francine: growing confidence. the euro rises as ecb forecasts are set to show a more optimistic outlook. investors look for clues on extra stimulus at today's meeting. trump on the defensive. the president contends he was right to downplay the severity of the coronavirus, after comments made to journalist bob woodward earlier this year became public. and lawmakers become lawbreakers. the e.u. considers legal action over the u.k.'s plan to breach the brexit deal. the two sides hold an emergency meeting today. good morning, everyone, and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. tom, i will give you your brexit briefing in a second. it was interesting, hearing from the astrazeneca chief executive. i know that's why you get up in the morning. is putting safety first and he can still deliver a vaccine by the end of the year. tom: it is nice to see the buzz one day on. -- was really

quite good. within the pandemic, it is a big deal. the news flow is extraordinary. but that was not a small item yesterday, that first failure of a phase three trial. francine: absolutely, and the next question is if we do have a viable vaccine, how many will take it voluntarily? we will talk about that in the coming days. that's get to first word news with ritika gupta. ritika: joe biden says president trump willingly lied about the threat of the coronavirus for months. the presidential candidate spoke after the president spoke with bob woodward -- after the president's conversation with bob woodward was revealed. he said he downplayed the severity of the virus in public to avoid panic. the book will be published this month. j.p. morgan found some of its employees possibly received coronavirus relief funds intended for american businesses. bloomberg learned the bank

noticed a suspicious amount of money had been deposited into workers' checking accounts. some employees have been fired. j.p.morgan isn't commenting. the european union is considering legal action over the u.k. plan to breach the brexit deal. boris johnson said it is ready to break its commitment over the irish border. two sides hold an emergency meeting today. the administration and tiktok's parent are in discussions about arrangements that would avoid a full sale of tiktok operations. president trump says if there is no sale by september 15, tiktok would be shut down in the u.s. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm ritikauntries, gupta. this is bloomberg. francine? tom? francine: -- tom: thank you so much. equities, bonds, currencies, commodities.

after the big lift yesterday after the giant norma's drop a few days before -- after the joy ginormous drop. .02,e tips, negative one shows the stasis we have seen in the bond market. -- 10 year tips, -1.02, shows the status we have seen in the bond market. this is been long-term strength versus china. nevertheless, on a quiet day today, the relationship and triangle -- on a quiet day to day, the relationship with europe and china and the united states cannot be underestimated. francine: you are 100% right, tom. european stocks, the euro is gaining before the ecb meeting, and that's probably the question of the day. the central bank is widely expected to keep policy steady,

but investors will watch out for comments from the ecb president for any hint on whether the stronger euro is becoming a problem for the region. i also want to show you pound, 20.0 joining us to talk about fx, jeremy stretch. jeremy, always great to see you, especially on thursday morning on ecb day. centraltral bankers -- bankers don't talk about the exchange rates. but will there be hints from the ecb because euro strength is becoming problematic? jeremy: you're absently right. it is a topic that central bank governors like to talk about least. one suspects that when christine lagarde is questioned in the press briefing, there will be a question about the value of the currency, and she will push back over the fact that the ecb does

not have an interest-rate target. i think we should not lose sight of the fact that despite the monetary conditions because of the strength of the euro we have seen since the june forecasts, if you look at the five-year inflation swap for the euro zone, it is similar to levels that we went into. in a sense, the ecb are mindful of the currency, but i think the president will want to try and stress it too explicitly, but nevertheless i think she will preclude a- try to meeting over further strengthening. francine: what does that mean? are there hints of possible rate cuts this year? evaluating ecb is further rate cuts, and that would affect the efficacy of rates, particularly with germany. it is likely the ecb will provide at least some steering toward an increase by the end of

the year. the interesting point is, and one of the reasons the year -- the euro has rebounded from the lows from yesterday, is an uptick in the group targets for 2020. i think the key metric will be the assumptions for q4 activity. if that does prove to be moderated from a quarter on think thatin, then i can open the door for some degree of additional funds buying and extending the bond buying out into next year. that will be a mechanism to try and preclude a significant euro gain from here. tom: what is the fiscal exposure right now in europe as compared to the united states? we are in an uproar in the united states about a growing debt and a growing deficit. is the same tension there for president lagarde? jeremy: i don't think there is. we have seen some degree of -- that blank zero policy which

governs germany policy over the last decade has now been moved aside, so there has been a significant increase in fiscal expenditure, and there is a fiscal gap which has been opening as a confident -- as a consequence of the covid crisis, as we have seen in all markets. but i don't think there is necessarily that same degree of concern. when we have seen his actions of the pet program, the spread differentials have obviously compressed in the periphery in terms of buttons, so we had -- bunds.s of i think eurozone is not facing the same degree -- that perhaps we see in other markets. tom: you gave me the answer i wanted to hear. what are her degrees of freedom today? does she have a greater set of tools in your kit -- in her kit

then chairman powell has? jeremy: the central bank is continuing to plead with the policymakers to suggest there is more latitude in terms of a recovery phase from the physical dynamic then there are from monetary ones? and in a sense the ecb has given themselves some leeway by that pet program and the imposition of that, which has dealt with some of those fragmentation issues. so i'm not sure she has more latitude, but i think the ecb will continue to implore, as it has done consistently, that governments are still required to put their shoulders to the wheel and provide additional stimulus going forward because monetary policy is already ultra-loose enough. some degree of sanctions, how much further they can take that, especially in terms of the consideration of the deposit rate. francine: how worried are you that the recovery that started strong in europe is slowing down significantly?

jeremy: it is true that the eurozone did have an early recovery, in particular, compared to say, north america. that is good news and one of the reasons the growth numbers is being revised up to 2020. yes, there are issues in family relations to the resurgence of covid cases across the continent and the impact it has in terms of the national shutdowns. there is going to be a degree of and gains are, going to be much more challenging. that is why there is an important dynamic in forging a gdp dynamic. we know that q2 and q3 was a little bit better than i assumed . the v-shaped recovery that of course we all hoped for -- i think that right-hand access or the right-hand dynamic is going to be a little shorter and shallower than perhaps

policymakers would like. francine: thank you so much. jeremy stretch of cibc stays with us. coming up, the european commissioner for the economy and financial affairs. you don't want to miss it. this is bloomberg. ♪

,"m: "bloomberg surveillance good morning everyone. we will have full coverage for you this morning, the important decision and the press conference as well with christine lagarde. francine lacqua in london, i'm tom keene in new york. all the talk in washington is "rage," by bob

woodward. nothing like the rage in the united kingdom right now over prime minister johnson and brexit, i believe is what it is called, if my memory saves me. jeremy, for our global audience and americans like me, where this is just off the radar, what is the rage over what prime minister johnson is doing with ireland and northern ireland? , one of the tricky issues about the divorce process is about ireland, which is broken up into the northern part of the united kingdom, and the southern independent art, which is going to remain a remember of the european union, so the trade relationship in the north and island is going to cause consternation because there are different tariff regimes once the u.k. has left the european union.

that has similarly been agreed under the withdrawal agreement last year, but now the governments are seeing to unpick some of that unilateral international law that has been agreed. that i think is one of the issues that is enhancing the risk of a no deal scenario and put the u.k. under some much pressure over the last couple of days. likehere's what outsiders me are saying -- are you kidding me? just say no. why are they not doing that? jeremy: europe could do that, but that would also come with an economic cost to them because whilst the u.k. is at risk of a disadvantage in terms of the greater near-term impact from economic dislocation from a breakdown in negotiations, there would also be dislocation and downside risk for the euro zone economy as well. and for the two nations which are highly correlated in terms --trading patterns, it is

you have to institute -- the european union did not immediately break off trade negotiations in the brexit talks yesterday, which is good news, but of course there is still an increasing degree of risk that the talks will break down ultimately, and the u.k. will be heading towards that no deal, wto type trade arrangement from january 1, and that of course will have some negative implications for the u.k. activity as a conscience -- as a consequent. francine: jeremy, what would that do to pound? jeremy: with the no deal scenarios in terms of sterling once again, normally we would think there is something of a 10% to 15% risk of depreciation risk in terms of a trough move on sterling with a no deal scenario. clearly that would take it back to sub 120 again -- to sub 1.20

again against the u.s. dollar. but the fed is actively keeping monetary policy loose to cheapen the dollar. the better way to play in the short-term may be looking across like sterling yen. that is one where there is a little more traction, and we can easily see a sizable move lower in terms of sterling/en because of the dynamics of the markets not willing to discuss the profitability -- the probability . francine: how difficult is it to see whether this is a bluff or if this is for real? jeremy: that is the problem. we are talking about politics and a high-stakes game of poker. i think the european union always knew that when we had the previous prime minister, theresa may, that she would give ultimatums will would always fold -- but would always fold under pressure. we saw something similar with the withdrawal a year ago or so

when the u.k. decided to accept the of the ramifications of issue which is now -- now they are trying to unpick. there is a very high-stakes game of poker here. political pragmatism has always been sort of our benchmark in assuming there would be ideal eventually, but that deal will be limited in scope. that pragmatism does seem to be in incredibly short order as we speak. so that is why these no deal risks are on the rise. tom: jeremy stretch, thank you so much. cibc head of g10 fx strategy. 1.1830., it has been a most interesting year for mr. barrick in california. he has had an extraordinary year in real estate and also in

politics. his support of the president of the united states. a conversation with tom barrack, coming up. futures -13. this is bloomberg. ♪

tom: "bloomberg surveillance." francine lacqua and tom keene. tom barrack was a great supporter of president trump. that has ebbed a bit over four years. jason kelly, in conversation with mr. tom barrack.

powell has done an amazing job with 435 individuals, say how do we get theplan not to us, not to big countries -- it is not the balance sheets, people are panicked for survival. the average individual trying to figure out how do i live, how do i go forward? what is happening with my rent, my home loan? what is happening with my check that is not coming from an employer? that confusion and dismay, when to $5ve $3 trillion trillion being flushed into the economy and how do you disperse it? you have to give them all credit. at the end of the day, the solution to all of that has got to be a resurgence of confidence across all the things that we talked about. pandemic -- i honestly never thought i would see a global

submission as bad as this is, -- and asrible horrible as an environment like this is, we cannot find a solution, a cure, that is another quandary. but the cessation of revenue in the world is a problem. and the unintended consequences openness of the division between the have and the have-nots, what we are seeing in black lives matter, what we are seeing in kenosha, portland, chicago, and the anarchy, certainly is part political, which we have always had. it is being displayed in a different way than it has been, but it is part of this financial frustration of people just not having a gps of what is there life going to be and can they sustain themselves? until we fix that, i think nothing is going to work. jason: many people put that squarely at the feet of this

administration, the trump administration. exactly four years ago that you were on stage at the rnc telling the world about your friend donald trump. many people would blame him for exactly these ills that you're describing, with this widening disparity. what do you say to that? that thank god we are in america where we can all criticize the powers that be and hold them accountable for whatever variances that we feel that are at stake now. starting with our position and my position as a public chairman , i support whatever regulatory body is in power at the time, and one of those set of rules and regular czar, we will live with them and abide -- whatever the set of rules and relation is, we will live with them and

abide by them. i have great respect for the individualsd the paid $174,000 a year to take all the abuse that they all take and try to figure out how do we solve these global ills. at the same time, i don't agree all the time with how he messages or what happens come as i don't agree with a lot of world leaders. situation itical think is frustrating because people are in agony, and that decision will be in the polls for joe biden. joe biden has been a friend. i have great respect and admiration for him also. i think the process is the right process. president trump came into diss intermediate a system that at the time his core believed was the proper thing to do. now the report card and a process in which a democracy, which is threatened -- i mean

what is happening is we are testing our democracy. it's not working well, right? the rich seem to be getting richer and the poor seem to be getting poorer, and people are frightened for their education and primarily for health care, just the basic needs. that's got to be fixed. francine: that was tom barrack with bloomberg's jason kelly. you can hear more of that interview throughout the day. we have a good and robust conversation about the european central bank. we will talk about the currency, we will talk about trade wars between the u.s. -- with peter praet, former u.s. chief economist. this is bloomberg. ♪

>> we don't want to show panic, we are not going to show panic. that is exactly what i did. i was very open. another political hit job.

you cannot show a sense of panic or you're going to have bigger problems than you ever had before. tom: i rarely do this. that is total malarkey. by bob woodward of the post; today, this was agreed to by the president and the president did 18 interviews with mr. woodward for the book. .t is radically different for perspective, rosalyn joins us. truly, america book exhaustion. ay 13% off this sw voters? extent, books that

have been written before focus on overseas. he is standing up for us overseas. it does not affect me directly. but this crisis is affecting america very directly. if you are a democrat, you believe trump has mishandled this. if you are republican, you believe he is trying to get the economy open again. it probably won't change things. if you are a swing vote, does this tip you over? many americans feel this personally. that is where it could resonate. francine: good morning from london. the undecided voters? november is still a long way away.

the president is trailing in polls, repeatedly trying to shift the focus away from the virus; specifically his message on law and order at home. his comments about veterans took the focus away. something else happens. virus,is question of the one thing that will come up -- we are having some technical -- >> and will localize. that is the key question. if he acted earlier, with the economy have been in better shape? francine: thank you so much. today.atest decision christine lagarde has to contend

with challenges, including a stronger euro. peter, thank you for joining "bloomberg surveillance" on such an important day. it is the euro rising too fast? problem ismain inflation. it is one of the elements. the exchange rate is just one part. rapid movements complicate the ecb. that will be the focus of today's meeting. francine: should they do something about it? careful.e has to be

reaction was positive. [inaudible] hand, the fed's puts pressuresion on the ecb to speed up thinking, they promised to do it by the end of this year. what happened in the u.s. -- [indiscernible] -- to which the ecb has to react. communicate -- the reaction would be to

communicate. madam lagarde -- is she constrained or constricted by the fiscal stance of europe right now versus the u.s.? peter: that is the key question. monetary policy cannot do much. it is essential to support what happens fiscal side. shock --have such a [indiscernible] not pushing them down basis points, whatever it is. you really need fiscal. you need good fiscal policy. we have that precisely. the euro group meeting later this week -- [inaudible] interaction, fiscal

policy will be stressed. -- [inaudible] -- christine lagarde will insist on the importance of fiscal policy. [indiscernible] the situation of cooperation between the central bank and the ministers of finance, which is rare. tom: what is the urgency. we are back from the holidays. everyone had a grand old holiday in europe. great. massive negative interest rates. 3% nominal gdp. probably closer to 2%. how long can that sustain? peter: good point. your generous when you talk about 3%. tom: yeah.

ther: the risk in europe, old problems will be exacerbated, which is precisely why they tried finance to deal with measures to support structural changes. the idea is not there to put money in reforms -- [indiscernible] things, which i think are key. even fiscalicy, policy, the main policymaker -- [indiscernible] -- monetary policy -- [inaudible] case to pushe any the interest rate curve even lower. i don't think it would make a big difference. in terms of currency, you have to be careful. early intervention may help a

little for a few days. really, if it is not followed by some policy action or policy communication, it will not do a lot. need isation we will more fundamental -- [inaudible] -- in terms of qe or asset purchases, that means you have to think about new strategy compared to what happened in the u.s. recently. this is a key point. i do not think it is too difficult to do for the ecb. unique consensus. [inaudible] ecb couldent of communicate a little on this issue about teachers review. -- strategic review. i do not think it is that difficult to do. francine: do you expect at some point ecb will have to put the deposit rate deeper below zero?

peter: i don't think there is appetite to do that. i don't think pushing the curve lower negative will -- [inaudible] -- it would not help the economy very much. it is essential -- [inaudible] -- on the interest rate curve. ecb may not exclude that will have to increase purchasing by the end of the year. [inaudible] in a situation where fiscal policy will be at risk. [inaudible] you have to be sure financial conditions will be preserved -- [inaudible] require additional qe. i do not see a case for pushing the curve lower than it is in the present situation.

much.ne: thank you so many more questions. luckily, he stays with us. stay with bloomberg for full coverage of the ecb policy decision, followed by the youth conference, 8:30 a.m. in new york. this is bloomberg. ♪

tom: good morning, everyone. important ecb meeting. i really have been remiss about the importance of this and what it means for lower for longer.

we will see. we are getting perspective from peter, an economist on a tour of duty. ist i find interesting here backed up to gdp, innovation and productivity. apple, amazon, this, david is coming up, we will talk tech, europe seems to be without tech. is that accurate? re: missing the technology of the continent? peter: [inaudible] that has been understood. [inaudible] gap. is a technological [inaudible] this is understood -- [inaudible] --

technology. that is part of the state of the union that will be communicated by the president of the commission next week. it will be climate, digitalization -- [inaudible] --the issue of -- [inaudible] -- to put down the money and support of the winners. it remains to be seen if that is successful. [inaudible] francine: back to something we were talking about before. , you say theree is no appetite but if we have infections rising, concerns about inflation, what would it take for them to cut by 25 basis

points? peter: i would not cut. the option runner means. -- remains. it is officially in the communication. [inaudible] mitigated by the central bank for loans. [inaudible] the credibility, the option has some value. it is low value. [inaudible] what comes next? suppose we -- [inaudible] -45 basis points creates issues. [inaudible] -- big problem. the main problem is not monetary policy. [inaudible]

-- below the curve, more than today. today is tonction preserve. huge issuance of this [inaudible] question is, main fiscal has to say accommodative '22 but howainly in do you spend the money? [inaudible] question back to the -- [indiscernible] correctly, you know it is supporting structural reforms, technology. it takes time. there is not much time. tom: peter, thank you so much. the former ecb chief economist.

coming up, interesting, david kirkpatrick, not on a specific technology,erican our digital dominance forward. we will look at the digital effect. this is bloomberg. good morning. ♪

tom: good morning, everyone. knownberg surveillance" for politics from time to time. francine lacqua and tom. futures, -10. good time, after this most odd summer of 2020, to look forward on what has mattered to the summer; digital dominance. absolutely no one better to do by,, ok, if bezos wandered we would talk to him, but david kirkpatrick, we are thrilled to talk to you about the big picture forward. do you extrapolate excellence out into the future?

general?e companies in tom: yeah. do more orsolutely less for the indefinite future. one of the things interesting about the pandemic is that while we would have expected, i don't think we knew what to expect but these companies, almost without exception, have cemented dominance further during this and one of the more interesting aspects of that is that it has happened on the consumer and the enterprise side. both consumers have found themselves more glued to facebook/google, being at home, the internet is their lifeline but companies have found, oh my gosh, the only way i can connect with my customer, whether it is cto b customers or b to

customers, is digitally. that has been a benefit to big tech stocks. you, mes goes back to and a bunch of other fancy people trying to get the future forward. i respectfully suggest none of us thought marc benioff would be in the dow jones industrial average. what is the symbolism of the new tech weighting of the dow? david: that is a good point. i am a huge admirer of salesforce. it has executed better than anyone would have guessed over an extended period and it turns out that what they offer is that, a lot of companies, a lot, lot, lot of companies want. we are entering a digitalized global economy. that is the significance.

everything is getting more digital. sense, it puts us more and enthralled to a small number of powerful companies we have every reason to be scared of. on the other hand, we can do things we never imagined. that is spectacularly good. in an ageng dilemma of digital transformation. monopoly. toward semi the companies that do that get extraordinary advantages. it is hard to say it is a bad thing when our lives are so proved. -- improved by it. francine: we are completely surrounded by technology. does it mean these companies

will pay more tax? more regulated? you could argue regulators have not done with what they have done with past, more mainstream technologies. is now the time when they will look at them increasingly? david: i totally agree. important point. we require much more government oversight/regulation. the eu has stepped up in the last couple years, pushing in the right direction. i was heartened, and the house hearings, july, when they have the tech ceos in front of them and they gave them an intelligent grilling; it made you realize at least for some members of the house, mostly democrats, there has been a breakthrough in terms of their understanding of how these companies work and the degree to which they need to be examined closely. the questions were generally quite brilliant, very well studied.

it was a turnaround completely from what we felt before when congress called these people and acted like they were deer in the headlights. overdue,eing an unfortunately, overdue change in how government understands tech but i do not think that will go back. you have a lot young members of congress who are deeply cognizant of the power of these companies and who have grown up in a tech world and they want to do a better job. francine: how will that change? david: they will pay more tax. they will have to answer to more authority. they will have less room to move. that could be a negative for investors, long-term, you might speculate if company's latitude is restricted. there is an infinite number of ways these companies need to be overseen. privacy, electoral interference, hate speech, competition,

antitrust, dominance of markets -- these are all things that have to be overseen. tom: 10 seconds. pandemic. get over it. when is the next book out? [laughter] david: this area we are discussing is something i am interested in. what the society do? tom: do something about milan. , it has agedrick very well. citigroup next on christine lagarde and the ecb. futures -9. this is bloomberg. ♪

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the big events are back. xfinity is your home for the return of live sports. tom: this morning, it is all the rage. call it others for longer.

how accommodating can president lagarde be with the ecb reports? all will listen. 500erday's lift -- the s&p hits 5% below its peak. apple is 12% below its peak. tesla, an outrageous recovery. and from fear to rage, trump cooperates. woodward interviews the president. the result, outrage about the book "rage." this is "bloomberg surveillance ," from our world headquarters in new york. francine, i have eight things to talk about but we have to go -- is this media a big deal? francine: this media is a big deal not because and it would is expecting anything now, but we will get updates on inflation. this is the first meeting since covid cases rose significantly, but also