♪ manus: good morning from bloomberg's middle east headquarters in dubai. annmarie hordern in london. your top stories today. market rally pauses ahead of jackson hold. jay powell will upset -- update. mike pence tells the rnc the nation's economic recovery is on

the ballot. hurricane laura is on the verge of becoming the most powerful hurricane to ever strike louisiana. towards the u.s. gulf. the eu's trade chief steps down after criticism he broke virus regulations. it comes amid a rise in european cases. rejectspain, and france the possibility of fresh lockdowns. it has gone 6:00 in london. 9:00 in downtown dubai. good to see you this morning. we were trying to wrap it up with the rrr's. risk, the rncly over the dnc. political risk. the trifecta coalescing today. lovely blog this morning. that upset the market week ago. good morning. annmarie: good morning. it's not just a rome powell we are waiting on.

we will hear from andrew bailey and philip lane. will inflation become a moving target? for me, that will be the focus of jackson hole. there's a number of other risks out there including the political, mike pence saying joe biden is a trojan horse for the radical left. also, this hurricane. this is expected to really batter across the u.s. gulf coast. let's take a look at how this risk is doing this morning. msci asia-pacific, relatively soft. s&p 500 futures under a little bit of pressure. down 2/10 of 1%. the yuan this morning, 6.87. we are breaking out of that bermuda triangle. 1%.t crude up 3/10 of this comes down to hurricane fear. updates on the u.s. crude stockpile, showing a bit of a demand recovery.

that's the price action this morning. now to politics. the third night of the rnc. mike pence took the stage to accept his vice president of mom and nation. -- nomination. he defended president trump's record on the economy and combating the coronavirus outbreak. , moreadowing his speech dramatic events across the united states. that includes hurricane laura, the arrest of a teenager for shooting protesters in wisconsin, and u.s. athletes refusing to play in solidarity with demonstrators. those are the events that are unfolding. this year's jackson hole event will be held virtually. the public will be able to view the entire event via a webcast. global stocks are touching all-time highs ahead of the fed

chair jerome powell's speech. that is much anticipated. they are expecting details on the fed's new policy framework. seen holdinging -- short-term interest rates for five years or more. the event will look into the challenges facing policymakers in the world economy during the pandemic. we spoke to the kansas city fed president on the central banks inflation target. >> i've never thought of 2% as a ceiling. to stay focused on what anchors inflation expectations in the economy. from a communications standpoint, i think we will be talking about the kinds of things that help us do a better job of achieving our objectives. now, head ofg us investment grade credit for europe at wells fargo asset management. thank you very much for joining us this morning. the target, the elusive 2%

scarlet pimpernel. they never quite catch it. targetinginflation imbue a sense of confidence that the fed can and will breach the 2% level? what is so different about inflation averaged targeting? henrietta: i think it is something they are doing at the moment. i'm not sure that this will bring much change. 2% has been an average for them already. in the previous years, during the financial crisis, they were willing anyway to let inflation go higher than 2%. they will see it as an average. that's what we're expecting. it's not a huge difference to what they have done before. 2%, is it achievable? that's a different question

given the current circumstances. as we know from other countries, you may have a target but you may not reach it. annmarie: if i could take the contrarian view for a moment, i get what you're saying. we have not been able to get close to the target for years. if we were to have this upper end headroom on the inflation target, what does that imply from the fed to the market, in terms of their policy toolbox going forward? henrietta: i will answer this one differently. the picture for inflation at this point, given the extraordinary circumstances that we are in, there's a fair amount of uncertainty as to what path it will take. given the impact on demand, given impact on supply, given the virus at the moment. there is funnel of opportunity in terms of inflation, maybe not immediately. it had a deflationary effect at this point. 2001.l be quite wide come

it will be interesting to see how that plays on the inflation side. and then we can see how the central bank reacts. manus: let's take it. busted and left in the dust. mark hazel says, we will see this new narrative from the fed. the fiveeinvigorate 30's. you say it will not be a huge breaking news event. where they a context react celery? -- re-accelerate? henrietta: from my perspective, is driven by uncertainty in the markets at the moment. rather than the communication on the fed side. i agree, the communication might

be trickier given the format. remember that in the background, from an economic perspective, we have a very unusual situation. annmarie: as we approach jackson hole, what will we get more clarity from? the fed and powell? interest rates going below zero from andrew bailey? or philip lane about the ecb bond buying program? which out of the 3-d you expect the most clarity? henrietta: in terms of the zero more ait's possibly question for the u.k.. i think the hurdle is quite high for a country like the u.k. or the u.s. to across the zero bound. i think they are in a different situation from eurozone in that respect. i think the stigma of doing negative in that case is very high. our expectations for the u.s.

and for the u.k. is that that zero bound will stay. in terms of the ecb, they have a lot of ammunition from the perspective. we will see how they move forward. for now, they have a lot on the table. annmarie: go on. manus: go ahead. go. annmarie: we will carry on. henrietta will be staying with us. we want to get an update on the first word news. for that come we have laura. laura: a 17-year-old was arrested yesterday after two people were fatally shot in kenosha. it came during violent clashes between protesters and counterprotesters and the police. the fourth night of unrest, days after a black man was shot seven

times in the back by police. the wisconsin governor has doubled the national guard members available. the white house is defending guidance from the cdc. it says people who came into close contact but do not have symptoms may not need tests. that has alarmed many public health experts who say it could limit how many tests are performed. the new york governor says the move is political propaganda. the white house denies the change will influence them. the european union trade for -- chief has set down. he broke virus regulations. he attended a golf dinner in ireland last week, an event that is under police investigation. the eu will have to move quickly to fill the post. it has a key role in trade discussions. 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. this is bloomberg.

thank you very much for that. coming up, tensions rise as beijing files missiles into the south china sea. .he u.s. imposes sanctions we discussed the risk. this is bloomberg. ♪

manus: daybreak europe. i'm manus cranny. tensions between china and the u.s. are escalating over the south china sea. beijing fired medium-range listing missiles into the waters as trump and the administration are imposing sanctions against chinese companies that set up outposts in the disputed region. the action comes a day after china protested a flyover by a

u.s. spy plane. china says it has made concessions to let the u.s. regulators order some of it sensitive companies. beijing chairman says wants to resolve the standoff over accounting issues. he also underlined that more chinese financial markets would benefit, both on the mainland and foreign investors. up has always been a key strategy of china's growth over the last 40 years. that is also true for the financial sector. tensions, theese talks of decoupling, the opening up pace of our financial markets

has actually accelerated in the last year or two. since the beginning of this year, in terms of lifting the equity cap of foreign financial this operating in china, made a huge stride. >> do you think that pace will accelerate? do you think about the pace of that opening? >> it's a good question. i think it would accelerate. the chinese economy, despite the challenge of covid-19, has actually recovered quite nicely. over the last three weeks or so, i went to four cities over the

last three weeks. just based on my own observation, the economy seems to have quite fully recovered. when i was there having a vacation, the old hotels were full. it was incredible. the consumer power of the chinese economy is just amazing. i have a sense that in six months or so, the chinese economy will again be the locomotive of world growth. the capital markets in china will continue to be -- continue to expand. that provides a basis for foreign participation in our market. that's one reason. for a capital market,

high-quality economic growth. we need participation in our markets. we need higher quality financial services. that is something that foreign films can provide. in terms of the stock market, china is a very high saving economy. there are a lot of retail investors in our economy. trading behind act of this year. investors are not very good at determining the value of a stock. we need a lot more institution investors in our market. the money is usually coming from institutional investors. that they have a much better sense of what a

stock is worth. the presence of foreign investors in our market has in thed an anchor valuation of the market. to can -- it continues promote the quality of our stock markets. we welcome more participation. both from a demand and a supply point of view. i do expect that foreign participation in our markets, whether in providing services are capital, will accelerate. annmarie: that was the vice chairman of the china security regulatory commission speaking exclusively to bloomberg. our guest is still with us. very quickly, we have trade tensions escalating this morning. the yuan holds firm, breaking out of its bermuda triangle. do you think this strengths will -- strength will last?

henrietta: [laughter] i like -- it's hard to tell. we are entering a very interesting time from a political perspective. you mentioned that at the start. the u.s. election is really going to enter its campaigning phase in september. as a result, china is going to be one of the topics that gets discussed. the u.s. attitude to china will be one of the key topics from my perspective. as a result, it will be interesting to see how trump in particular, given he's more vocal on that relationship, reacts over that time and how much under pressure he is. i think that that will determine the course of the relationship with china over the next few months.

as we just talked about, there are a number of points of tension, be it the south china sea, on the corporate side, the relationship between chinese corporate and u.s. corporate, the trade war. i expect that that is going to ebb and flow as the campaign heats up. just a finish off, do you get a sense of the pboc is in a more neutral position annmarie: that might put -- neutral position? new zealand is reckoning for negative. just a brief comparative. henrietta: yeah. they are in a different situation. where they are in terms of recovery post fire us is in a different location. they are a little ahead of other countries worldwide. as a result, yes. more of a positive this point --

pause at this point makes sense. the northern hemisphere heading into automated winter. we need to see how that plays out. we are in a different situation to the pboc at this point. manus: that will play out in the covid situation as well. thank you very much. we will stay tuned for those numbers. thank you for being with us this morning. it could be the most powerful hurricane ever district louisiana. the details, the impact, the cost, and the market incomes -- outcomes here on bloomberg. ♪

manus: it is daybreak europe from dubai. annmarie, contracting the hsbc story. saying basically, the bank is helping deny freedom, attacking the bank over its handling of next media executives. this is another swipe against the management there in terms of their position with the chinese authorities. free nations must ensure that their corporate interests are not suborned by the ccp. stock is down nearly 2%. a lot of-- annmarie: risk this morning. hurricane laura will be the most powerful hurricane to ever strike louisiana. areas could be uninhabitable for months. the region basis for bradley --

deadly storm surges. we will look out on how the market reacts. we will bring our guest in for her take on this. what does this mean for refining margins across the gulf coast? perspective,om our this is an event -- we have seen it in hurricane seasons before. it will be supportive for the oil price and for refining margins as well. that's what we are expecting. however, we will have to see how the hurricane passes and the degree of damage and how long the various areas will close subsequent to its passage. impact that wee will be watching out for. time wherening at a there are stocks available and

have been made available. there is less pressure from a demand perspective. that will help put a lid off of prices. we will see how that plays out. it will be the length and duration of the impact that will be key to prices and their path at this point. manus: it's interesting. they turn on the taps ever so slightly. their compliance is really quite stellar. that's probably part of the floor for this market as well. in terms of a 95% overall compliance. that is key. henrietta: that is key. again, given the extraordinary circumstances we are in, it is helping on that front and making sure, given the volatility that

we saw earlier in the air, countries have an incentive to comply at this point. prince,: certainly, the the saudi oil minister really took on that the nokia problem for the cartel and doubling down on the cheaters. thank you so much for your time this morning. coming up, having gone to unprecedented lengths to combat the covid prices, monetary policy makers kickoff a virtual jackson hole conference. i will miss the beautiful landscape and mountains we usually get from jackson hole. it's all online. you could be a fly on the wall. we discuss it all, next. bloomberg. ♪

♪ annmarie: good morning from bloomberg's european headquarters in the city of london. manus cranny live from dubai. this is bloomberg daybreak europe. these are today's top stories. u.s. equity rally pauses ahead of jackson hole. jay powell will update on the feds framework review. , thepence tell the rnc economic recovery is on the ballot. hurricane laura is on the verge of becoming the most powerful hurricane ever strike louisiana. oil is near a five-month high.

eu's trade chief steps down after criticism he broke virus regulations. arising european cases. italy, spain, and france reject the possibility of fresh lock downs. good morning. it is just a storm of risk this morning, isn't it? a trifecta of the top three. jackson hole, jay powell, inflation debate, the rnc in the middle of geopolitical tensions with beijing, and of course hurricane laura really about to batter the gulf coast. that's what the market is focused on. we have other things like rising coronavirus cases. the tiktok ceo stepping down. hsbc this morning. a flurry of risk. a lot for the market to digest. it's almost manus: as if we set off on this virtual journey with the fed, navigating

the decade ahead. bouncearkets literally from one fed headline to the next. i think what we have to ask ourselves is, what is the risk? many people said they were bland. they had this narrative that moved the bond market. unseat thewant to equity juggernaut that has taken off. let's whiz through the markets. s&p pausing. jackson hole. prefers europe over the united states of america. have a look at the yield curve. rise in looking for a

curves as a result of this jackson hole. it reaffirms curve steepeners for them. what will the narrative of action inflation targeting do for the dollar? we are on a role on the back of the hurricane and supply-side. 43 38 is where we are, back to flat. dead as a dodo. we've gone to unprecedented lengths to combat the covid crisis. aretary policy makers kicking off that virtual jackson hole conference. jerome powell scheduled to speak today on the long-awaited fed framework review. let's look back at what the policymakers were saying this time last year. >> i think we have to act as appropriate when we see the economy having a shock. i don't see that right now. i don't think we need to act right now. >> as i look at where the economy is, it's not yet time. i'm not ready to begin to

provide more accommodation to the economy without seeing in outlook that suggests the economy is getting weaker. >> you see the data coming in solidly. tumors are confident. consumer spending is solid. business investment is slowing. weighed down by uncertainty. it is still not negative. we still have growth. >> the center of gravity in u.s. economic policy today is not monetary policy. it's trade uncertainty. it's immigration policy in some places. >> interest rates will be lower going forward than they were in the past. that was the understatement of 2019. let's discuss more with senior a sure economy reporter. good to have you with us. nobody expected a global pandemic. what is the big message we will

hear from jerome powell? why is inflation averaging so materially different? our guest says there is nothing new in it. what do you say? michelle: a very different world than yesteryear. we are set to get more detail on the fed framework review. these plans predated the pandemic. the conditions are making it more urgent to hear the sort of long-term thinking from the fed, even with all the short-term risks that we are battling today. what we are looking for is to main messages. inflation and interest rates and other tools they can use. on inflation, we expect to hear that the 2% target that the fed has missed for the last decade, it will stay. we might hear that the fed is willing to overshoot that target , given how long it has been undershot. connect to that is what he will say on interest rates. the fed will keep the benchmark at or near zero for five years or longer.

overall, a completely dovish message to markets today. ,bs advising this morning investors should keep cash at a minimum. the hunt for yield will be externally tough now. annmarie: what did he say in june, we are not thinking about raising rates. i think everyone is expecting quite a dovish fed. we have andrew bailey from the boe, the ecb's philip lane speaking. what are you expecting in terms of the other speakers, about what they will say about the economy and their respective central banks at jackson hole? michelle: plenty to talk about. hear from critical to chair powell and the others, the raging debate about whether inflation is dead or if it is looking around the corner. we talked about this recently, especially with the stimulus

unleashed worldwide. whether that is directly getting into the economy in ways it didn't during the financial crisis. what central banks have left to use, we talked about diminishing firepower. what else can they use? what else is the prudence of things like negative rates? control, powell has been tepid on that. in southeast asia, there's a lot of talk about what bank indonesia has been doing with direct debt financing. that's another debatable tool, whether they can achieve that without rattling markets. so far, they have been able to. plenty on the offering. anything from the speakers including powell and others, the path of the global economic cut -- recovery. they today, these things are changing. what we know about the virus outbreaks will be critical. how different governments are handling mobility restrictions.

trying to get that stimulus popped out to the right parts of the economy. manus: we will go off script. annmarie says you like politics. let's go there. michelle: [laughter] manus: why not? [laughter] this will be fresh and real. michelle: [laughter] manus: do you think you get more trump jawboning between now and the election against powell or towards powell or the fed? michelle: you could perhaps expect that. chair powell has been extremely diplomatic and smart about the way he addressed that, playing the fed card, the fed independence card. they want to make sure that they are seen as nonpartisan, not being influenced one way or the other. there's the pressure to hold true to what they have said before. that fed officials want more fiscal spending. they want some sort of deal.

they can be debated whether they blame the lighthizer democrats for not getting to that point. we expect to hear that message. there's more to be done on the fiscal side. perhaps they are not on board with the read of mike pence and others that are saying that the economy is on a pathway stronger recovery. you've heard a much more pessimistic tone from the fed officials. manus: indeed. larry kudlow on a 20% recovery and a v-shaped all the way. good job on the road quest. what we can expect. don't miss our interview this afternoon with the st. louis fed president, friend of the show. let's get your first word news. laura wright is in london. laura: thanks. tona says it will select audit sensitive mainland companies.

[inaudible] the vice-chairman of the chinese regulator says beijing is ancere in wanting to fall standoff. business links on both sides benefit. >> for all the u.s. investors who have invested in chinese companies, they have made a lot more money than the average market in return. it's good for the chinese companies as well. they have access to international capital and listing in new york also helps raise the corporate governance standards of these companies. it is mutually beneficial. i hope there will not be a decoupling. laura: the u.s. has accused hsbc of aiding the government's hot lockdown on hong kong. mike pompeo says it continues to provide services to people sanction by the u.s.. .e cited reports

no comment from hsbc. three of the world's richest people have just achieved staggering new levels of wealth. the amazon founder has topped $200 billion. --t surge a rally in tesla shares pushed elon musk's wealth above $100 billion. 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. is bloomberg. annmarie: thank you. coming up, my interview with louis vuitton's first black that it does -- artistic director. stay with us for that excuse of interview. this is bloomberg. ♪

manus: it is daybreak europe. annmarie hordern alongside me in london. hundreds of protesters enraged by another shooting of a black man gathered across the united states last night. this comes days after jacob lake was shot seven times by police officers in kenosha. arrested-old has been and two people were fatally shot during the clashes. annmarie: we will be tracking that throughout the day. blackvuitton's first creative director was criticized in may for his response to black lives matter protesters. he hit back, sharing his own experience of racism and commitment to positive change. this is my exclusive interview of how he's raising black voices in the fashion world. >> a lot of it is how i a press might -- approach my advocacy.

me being one of the few black designers at the head of a parisian fashion house gives me a unique opportunity to lead in that space. i started my postmodern scholarship fund which works at the education level to make sure that there's inroads cap for young black designers to work in the fashion space. all the way to my show in shanghai, largely created by an all back -- black creative team. to showcase how diversity and inclusivity can lead to great results. >> their website talks about how your advocacy looks different. what does it actually look like? walk us through that. >> indeed. part of my advocacy is fundraising. putting dollars where it matters to make sure students are entering the road to having a career in design, fashion, creativity.

that's not all that it encompasses. a lot of that is leading by example. i'm the head of a house. how i built my collection, how i represent black culture, how i represent black dna is important. as well, i'm supremely focused on mentorship. there's a critical point in everyone's career in order to receive the right advice, to work in the right position. all those different spheres are important to how i would approach my advocacy. >> looking internally, especially big corporations are them, is itwe asked time to start implementing metrics? do you think a system like metrics would work for diversity? >> for this system to change, to eradicate systemic racism, all tools need to be used. i think that we want to see this

at the grassroots level all the way to the level that the consumer can feel it to show that we are committed to it. for me, on my hands, i advocate all tools to root out systemic racism. >> has your leadership changed? >> i think my leadership has changed. i would agree with that statement of, me being one of the foremost figures in design as well as being a blackmail, there's a unique opportunity for me to see, to be a leading voice, to lead by example. my postmodern scholarship fund was announced as my wide sweeping effort to tackle that. also, rolling up my sleeves and showcase the work i believe in. i welcome the challenge. i'm taking it to heart. the listllaborated -- is ongoing. nike, evian, ikea.

you have the personality, kanye west, serena williams. you have showed at our institute in chicago, atlanta. you dj. i don't know where you find the ise a resume like that, what next? >> eradicating systemic racism and showing how inclusivity and a positive mind can be the forefront of creative business. if i look at a birds eye view of my career, i started from humble beginnings. i started in architecture. that was not adjacent to fashion. work, a lot of traveling, a lot of persistence, i have been able to achieve great things. for me, it's not about myself. it's opening doors for those just like me, behind me. making sure they can follow my path. annmarie: that was the artistic

director of louis vuitton menswear. you can catch more of that exclusive interview right here on bloomberg tv. read the article in full in this week's edition of business week. we're kicking it off in terms of pursuits and and fall fashion. the pandemic is shifting the fashion industry. manus: i want to know where you get the additional time. in.pack a lot annmarie: i do. manus: that's what we like. productivity. let's talk about this was economy. we've had this was economy numbers come through. 8.2%. that's not as bad as the market has anticipated. better in some of its neighbors. all data is appreciated. we will keep an eye on that.

private consumption collapsed by 9%. coming up, collapse at the top. quits after chief growing criticism that he broke the virus regulations in ireland. we will be live to brussels to discuss the latest story. this is bloomberg. ♪

manus: this is bloomberg daybreak: europe. france aren, and seeing a growing number of new covid cases. that as the outbreak among returning tourists and partygoers continue to expand. inly joined france and spain rejecting the possibility of reintroducing a nationwide lockdown. the italian health minister

ruled out the measure in an interview earlier on wednesday. >> i exclude the possibility of another general lockdown. i believe we are in a new and different phase with a much stronger national health service. turning to brussels. the european union's trade chief shut down yesterday after growing criticism that he broke fibrous regulations at home, my home country in ireland. now is maria tadeo. he was definite that he did not do anything wrong. what prompted the resignation? maria: that's right. there's a number of things happening. this is going back to a dinner that happened last week. he's irish, as you mentioned. this was non-essential travel. he should not have gone to this dinner.

he has been apologizing for a few days now. the pressure became too great. there's two elements to this story. one is the optics. the governments are telling people, don't go to gatherings. we need to be cautious about the virus. you have a very high ranking european official who decides it's ok to go to wait dinner. it is non-essential travel. you have this political side to this. the irish government has been pressuring phil hogan, saying he had undermined a lot of the government role, that this is sending the wrong signal to citizens. it has proven distracting for the european commission. a very difficult decision for phil hogan to take. you can argue, this was bound to happen. it's a very sensitive time. look at the virus. the optics are not good. annmarie: certainly not. you have citizens being forced

to self-quarantine. what are the implications for the european union trade policy? who will take his job? there's big implications. phil hogan had a big portfolio. this is one of the key jobs in the european union. we are going into the brexit trade deadline. we have a u.s. trade deal that still needs to be cut. we are looking into the u.s. election and potentially new trade deals that could come back to that. the timing is very sensitive. the european commission will have to reshuffle these top jobs. urszula vendor line with another headache. it has proven a huge distraction. the european union should be focusing on other things. the question is whether fonder line will change the portfolio. or a full reshuffle, with --

which would be very complicated. annmarie: thank you for joining us this morning. that's it for bloomberg daybreak: europe. the european open is up next. we have euro stoxx 50 futures a bit softer. s&p 500 futures softer. it's all about the risks this morning. there's a trifecta of risks as we head into the speech this morning at a virtual jackson hole. manus: the best thing about this week is we say the trifecta. this will go very well. we have you converted to trifecta risk. hole.about jackson what will philip lane say? you have a dichotomy between where the fed is and where the ecb is. have you enjoyed week one? annmarie: i loved week one. it's been a lot of fun. keep me on my toes. manus: i will be back on monday. as i said you every week, don't

break anything tomorrow. have a great show. annmarie: i won't. we will be digesting the final day of the rnc with president donald trump accepting his nomination. this is bloomberg. ♪

♪ anna: welcome to bloomberg markets: european open. i'm an edwards in london along side matt miller in berlin. matt: the markets say all eyes on the fed chair and that hurricane in louisiana. asian stocks slip as the global equity rally takes a pause. the cash trade is less than an hour away. here areouto