francine: trump in kenosha. the president condemns anti-police rhetoric a week after two protesters were fatally shot. rival joe biden accuses him of failing to meet the moment. acrosso briefly breaks 1.20. candle -- scandal. enforcement proceedings against credit suisse over spying on former employees. good morning, everyone and welcome to "bloomberg

surveillance." i'm francine lacqua in london. this is what your markets are looking at. markets looking at the credit suisse spying probe escalated by the regulator, partially looking at that news. european stocks opened pretty strongly higher. the euro falling, futures advancing. we are getting data on jobs and the economy. if you look at the adp employment report, it may signal that the pace of employment in the private sector may be bouncing back. coming up, despite a bumper month for many stock markets, 50% of new money has flowed into fixed income. you can hear more about that on our new weekly show "etf iq europe," that starts in about 30 minutes from now. thes get straight to bloomberg first word news with leigh-ann gerrans. >> the u.s. economy needs new

theulus to rebound from coronavirus crisis according to treasury secretary steven mnuchin. he started a conversation with house speaker nancy pelosi amid negotiations on a relief plan, but he stopped short of offering a fresh proposal to try to break the deadlock. australia's economy contracted the most on record last quarter, confirming the first recession in almost 30 years. gdp plunged 7% for the first three months, about a percentage point more than actually expected. delaying the recovery is the ongoing lockdown in melbourne, the nation's second-largest city. in japan, prime ministers shinzo abe's right-hand man is the leading candidate to replace him, a sign the nation will stick to its economic strategy to get out of the crisis. yoshihide suga isn't ahead in opinion polls, but he has the

support of key factions within the party who will decide the succession. local media reports the contest will be held on september 14. china's charm offensive in europe may have backfired. the visit of the chinese foreign minister culminated in a tense exchange in berlin yesterday when he was confronted by his german counterpart for saying they would pay a heavy price for a visit to taiwan. would not beurope intimidated. global news 24 hours per day powered by more than 2700 journalists and analysts in more than 120 countries. i'm leigh-ann gerrans. this is bloomberg. francine: a week after two protesters were fatally shot in kenosha, wisconsin, president trump visited and applauded the police and national guard. the visit came over the

objections of the mayor and the governor, both democrats. the president did not meet the family of jacob blake, the man shot in the back by the police. president trump: the people of kenosha want change, they want to see law and order. they want great police force. they want people that are going to keep them safe where there houses aren't broken into, where they are not raped and murdered. that is what they want. francine: meanwhile, as the stock market continues to rally to record highs, november's election is a dark cloud, hedging against potential volatility does not come cheap. it is the most expensive event risk on record. donovanus now is paul from ubs wealth management. great to have you on "bloomberg surveillance" today. we look at the possibility of the u.s. election and the

outcome -- how will it change the u.s. economy? paul: i think the uncertainty is simply delaying decisions at the moment. for example, i think a lot of the dollar weakness is reflecting the fact that international investors are nervous about the outcome. will the outcome be contested? what will the electoral college produce for the presidency? what will happen in congress? these all make really quite big differences to the tone and structure of policy as we look forward. intonk however as we look 2021, almost regardless of the election outcome, we are likely to see a continuation of fiscal support for the economy. the uncertainty is essentially around what shape that fiscal support takes, but i think there is general recognition that the

economic bounceback we are seeing is going to fade as we go into the end of the year and there will be a need for continued fiscal support. it is really in the details that we have the uncertainty about the level of support the u.s. government is going to be giving the economy. francine: we are also getting some breaking news about yoshihide suga, a top aide to the upcoming japanese prime minister shinzo abe, formally announcing a bid to replace his boss. we understand from the party's powerful factions that they have indicated they could deliver enough votes to win the race. a top aide to the outgoing prime minister shinzo abe entering the race formally to become prime minister. i don't really want to talk about the u.s. election and the japanese election, but as we go into 2021, there is a lot of uncertainty out there, the election being one of them in the u.s., maybe something with

japan. in general, this second wave of covid-19. is it more uncertain now than we thought it would be or is it more stable, the outlook? that theould argue politics has got a shelf life. even if there is a degree of contest over the election, we are done with the u.s. politics by the end of the year. veryese politics is central. there is less political uncertainty there. i think when we look at the virus, the uncertainty about the pandemic has declined. this isn't because of uncertainty about the virus itself. the virus is still a concern. we have seen rising cases in countries like spain, but the fear of the virus has become substantially lower over the last few months. it is the fear of the virus that has the economic impact. i think because fear of the

virus is now clearly more contained, there is less economic uncertainty around the pandemic then we have had say three or four months ago. to thee: let's go back u.s. election. what is being priced in? would a second term of president trump be a shock to the economy and markets? the markets have probably increased the probability of vice president biden winning the presidency in november. i think that much is clear. the international investment community tends to look very closely at opinion polls and those have been giving vice president biden a clear lead, though the lead has come down in the last couple of weeks. i don't think the markets are definitively pricing in one outcome or the other. we have to remember it is not

just the presidential election taking place in november. there are tens of thousands of elections taking place across the united states, so the overall composition at a state level and at a federal level is something which is still uncertain. that does make a difference in terms of what it is you are going to be pricing in. i think markets are also expecting a certain amount of pragmatism of reaction to the economic circumstances that the incoming president is going to find themselves in at the start of next year and that is something that also has to be thrown into the mix. francine: where do you expect the biggest scarring to be in the u.s. economy? paul: the issue i think in the united states is at the moment we still have this lack of support with the unemployment ofefit ending on the 31st

july. that itself has caused some concern. my worry is that what we are going to end up with is being british i would term a sort of the lower middle-class, the semiskilled jobs being threatened by the situation. i think very low income jobs will probably fare a little bit better in the post-covid environment. higher skilled jobs tend to be a lot more flexible. it is that other band of jobs that i think is really quite vulnerable. if we start to see an increase of unemployment here, the risk is that a lack of flexibility in the labor force, a lack of flexibility around skills levels and so on causes those jobs to be permanently unemployed and that would be something that would concern. francine: paul donovan from ubs wealth management stays with us. coming up, the euro falters after breaking above the 1.20

dollars level. what is next for the shared currency? this is bloomberg. ♪ ♪

economics, finance, politics, this is "bloomberg surveillance." just getting some live pictures out of tokyo. this is because yoshihide suga, top aide to the outgoing japanese prime minister shinzo abe, has formally announced a bid to replace his boss. the party's powerful factions have indicated they will deliver enough votes to win the race. he will run to replace his boss as prime minister. he is also saying that he will

do whatever he can to continue prime minister abe's policies. we are separately getting breaking news out of deutsche bank. is alsof executive speaking to reporters and investors, saying the new strategy is working. this is the deutsche bank chief executive also saying there are measures needed to counteract the negative rates. let's get to the bloomberg business flash with leigh-ann gerrans. leigh-ann: a financial regulator has opened enforcement proceedings against credit suisse following a spying scandal that damaged the bank's reputation and led to the ouster of the former chief executive. formerlyr was appointed, but this latest move represents an escalation. the dating app that lets women make the first move, bumble is planning to go public. it could seek a valuation of $6

billion to $8 billion. it has not settled on a series of banks. blackstone took a stake in bumble last year. growthre sales to fund -- it wants to sell as much $5 billion in stock to help solidify its position as a global leader in electric cars. it comes as the world's most valuable automaker is seeing surging demand for its shares from retail investors. tesla is expanding with new factories in germany and austin, texas. that is your bloomberg business flash. francine: thank you so much. the euro is faltering after breaking above the key one -- 1.20 level. still with us is paul donovan from ubs wealth management.

iswhat point, at what level euro actually problematic for the euro area? paul: this is a complicated issue. thate to say i don't think the current level currently matters that much. we are not living in the 1970's anymore. as a result, what it matters to most of the time is corporate profits. rather than for the wider real economy. so, where you get very sudden moves, that can be very disruptive for companies, so a fast move would be something that would be problematic. value hovering around the in euro-dollar at the moment. so i don't think that the current level is particularly problematic and i don't think the move is also particularly shocking.

economist, he does not want a bigger move from here, but i don't actually think we are in a particularly bad place with it. francine: are you expecting euro to strengthen further? is this about euro strength or dollar weakness? paul: no, this is dollar weakness, i think. what we are seeing here is the classic issue. international investors in any understandays politics less well than domestic investors. this is just inevitable. locals understand the nuances. tend notonal investors to understand the political implications as well. november,on in leading international investors to say, we will wait and see. haveollar can't

international investors saying wait and see because the dollar needs international investment to finance the current account deficit the united states always has. this is giving the negative bias to the dollar at the moment. i think we will continue to see dollar volatility. i would be surprised if we saw the same scale of move we had over the last couple of months. francine: what do you make of brexit negotiations right now? how much is that going to hurt the euro zone? issue that wethe always have with the interminably tedious process of the u.k.-eu divorce is that always, always in europe everything gets decided at the last possible moment. when did europe ever forward plan anything? it has never happened. we know what is going to happen. at the very last minute there will be a conference of sleep deprived heads of government and

they will knock together some compromise. up until then, we will get this noise and uncertain the and certain rumblings of concern. i think as far as the general idea is concerned, the principle that there will be some kind of low-grade deal between the u.k. and europe is probably in the price and i don't think that that is necessarily going to be too disruptive in the near term. i think if we look to longer term taking the european union obviously does damage to the u.k. economy, but it also does damage to the european economy. it changes the tone of debate. it shifts the way in which europe is going to go. the anglo german dominance of economic policy. germany alone is going to struggle to get some of their views through. i would argue that some of those shifts in policy may not be entirely helpful to europe over the long term, but things can

change. we are talking multiple years. there is a lot of structural change in the global economy. europe may reinvigorate as a result of this. it is true to say that things like the fiscal cooperation we have seen during the covid crisis would have been a lot more difficult to achieve had the u.k. still been part of the european union. francine: paul, thank you so much as always. paul donovan from ubs wealth management. coming up, the swiss regulator escalates the spying scandal of thed to the ouster ceo of credit suisse. this is bloomberg. ♪

the financial regulator is escalating a probe into credit suisse. they opened enforcement proceedings against the bank on formerng employees. the scandal led to the ouster of the former ceo tidjane thiam. does the latest announcement actually bring us with the scandal? thanks, francine. you will remember this dates back to just about a year ago when we discovered that credit suisse had been spying on a former banker working for its arrival ubs.

we had gone through about a year now of their bank trying to put this to bed and move away from this reputationally, but now we will have a couple more months of this because the proceedings open by the regulator will take a couple of more months. the bank will have to contend with further results. finma tends to be a little less powerful than other regulators in other cases in other countries. they don't necessarily have the power to find the bank or individuals for -- fine the bank or individuals for bad behavior. the most would potentially be a band for five years from operating within the financial industry. francine: what are the reputational risks for credit suisse? >> this will continue to drag on.

ceo who hass new spent the year trying to restore in investors and analysts, which in the international community, to bring the bank back to what it stands for. that work has been a little bit overshadowed now by this latest news. he will have to keep working on that. he has done this with respect to the risk. he announced a little bit of restructuring, so that should help bring the bank to say, we are addressing the issues. francine: thank you so much. this is bloomberg. ♪ so you're a small business,

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everything you need to know about the funds. ♪ investors by bonds. european exchange traded funds over the past month for percent going into fixed income. month forbumper stocks, investors and europe after the technology rally is running out of steam and green investments in the black, a 12 straight week of inflows. will 20/20 be the year that the sector comes of age? so, let's kick off the program with a look at what has been attracting the money over the last month?