is bite end of next year we will be able to solve many of those constraint and actually have a vaccine we are confidence in, have safe efficacy, and large scale manufacturing and can be used in large populations. we are going to have to make some difficult calls in the coming months. what is safe enough? with limitted supplies, who will need the vaccines in the near term. those are the discussions we

are going to need to have with the public policy community in the coming month. >> is there a danger we are developing a vaccine without fully understanding the virus? it is difficult to track, difficult to see how it mutates and difficult to know who to vaccine first. we don't know how people fight it with t-cells and others with antibodies. >> we are certainly moving at break neck speed. there are many open questions. typically the experience has been to develop a novel vaccine takes about 10 years. it takes that long because we typically want to deeply characterize the vaccine, understand in many different patient populations in phase two studies, and then go to large scale face three studies and follow these patients for a year. in this instance we are completely skipping phase two and going directly into fade three studies without understanding a lot about the biology of the virus. so i think given the scale of the pandemic, i understand why

that is being done. but i think it is really important that we support global regulatory agencies to have rigorous standards. the worst thing would be that we roll out a vaccine too fast, and we lose future trust for a future vaccine for covid. and we lose the wrodder public trust in vaccines in general. >> you helped develop the h1n1 vaccine and that only took six months. is that because we had a different basis for that? >> with influenza pandemics, we have manufacturing facilities, and we have technologies we deeply understand. in a sense what we do with pandemic influenza, we have the architecture set up and we change the cassette of the virus. we can know pretty well we are going to generate a strong protective immune response. in this instance we are pretty much doing everything new.

platforms are new. technology platforms are new. the virus is new. the human population has never een this kind of virus before, whereas we have influenza every year. there is a lot more complexity with this vaccine notice. we didn't success in developing a vaccine for the first sars outbreak in 2000 or mrs which happened a few years ago and only partially with respect to ebola. we have to be humble in figuring out is a vaccine savor effective. neijra: that was the novartis c.e.o. speaking with francine. you can catch the full episode during the first week of september. we gave an update earlier on the state of affairs in terms of the u.k. continuing to ease its lock-down while imposing quarantine rules on more countries, including france and the netherlands based on the

rate of infections in those countries. we were talking earlier about euro dollar. how vulnerable is the euro right now given the substantial rally it has had? >> i would say it is quite vulnerable, but i also would say that the overall dynamics behind the euro have also impressed compared to a few months ago. would say you have a lot of large positions. especially if you get economic data weaker than expected and not so much the number today, but much more the end of the year and beginning of next year, we have a double dip based on a weakening labor market as well as bankruptcies and the distortion of global traits. en you get this, you get a

bit of reality check. that is probably what is going to happen in the coming weeks with the euro. it is that the overall environment has been a bit more positive, but i think we have been -- the move has been too quick in a very short period of ime. that is a what could happen to the euro if sentiment changes somewhat. we see some profit taking. >> we were at 106 back in march. now we trade around 118. however, would you say that the down side to the euro is limited given that you also think that the long-term background for the dollar is weakness? >> i think the down side is limited.

we recently changed our forecast as well, reflecting he recovery due of the e.u.. that also means that is riding on the periphery will probably be less than we originally have. dollar ld say a kind of s a bit of a position squaring on the back of weaker news. it is on the up side. >> fine. we don't have a lot of time left, so i want to get some of your key f.x. calls in terms of anything that has changed recently. we have talked about the dollar and the euro, but are there any currencies where you are bullish or bearish other than that either in g-10 or

elsewhere? >> we think that sterling has rallied a bit too much. it is not really reflecting the economic weakness in the brexit notes. we expect it to move lower in the near term. like the erling is, euro dollar has been rising too quickly. it is relatively in a range. we don't expect another big move there. that is what i would also like to add. >> interesting. thank you for joining us. great to catch up today. now let's get to the first word uses with laura wright. >> thanks. the white house has no plans to do away with the payroll tax altogether. that is despite president trump saying he would repeal it

permanently if he wins another tournament. the idea of doing away with the tax is unlikely to get support from congress. it could drive up the deficit by trillions of dollars and spell the end of some social security payments. the latest controversy in the u.k. is around student exam results. boris johnson is defending his government's handling of exam scoreless. students complaining they have had their grades downgraded. teach he is gave an estimate which in turn was put through an algorithm. fiasco. calling it a in china, output rising 4.8%. but domestic retail sales are continuing to undercut the rebound, falling over 1%. china with a jump in private con suns will keep the bounce-back on track.

this is bloomberg. neijra: laura wright, thank you so much. coming up, banking black. banks serving under represented communities have been disappearing. they are urging people to #sctopten bank black. more than that next. this is bloomberg. ♪

>> this is bloomberg day break. i am in london. t was a historic moment when joe biden picked kamala harris to be his running mate. she is the third woman ever to be picked as a advice presidential no, ma'am necessary ant first black and indian woman. she has been subjected to increased scrutiny and criticism.

for morey we are joined by quick take reporter jennifer. great to have you with us. now yesterday on the show we covered the reaction from trump and also others to harris. why is the reaction and senator harris' announcement so significant at this time? >> 2020 is already shaping up to potentially be another year of the woman. the reason why this is so significant in the contentious of harris is within 24 hours of her nomination, we heard a personal attacks going to her. we heard president trump calling her things like mean, nasty and angry. these are something that many female politicians have been subjected to throughout the course of their campaign. as you mentioned, she is a historic pick, but the women hat came before her, hillary

clinton, geraldine ferraro and others were subjected to personal attack. we are seeing this growing movement of women say that enough is enough, and we are not going to tolerate some of these personal attacks and double standards that a lot of female playings are subjected to, and they are going to call it out and keep calling it out. i think this is important for people to pay attention to because it doesn't just affect female politicians. this is also a reflection of the way people see women in soto. as we move towards the election, the coverage of kamala harris, the way people talk about her, the way that other politicians talk about her and describe her will be something that we are paying attention to. >> absolutely. legendary investor jeff saying she was too charismatic and might be a little dominant with her personality was disappointing to say the least. you spoke with the c.e.o. and president of times up as well, which fights against work place

harassment. what did she tell you? >> it was fascinating. within a few minutes of the announcement, time's up came out and said they are starting a campaign called #sctopten we have her back. again it wasn't just about kamala. it was about all women who are subjected to a double standard criticism that men are not subjected to. here is at bit of the sound that we talked about yesterday. >> when president trump called kamala harris phony, it sounds like that is not a sexist word, but it plays into the idea that she is a phony because women don't belong running for leadership. it is sending that message. and it is sending that message not just to kamala harris and to our daughters and sons about how they seed women in leadership. deep culture change requires us to call this out. >> that was me speaking with

tina chen of time's up. i think a lot of women are feeling that way. we also saw several black executives, notably ursula burns come out and say this is not just about this one selection. of course it is historic and something that a lot of black women are excited about, but this is about the way we perceive and discuss women. with 80 or something days left to go until the election, it is going to be something that people are going to be calling out and also paying close attention to again. >> jennifer, our quick take reporter. thank you so much. now let's turn to the banking world. .s. rapper and activist killer mike says america needs black owned banks. they are disappearing at an alarming rate. for more we bring in our financial reporter. thank you so much for joining.

what is the bank black movement all about? >> thanks for having me. the bank black movement is about calling on consumers to use their economic power to drive business towards black-owned banks. this is part of a bigger movement in the u.s. to buy black as well and to support black-owned enterprises in the u.s. it is really about addressing the legacy of slavery and addressing systemic racism in e u.s. and directing money towards enterprises that support black people and equality. >> and you know, it is a great story that you wrote. you had a common in there from somebody talking about the owned deline of black banks in america and saying that was to do with institutional racism. is that the reason that two decades ago there were 48

black-owned banks and today there is just 21? >> what has happened is the black owned banks have been subject to the similar economic forces as their customers. if you think about a business taking in really small deposits, they don't have a lot of capital to make as many profitable loans. it is harder for black obamaed banks to make money and grow because they are collecting such small deposits from their communities, which are less wealthy than white communities. we contrast that with the bigger banks, which after the financial crisis were bailed out bite government and were able to build assets and post record profits in recent years. i think there is a sense here that consumers can support these black owned businesses and the live blood of these communities by directing more funds towards black owned banks. they have more chance of staying afloat if they get more deposits. >> thank you so much for joining us.

i encourage everybody to read her story on the bloomberg. coming up, normalizing relations. israel and the e.u. make a step in their relationship. we bring you all the details next. this is bloomberg.

♪ >> this is bloomberg day break europe. i am in london. israel and the u.a.e. have made a potentially historic break through in their relationship, hailed by american and israeli leaders as a crucial step towards peace. >> this is a truly historic moment. not since the israeli-jordan

peace treaty was signed more than 25 years ago has so much progress witness made towards peace in the middle east. >> but not everyone is thrilled by the agreement to normalize ties. palestinian officials call the u.a.e.'s decision a betrayal. for more, we are joined by amari. what are the finer details of the deal? >> good morning. on the on set it is a normalization of relations between the united arab emirates and israel. this could signal things like ambassador swap and air travel. israel israel will temporarily suspend put on pause and ex-ation of the west bank. what happens we will see in the next few months and years depending on how this is implemented. many are claiming this is historic. the state department says the three winners are the u.a.e. in the sense they say they

prevented and ex-ation. of course the united states is a break through for them. najera who is a way. the other big question is what does this mean for the rest of the quffle arab states. everyone is looking at saudi arabia. will the crown prince follow in abu dhabi's footsteps, taking a look at potentially normalizing relations between them and israel. >> so in terms of changing releases in the middle east, you sort of hinted at some of this there, but who are the winners and losers? >> really the biggest loser would be iran. the "new york times" says this is a geo political earthquake for the region, and he is right. for iran, this is going to build a broader anti-iranian block and sentiment in the middle east. the fact that we got to this point, part that have is that

we have seen relations warm between arab states and israel over the course of the last few years because of their sentiment and their tone and where they stand foreign policy-wise towards iran. iran is the one that is being put in a box here. the others are the palestinians. officials came out and said this is a betrayal. we have seen them recall their ambassador from the u.a.e. >> bloomberg's amri. thank you so much. that's it for bloomberg day break europe. the european open is coming up next. it looks like it could be a muted day again for european stocks. futures county .2%. u.s. futures after the s&p 500 closed clear yesterday, but the sell-off was led by some of the seikalyal stocks, which speaks to the risk off tone we saw yesterday. this is bloomberg. ♪

[captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] ♪ >> good morning. welcome to bloomberg marks, the european open. i am anna live in london. it is just less an hour away. england adds france and the netherlands to it's quarantine list. the prime minister says businesses including theaters, par larry and casinos can odom tomorrow. police can issue 3,200 pound