trump in kenosha. he condemns anti-police rhetoric after two protesters were fatally shot. breaks 120. the single currency briefly crosses the key level for the first time in two years. swiss scandal, the financial regulators enforce regulations on credit suisse. is a bloomberg surveillance. i am francine lacqua in london. kaylee, it's great to have you on the program. u.s., politics, and european finance as well. to be: politics continue front and center stateside, both what is going on in racial justice and to stimulus. we will have to wait and see. francine: it will be interesting to speak about the stimulus and how that changes monetary

policy. let's get to the bloomberg first word news. morning. steven mnuchin says the economy urgently needs more stimulus to rebound from the coronavirus. he says he initiated talks with nancy pelosi try to negotiate. going again.ations republicans have been putting together a narrow relief package. he says he wants a much larger deal. president trump has condemned what he calls anti-police rhetoric while meeting with police in kenosha, wisconsin. he toward damage caused by demonstrations after a man was shot in the back during an attempted arrest. two demonstrators in kenosha were killed in the protests. a warning from the pentagon. china is closer to joining the u.s. and russia as the only nations capable of deploying nuclear weapons on land, in the air, and at sea.

china has been upgrading its strategic bombers to carry a nuclear payload. has announced his has enoughto -- suga votes to win. global news, 24 hours a day on-air and on quick take, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. kaylee: thank you. stockse: the european expanding gains that were seen for u.s. futures. they are seems to be factored in the market hope that there will be the report on jobs in the economy later today that will give a bit of support to the dollar. that's very different to what we saw yesterday. the euro actually falling further below 120, a level it

reached for the first time in over two years yesterday. i'm looking forward to speaking euro levels and getting thoughts on what we heard from the bbc's chief economist. kaylee: futures are pushing higher in the u.s. as well. s&p 500 futures out by 25 points, outperformance no surprise from technology with futures up 1%. is it a weaker euro or a stronger dollar? the dollar is higher against everything in the g10 space. .3%.off session highs another risk asset benefiting from the risk off tone. $44 a barrel. francine: if it is euro strength or dollar weakness. let sorted out with the former ecb president. he always makes our shows better.

we are delighted he joins us. there's a lot of talk if the euro is too high. i don't know at what point it becomes problematic, but there were warning shots from the ecb chief economist saying this could mess up monetary policy. does it? important to is consider the euro went up vis-a-vis many other currencies around 12% in a certain period of time. the euro does not need that taking into account the difficulty of the current situation. in the u.s. we had a growth and catching up process in the time of pandemic, which takes time, and we are not in the best situation possible. i am a little bit hurt, not by the fed itself, because the

language of the fed is very but from time to time in executive branch the u.s. is talking down the dollar, which is not appropriate, obviously. there is no place for that policy where we are, and i hope they will be as responsible as of thee in sticking executive branch of the united states. francine: what is the level that becomes uncomfortable for the euro? jean-claude: i would not pronounce any level. change. 12% is a big commenting on such a move as brutal myself. think what we need is

stability, and certainly not talking down the main currency, which is the dollar, which is not appropriate. francine: you are very clear in your comments. policy,e, given the fed will the dollar weaken even without that rhetoric from the executive? confess, to i must ae extent that there is dimension associated with the recent decision of the fed, i think it was overdone by the market. of fed, if we do not get out the present situation we will continue to have an economic policy, but the economic policy of the fed does not mean negative interest rates. you have negative interest rates. the fundamentals are below all of the noise we are hearing. in my opinion there a good case

certainly not changing the dollar-euro position based on the recent decision of the fed. i don't think there's a case for that. i'm sure that the market will realize there is no case for that. kaylee: a stronger currency can be a hindrance for inflation. in ther prices euro falling for the first time in four years. how big of a problem does that create? jean-claude: the problem of the same asore or less the all major central banks. we have inflation that is much too low that creates two problems. we have the risk of maturity should of deflation, the ultimate risk that we must avoid.

second, it calls for very low interest rates which have their if drawbacks, particularly you are nighttime when you need more commodity purchase. is the situation of major central banks, the ecb has to cope with that situation. it does it as well as possible. i would say my successor is doing as well as possible. the governing council is doing as well as possible, but the situation is demanding. we don't need a change in the overall condition that would be conducive to less growth and less activity in europe. , given the trichet fed's move towards average inflation targeting, does that add pressure for the ecb to follow the fed blueprint on that

front? jean-claude: it will take a little time. i would say seeing it from the european perspective, the idea of judging on the average inflation, the meeting the objective, is something that's natural in europe. myself, i remember going to various capitals, including berlin, in my time. ours claiming we were up to responsibility when we were delivering more or less 1.9% average. towas natural in europe reason on an average basis. also the fact is in europe in principle we consider you mustine inflation look at, because it's the

inflation our fellow citizens are seeing. the other is a concept not seen by the general public. if you are following headline inflation, it goes up and down and you have necessarily some kind of averaging to operate. all that said, we will see with ecb will do. what reassures me in a way and what has been decided in the is 2% was not abandoned. academics were recommending to go down to 1% or 0%. is better.ng 4% which in with the 2%, the u.s., the u.k., japan, and the ecb, which is a first. the fact that all the central banks, including in many

respects the bank of china, have this kind of reference in mind is in my opinion helpful in terms of global monetary stability. , when youmr. trichet look at the specter of deflation, we started lockdown looking at all this stimulus thinking that it could lead to strong inflation, maybe even rapid inflation. is the risk deflationary holds in europe becoming more like japan? jean-claude: with what we know in all the advanced economies is japan was very much ahead of the other major economies, but we are all in that situation, which is very well summed up by jay powell. we have growth potential which is significantly lower than before. equilibrium interest rates that are much lower than

before. third, we have inflation which remains extremely low, reasons,y low, for all particularly the two reasons, the maturation of deflation of risk and the too low nominal interest rates that i would say are engineered by that situation. that is the key situation and all the advanced economies. it calls of course for getting out of that situation. the central banks are doing all they can in my opinion. much bolder than what was for , in particularn the ecb proving the capacity to react to fickle situations. situations. the problem is the pandemic at moment.ast

soon as we have fought successfully against the pandemic we will have the problem before of the pandemic. the problems we had before the pandemic are the problems we just summed up. we will see exactly how to get out. in my opinion, we will get out but thesituation, central banks alone cannot change the growth potential, they cannot change the real neutral interest rates. that is the responsibility of all the partners. we have the main problem of the phillips curve. i can elaborate on that if we have time. francine: we will, actually. jean-claude trichet stays with us. --ing up this is bloomberg. ♪

francine: this is bloomberg this is bloomberg. ♪ -- this is bloomberg surveillance. ,e were talking about inflation talking about the euro strength, we started by talking about the phillips curve. if you look at what the phillips curve has told us so far. this is the economic concept that states inflation and unemployment has a stable and inverse relationship. how will that change because of the crisis? jean-claude: it looks like it changed dramatically since the crisis. we turning point is around

men and a couple of years after. economies,vanced even with full employment, you don't have the inflation pick up that you would normally expect. that is a major problem, because of thects the full body central bank monetary policy. we were speaking of that moment ago. course, it's probably due to a number of factors, and academy has worked on that. globalization, new technologies, but i would stress that in most countries the bargaining power of labor has diminished. that's obvious. the economies

problem, but also a social/political problem. countries atof full employment. it is not appropriate to suggest wages andelevate the salaries, because it's not in line with the idea. if those countries like japan and u.s. before the pandemic, germany and the netherlands before the pandemic, and other countries, it's abnormal in my opinion that the very weak callsning power of labor and salariesages to be that flat. change, wet must have to change, because it's not an economic problem, it's a

social-economic problem. we see on the social/political dimension it is more and more of the major problem. we solved that problem progressively, but we are just in the middle of this problem, and the pandemic is aggravating the situation, because it's a instead of asking for more. kaylee: coming out of this pandemic, let's talk about other changes. has the function of monetary policy changed? ? the exception area monetary policies going to have to become semipermanent? jean-claude: it is true the new normal was very different from the previous normal.

it was true we have to take into account the extraordinary capacity of the central banks to be accommodating in use -- in utilizing. we had prices been mandate. as a primary let's not forget once you obtain are in ability, we present situation where the problem is to go up to the level of objective, then you can accompany all other policies of the european union. this is the treaty. priceeaty says clearly stability, the central bank assist them, ecb, all the other policies of the system.

from time to time we are called to say in the u.s. they have two objectives, and europe there is one objective. one objective, but again, the mention is in the treaty that when this objective is obtained, then you have to accompany the of the policies. , thank you trichet for joining us again. jean-claude trichet, the former ecb president. speaking to bloomberg. this is bloomberg. ♪

bloombergis is surveillance. continue to climb higher. s&p 500 futures up. one percentage point for the nasdaq. a looks to be a positive open yet again. francine: the dollar actually strengthening zero point 3% against a group of its biggest peers. we had a conversation with mr. trichet about that. euro strength, we still have it, but not compared to yesterday. 1.20,ro falling below the level it reached yesterday.

to sell itsaring first solvent bonds. 2% higher makes up for some of the things we saw the last couple of days. industrial metals in europe climbing. kailey: we are certainly keeping an eye throughout the session. coming up, our interview with the ceo of daimler at 8:30 am in new york and 1:30 p.m. in london. this is bloomberg. ♪

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are the most efficient. this is what he's facing across the business and wealth management, too. kailey: does this impact his ability to lead the bank going forward given that he has inherited at least one scandal? >> he has come in and made quick steps to address the structure of the bank, which shows as he is keen to put his mark on the company. at the moment he is well stedrested but -- well entru by the board. francine: you have been talking for a couple of minutes and i haven't asked if we will see mergers and acquisitions in the banking center. i'm losing my touch. this is something we talk about day in, day out. does it spur spu further acquisitions? >> covid-19 and the hit to the reverberate through the financial services sector at when thet government supporting measures end. force banksevitably

in europe to look at consolidating because there are too many of them. that will probably happen first, then markets, then providing that wille progress, probably spill over to the more international consolidation. for those deals that happened, there has to be more clarity and big of ay as to how hit the pandemic will have on the industry. we probably won't know much about that until well into next year. francine: you have been writing amazing pieces for bloomberg opinion, one that caught my eye was britain bankers are having a terrible time. brexit may also take a terrible toll on them. what are you working on from now until december? the u.k. banks versus the central european banks, versus the swiss, for something else? >> critical over the next we

humans will be watching the gdp recovery rise across the world, and gauging from that feedback into the banks. the u.k. has additional complications of the brexit negotiations, the repercussions on the economy could be deeper here. hence we are seeing that in the banks, which are underperforming compared to other european lenders. that could be one to watch. kailey: in the u.s. we are seeing bank lending tighten and a time that many consumers need access to credit. are you seeing the same thing in europe? is something the european policy measures have tried to address, the ecb and cheaper lending to the banking industry have really tried to prevent those conditions tightening. it is too early to tell.

we will see more over the next three months, but the early implications is clearly this is a concern. kailey: thank you so much for joining us. it is time now for a check on the bloomberg first word news. ritika: it was a record-setting month for joe biden. bloomberg has learned they will report raising more than $350 million in august, the most ever in one month. the trump campaign has not announced its numbers for august yet. a victory for the democratic party's progressive wing in massachusetts. a hotly contested senate primary. aoc.s backed by ofnedy is the first member his well-known political dynasty to lose a race in massachusetts. president trump claims thousands more people have died from the coronavirus in china then the

admits.nt he did not give any evidence and it interview with fox news. china reported 4700 deaths. the president says the death toll is really in the tens of thousands. the trump administration will use quarantined rules to prevent an eviction crisis to temporarily halt evictions of renters earning no more than $99,000 a year to prevent the virus from spreading. congress can put evictions on hold, but that authority expired when no decision was reached on a coronavirus relief bill. global news, 24 hours a day on-air and on quick take, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. francine? francine: we will have plenty more on the u.s. election. we will listen to the london school of economic professor of international relations. we will talk about president trump. we will talk about joe biden. this is bloomberg.

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kailey: this is bloomberg surveillance. francine, we are talking politics? president trump is framing the protest in kenosha, wisconsin as a matter of law and order. joining us is the london school of economics professor of international relations. order messaging resonating with voters or ringing hollow? >> i think it is actually a little early to tell, but so

far, when we look at the poll numbers, donald trump really not getting a lot of traction. he is really trying to reframe the election, to move it away from a conversation and contest about the pandemic and economy, but he has been hammering on this issue ever since the killing of george floyd in may of 2020. he has gained may be a little bit of traction, but not the kind one would expect. beforeu look at the poll the convention when law & order was really framed by the republicans at their convention and today, there's not much change. trump has moved up a little in some battleground states, but so has joe biden. financial least four

markets seem to say that the race is tightening. do you not see that? peter: i have been arguing for a long time that the race will tighten simply because the country is deeply polarized. there are republicans who will come off of the fence and back donald trump, i think. still, it's a very big margin to close. if you look at the polls, right now there's not much change where they were two weeks ago. i think this is going to be a tight contest. it will tighten. i am not suggesting biden will butaway with this contest, i think the messaging trump is pushing now is tricky. thereht work for him, but is a decent chance it won't.

remember, he pushed this in 2018. migrant caravans coming across the border. republicans got hammered in the midterm election. 3, i am: come november a u.s. citizen, do i think about law and order, jobs and the economy, or simply how covid was handled? think that ise, i what this contest is about now. which one of these narratives will prevail. if you're looking at the pandemic and the economy and trump's handling of it, or will it be about law and order and trump's efforts to play that card? i think probably the way to think about this is for different parts of the american electorate, different messages will work. trumps bet is that the law &

order message will work with blue-collar voters, and especially those blue-collar voters who did not vote in 2016. there are plenty of them, and they are in key battleground states, like michigan, pennsylvania, and wisconsin. prettysaid that, it's clear from the polling that this is not working with white suburban voters that trump basically had on board in 2016. that is i think the question. if this works for part of his constituency, but doesn't seem to work for another part of the constituency, and i think it's too early to tell how it will play out. francine: is it going to be about the swing states? what can you tell us about the swing states? how much does it depend on whether people get the checks they need through the post soon? is a first on the

swing states, they really matter. the question is, which are the swing states? you're normally talking about pennsylvania, michigan, and wisconsin, states that donald trump picked up in 2016. but right now there are a couple of other states really in play in a surprising way, like arizona, where polls show they are leaning towards biden. it's important to remember that if trump holds all of the states he held in 2016, including arizona, he doesn't need to win wisconsin, pennsylvania, he only he to win one of them, but has to hold arizona, florida, north carolina where the race has really tightened. there is a bill coming out of the senate early next week. kailey: that bill is going to be

pretty skinny, i far cry from what the democrats in the house were originally proposing.there seems to be consensus more needed. is what is making it so politically difficult for them to find a compromise? peter: you have plenty of republican senators who do not want to be associated with yet another stimulus package. frankly, the republican caucus, at least in the senate, is divided on this issue, and this is presenting a real problem for o'connell. i think the administration itself is divided. it seems the chief of staff is very much opposed to a package that is anywhere near what the democrats are pushing. it seemed less clear to me that mnuchin, the secretary of the treasury, has that particular view. there is some divisions within

the administration and within the republican caucus. that has made it difficult. as wek the question is get closer to october jobs reports where republicans move. kailey: i will be keeping an eye on that in this jobs report as well on friday. appreciate your time. power,oday on balance of the new york presbyterian president and ceo at 12:00 p.m. new york time and 5:00 p.m. in london. this is bloomberg. ♪

ritika: let's get your bloomberg business flash. its cars by u.s. consumers rose in july and august even after supplemental unemployment benefits expired. rose 26% inspending july and 24% in august, upsetting and the 8% decline in spending on visa credit cards. wells fargo plans to keep most of its employees working from

home through at least november 1. it does not know when it will return to a more traditional operating model. wells fargo has 200 66,000 employees. 200,000 have been working from home. homebuyers are still hesitating. contracts to buy co-op apartments in manhattan plunged 26% in august from a year ago pending condo deals plummeted 38% according to a report. meanwhile, co-op deals nearly tripled in brooklyn. demand soared in the suburbs, too. that is your bloomberg business flash. reporting a smaller than expected drop in earnings. bloomberg spoke exclusively to him. >> we are seeing a lot of

adapting to people the current pandemic environment. more homeve seen is gatherings and at-home consumption offsetting to some what has declined significantly. people wanting to shop less. frequency has lowered. and spending less time in stores. l, becauseseen as wel people were not able to physically connect or travel to meet up through social gatherings, we have seen virtual social gatherings with people having drinks and cocktails

through a social platform or zoom, for instance. >> i've heard a lot about the zoom happy hours. when do you think we will get back to pre-pandemic levels in terms of social gatherings, going out to bars, going back to restaurants, because that would clearly be a big positive for your company. >> not only would it be a big positive for our company, industry, and customers, the restaurants, bars, and nightclubs who are struggling and have suffered a lot. some of them, unfortunately, will never reopen. they have gone out of business. the one thing we know is they will all reopen -- the real question is when. i believe there is the regulatory environment. wherel see some markets

closures are mandatory after specific hours. within some countries, areas, restaurants are asked to go back to lockdown as well. happen,o things need to first of all the pandemic needs to go and consumer confidence to go out needs to come back. is the, because there human instinct of wanting to reconnect and be with people. it will happen, win, i don't know. the reason you can't give 2021 guidance? >> the environment remains uncertain. the environment remains volatile, and related in particular to the pandemic. because of this, it's difficult this stage.ance at

there is a lack of visibility. the one thing we know, and good news for us as a company, is resilience. this is what the markets are telling us. european stocks are heading for a pretty big day of gains. 2% headed for their biggest gain in 11 weeks. up. futures are a lot of what is priced in appears to be positive reports of jobs and the u.s. economy later on. the u.s. dollar strengthening. is 1.1869the level falling below 1.20. bonds rising. kailey: futures do look towards a positive open.

the s&p 500 futures of 5:26 points, mastec futures up by more than 1% -- nasdaq futures up by more than 1%. strongerntioned, a dollar today with virtually up against everything in the g10 space. oil, it is off on session highs but just under $42 a barrel. coming up the wells fargo chief economist talking about some of the data coming out of the u.s.. later on we'll be talking dollar dynamics. this is bloomberg. ♪

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the big events are back. xfinity is your home for the return of live sports. francine: the president condemns

anti-police rhetoric week after two protesters were fatally shot. joe biden accused him of fanning to meet the moment. the ecb chief economist says it matters for monetary policy. swiss spy scandal. the countries regulators a start enforcement procedures on spying. welcome to "bloomberg surveillance." kailey leinz is stepping in for tom in new york. there is a lot of positive momentum. kailey: i just want to know how far this rally can run. we are looking at the nasdaq. futures pointing to a higher open by 1%. how far can these tech stocks run before they are tremendously overvalued? francine: one of the things we