♪ >> good morning from bloomberg headquarters in dubai. i am manus cranny. it is daybreak europe. your top stories, stocks pushing tencentn hopes of -- jumps as the white house officials are said to have reassured u.s. businesses the we on wecahat will not be -- chat will not be as broad.

plasma will be expanding. markets turning attention to the virtual jackson hole and the crisis fighting measures. the republican national convention begins in north carolina today as presidential rival joe biden says he would be open to a second term despite questions over his age. 6:00 a.m. inne london, 9:00 in dubai. there is a open letter to the fed. it is satire at its best. i like bonds over fx. just do whatever the bond market says. it is bigger, better, better educated and sharper than both of us. it is a great piece, but it is genuflection to, did you read the minutes and just do whatever the bond boys and girls say.

>> what businessweek calls cringe worthy satire. they give it to jackson hole saying please do us a solid, keep this mind in vote during the jackson hole summit. no cowboy stuff, jay powell. it makes a lot of sense, this satire. it is trying to make sense of the market when you have covid-19 pandemic still ravaging economies and people's health and the s&p 500 on friday hitting a fresh high. satire piece warns the robinhood boys and girls it will not end well for them. the bond market did move quite a lot less week, the biggest one-week move since june. you take it away. the robinhood boys and girls, they think they are smarter than warren buffett. this is not going to end well. i have been on the pension fund again and moved up the great

inequities. -- the grade in equities. when you press the button, it is all over. ann-marie: let's look at what markets are doing. we have the msci to asia-pacific -- msci asia-pacific moving up higher. it is breathing what has been a horrible month for asian equities, on course for the best august showing since 2003. things are pretty weird in the markets. the 10 year yield, point 65%, watching treasuries the entire week. dollar-yuan, 6.9. this is something we are watching as well. there is a great piece talking about can we break out of the bermuda triangle, and then i put up nymex crude. we are softer, but this is the calm before the storm. we could see an uptick in oil

prices. we have marco and laura approaching the gulf of mexico and half of production on the coast is shut as they prepare for the storms. not just political storms, there are hurricanes as well. manus: that has big ramifications all the way around. let's talk about the president of the united states and his bloodto fast-track a new plasma therapy widening access to the promising treatment even before researchers fully understand how well it works. study 100,000 arrogance have enrolled to receive this treatment and it has proven to reduce mortality by 35%. ann-marie: investors await fed jackson jay powell's hole speech. andrew bailey and european central bank economist philip lane. joining us now to paint the

picture, the head of fx and microstrategy at barclays. thank you for joining us. , asbig thing for the market we kicked off the show, is going to be what jay powell says. do you think we will get a hint of where he sees inflation going? >> i think we are hoping to get some stances as to where the fundamental review is going. there is a lot of expectations around that. are going to move towards some type of average inflation targeting. that is priced in the markets already. i don't anticipate a huge amount of surprise. what would be newsworthy is if you disappointed markets and didn't give us any chance about where that was going. there was disappointment about that. that is where we started,

the satire piece. just do whatever the bond market says. it is bigger, it is better educated, it is sharper. they read the minutes. the bond market read the minutes. herein lies the angst. fed? pushing the is it the explosion in equity valuations, or is it the rally you saw on the bond market last week? really their is focus on getting the economy back on track and getting inflation to target and showing to people there is some metrics around that target because they have been undershooting the target for years now. that is what blonde -- bond markets reflect. to the point that equities are at highs. risku look at the equity remy him, the amount of premium pricing of equities over the

markets, it is a high lover -- high number. the stocks are not as expensive as people think. bonds are super expensive and they are reacting to the fed saying we will get policies easy for a long time because we have been shooting inflation for so long and we face a huge economic challenge now. ann-marie: i am getting the sense a lot of it is already priced in. standard chartered saying the dollar has another 5% to fall from here. the dollar from here on out? >> i think we have a different view. this generalized consensus that is developing around a weaker dollar is overdone. at the end of the day, the u.s. still has much fundamentals in most other company -- regardless

of what happens with the election. we saw clearly in march safe haven choice is the dollar. nothing is preferred to the dollar, not gold, and we also see if you look at where returns from capital will come, growth, the u.s. is outperforming other g10 economies. we are not in the camp. i do think you have to respect there is a market consensus around a weaker dollar. u.s. election does pose some risks to returns to capital outlook in the united states. all of those things mean there are short-term risks to the dollar, but it is difficult to see this developing into a trend. manus: so those pass with a political outcome. the options market, looking at the run the euro has had, we took a back lap last week, if i

look at that kind of momentum, and i want to understand this, the dollar potentially is being priced down because of the fiscal risk from biden, but the euro is did on the fiscal floor that the deal has done. the fiscal narrative is seen in two very different ways from the dollar and the euro. do you see and believe in that differential? there is one important difference with the fiscal package. this was done at anti-e.u. level, on press -- at an e.u. whereas hamilton guaranteed the debt of the stage. they are not doing that. it is a step in that direction, and it does increase the finallyity of europe achieving fiscal unity which would be a huge step that would

eliminate the background risk of the e.u. breaking up. that was really important. i think it is probably priced in at this point. the markets think there is more to go. i disagree, but that is why there is markets. manus: we will get a call from you in a moment. hold that thought. the head of fx and em microstrategy at barclays with ann-marie and myself. first word news on capitol hill, the house has passed a bill to roll back service cuts at the u.s. postal service after concerns the charges -- changes thed hit mail-in voting at november election. lawmakers have allocated an additional $25 billion, but the postal service is concerned by some of the requirements. they say they constrain and reduce costs.

the top trade negotiator of the european union is fighting to maintain his job after attending a golf society dinner in ireland. he apologized for the lapse. the government said no organized events at cafes and restaurants. he has a key role in the trade talks between the u.s. and the u.k. tropical storm laura is making its way across the caribbean, closer to cuba. it will make its way to the u.s. gulf coast which faces a double whammy from tropical storms. hurricane marco is rushing to make landfall in louisiana. in preparation over half of all output in the gulf of mexico has been shuttered. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. it is the republicans' turn.

trump travels to north carolina to attend the virtual rnc. we will discuss the four-day meeting. this is bloomberg. ♪ ♪

this is bloomberg daybreak europe. still with us this morning, the --d of fx em microstrategy macro strategy at barclays. where do you see the dollar going at the year-end, and at what point do we see euro strength that it starts to worry european policymakers? >> that is an excellent question. it is one we focus on a lot. with respect to your first

question, our forecasts are for 116 year-end and into the first quarter. we are already there and beyond it. we think that prices in the european deal. we also see some downside risks to our dollar forecast going into the election. it would not surprise me if we go further. we don't see a lot beyond the screen. where european officials get nervous, philip lane, who will be speaking later this week at jackson hole, he said in the past it is a question about is it a good reason for euro ? preciation or about recent this is a good reason but if you look at where the euro is in long-term purchasing power parity terms, on a lateral basis it is longer than average. for an economy that is weak, at

some point probably in the 120's , they will start to complain. 120's starts to get uncomfortable for christine lagarde. we will transition into politics. president donald trump is traveling to north carolina to attend the first day of the rnc. most of them meeting will be held virtually but they are still in charlotte to nominate trump and by spence -- vice president mike pence. a lot of people are painting a picture that the u.s. will look different from the dnc. what are we expecting? it will little bit because republicans will have a cross factor through this. that is something you will notice for all four nights monday through thursday. he will see a little bit different. it reflects the difference with how they are taking the covid-19

threat, republicans are on the get back to work, democrats on the keep distance side of the ledger. you will see it wind up with donald trump giving an acceptance speech with an actual crowd of some sort. for these four days, you should expect to see a lot of trump. that means donald trump the and thet, the family people donald trump listens to. there is a lot of republican party people who won't speaking here. in their place you will see the personalities trump listens to a that he watches on television, his close allies. this is going to be a convention more than i can remember in memory that is tailored around the nominee. and we also have an aide

to trump leaving the white house. what is the story? >> kellyanne conway is a long time trump person. she has been with the president almost since jump. she is a close confidant. she is somebody, when she speaks, he listens. she came in during the campaign, in that, has history making her portfolio. she is somebody who has gone through what i would call the absolute most public family drama i have ever seen in politics with her in the trump white house and her husband george conway on one of the key groups trying to get rid of trump and saying he is a sellout and horrible for democracy. this conflict was spilling out -- i don'tind of

know how even to describe it but to the point that the daughter who is younger than 18 was tiktoking and tweeting prolifically about how horrible trump was and all sorts of family drama. it seems like all of them, kelly are george, the daughter all taking a break from their public facing stuff to just kind rightl with themselves now. they are taking a coordinated break together, emphasizing family. that is what this seems like it had becomehat it uncomfortable to watch. our senior editor derek wallbank on the white house news. we have got coverage of this year's role again national republican-- year's

national convention. you will get a lot of various trump voices from the family and the president himself area the head of fx at e.m. microstrategy , it is going to be an interesting three or four days in terms of speeches. to bring it to your world, we touched on the dollar earlier, to what extent is strong dollar policy now debt and will it be buried between now and the election? the strong dollar policy, nobody mentions it. >> let's recall the history of the strong dollar policy. this was something robert ruben brilliantly rot in in the 1990's -- brought in in the 1990's when the dollar was at lows, kept falling. he started repeating this mantra after his predecessor had asked for a weaker dollar. there is no policy behind it.

there never was. it was just words. dollarderpins the strong is safety as a reserve currency and the returns from the u.s. economy. every single treasury secretary has been trying to get rid of those words. it did not mean anything. it got in the way of a lot of things. the trump administration i think they have other reasons why they did it, but they have somehow freed every future person to say that. ann-marie: getting rid of the words, a new policy. stay with us. he is the head of fx strategy at barclays. the first batch of companies listing on the nasdaq style index make their debut under revamped rules.

the details coming up. this is bloomberg. ♪

manus: daybreak europe. i am manus cranny. quick snapshot on the u.s. equities futures. it is week five of a rally, the longest winning streak, we enter am race for this week, apple a microsoft 13% of the markets. these records are being made as $8. stock funds saw nearly billion rinsed out of the market last week. one week $8 billion shift out of equities. the biggest in four months.

ann-marie: apple's market cap so immense, slowly but surely becoming the entire american stock market. stacking with tech, china -- revamped rules that removed daily price limits for new stocks. it has seen a flood of ipo's hit the market today rising an average of 150%. juliette saly joins us. talk us through what the changes mean. it is a testing ground for the main boards in shanghai and shenzhen. it could be the first step in liberalizing china's markets. market.a $1.3 trillion we have seen a flood of ipo's hit the market today, 18. some has risen as much as 500%. you can see this cable maker up 500%, grabbing those limits you normally have on the first day fiveading, for the first

days of trading and also scrapping limits for existing stocks. they can move either way. double the 10% limit. it is a volatile index. look at my chart which shows you how much of the chinext can move in a day, as much as 5% either day. that is continuing in the move today up 2.3%. we have been lower. a fund manager saying, if you continue to seek new shares hit the market at this fast pace, that will continue to see volatility as well. tech has been a massive player coming through, and it is no difference in china. the index at one point has been up 60% so far this year, far outpacing gains as you can see on this chart. these indexes have risen 18% or so even though it is off 8% from its earlier doubles of the year. the index isng

performing better than many had expected and it is expected to continue as we see state-based funds moving to support the chinext. thank you for joining us. still with us is the head of fx and microstrategy at barclays. i want to ask you about the bond. we had mark cranfield talking about offshore yuan and how it could break out of this or mute like ariangle -- bermuda triangle. could he go past 690? is possible if the dollar trend continues. one of the things people often lose track of here is ultimately the pboc still effectively renminbi.he even the offshore renminbi. intervention.

and so -- manus: you will have to hold that thought because the clock has grabbed control of the narrative. we will pick it up. we go to turkey. this is bloomberg. ♪ this is bloomberg. ♪

>> good morning from bloomberg's european headquarters. this is "bloomberg daybreak: europe." tencent jumps as white house officials are said to have reassured u.s. business the ban on we chat will not be as broad as feared. is adent trump's coronavirus treatment involving blood plasma will expand.

and republican national convention begins in north carolina today as presidential rival joe biden says he would be open to a second term despite questions over his age. good morning. a lot to look forward to this week. . the markets are very much focused on what jay powell said on thursday when he gives that keynote speech in the morning. in the evening we will hear from the president of the united states as he makes his pitch to the country for a second term. we are both in love with this love letter businessweek wrote on behalf of the markets, mostly the bond market, to jay powell. he says whatever the bond market says, do what they say, no cowboy stuff, jay powell. because apparently the bond traders read the minutes. our guest host this morning

saying average inflation targeting is all in the dollar buys. marvin can correct me. , when i grab something on a monday, it is great. it has some momentum. you have stocks on a record high. there you go. just do what the bond market says. and they did. record highs were broken. genuflect show your into dollar weakness? the options market say $1.25. at one dollar $.20, be worried. barclays said so. lower on average inflation targeting or is this in the price of the one? the bermuda triangle.

can the yuan break below that level? annmarie hordern, find that story from the blog. she has been whipping it away. let's talk more about emerging markets. natural gas in the black sea will likely be followed by discoveries. that could alter the geopolitics of the energy trade in the region. >> this is a major discovery. the first time of alert discovery of any natural gas resource in our continental shelf in the black sea or the mediterranean. it is the result of years of work on developing our own energy, butnot only our ability to explore, partner with other countries, develop the technical capability, and it is also the result of an

approach to our own geography. statement time, the that geography is your destiny has been used in a negative sense. here it has a positive significance, surrounded by three seas, and now we have found natural gas in the black sea. that is really important for turkey's economy. a country in the energy sector, now turkey will be an energy producer. that is very significant. that makes turkey more than just the producer of energy. it puts turkey at a different regional ands of global affairs. fornd how likely it is turkey to find more gas in the black sea based on your initial findings?

>> based on what our technical experts are telling us, there is a much greater potential. that is just the beginning of what they discovered yesterday. it is quite likely that as they continue this drilling over the next few months, they will be able to make a deeper assessment of what is available there. tonces are it will lead those fields. drilling, there are going to be new exploratory wells in the same region. >> true. that is true. the work will continue for exploration as well as drilling at the same time. we are very hopeful it will lead to other fields in the same area. we will continue to explore in

other parts of the black sea as well as the eastern mediterranean and other parts of the mediterranean, cyprus and other places as well. we are very much hopeful. president erdogan's spokesman speaking to bloomberg. it has revised the countries outlook from negative to stable. to our guest. from barclays, head of e.m. microstrategy. -- macro strategy. a moment of reprieve on the back of this. you look at the central bank, they left rates unchanged.

they are surreptitiously driving rates higher. i want to understand, volatility on the lira, it is implied. it is the second-highest after the brazilian real. did the central bank miss an opportunity to officially raise rates? well, whether they missed an opportunity or not, they chose not to. i think it reflects the underlying problem in turkey. to be anot seem independent central bank anymore. i think that is reflected in the lira and the continued deterioration over the last few years. having to surreptitiously raise rates in the background, even as you have this ongoing pandemic, their economy is going through difficulties like everybody else . they have lost credibility.

what is going on with turkey? do you think it could boost demand for haven currencies, or is this just an inside turkey story? i think it is mostly a turkey story. there is a broader issue here, which gets back to one of your earlier questions about the dollar. it ultimately comes back to, if we look across, there are definitely exceptions out there. this pandemic is yet another negative hit for emerging markets that were already to find a growth planner growth model. to underlying globalization advanced technologies, much more so than any trade rhetoric, is

ultimately increasing the demand advanced economy assets and currencies as a result. you make the point we have had the expansion indefinite. that is global. that is a given. many people have tolerance for that. e.m.,gher deficits for you think e.m. deficits are going to expand further. who has the capacity and therefore who's currency will move the most? they don't all have the capacity to just inexorably increase the size of their fiscal deficit, do they? >> no. it is not just emerging markets. we are going to start to run into questions of how much economies can continue to expand their debt.

we are not going to get bailed out this time like we did after the global financial crisis. we are already at zero rates. everyone,problem for but particularly emerging markets. it comes back to the point about turkey. many of these emerging markets do not have the same level of credibility as advanced economies. markets are going to much more naturally question those. that is already starting to happen in places like brazil that you mentioned and turkey, south africa is another one. you are starting to see that already. >> i quickly want to get your thoughts on a study bloomberg did about an and nation shock. -- an inflation shock. south africa and indonesia investors appear better positioned. where do you see the inflation shock if we are to have one, be hardest hit in the end?

>> i do not have a significant country, but i think it comes back to debt. there are three ways to get rid of fiscal debt. cut consumption or investment, both of which are painful, you can default, or you can inflate it away. while it is hard to say the probability of an individual thatry, it is very clear we now have much higher debt levels everywhere. the probability of at least one of these countries taking that bad inflationary path is much higher right now. annmarie: thanks for joining us. thank you for all of your insight on the dollar, euro, and e.m.. now, first word news. all trump says a coronavirus

treatment that involves blood plasma for recovered patients will be expanded to more sick americans. it widens access to the therapy before researchers fully understand how it works. meanwhile, the financial times is reporting the white house is considering fast tracking the oxford astrazeneca vaccine. sisternt donald trump's is heard criticizing her brother in reporting obtained by the washington post. the former federal judge was secretly recorded by her niece who recently released a book. goldman sachs expects almost a quarter of temporary layoffs in the united states will become permanent. 2 million could remain unemployed into 2021 while the transition late -- rate remains historically low, the figure doubled from june to july. china's banking regulator has pledged support for hong kong as a finance hub, reiterating

commitment to opening up the financial sector during a standoff with the united states forcing global banks to walk a tightrope between two world powers and competing roles. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. coming up, tens of thousands of protesters are protestn minsk to disputed presidential elections. we discuss on daybreak europe. ♪

annmarie: good morning. tens of thousands of protesters

have gathered in minsk to protest against a disputed presidential election. alexander lukashenko is facing pressure from opposition leaders to resign, but he remains defiant. seen arriving has residents carrying an automatic rifle. with more to discuss all of this, maria tadeo. stands forsaid it the people of belarus rejecting the election, but what can they do next? walking a very fine line dealing with the belarus neighbor vladimir putin. >> exactly. when you look at the picture we saw yesterday, summoning people on the streets saying lukashenko has to go reinforces this idea that the people of belarus want to see change. when you look at what has been said from the eu perspective, they actually did not believe this election was fair. they do not believe this election was transparent, and

they do not by the results. they don't think lukashenko is the legitimate president. the problem for the european union, which has already said it is considering sanctions, we just don't know what sectors will be targeted. they don't want to be seen as intervening too much. if there is a new government, they made it clear it needs to come through an election. arepeople of belarus expressing what they feel is democracy. for the eu, we seem there is pressure on lukashenko. the level of violence is unacceptable, that sanctions are coming, but anything further for the eu is difficult because they don't want to be seen as interfering in another country. matt: -- manus: where does russia actually stand on this? from putin support

is the critical issue. but where is russia? >> this is a man who may be on his way out, so it does make little sense for russia to bet too much leverage on somebody who may be on his way out and looks desperate. he is walking around with a bulletproof vest a weapon yesterday. a helicopter trying to patrol the streets as people gathered. the russians do not like what they see on the table. they want to see something else, and perhaps a candidate that is more of a compromise for the russians. someone who is not seen as to pro-european. the european side of things as we could see russia engaging in military action.

we saw it that turned out for ukraine. that is something the eu wants to avoid at all costs. if you look at the russian language, there is nothing to suggest there is any eminent military action coming that way. --t: manus: maria tadeo. the rise and fall of one part. this is bloomberg ♪

manus: this is "bloomberg daybreak: europe." i just want to have a quick look at tencent.

it is absolutely storming up. you are looking at $26 million back on the value. why? because we understand the u.s. without their lobbying saying, you know, reassuring on the wechat ban. -- may be me able to to do business with wechat. annmarie: this showed how forspensable wechat is massive american brands. we had lobbyists from walmart, china, gm, the like. continuing really the tech rally we have seen from the united states into asia trading this morning. another tech company wirecard is being removed from germany's prestigious dax index. insolvency from

following allegations of long-running fraud. wirecard sparked a blame game in corporate and political circles with anchored directed at german financial regulators. joining us about the rise and fall is bloomberg's senior editor from berlin. thank you for joining us. what is happening next with wirecard? where are we in this dog? -- saga? we see the company that fell into insolvency after the accounting scandal and right now the insolvency administrator is trying to find a new home for some of the assets that might still have a little bit of a value. frankly there is not a lot of that. it is 3 million -- 3 billion euros on one side and assets that may be worth a fraction of that, 200 million optimistically area -- optimistically. not much in terms of returns.

the process is underway. they have started selling assets in the you can brazil. the other thing that is happening is trying to find out how it could have happened, who is to blame. where are some of the men who got the company into this mess? large.still a the former chief operating officer. manus: it is truly a staggering story. where does the regulator sit in this in regards to their handling of wirecard? handling -- there are two scandals. one is the wirecard scandal. of noter is the scandal

investigating the scandal. for several years, they knew there was something going on. there were reports in the media that wrote about the couple of to 2008, the way back there were allegations of accounting fraud and so on. the question really that remains unresolved at this point is why on earth didn't the regulator go after them? there is a sense they investigated the investigators rather than going after the source of the malfeasance. annmarie: today we are going to get delivery hero or very soon replacing wirecard on the dax index. what do we know about the delivery company? they take thero, spot of wirecard. that is a company that does very

well during the pandemic because blood ordering more food online -- people are ordering more food online. sort of a broker for restaurants. somebody shows up on a bicycle or a scooter and delivers it. their stock has shot up the last couple of months and that has helped them become where they are now, which is one of the biggest companies, listed companies, in germany. queasy aboutre this, saying the company is not proven their business model. they have not turned out a profit. good to have is another tech company in the dax. we will see how that trade opens up when it adds to the dax today. that is it for "bloomberg daybreak: europe."

futures pointing higher. there is a story i want you to read. social influencers are helping. i think that is a nich for you on tiktok. i needed new tiktok. feel free to get them in. ♪ ♪

annmarie: good morning. edwards alongside matt miller in berlin. matt: today the market says the fed is not done yet. yields come off their biggest weekly drop since early june. european futures look for inspiration from record-breaking u.s. tears. here are your top