manus: it is "daybreak europe." global equities higher this morning. even as worldwide coronavirus infections hit 25 million. china pmi is a positive picture. approval from beijing for the

sale of tiktok's u.s. operation. this after china updated its export control, which the group says it will adhere to. calls forop diplomat new elections in belarus amid demonstrations against president alexander lukashenko. it is 6:00 a.m. in london. outside -- can the equity markets around the world follow this momentum? the data is good. good morning. do we believe in a leveling this steepeners?ade for annmarie: we are seeing that reflationary trade. we have risk assets moving higher. a lot of fed accommodation, but economists are skeptical. inflation get to 2% which for years you could not

get to? that is a question a lot of people are looking forward to the september meeting for. manus: and run it? 2.25%, 2.5%. i love the notes which talk about -- it is either a consensus trade, dollar weakness, we can debate that. annmarie: let's look where we are. csi 300 pushing higher. a very strong pmi number showing that rebound continuing in china. berkshire hathaway making a major investment in japan, something we have not seen from the firm in a while. dollar-yen this morning, 105.66. we spoke to mr. yen. we have more from him today. the euro stoxx 50 futures up. need to remind clients we have a

london bank holiday today. manus: yes. notting hill carnival has gone virtual. quite different. china's economic activity has continued to rebound in august as the pmi data in the service industry came in at the strong is level since 2013. service industries have been picking up as the government uses its virus control measures around the economy. pmiarie: manufacturing slowed slightly, but it is still expansionary territory. underlying data shows recovery is on track and demand is starting to provide greater support for growth. this morning, the global head of fixed income at thanks to bank -- at danske bank. it looks like a proper rebound in china. will we see this kind of rebound reverberate around the world? is this a case of chinese

exceptionalism? bit ine is a little china, i think the service pmi was important. i would argue to some extent , the q4 data because of the virus and restrictions, i don't think it matters much as long as we are looking for the world will be a better place in terms of economic data. we have the japan data as well which flew high on the back of august. the key thing is this. central bank differential trading, with this data from pboc, does this shift closer to neutral versus the fed which is in full on dove mode? >> i think there is. the fed is leading the pack. what it did last thursday is hugely important.

you can say it is going to be tough to live up to it. i do agree there is a difference in central banks. that will have to be related in markets. fed is a backstop for markets around the world, but we have seen the pboc interject and build up the domestic market. could we see more of that in china? >> i think we will. they have been quite clear, they want to support the economy. the economy is rebounding. done withink we are easing in china. that is hugely important for the world. ofna is one quarter ahead europe. the virus to china first. manus: whatever leveling we we can debate.

one narrative has become clear. the fx trade is the release for many economies. the yuan is getting stronger. i don't mean does matter, but to thet be a headwind momentum of recovery in china? >> i don't think we are there yet. the most important thing we are theing, that is good for market. i think china can live with it. it is not so much export driven anymore. as long as you get the domestic service part of the economy running, the yuan is relatively cheap. i would not be concerned. need to see more broad-based dollar weakness which i think we will. annmarie: you argue the fed

shift is more important than the u.s. election and the trade war. do you still agree with that? are you worried about this rhetoric between beijing and washington ahead of november? >> there is clearly a cold war between the u.s. and china. i also think what really matters head of the election is the trade war. that is where you have some very tangible. and is the reason why -- think on other things, for me, the u.s. election is more noise than economic differences. of course there is something on the fiscal side. i still think the fed is more important in the u.s. election than u.s.-china for markets. what is also important is any news about the vaccine. >> we still don't have a vaccine

yet at the moment. that is going to leave an indelible scar. talk about the dollar in the moment, if there is prevarication. a quick thought. you talk about the yuan against the euro. seeing the foothills of dollar weakness. they call for a stronger taiwan dollar, stronger you want, and stronger won. do you subscribe to the consensus that a softer dollar gives us a pan asia fx base? >> yes, i think it is huge. i have been in asia for many years in my career. asia is coming out of this crisis reasonably well. i think china is doing well. think asia can deal with it.

growth in asia is more of a structural thing. it is very much led by dollar weakness. manus: we will pick up on that theme and how dollar weakness may last the election or not. by tens will need the chinese government to approve the sale of tiktok. artificial intelligence technologies were added to the export control list. while it does not explicitly mention the outcome of the new restrictions cover tech. the new rule is aimed at delaying the sale and is not an outright ban. jodi schneider tracking this story. failing miserably i have to say. how do the rules affect the sale? >> it could very much affected.

used in tiktokis and requires government approval for any deal. people familiar with the matter his book to bloomberg say the spoke to bloomberg. president trump at first he gave a deadline. we have not heard a lot about that deadline lately. six weeks, which would take us up to next week, or mid september. microsoft and oracle have bytedancebids to while another asset management firm is said to have made a pitch on friday. fors right in the middle tiktok u.s. operations. annmarie: there is a great opinion piece saying this is

like someone trying to buy kfc but told they are not allowed to saucehe colonel's secret of herbs and spices. what implications could these rules have going forward? >> that is an interesting analogy. basically, how this is going to work, the chinese government is going to require such approval, it will make it very hard to sell these kinds of companies. we can expect more heated exchanges between president trump and chinese officials on this because president trump initially set off this matter when he said he was going to ban tiktok in the u.s. out of national security concern. inn microsoft already negotiations, he said he would allow a sale, but it had to be quickly. the clock is ticking and we don't know whether this is going to be completed.

and if they can't, what will the u.s. do? annmarie: thanks so much. certainly the clock is ticking for tiktok. thank you. i have to ask quickly, how are you getting on with your new tiktok? it's not going well. i cannot find an identity with the bloomberg band and me -- brand and me. they are not openly distribute of. -- distributable. you know the anchor on cnn? i really want to be him. 177,000 tiktok followers. if you can come up with an idea, send it through. annmarie: there is this niche. there are young traders who want to get in to the market, robinhood traders, looking for people to explain the market. if you can explain what is going

on, i think that can be your niche. manus: that could be. by the way, respect. i remember max from 22 years ago. i'm going to educate the robinhood traders of the world. off you go. annmarie: this weekend we saw the third death in less than a week amid racial inequality protests in america. a man was shot to death in portland, oregon saturday night. supporter of a right-wing group of counterprotesters. donald trump tweeted his condolences and plans to visit kenosha on tuesday despite the objections of the state governor. in the united kingdom, lawmakers are criticizing the idea of increasing taxes to plump the country's budget deficit after reports the treasury is considering the move. the telegraph says officials are

trying to raise 20 billion pounds per year. thousands gathered in belarus yesterday capping a third week of protests against president alexander lukashenko. the european union is calling for new elections, rejecting the leader's claim of a landslide victory. russian president vladimir putin has invited him to moscow to meet in the coming weeks. 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. covid-19 cases surpassed 25 million globally. india set the record for single day infections, becoming the epicenter of the pandemic. we will have the latest next. ♪

annmarie: good morning.

the u.s. fda has promised transparency in review of a potential covid-19 vaccine. commissioner stephen hahn told bloomberg data alone will drive any decision on clearance made by the agency. covid-19 cases in the u.s. are approaching the 6 million mark following outbreaks on college campuses. india has become the latest epicenter of the pandemic as it sets the global record for single day infections with over 78,000 cases recorded yesterday. thomas, we have this ongoing issue. a little bit of good news on the vaccine front. we need validity on new stories. to the back to the fed, the core of your narrative through the first discussion that we have, do you believe we are on a

re-inflationary cycle? evered is not really achieving the pce it wanted. will ait take us to the promised land? >> that is the $1 million question. the fed will do whatever it takes to try to solve that issue. in september they are going to -- it is a little bit more uncertain. i think the market believes they are going to deliver -- that is important. we may see a setback. with the global recovery, the fed doing what they are doing, and the hope of a vaccine , i think the reflation trade is

still alive. annmarie: what tools do they have left? >> that is what we need to think hard about. they are going to do more qe. think -- and that is different . they are going to clearly signal we are going to administer the current level. i agree it is not easy. some of the structural things driving inflation, but they will do what they can. i'm not hundred percent certain you can say they will deliver on the target. i am certain they will try. pimco believe in them.

30's?oes it do to five what does it do to the curve? the debate is you need breakevens to validate curve steepeners. does that make sense to you? more qe, curve steepeners? >> that is the tricky part. they do more qe in the long run, that will depress interest rates. what will dominate is the rising inflation expectations and commitment to do whatever it takes. of structural trade in terms 0.2 or even 1030, that is the right way to look at it. move in ton a decent jackson hole. rise of had the

inflation expectations. normally yields would move a bit higher. real interest rates getting lower, normal yields getting higher in line with what we have seen. convergence of those two. thank you. breaking news coming through. this is netflix. this is on the biotech side of the business field. 35 --re going to pay $34.50. 174% premium for the close of the 20th of august. this company, it produces allergy prescriptions for kids. it is a deal for nestle. $34.50 per share. annmarie: we will see how the stock opens in one hour, 40 minutes.

especially given the fact the ftse 100, it might be abused or not for exchanges in europe. coming up, betting on japan. berkshire wagers $6 billion on some of japan's biggest trading companies. ♪

manus: this is "daybreak europe." storing aftero berkshire hathaway declaring a stake in five japanese trading companies valued at $6 billion. the $6 million man warren buffett. good morning.

what is the trait about? >> nothing like $6 billion to kickstart a monday. warren buffett says he's going to participate in the future of japan. other shareholders in these companies would also be delighted when you have a look at the move in share prices today. has acquiredhaway stake in mitsubishi, mitsui, adding to his wager on the commodities sector. the biggest foray into it is second-biggest economy at a time when we were talking about what the economy looks like following the resignation of prime minister abe. chart, see on my machinery and chemicals outperforming a lot of these other companies buffett has been investing in. also trading less than bulk value and offering a higher dividend yield.

when it comes to the broader market, we have been seeing very strong moves coming through in japan's equity market today. we look in u.s. dollar terms about the momentum in the nikkei 225, getting back towards its heyday of the late 1980's and early 1990's. really just giving a positive impetus to other investors wanting to get into japan's market. where you have the $6 billion man backing large trading companies. annmarie: thanks so much. bank isarr at danske still with us. i want to ask you about japan. what does post-abe japan mean? >> for fx? assets in general.

>> i think it is important. mics, itsay abeno provides us uncertainty about what is going to come next. hopefully the next one coming of trying torms stimulate the economy. it creates uncertainty. i would see it as a negative. he has been the one pushing this. manus: as we go toward the u.s. left, would seconds you hold dollar-yen or gold? >> i would position for dollar-yen lower. thank you so much.

are live to belarus next. ♪

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annmarie: good morning from bloomberg's european headquarters. i'm annmarie hordern with manus live from dubai. global equities broadly higher this morning even as worldwide coronavirus infections top 25 million. china pmi data with services looking particularly strong. china updated its export control

list with -- which bytedance says it will adhere to. foreu's top diplomat calls negotiations in belarus after demonstrations against alexander lukashenko. good morning. the fed continues to drive markets in the yield curve as well as the dollar. we have continued divergence from the financial markets and the real economy. for me, that idea came into place friday. mgm had more layoffs. capital one one is capping individual credit limits. the fed remains more accommodative to companies. you see this divergence between the real economy and the financial markets. this is something to be looking at as we go towards friday's job number. the report friday will be important.

powell.k to the fed not actively concerned. deals.e of let's check again. sweave really going after de. you are looking at around $6 million as an enterprise value. $2.6 billion. they tried to do this deal. risk on, equities are up, china data stronger. looking at the services data since 2018, you are looking at the strongest manufacturing data out of japan since 1958. the nikkei up 1.25%.

our guest host this morning from danske says you want to be longer the yuan against the euro. up 0.3% on commodities. steepeners will come. the fed will give more qe. important, soe says the guest host. we very disingenuously cut you off when the commercial break came along. to you was about the u.s. election. how do you want to play that? we are in a new dollar trend, so everyone tells me. in the moment of prevarication or procrastination in the u.s. election, do you want to belong the dollar or the end? -- the yen. ?

think broad dollar strength will build for a weaker dollar heading into the election. uncertainty, is the election rigged, all these things which can happen, there is a risk, the dollar may strengthen. i think the yet will strengthen more. i will be looking for dollar-yen. the dollar has had most of its run. you have seen the real interest rate in the u.s.. we have inflation expectation higher but also normal yield higher. jpm had a note saying if abe was to resign and president trump would lose the election, the yen would go to 100. we heard overnight in asia programming, 100 on the pair.

is that where it is going? >> i do not think right now, but i agree that abe getting out of japan, that is bearish for dollar-yen. qe forbeen pushing for the central bank doing what they have been doing. you may see a higher nominal interest rate in the u.s. that has been an important ofnge since qe in the end march. manus: a little bit of breaking news on philips. they still see

modest full-year comparable year.growth for the they are cutting their full-year adjusted abbott the margin ta margin outlook. headlines.he top keep an eye on that story. new guidance from philips. what a weekend for protests in belarus. annmarie: certainly. thousands once again took to the streets this weekend. the third week since protests in belarus demanding alexander lukashenko resign. over 100 people were arrested. meet putinplans to in coming weeks. maria, another week of protests. the question is, will lukashenko

step down? >> this is the third week since the election happened. thousands of people in belarus still say it was not a fair election and they want him to go. to answer your question, he would say no. he is still hoping there will be some type of intervention coming. his view from russia and vladimir putin -- what is interesting is putin has said reelection -- there is concern of military intervention. the european union repeated the images we are seeing do show the belarus and people want to express themselves in a vote that is legitimate. the eu repeated what had been saying. the election was not transparent. protests,ing

lukashenko not going. the eu and russia are not making any significant moves at this point. manus: good to have you with us this morning. where are we on the escalation of sanctions from the eu? said 30's toeady be action -- there needs to be whoon against people who participated in fraud. the eu foreign diplomatic chief said in an interview for the eu to be credible, sanctions need to come quick and the need to happen. they have to go hand in hand. this is not just about saying what you did was wrong. you have to show the eu is willing to go. on a different note, emmanuel macron over the weekend said at

all costs, we need to avoid something that looks like ukraine where you have two factions that looks like civil war. tadeo tracking the story in belarus. 6:38 in london. credit suisse aim to double their headcount in china over the next five years. the firm is accelerating pursuit of wealthy clients in the nation. a 100% increase in revenue. credit suisse want asia to make up to 25% of overall revenue. it is 17.5% right now. this weekend, berlin faces protests against the government's coronavirus restrictions. marches turned violent on saturday. a forecaster estimates 38,000 people took part.

some protesters broke through, reached the stairs of the berlin reichstag. the head of the u.s. food and drug administration's promising any review of a potential vaccine will be transparent. speaking to bloomberg, the commissioner says the decision will be driven by data alone. president trump has said the fda is moving too slowly. pressure will cause them to rush the review of that vaccine. 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. annmarie: japan could have a new prime minister within weeks. the latest on a long serving leaders rapid departure. ♪

manus: this is "bloomberg daybreak: europe." annmarie hordern in london. the political situation in japan, the ruling party is set to decide the process for a new prime minister tomorrow after shinzo abe resigned for health reasons on friday. man isabe's right-hand the favorite for the top job. experts bloomberg has spoken to say. >> abenomics has succeeded and whoever takes over will continue this process. >> continuity is key from a market standpoint, from a yen

standpoint. overwhelmingly dovish monetary policy, bond buying orchestrated by governor kuroda and the bank of japan, he still has a couple of years. uncertainty may raise concerns in markets about a revolving door in japan's leadership. >> i don't think there will be discontinuity. there is not much room to from the mainstream reform strategy. >> whoever takes over from prime minister abe is likely to maintain that crucial

relationship between government and central banking. annmarie: joining us now is stephen engle. are there any dark horse candidates? >> there are some. 71-year-oldout the right-hand man of shinzo abe. if you want continuity that is probably the guy. there is also the former defense minister. he is the most popular among the populace, but that does not translate to an election victory because this is not a general election. this is an insider election coming up two weeks from today. as far as dark horses, one interesting dark horse would be the current defense minister. he is fluent in english, he is a georgetown graduate. he laid out a plan for the boj to exit easing monetary policy.

he can also be more hawkish with china. if you want to talk about real dark horses, the environment minister. that is a familiar name. he is the son of the former prime minister. he is a rising political star. he is 39 years old. he is not joining the race yet, but says he would back the man i just mentioned if he does enter the race. manus: from a market point of view, abe's successor, it is about the continuity of abenomi cs. confidence in business in japan. how sure can we be of abenomics mark 2? >> if you look back over the last eight years it has a checkered past, but it started out well. monetary easing, fiscal policy, and regulatory reform. the last year, especially the

last eight months, we have seen the coronavirus take wind out of shinzo abe's sales, literally, put everything into a tailspin. the boj has had to shift from providing inflation to throwing lifelines to businesses. inflation is flatlining right now. deflation could accelerate after the coronavirus decimation of the economy. here, households and companies are back into savings mode again. there will not be a spending bonanza from the olympics that have been postponed. it will force the government to borrow heavily. by default, they may have to continue the process. where does this leave structural reform? is that on the back burner with the economy hit so hard by the pandemic? >> i think you are right. ultralow range and bond buying rally in stocks was driven naturally with --

initially with abenomics. they did not embark on the big structural reforms. wages did not go up enough to boost consumption. abe supported getting more women into the workforce. it was popular. this coronavirus, they are not even out of it, they are going through it, it is going to be hard to convince the government and the companies that structural reform is a priority over profitability and getting the economy going again. engle on then takeover from shinzo abe. up, proposals for a fintech company unit. we look at the rise of the german payment company wire and what is in store. store.

annmarie: this is "bloomberg daybreak: europe." wirecard's breakup kicked off proposals. wirecard u.k. will sell its asset and transfer client relationship to another company. deutsche bank has submitted a bid for assets. let's recap the timeline of the wirecard scandal. the payment company entered the dax index, to the arrest of the ceo in june. >> wirecard was a german dream. to the country's beleaguered finance industry to show it could give tech.

in two years wirecard was insolvent and its ceo under arrest. celebrations were soon punctured. the financial times report an executive in the singapore office suspected of forging contracts. bearish bets pilot. a financial regulator bans shorts. the first single stock in germany. the ban was lifted but by the fall of 2019, more doubts over practices piled up. to calm investors, wirecard hired an independent auditor. shares jumped on the announcement. the final report, something is missing. over $1 billion in revenue. the reason, internal shortcomings. wirecard's ceo rejects reports of accounting irregularities, but by june, the company's defenses are starting to unravel. prosecutors launch a criminal investigation and police raid

the company's office. wirecard admits the missing 2.2 billion dollars of assets probably does not exist. the next day, the ceo was arrested. -- with the political repercussions still playing out, accusations of being asleep on the job. finance minister roll up schulz has called this a wake-up call cholzl off schulz -- olaf s has called this a wake-up call. wirecard could prove to be a political nightmare for berlin. manus: joining us now is our senior editor. good to have you with us. let us turn our attention to germany. what is the latest in regard to the wirecard assets?

benedict, i think we possibly just lost benedict for the moment. we will try and get benedict back. annmarie, there are three big names on the equities narrative this morning. nestle agreeing to buy ammimmune. to cough up 3.8 million. two deals in that region. you have philips as well. annmarie: cutting their full-year adjusted ebita margin outlook. they asked to deliver modest comparable sales growth. those are stories to watch ahead of the open. it is going to be heavy on the continent given it is a bank holiday in the u.k..

i was struck by the viola deal. they have been trying to do this for eight years. they finally were able to get it done. a leader in waste and water in terms of -- manus: let us pick up on the philps news. what i found fascinating is philips have basically warned us they are going to have a tough time hitting their margin numbers. when you dig into the story, this is about not being able to sell ventilators. covid, the middle of saying we are going to supply 37,000 hundred, these are ventilators. they were supposed sell those to the strategic national stockpile in the united states of america. the department of health and human services partially

terminated that contract in april 2020. this is about cancellations in the middle of the pandemic when the numbers were rising. who knows what the reasons were behind that. annmarie: that is a lot of deliveries. i guess they were hoping the department of health will not need them. of course we still see the coronavirus through the united states and other parts of the world as well. listen. you did not get to talk about it yet, but warren, $6 billion man, what a way to go. the silent but deadly position. annmarie: we have seen a lot of foreign investors flee japan. going into buffett japan the most he has ever gone in for berkshire hathaway, will this change other investors'

outlook on japan? the european market open is next.

♪ matt: good morning. this is the european open. i'm matt miller live in berlin. cash trade just an hour away. here are your top headlines. bob it gets big in japan. berkshire hathaway build 5% stake in five of the biggest japanese trading firms. this is candidates lineup to replace shinzo abe after his shock resignation. ready to come about.