♪ manus: good morning from bloomberg's in dubai. annmarie hordern in london. your top stories this morning. competitive stay until inflation hits 2%. jay powell's caution on the rebound ways on stocks. >> we believe that this very strong forward guidance, very powerful forward guidance we

have announced today will provide strong support for the economy. we are saying that roommates -- rates will remain accommodative until the economy as far along. leaves stimulus untouched. no move expected either. today's action could come from south africa as they battle we growth. president trump contradicts his health officials, saying a vaccine could come by october. deutsche bank says new york city staff can stay at home until next year. 6:00 a.m. in london. let's get you up-to-date with the interpretation of fed speak. good morning. i take you to ing. it's about the credibility andeen forward guidance state contingent forward guidance. we got both last night.

that makes for more potent situations. perhaps doubly irrelevant. annmarie: a note this morning saying there's no pleasing some people. what else could the fed have done? maybe qe. also talking about the fact, they were saying, monetary stimulus, it's time to focus on policies for the real economy. in that moment, jay powell is right. will d.c. stepped up? he pointed the finger to congress. i love what john authers said. nothing was broken. no trends were broken. therein lies the fine line point. i have a roll call for you. mentored and dalio. all warning about the malevolence of the underbelly of

the resurgence of inflation. let's take a look at where we are this morning. nasdaq 100 futures to the downside. we are seeing a risk off sentiment this morning. moving on. we see the bluebird dollar index getting higher. 3/10 of 1%. we are now below $40 a barrel on wti. also hitting oil market is stockpiles. meeting.sters we have been discussing three more years. the rates will stay near zero until 2023 to help the economy rebound. jay powell says the recovery has been faster than expected. activity remains well below pre-pandemic levels. >> we believe that this very strong forward guidance, very powerful forward guidance we have announced today will provide strong support for the economy. rates will remain a connotative

until the economy is far along in the recovery. that should be a powerful statement and supporting economic activity. inflation persistently below 2%. inflationm to receive above 2% for some time. the average is 2% over time. longer-term inflation expectations remain anchored at 2%. the labor market has improved. it's a long way from maximum employment. my sense is that more fiscal support is likely to be needed. the details are for congress, not for the fed. we believe strong policy guidance will serve the economy well by promoting our goals through the many possible paths the recovery may take. long were covering for that labor market. joining us now to discuss all of it is marija veitmane. thank you for joining us this morning. powell talked about the fragility of the market and how it needs fiscal response now.

are equities starting to wake up to the reality? the divergence between the real economy and wall street. marija: yes. good morning. it's veryr view, difficult to talk about stock markets. it's very difficult to talk about economy on average. we see this recovery as very much case shaped. it will have winners and losers. companies thatr have stronger fundamentals, have managed to shift the business recovery, it the has actually been really well. in the performance of technology stocks. insee that in recovery certain parts of the retail activity. we see that in metal prices.

other parts are really struggling. we see that fiscal and monetary policy is really targeted towards weaker parts of the economy. trying to support them. ironically, that will provide more ammunition for the stronger parts, materials, that can benefit from this low interest rate. that's probably more interesting. manus: let's just pick up on that differential and how we go forward. growth versus value. will value catch up with growth? you are of the mind that gross -- growth outperforms. do i need to be more selective in growth?

if so, what does that mean? marija: yeah. growth will outperform. the key reason for us has been sluggish economic earnings growth. that hasn't gone anywhere. very low interest rates. the fed has told us to not even bother looking at interest rates for the next four years. quality component of growth stocks. having better are underlying fundamentals. higher margin, lower debt. that is still there. yes, you can talk about valuation of growth stocks. that's really challenging. if we know that interest rates, not just a it zero but stay at zero for a very long time, that makes this valuation more palatable. i'm still very much in the growth camp. i can't see how value stocks can't perform.

one thing that can help value economic recovery. we know that it's a great hope. i hope that it's coming sooner rather than later. it's difficult to see that vaccine will be very widely available in the next six months. markets anticipate some impact from that. happen, airlines and hotels stocks might start performing. i really struggle to see tech stocks going into there. i would rather see investors putting down cash allocations and going there. not getting out of the fast-growing high-quality stocks. ? there -- annmarie: there's a lot of commentary that rates will stay near zero.

the dots can change if the economic situation worsens or it gets better. is there a risk that investors are not pricing that in it all? marija: yeah. i suppose the debate as very much on the average inflation targeting. if we were in the old regime and economic growth picked up and inflation expectations picked up, markets begin to reprice interest rates. is, if wenew mandate think it's credible, then we need to see inflation really -- we need to see the economy overheating. we need to see the economy getting a lot stronger than the previous cycles. one of my colleagues did an experiment. we looked at the previous rate hike cycle with the new fed mandate. the one before would never happen. you need to see a lot faster acceleration in economic activity than you would

otherwise see with the new mandate. manus: ok. we will find out whether that ties into the inflation narrative. maria stays with us. don't bail on tech. your first word news. laura: president donald trump says a coronavirus vaccine could be widely available as early as october. he is contradicting his top oath officials. they made estimates ranging from march until the end of 2021. anthony felt he told bloomberg he's confident the vaccine will be available by the end of the year. widescale adoption takes time. keys johnson is making a concession on his brexit plan to get it to parliament. he agreed to give the house of commons a veto over whether the government can override parts of the divorce agreement. it comes as one of the governments senior officers resigned over the proposal.

deutsche bank has told its new york city staff they can continue to work from home until mid-2021. that's in contrast to rival banks. in the memo, deutsche bank said workers only have to return in july. citigroup employees have been paste on played leave pending an investigation after revelations he operated a qanon conspiracy theory website. site has since been shut down. no specific comments from citigroup. the bank says employees need approval for any outside business activities. global news 24 hours a day on air and at bloomberg to take -- quicktake, powered by journalists and analysts in more than 120 countries. this is bloomberg. annmarie: thank you. tech takes a hit as opposed pandemic world. our guest host says not a time

to dig tech yet. that's coming up next. this is bloomberg. ♪

>> the ipo is a price discovery process. we were after a set of institutional investors. people that can hold multibillion-dollar positions for 5-10 years. people that don't chase momentum either up or down. his company's record ipo. bring up the board. snowflake made a name for itself yesterday with the biggest u.s. ipo of the year. the largest ever for a software maker. look at that. up 111% on its debut. manus: it did get higher than that at one juncture. it made it to a $70 billion valuation.

we will stay with tech. commentswell, his pushing the sector lower today. the s&p 500 fell aztec stalled -- as tech slid by 2%. nasdaq futures traded layer this morning. looking at snowflake. i'm going, wow. at one stage, this was worth $70 billion. that's as much as goldman sachs. of by everything tech? what does that ipo signal to you? frost or opportunity? i don't want to specifically comment on snowflake. tech is a king now. you want to buy anything tech. is isat tech high-quality, high-margin businesses that are very

adaptable to the recent economy. work from home, shop from home, entertain from home, school your kids from home. unfortunately for us, that's an economy that we need to adapt to. we will be in it for a long time. those companies can easily function. they can function very well. they can grow their profit. backwas saying, when we go to normality, those companies still have 30% margins. they still have return on equity in about 30%. that's great. i want to have those companies. even when the economy is normal. what is normal? normal economic activity. when i started, we talked about real economic growth below 2% being a sign of recession. now it's a sign of fantastic recovery.

we would die for that. economic activity, earnings growth is never going to go in double digits. yeah, i will have tech. annmarie: it has been suggested many times -- it's time to rotate. you would have missed out on opportunities. i understand what you are saying. at the same time, these valuations are so much higher than we have seen in the past. bill gross was saying it's time to get defensive. about the me, think asian model. you discount future dividends, some discount factor. we are told now that the discount factor is not just zero. it will be zero for a very long time. in the world where money is really free and expected to stay free for a long time, you have to buy high duration, high-growth assets. to answer your question,

valuation begins to matter when rates start going up seriously. not five or 10 basis points. interest rates going up 4%. then you start worrying about valuation. how weit's interesting now qualify what is serious rate hike might be. had was 25te hike we basis points. my gosh! 50 basis points, i'm having a panic. 75 basis points, we implode. our perception of normalization is completely different. what is the ability of the equity market to continue higher if bond yields get back towards 1% on a recovery narrative? does it dislocate the equity story at all? i will throw it back to you. dollar futures are discounted now. interest rates are going up 1% in about nine years.

i think that's the duration. [laughter] are having a very theoretical discussion this morning. nobody is expecting interest rates to go up 1%. [laughter] i will leave you there. i struggle to see very substantial interest rate increases. if money is truly free, we are looking for some sort of slow and gradual and uneven recovery. i'll take it. i'll buy stocks. high duration tech stocks. annmarie: marija veitmane. you are very bullish on textiles. -- tech stocks. coming up, the central bank thing. more action to come. some emerging markets as well. south africa, russia, are they primed to cut? we discuss that next. this is bloomberg. ♪

♪ >> after we had such a deflationary shock with covid and the lockdowns, now we are getting a bounceback. people, retailers have had to liquidate big inventories. they were very cautious in ordering for christmas season. i think we will see further up pressure on inflation over the course of the year. that doesn't necessarily mean it's a circular rise. it means it is a short-term increase. guggenheim was the global chief investment officer talking about inflation in the aftermath of the fed's rate

decision. annmarie: we have more central bank news as well this week. we could see a rate cut in south africa after gdp shrank an annualized 51% in the second quarter. friday, further details from the bank of russia. the central bank is likely to keep its key rate on hold. our guest is still with us. thank you for joining us this morning. many expect central bank's to remain dovish for a long time. in emerging markets, this is much more challenging. how do they remain dovish and attract capital in this type of environment? marija: that's exactly the challenge central banks are facing. they need to support economies. they justifiably cut rates. this year, it is probably ok. asrent-account deficits activity came down. should people start spending again, it would be very acute problem.

for this year, they are probably all right cutting rates. next year would be problematic. with the performance of emerging markets. emerging market countries struggled to issue local currency debt. a lot more issuance in dollar-denominated debt. that probably has to do with between emerging and developed markets. now there is no reason to go and by emerging-market debt. i see a lot of reasons to by emerging-market stocks. with debt, it is very challenging. investors are finding it hard to come into that market. central banks are on the receiving end of it. between a hard place -- yeah? manus: you can't say i would like to by emerging-market

stocks and say that's for another conversation. his daybreak europe. marija: [laughter] manus: short answer or long answer. what draws you to em stocks over debt? be as brief or as long as you want until the bell rings. marija: emerging-market debt, 80% of it is in asia. emerging-market debt. half of it is tech. [laughter] guess why i like it. manus: [laughter] marija: it's exactly the same story. where do we get tech? absolutely. cheaper-market tech is than u.s. tech. i venture a guess that it's probably less old given the tensions between china and america. people may be more scared to go there. we think if anything, the government is far more likely to how stack than the american government.

we like it. annmarie: right. that goes into one of the things we love. the bifurcation of the tech world between beijing and washington. i want to ask you about fx. there's a debate on whether we will see a full-blown currency war. there's obviously tension in the fx market. what is the impact on that into the em world? i think you're right. i think it's very difficult think of em, fx as very attractive opportunity. that probably goes back to the discussion we had. there's a lot less reason for investors to go and by emerging-market bonds. it, it is faruy less interesting for them to hedge it given the interest rates. it as a block is probably

less interesting. having said that, there are definitely opportunities within emerging markets through red that would have -- relative value rates. there are possibilities there. that's more interesting. is reallyory in fx dollar debasement and the dollar going down. everything else is going up against it. that's probably a far bigger driver than anything happening in fx. much. thank you very we got the message loud and clear. all tech, any tech. a little bit of asia tech over u.s.. marija veitmane. the message is strong at state street. may the tech be with you. we could not do it daybreak europe without a little bit of opec-plus coming to bear. will the laggards we brought to heel? we discussed, next. u.s. equity futures.

there you go. he's holding his hand up. his royal highness. herding cats, opec style. we speak about oil. that's next. this is bluebird. ♪ -- bloomberg. ♪

♪ annmarie: good morning from bloomberg's european headquarters in london. this is bloomberg daybreak: europe. these are today's top stories. three more years. the fed predicted rates will stay neo-zero until 2023. his caution on the economic wave -- rebound ways on stocks. >> in this very strong forward guidance, very powerful forward guidance. it will provide strong support for the economy. we are saying that rates will

remain highly accommodative until the economy as far along in its recovery. that should be a very powerful statement and supporting economic activity. annmarie: the boj leaves stimulus untouched. no move expected. today's action could come from south africa as it battles growth. president donald trump contradict his health officials, saying a vaccine could come by october. deutsche bank says new york city staff can stay home until next year. good morning. i can't imagine staying at my kitchen table until next year. i guess it's their choice if they want to come in or not. driving the markets is the fed. you pointed out to me that ing -- markets just want more. are they greedy? they are like that carnivorous plant in little shop of horrors. should you keep meeting them -- feeding them? manus: [laughter] three weeks together.

i'm not usually lost for words. i will raise you rapacious demand from the markets for more, more, more. really, john authers captive for me in his opinion piece. he says that no trends were broken in the making of this guidance. the question is about the rhetoric. the path ahead is uncertain. annmarie: highly uncertain. one thing jay powell did do, i will bring it back to whether we get stimulus out of d.c. he's walking this fine line. adding involved in the politics. with the fragility of the economy, he says that fiscal support will be needed. even donald trump took to twitter, saying that they want to make a deal. whether we can get there, that's the question. manus: absolutely. that and a vaccine are the narratives. have a look at stocks. the path ahead remains highly uncertain.

it seems as if we've all focused in on that. john authers says unemployment needs to get back to blow 4.1%. dovetail trace. down just 1%. rolet over. have a look at the rest of the markets. it gives you a personification of what's at play. did he do enough to steepen the trade? our guest host in the last 30 minutes talked about the ability of tech to outperform oil. don't forget, we put on 5% yesterday. powell scorched the v-shaped narrative. it's not a demand relapse. it's just a pause in the demand. it's a deceleration, according to our next guest. the dollar turns around and goes big. let's delve deeper into brent's trade. opec-plus members gathered today

to discuss production cuts. the group still has work to do to bring the laggards into line. while the united bear moritz signals that it would make off for the pumping too much in the last few months, iraq is x porting more crude this september than its daily average in august. francesco martoccia great to have you with us. let's get to it. bob mcnally was with me in the last hour. he corrected me. he said we are not facing a demand relapse. we are facing a deceleration. what scale of deceleration are we facing? does that bring me to surplus? good morning. >> we remain constructive on the orbital balance.

supply is still capped at 9 million barrels per day below last year. side, we see the gap compared to last year narrowing by 4 million barrels per day over the next three months. 9 million barrels per day below last year. the balance is actually tightening. that's why we remain attractive on prices going forward. callede: is that why you it a floating store that's rising ahead? francesco: yes. what's happening on the floating seen storage have remain quite high in the order of 180 million barrels. 85% of this is still around the asian coast. more than 50% of this is concentrated in china. you have some bottleneck issues.

weeks, thest structure of the demand curve was fairly weak. bit oflowed for a stalling, particularly if your financing conditions allow. we don't really see storage coming back. storagef the floating is a head fake and a temporary issue for us to deal with, if the uae comes back on board, writes the ship, and a rack does better, what does that do to the contango? a lot of people have said the contango is moving on the demand side of the equation. it could be righted on the element that you just pointed out, couldn't it? francesco: exactly. exactly. going forward, the refinery should certainly improve.

hello? you might see the case for inventories continuing to drop. that is shaping the structure of the curve. annmarie: bringing it back to what the rhetoric needs to be, what does his royal highness have to say? he's done a decent job in terms of the pinocchio problem, getting the cheaters in line. we had a mishap with the uae. iraq is starting to cheat again. what does the message from him need to be? is it staying the course? will we consider ratcheting back production of demand? -- if demand stays weaker due to the virus? arabia willaudi rule out any further cuts for the moment. they will likely stick to their rule. , compliance, compensation.

i would expect the oil minister to put further pressure on the laggards. consider also that demand has been revised lower for the quarter. you a cd recently said that the global economic will shrink less than expected. 4.5 compared to 6% as expected. confidence for the meetings today. leaving things as they are now. what happens by the end of the year? that's a question mark. yesterday, the russian minister said that he would like to outpute their outlook -- quota. that's beneficial for the russian economy. everything is contingent on price. if oil prices are in the low 50's by the end of the year, we

might see compliance slipping away. manus: can we roll forward to next year? the risk that abide in victory gives you iran supply and libya supply returning. that's the real risk in 2021. is that reflective in these prices? for the moment, it's not reflecting in the market. the l&h and gna and libya. that could add one million barrels per day. it's more likely to see libyan supply coming back earlier than a rainy and supply. the iranian supply is contingent on a bite in victory. even then, the timing is quite tricky. election, he the will enter the white house by the end of june. four or five months to

orchestrate the meeting. in any case, any return of the iranian supply will put pressure on the macro plan. we might see an increase in supply. libya is something we have to keep under the monitor. annmarie: thank you so much for joining us this morning. me and manus are disappointed we won't be seeing you in vienna or riyadh or wherever this meeting would have been held. citigroup said that they see oil going to six dollars a barrel by the end of 2021. for more news around the world, let's get to laura right. good morning. ♪ laura: -- zero for three years. the central bank about to delay any tightening until the u.s. gets back to maximum employment

and 2% inflation. the fed will now allow inflation to overshoot slightly after a series of underperformance. president donald trump isn't happy with what he's heard about the terms of the oracle tiktok deal. he won't be briefed on the specifics until the morning. sources told bloomberg the top out what -- top white house officials have raised concerns about the proposal. they say it falls short of satisfying national security goals. joe biden is warning about the impact of the latest brexit plans. he says an agreement depends on the continued respect for northern ireland peace process and the good friday agreement. the government plans to renege on part of the eu divorce agreement, making other deals more tricky. onbal news 24 hours a day air and up lumber quicktake, powered by journalists and analysts in more than 120 countries. this is bloomberg. ♪ manus: thank you very much.

the coronavirus pandemic has caused millions around the world to work remotely. on the latest episode of the david rubin side show, the alphabet ceo spoke with the carlyle group co-founder about how the work environment has impacted the company's thousands of employees. >> when you started working remotely, did you ever were you would be a problem? you have all these people but your technically very savvy. >> it did seem daunting. i'm responsible for our crisis response. i put together a strong governance about how we get people to move home. we were in sync daily. that worked really well. what we were most concerned about would be the impact on productivity and wellness. our chief medical officer very early said that more people would be affected by mental health issues than the physical disease itself. we focused on those.

that was really important. the other thing, google is about our people and the ability to live. one of the things we didn't have to worry about was our ability to really deal with a surge in online activity. that was because of all of the investments over many years and all of the testing for what could happen in a crisis scenario. i think it's an important point. you can't solve the risk management issue in the middle of a crisis. you need to solve it ahead of time and that work. >> many companies are saying, now that i've i learned -- i have learned that my people can warm from home, i don't need all these people. is that your view? >> we believe that when people are together, that's a critical element for innovation. collaboration helps support innovation. collaboration within teams and collaboration across teams. collaboration and serendipity. we look forward to having people

back in the office. what we are looking at is the productivity lift you get when people have the ability to work from home some days, be in the office when the rest of their team are in the office. if you can save people commute time, you have better access to talent. you are solving what people want in their personal life. it will result in a better outcome. what that means for real estate we are still figuring out. >> google was well-known. you got free food. what about if you are working at home? do you get free food showing up by delivery somehow? how do they compensate for that? >> we are not doing that. a lot of people focus on food. really, what we are trying to create is this fun, quirky, magical campus. it's about more than just a free food. it's the experience on campus. what will he -- we did is move a lot of these connecting the community to a virtual delivery.

for food, you can do a one-on-one session with a chef. can do a cooking class. we took our fitness classes and moved them to virtual fitness classes. even some goofy google style ones like yoga with your dog. annmarie: that was the alphabet cfo speaking with david rubenstein. interviewtch the full at 7:00 london time tonight. you don't want to miss that. coming up, policymakers are expected to leave u.k. rates unchanged later today. we preview the boe, next. this is bloomberg. ♪

annmarie: good morning. 40 submit -- 47 minutes past 6:00. monetary stimulus at a

ratesetting meeting a few minutes away. optimism over the u.k.'s rebound fizzles out, forecasters don't see immediate action. they predict the banks bond buying program will be extended again. the market expects the key base rate to be cut below zero and 2021. joining us now is liz martin's from hsbc. let's kick it off. we heard the bank of eglin say they could go into the toolbox. they could go below zero if they had to. do you think they will? if so, when? liz: we don't farecast any further easing. the converse is expecting more q. week in november. that's because they have been pretty optimistic so far. far, the data has broadly vindicated them. the first part of the u.k. v-shaped recovery, post lockdown

recovery has been are markedly strong. clouds are gathering. two main clouds, an increase in the covid-19 cases and the rising noise in the headlines around brexit. themis meeting, we expect to strike a more somber tone. they are assuming a smooth transition to a conference of trade deal on brexit. at the moment, that feels like a reach. forecasting any further easing currently. unless there is a no deal brexit. a collapse in the middle of october. we would expect them to cut rates. manus: ok. let's go for the country headlines. no deal. chaotic disintegration, breakup. you are way down. you have tens at zero.

is that an extreme call? is that just a knee-jerk call? similar to what we did in 2016. a lot of losses were maintained. the way we look at it, a lot of developed market currencies are in the same place at the moment. everybody had a big recession. everybody deployed in norma's fiscal and monetary ammunition. the u.k. has this one differentiating idiosyncratic fact. exit. -- brexit. we think that's enough for sterling to fall apart. sterling will fall towards the end of the year even if we have a partial trade deal, a bare-bones trade deal. in a no deal scenario with chaotic headlines, the market

doesn't price in the bank of england cutting into negative territory, that will make sterling an outlier. done potential on the negative interest rates. we've done the brexit trauma. i want to ask about the u.k. jobs market. sentiment of the glass being half full. the data we've seen recently is not looking that bright. the furlough scene will be ending in september. what is the message today on u.k. jobs? liz: yeah. u.k. unemployment is the third big risk going into the final pause. we will get a big fight when the job retention expires. i don't rule out that the government does something to cushion that blow beyond the 1000 look -- pound incentive to keep people on. , yeah, don't do anything there's a real likelihood that a

lot of people who have been kept on by being subsidized by the government just don't go back. there's no jobs for them to go back to. or they have to take a big pay cut when they do. that's why we are worried towards the end of the year. we started to see this coming through in the july data that we had earlier this week. this is something that is really affecting young people disproportionately. we've seen an limit rise -- unemployment rise primarily among young people from 60-24. manus: the reality of covid and the economy. let's see what the boe delivers today. thank you for being with us this morning. coming up on the show, the banking returns. job losses that the lenders this year are on course to be the deepest and half a decade. we have the details. that's next. this is bloomberg.

♪

manus: the world's biggest lenders. banks from city to hsbc have begun to slash the workforces, putting losses at the top of last year's levels. dani burger has been looking at the numbers. good morning. >> it is set to top last year's level. this could be the deepest job cuts we have seen since 2015. more than 60,000 so far have been planned. this is because banks are trying to save cost. they have piling loan log -- losses. they are spending more on technology. when you dig into these numbers, the cuts are really present in europe. 78% of these job cuts are coming from european-based lenders. the majority of which is hsbc. 35,000 jobs they announced they will cut in february. let's not forget the human cost

of this. it will be difficult for unemployed bakers. data shows that listings here in london have fallen by about 50% year-over-year. for those who are getting cut by these banks, they will struggle to find new jobs. annmarie: one minute left. we have been talking this week about the challenges banks are facing. jp morgan, no more uber. manus: if you want to get that creative can dustin, jp morgan isn't going to pay for their junior bankers to do that. we were talking about how banks are not on the same page. banke other hand, deutsche telling their new york city employees they don't have to come into the office until mid-2021. annmarie: thank you so much for tracking this from the kitchen table back to the office. we will have to see banks taking different approaches. manus: they are. creative combustion. we do it every day. thank you very much.

it's my friday technically. you know what that means? you have the buck tomorrow. annmarie: enjoy your weekend. i won't break anything tomorrow. futures lower. this is bluebird. ♪ -- bloomberg. ♪ look here, it's your very own all-in-one

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anna: good morning. an cash trade is less than hour away. here are your top headlines. three more years. the fed predicted rates will stay near zero through at least 2023. jay powell's caution on the economic rebound ways on global stocks. standstill. dovish noises from the bank of england