good morning from dubai, i manus cranny. this is "daybreak: europe." your top stories. president trump calls all stimulus talks just hours after jay powell warns of a week recovery. stock selloff into the close though u.s. futures edge higher this morning. christina barred warns that if his go eight is ended too soon,

the warning comes just hours before france downgrades fourth quarter growth to zero. and the u.s. legislators propose sweeping antitrust reforms on tech giants including alphabet and amazon. 449 page report recommends curves -- curbs on acquisitions. 6:00 came in london, 9:00 a.m. in downtown -- well done, welcome to the myriad of tweet storms. it pulls the ripcord on fiscal negotiation. a very machiavelli move, then he offers the art of the deal. good morning. we are betwixt and between. ann-marie: good morning, a bit of a tug-of-war because these came after jay powell was pretty unequivocal about his stand on what is needed for the u.s. economy, saying the risk of overdoing it seems to be small.

you're looking at the trump tweets instructing his team to close negotiations. manus: the other thing that comes to mind is this, from promises to do a deal after he gets reelected. the risk is this, we have a fiscal void, that is the risk until february. fiscal void takes you through to february. take it away. ann-marie: the market was hoping for some sort of physical agreement, the timing was always a question. let's take a look at what is going on in the markets. when that tweet came out, he did have a subsequent tweet calling for more money for airlines and paycheck protection programs for small businesses. gilts still holding on , andere we are on monday brent crude down 1.5%. reflationary commodities are getting hit with this kind of tweet.

manus: indeed, and it's been months in terms of the hard-fought stimulus debate and talks. night after night, the president of the united states ending those negotiations pivot on twitter he's putting talks on hold he says until after the election. again callingtter for support for the airlines and the paycheck protection program. the democrats have been pushing for a package while the white house didn't want to go above $1.6 trillion. >> quite a gap, and is moved to jay powellurs after strongest call yet, warning of tragic economic consequences without more aid. >> too little support would lead to week recovery, creating

unnecessary hardship for households and businesses. by contrast, the risk of overdoing it seemed to be smaller, even if policy actions proved to be greater than needed, they will not go to waste. fiscal support will not go to waste, unequivocal in his plea to congress to get the job done. our guest joins us this morning. i just want to start with this tug-of-war with saul, jay powell, really a final plea to congress at fiscal support is needed, the fed can only do so much, and hours later, the president saying he has instructed his team to pull the plug. what do you make of it all? >> first, it is a pleasure to be here. , andsition our portfolio these comments are because when you see one party saying one

point and another party is going against it, it compromises communication between us democrats and republicans and the presidency. for us, we are positioned in these times of uncertainty, and we're seeing volatility in the market as a result. we position accordingly for pmi. manus: good morning, it's amazing, i'm amazed that the equity market only drew down by 1.4%. my eyes were drawn to the volatility in the bond market, it has absolutely erupted in the past 24 hours. what do you make of that differential? is quite unexpected, given where we were a couple of weeks ago. i'm sure most

investors would agree, you naturally see a steepening of the yield curve when investors in the general public are expecting a more economic alliance and if it supports fiscal stimulus. the steepening will be a result and you'll naturally see that sequence in the yield curve. the volatility is high, and i think leading up to the elections, we will continue to see that volatility. for us as investors, is a lot of discussion around bonds in a portfolio in general and the position in asset allocation. we are of the opinion that we will see continued volatility, but in the position we're willing to take in portfolios at the moment and focusing on the medium to long-term, our

exposure with that volatility is rather minimal, which is beneficial for our clients in the short-term, especially after the election. annmarie: the story this week has been the polls, with joe biden leading and that has been the movement in the bond market. if investors are already starting to price in the biden win, wiser so much worry about the contested election? you saw the cnn poll yesterday where biden was up a massive majority against the president. do you think the market is overpricing this contested election? justine: it's very hard to say -- if it'snt what priced on one party versus the other. with the biden victory coming in and the pole suggesting a higher chance of a democratic alliance, we believe investors are

with bidenre -- coming more recently, but because of the democratic alliance. there will be a strong majority potentially in the senate and it would lead to a fiscal stimulus most likely being pushed through , so there could be optimism surrounding that, and optimism in the u.s. economy. we believe that is not surprising given the labor market. , biden coming in over a short-term victory is so hard to tell at these early stages, and we will continue to see volatility as a result. manus: the other big story overnight, if consensus bills around the biden victory, let's believe the polls, let's all three of us jump on that train. we believe the polls, biden formes power, one thing

sure is that house democrats last night passed an extraordinary narrative urging a breakup of big tech. the name amazon, google,, facebook as a guardians of the internet, too much power, they need structural separation. this is a democrat risk for tech, isn't it? big tech faces big risk as you go into 2021. justine: yes, that's true. are heavilyestors tech expose, including ourselves. we got about 20% of our portfolio in u.s. equities in tech companies. the biggest risk to tech is the regulatory framework. various commentators last night, and the breakup of these companies have been proposed given the length of the report

that has come out, however, who are we to comment at this stage, breakup ofif the these companies is even feasible. they are such massive giants, more important the social implications of the products being sold, who is affected on these various platforms if there is a monopoly. who are we to be commenting on how they run the company anyway? we'll have to wait and see how the new regulations are implicated. manus: it should just be said that amazon did pushback in terms of qualifying the u.s. and global market. areine, stay with us, we currently having a live debate about whether that is a statue of mickey mouse on the right-hand side. we will come back to you with that most important question in

the next 10 minutes. we are loving your set up. justine there, first time on the show, warm welcome from you. here is the first word news. >> the european central bank is signaling the need for extra monetary and fiscal stimulus. president christine lagarde said her greatest fear is when fiscal eight is restored to soon. microsoft and wells fargo have decided to double their ranks of black leaders but they both received letter -- letters from the labor department. microsoft and wells fargo both is there confident this legal. rock ledge and eddie van halen has died of cancer at the age of 65. innovation secured

his eponymous place as one of the best of all time. rolling stone put eddie van halen at number eight in that's list of the top 100 guitarists. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. and kamalaike pence harris will take the stage tonight under extraordinary circumstances, elevating the often forgotten vp debate to the highest state running mate match in years. let's get more from derek. these debates are not usually the high stake, have to watch events. what can we expect from tonight's debate? derek: you are right, they usually aren't, but the fact that you have a democratic candidate who has billed himself as a transition candidate and

joe biden, and you have donald trump who is currently undergoing this health scenario, it means that you do have an extraordinary amount of focus on mike pence and kamala harris. you will see a very different debate then you did between biden and trump. i don't expect for a second that this will devolve into a shouting match with everybody talking over each other. see a littleing to bit more of a social distance affair. you will see candidates seated about 12 feet apart, it looks like there will be a plexi gas -- plexiglas shield between them. it will look different from things you have seen. surgical a prosecutorial debater. she landed really hard shots at biden himself during the primary , so i would expect her to try and do that. but mike pence is underrated on the debate stage.

he knows how to turn a phrase. he certainly does. it will be an interesting one to watch tonight, plexiglas and all. you,ve the coverage for the vice presidential debate kicking off at 1:30 a.m. london time. show, to top is furthers call for stimulus to help the struggling eurozone economy. this is bloomberg. ♪

june, a prediction of a severe global transaction --

contraction in 2020. the prediction today is less dire >>. the recovery has progressed more quickly than generally expected. late in 2022. >> the expansion is still far from complete. at this early stage i would argue that the risk of policy intervention are still asymmetric. >> it's important to recognize that fiscal policy will play an important role in our policy. >> the recovery is still on even and incomplete and uncertain. >> we will continue to project for 2021 a painful and uneven recovery. >> of course the economy may perform better a worse than expected. it remains highly uncertain because it depends on controlling the spread and effects of the virus. annmarie: you just heard some cautiously optimistic comments from the feds drone powell and

christine lagarde and others on the global economy. there urging for further monetary and fiscal stimulus as the euro zone struggles to sustain its economic recovery. that: and it is evident france is set to stagnate in the last three months of this year, according to the statistics agency. has been downgraded to zero in growth forecast from 1% with the uncertainty and risk of lockdowns. justine is our guest host. that is reality laid bare in france at the end of the year. what really caught my ear was when christine lagarde said we the negativehed reversal rate on rates.

top-notch economists say you can go negative until you hit the reversal rate. we don't think we are at that point. will it be the last shoe to drop for the ecb? don't know the capabilities of how far government can go in terms of reducing rates. yes, it would be possible. annmarie: i know you are underweight u.s. in terms of equities and you do like europe. where in europe do you want to be exposed? we focus on strategic allocation of equities and bonds. equities at the moment we are underweight relative to be overweight europe. not europe in its entirety but in specific sectors. withe a fan of real assets

exposure to infrastructure, consumer staples and discretionary and pharmaceuticals are the areas we are mostly exposed to. ouranies we are looking at infrastructure, wind and solar energy companies too. manus: one of the themes that come through, and we've had a couple of conversations on cyclicals. can we just push you a little bit on banks? state street saying you'd have to pay them to buy banks. and some saying banks are too cheap to ignore. where do banks fit at all for you into this portfolio? justine: i wouldn't go as far to say he would have to pay us to hold back. however, there are investments focus more on policy growing companies. we just don't believe that banks and financials are well-positioned in the current environment to warrant a place

in our portfolio. annmarie: i also want to ask you about oil stocks. cover oili both stocks. you drop exxon. is it because of the dividends at risk or is it a straight future climate play? justine: there are two primary reasons why we've exited oil stocks. , asly is all over the place well as demand. the second part is we prefer not to hold negative assets in the oil majors and prefer to be part of the solution with renewable energy companies. so we are transitioning out of oil in favor of renewable energy companies. manus: it's good to hear sometimes what people actually don't want. mouse on your

desk. are you long disney? justine: it's a personal preference to have disney at home. yes, we are holders of walt disney and we have been for quite some time. we all maintain our conviction in the holding as well. us,arie: thanks for joining and we really do love your background. thanks so much for joining us this morning. coming up, we will talk more about the reflation trade, it was in full flow, and then president trump tweeted, but does it still have legs? we will discuss, next. this is bloomberg. ♪

annmarie: 6:25 in the city of london. good morning, this is "daybreak: europe."

president donald trump's tweets have roiled markets, the reflation trade potentially at risk. juliette saly is all over this throughout the night. von volatility has absolutely exploded. juliette: those tweets short-circuiting the reflation bid we had coming through in treasury and markets. it's been a wild night in bond volatility. spike following president trump's tweets which came after we had seen those talks stall somewhat. we saw the implied volatility dropped nearly 18 percentage points, his biggest increase since march 12 when we had that massive spike in coronavirus cases. earlier we had had a hawkish hope that we would see some moves in that steepening curb on the back of what jay powell had said. spreaden the reflation

pushing to the widest of the year. at one point we saw it widening nearly 128 basis points which was within one basis point of the 2020 hi and the steepest the yield curve had been since november 2016. but it's all been turned on its head and there are still a lot of steepener drivers in place even though the talks have ended. haven't looking -- they average entry point of 74.0 five basis points saying the reaction to the abrupt halt of the stimulus talks is understated. you could still see a big move coming through in the event we see virus cases surge as well into the fall and then you could see more coming through. manus: thank you very much. juliette saly on the ever-increasing volatility in the bond market.

with that in mind, we use that chart earlier on, who is the bravest of them all? traders went to lunch. the question is, where is the next move in volatility? it could be a career defining move. there is a lot of uncertainty ahead of the u.s. election. justine's notes are all about the fact that she's underweight the u.s. and she is staying out of it because she doesn't want to make any decisions until there is more clarity, a.k.a. a president of the united states. they didn't exactly go to lunch, but it's quite a turnaround on the tweets, euro stoxx down by .5 percent. coming, it's all about rescue to

recovery. the central bankers of the world stand ready with more measures. this is bloomberg. ♪

a.m. in theod, 6:30 city of london. this is "daybreak: europe." here's today's top stories. president trump off stimulus talks just hours after jay powell warns of a reit -- weak recovery. u.s. futures edge higher now. christine lagarde warns of a cliff effect if physical aid is ended too soon. the warning comes just hours before france downgrades fourth-quarter growth 20.

u.s. legislators propose sweeping antitrust reforms on tech giants including alphabet and amazon. the 449 page report recommends curves and acquisitions. good morning, manus. the top story today has to be between this tug-of-war between the white house, president trump pleading he's going to pull the plug on the stimulus talks with house speaker nancy pelosi and then the fed chair, jay powell, unequivocal in his bid for fiscal stimulus. really telling congress that they need to do it, and also what he is saying is that the risk is not having enough. at the moment it seems like he said who cares about the deficit, it's time to start spending. that: absolutely, and jives with what christine lagarde had to say yesterday afternoon. prudent,ne said be

doesn't matter what it costs at the moment, get on with it. so you've got lagarde, powell and lane all chiming in with that narrative. to the markets, because in that one tweet yesterday, bond volatility exploded, the s&p dropped by 1.4%. we managed to pick up a bit on the back of the tweets. it has turn the narrative around. , has the reflation trade busted? it house committee saying was a democrat committee saying break up big tech. , that is the go index for you there this morning. we should show that as a percentage. the aussie moves on the back of the fiscal stimulus 11% and oil

drops as a risk from fiscal prevarication in the u.s. and seats the oil market. a bumpy ride for the next 30 days, and do you want protections? the new stimulus package is on ice for the moment, ignoring the strong appeal from jerome powell and the fed chair warned the u.s. economy can suffer tragic consequences without sufficient government aid. >> the expansion is far from complete. i would argue that the risk of policy intervention are still asymmetric. too little support would lead to a weak recovery, creating unnecessary hardship for households. -- the risk of overdue it overdoing it for now seems to be small, even if policy actions proved to be greater than needed, it would not go to waste. annmarie: risk from overdoing it seems to be smaller, from jay

powell. monetary policymakers are standing by to do more to support their economy, signaling they will at the very least keep interest rates on hold. michelle, thanks so much for joining us this morning. what can the fed do as stimulus talks are pretty much broken at the moment? theelle: you can since frustration just dripping from the words of chair powell, saying there's little risk in doing too much. we talk about the debt risk around the world and what it might do to credit ratings but that conversation remains very long-term at the moment. conservatives are conceding that there is still a lot that needs to be done to rescue certain areas and help consumers and businesses that powell is talking about that are in a hardship state and will be so until we get more stimulus. officials are

frustrated because they feel they've got little firepower left. our central bank tracker a bloomberg shows that of the 23 top central banks in the world, just four are set to still cut for the remainder of this year. it shows they are scrambling in the toolbox and there's not much left they can do. there are parts of the central economy that the central banks just cannot reach. if there's no physical agreement between now and the u.s. election, you could be looking at february. so you have this fiscal gap, potentially this crater could open. i just wonder is it political suicide for both of them not to come to some kind of an agreement, because the impact on the economy is going to be, to quote powell, he intimated it would be tragic.

and the hardship that would come on the reality for americans. you are looking at it rationally and sometimes that doesn't turn out to be the case. there's a lot of classic finger-pointing because both sides start want to be blamed for settling any sort of deal. there's a few days that come to it seems to be what signals are pointing to at the moment. we could get something in the spending bill to keep the government open after december 11. you mentioned also that trumpa said perhaps some aid for airlines could be approved soon, maybe before pre-election. but there's a few areas that especially need help, the unemployed in particular, households who lost a lot of personal income in august, one

scary data point of been looking at is one in five of those jobless americans have been out of work for happier or longer. labor economist tell you that's when they start to lose soft and hard skills and he gets even harder to get back in the workforce. airline sauce payroll support as of september 30. restaurants are bracing for a tough winter season when they have to figure out how to operate safely indoors. there are estimates out about how that will affect the industry and the broader economy. real are likely to be consequences if we don't get more signals out soon. much forank you so being with us. some mornings i domenech to find some rationality in my thinking. tracking the big moves across the world. london's hq is a destination.

berlin is the latest european city to crack on his night the german capital will prohibit outdoor gatherings and close restaurants at 11 at 5 p.m. the new rules go into effect in saturday and will remain in force until the end of the month. the french economy is had to stagnate in the last three months of the year among uncertainty and the risk of lockdowns. forecast -- growth forecast was downgraded to 0%. the presidential doctor says donald is now showing no symptoms of coronavirus, but more infections are emerging in the white house including one of the presidents military aides. joe biden says they should scrap the next presidential debate if donald trump is still infected

with coronavirus. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. annmarie: thank you so much. coming up, limits on russian uranium. the u.s. and russia come to an agreement that avoids tariffs" us. we hear from wilbur ross on the deal. that exclusive conversation is next. this is bloomberg.

manus: this is "daybreak: europe." u.s. and russia have agreed to a 20 year protection of limits on imports of russian uranium. the trump administration said the move will benefit american minors and others in the

industry. wilbur ross told bloomberg that the deal avoids tariffs among quotas, and other remedial measures being imposed on russia. the old agreement has been scheduled to expire very shortly, though the new one annuallyit, reduces the percentage of uranium that the russians can supply to the u.s. and changes some technical we process that now uranium coming in. the net effect of this will be to strengthen the u.s. uranium and u.s. industry uranium refining, but to do it in a very gradual way that does not have any material impact on electric utility rates for those

utilities that are using uranium. >> give us a sense what is the industry in the united states, what it does for them, but also, longer-term strategically for the united states, what does it do for the united states? policy has several important components. one is national security. there is obviously a national security risk to the degree that are electric power industry depends upon russia as a source of its raw material. there's an even more direct national security risk as our navy depends upon foreign sources such as russia for the nuclear submarines that we have going about in the ocean. so the way to deal with all that is to have a healthier domestic

industry. >> do we have the wherewithal to supply the amounts of uranium -- a different web putting it, is the price going to go up? theexpect it will support price of uranium to the utilities? reducinge're doing is the russian content from about directly, and7% then we are making the other technical changes. that change occurs over a period of years. see you are talking a very small inputn of the utilities and uranium for nuclear power is only a small portion. i think it's around 20% of their total power. so it will not be noticeable, especially since there is such volatility in the price of the other sources of power, namely

oil, natural gas, and coal. this is not noticeable to the consumer, but it will be very noticeable to the u.s. >> i understand your point about the strategic for the nine states. what did russia get out of this deal? >> what they got out of the deal herehe stable relationship for many years to come. the alternative to the suspension agreement would have a 232or us to bring proceeding and essentially impose tariffs, quotas, or other remedial measures. what it gives everybody on both sides is assurance about what are the rules of the game, how much material will come in from russia, how much material will

not come in from russia, and therefore should stabilize things both from the u.s. point of view and the russian point of view. that was u.s. commerce onretary wilbur ross bloomberg. the house panel has proposed far-reaching antitrust reforms to curb the current u.s. technology giant. new findings target four of the big ten, amazon, google, facebook. dani burger has been looking at this report. take us through the details of the house subcommittee. >> i don't think it would be an exaggeration to say this is some of the most dramatic proposals if passed in more than a decade. the findings say these big tech giants are gatekeepers of the digital economy and they are the ones who have been deciding who the winners and losers of the

economy is. that means has been less competition and less choice for consumers, as well as just less innovation. so how are they going to address this? they are saying the platforms cannot compete with any of the companies that rely on the platform. it is also limiting the markets they can engage in, and acquisitions going to be presumed anti-competitive unless the big platforms can show that there is a public good. finally, they are also saying their ability to move data for customers needs to be more easy between platforms. annmarie: nasdaq futures up .4% this morning. if this does represent such a large overhaul, why isn't there anymore move into the markets this morning? >> i think it's just a really noisy day. all focus it seems is on the white house overnight. i talked with a senior market strategist who said that right now the market just doesn't

believe this is going to happen. there needs to be democratic sweet, republicans voiced skepticism and it seems like they would shun these recommendations. a blue sweep seems like it's coming in the polls, to expect this to be priced into these stocks. annmarie: dani burger, thanks for joining us. coming up, just over two months before the cdu convention that will decide on angela merkel's successor. it is heating up. this is bloomberg. ♪

manus: this is "daybreak: europe." the trading day had could be bumpy. here are some of today's events, it's all about politics and

monetary policy. christine lagarde speaks at 1:00 p.m. london time. the fed published the minutes of the september meeting. so much has happened since then, really. tomarie: and the wto plans announce to finalist to be the next director general, and it 2:00 a.m. tomorrow on this side vpthe pond, we have the debate. i'm never seen such excitement on a vp debate in my entire life as an american. with just over two months before the cdu convention that will decide on angela merkel's party successor, the election race is heating up. her longtime political adversary ands to stand a good chance there could be a compromise candidate. boris johnson will have to take the internal market bill off the

table if he wants a deal with the european union. be theourse this will which a long period in the chancellor has shaped and strengthened the reputation of dealmaker,an honest and has strengthened trust in engagement,ity and but this is democracy, that governments change, that new people come into responsibility thinkwer, and we have, i we can say we have evolved to be a mature democracy. so new people will follow. the styleperienced and success of the style of angela merkel, but then of course there are new challenges

ahead of us. i'm very convinced we are going , and theg challenges ongoing unraveling and all the certainties we have thought that would last in the future. so new people will face new thelenges, and i think world and our friends can trust reliable,ll follow a engaged, responsible path, particularly in foreign relations. britishremains the position that the brexit agreement is not the basis for future negotiations and relationships, then we have to face the bitter reality that we obviously and unfortunately for the moment, cannot trust in the words britain the

has given to the european union. so we always had no doubt that the rules of law was and has cornerstone of british foreign policy, and could be expected as also a basic element of our future relationship. this we were to see materialize, then of course i both say the basis of for you to treaty relationship deal has then been put in question by written, very unfortunately, but we would have to realize this new reality. that was one of the three candidates for the german

leadership race in an exclusive interview with bloomberg. matt miller was part of this. when you listen to that interview, do you think that ups his position in the running? is that the narrative that's going to win him the cdu leadership? matt: to be honest, i'm not sure that most of the german populace really thinks of him as a true contender for leadership in the party or chancellor. the head of the sister party but he is aria, wildcard number four in this race, kind of, depending on where you put the others. he's more important as head of the foreign affairs committee and his views on brexit have been well known. he wrote a paper right after the

vote in 2016, and his that she is most well-known for his views on nord stream 2. he's been fairly outspoken in saying his that she thinks the country needs to shut down nord stream 2 and stop it in its tracks. annmarie: very interesting, thank you so much, matt miller. that's it for bloomberg "daybreak: europe." we should quickly take a look at what's going on in the markets, donald trump's tweet roiled the market. in you have the futures europe pointing down but s&p futures recovered a bit. manus: you've got the european market repricing itself with a one point 4% drop that went through late yesterday evening in the united states of america. u.s. equity futures are higher because of the benevolent tweets from the president offering supports for airlines and pbp.

u.s..is the you staying up for the vp debate? manus: yes. [laughter] ♪ so you're a small business,

or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business. anna: good morning and welcome

to "bloomberg markets: european open." i'm anna edwards alongside matt miller in berlin. matt: the markets say get ready for a bumpy start. u.s. future steady. european contracts set for a rough morning. the cash trade is an hour away. here are your top headlines. president trump calls off stimulus