off stimulus talks, spurning fed chair jay powell and roiling markets. he says there will be no action until after the election. u.s. legislators proposed sweeping antitrust reforms on tech giants, including alphabet and amazon. the report recommends curbs on acquisitions. plus, kamala harris and mike pence face off. it could be the most important vice presidential debate since the events began. we'll bring you the very latest. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london. tom keene is in new york. i have to say there is a bit of news going on in europe with brexit talks and in spain, but really all eyes are riveted on politics in the u.s. and what president trump will do next. tom: i said in our morning meeting today, let's not forget europe. remind me -- spain is coming out with new plans off the pandemic, right? francine: we heard from boris johnson yesterday, and we will hear about economic plans over the longer-term.

spain is working on a six year plan to kickstart the economy. so there could be something in terms of maybe transitioning as well. we are inspecting the news at any moment, but i think a lot of the markets will depend on what happened in the u.s. tom: we are working on the six hour plan. knows what will happen in the next six hours. we have to get to the debate tonight in salt lake city, utah. kevin cirilli is up for the debate. you are right for the opening, this is a big deal. francine: i don't think a vice presidential debate has been more important. let's get to first word news in new york city with ritika gupta. ritika: president trump rocked fedstock market and spurned chair powell by holding stimulus talks, ending negotiations with democratic leaders, saying nancy pelosi is not negotiating in good faith. he said he will get a major stimulus bill passed after he wins the election. powell had warmed that too little support would lead to a

weak recovery. president trump is getting --tless and wants to a 10 and wants to return to the oval office. some of his aides do not want him to leave the right house -- the white house residence. the presence doctor said he has no symptoms of the coronavirus's first night back. joe says he and president trump should scrap next week's debate if the president still has the coronavirus. the debate is set for october 15 in miami. there president was diagnosed with a virus october 2. the cdc says people with mild to moderate cases remain infectious for as long as 10 days after the onset of symptoms. mexico to calling on ised up a week -- 2 -- it urging that fiscal supporter households, private bins is as, and health care be more than tripled. i met has forecast that mexico's economy will st shrink 9% this

year. 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. tom: thanks so much. a data check. interesting off the 600 point drop we saw in the dow, futures up 19, s&p futures up 19, dow futures up 1.77. the vix centers here, out to 29.48, showing maybe the pulse there and the reversal. what i would note is the two-year yield is lifted. you have to be very careful here. it is out to two standard deviation moves, a substantial move in yield, but it has been such tight range. on the two having your is a different two-year yield. turkish lira back on track. francine: i want to spend time on some of these european bonds.

euro area bonds climbing before the european central bank president speaks, and i don't know exactly what the market is expecting from christine lagarde, but it is clear on tuesday she outlined more of a w-shaped recovery, which means we could see extra stimulus or hint at extra stimulus from the european central bank. i decided to look at the italian 10 year yield and the german bund tenure yield. i am also looking at the european stocks, up before, now trading sideways. to millis measure from the u.s. has also postponed in the global stock market. donald trump has pulled the plug on stimulus talks with nancy pelosi, ignoring jay powell's call for greater spending. he said he would pass a bill after the election. joining us now is tina fordham, head of global political strategy. thank you for joining us. it is unclear to me if this

could be a winning strategy for the election. i'm not sure why trump is doing this. you: i have to say i'm with on that front, francine, because first of all, the markets were expecting it, given his tweet coming out of walter reed hospital, where he said that congress needed to get it done, which led markets to believe that congress would then act. i certainly have been saying for a long time i thought we would see another round of stimulus before the election. this is exactly the kind of thing that governments do in a reelection period, not to mention something as extraordinary as this. it appears the president has decided to make the whole thing hostage to a second term victory for him, and that means that everything is now pushed into the lame-duck session between the elections and the inauguration, january 20. francine: if you look at the

polls, partly it is also -- if not all -- it is his handling of the pandemic and his handling of the pandemic within the white house, and also with his personal safety. does this move the polls ahead of the election, the fact that he said we are stopping negotiating e? tina: i think it is such a short period of time, it is unlikely people will feel consequences in the real economy in just a couple of weeks, and i suspect that is what he is taking a punt on. for a president who values the value of the s&p as much as he does, it is a surprising move to take. i'm not sure the lack of stimulus hurts him as much as the way americans appear to be reacting to the way he has handled the pandemic for the nation. but even the vip treatment at walter reed, and taking

liberties with people who work around him. tom: it is so crazy right now. i think all of us can agree that it seems like a week or maybe a month. it was long ago, like 24 hours ago the guardian talked of rudy giuliani, one of the president's key advisors, coughing his way through interview on fox. we will speak with rudy giuliani this morning. from where you are, can you perceive that the president is listening to his closest confidantes, like the former mayor of new york? tina: i don't think there's much that anybody can tell the president at this stage. he is later focused -- laser focused on victory, putting forth an image of vigor. i don't think he will be taking his shirt off to ride on horseback like putin did, but it is something like that.

meanwhile, the cluster of illness in the white house is quite striking, and it seems there is a real disconnect that the president is not sensitive to the way that plays with the public, saying get on with your life, coronavirus is not that bad, one over 200,000 americans of all persuasions have died. tom: i talked about this 10 days ago. when president nixon was struggling, the legislative up to advise him on process. where are the republicans to advise their president now? they don't seem to be in the residence with the white house. that are many who suggest the president takes his cues news has and even fox

'sen critical of the president handling. we are in an extraordinary from jayere the police powell, the fed chair, saying there is not too much that the government can do right now, are falling on deaf ears in a very narrow part in politics. yet the polls are moving away from the president, right? i mean, the gap between biden and trump is growing. there was a sympathy balance -- afterrest johnson boris johnson was hospitalized in the u.k. francine: do you trust the polls, or can the polls swing? if you look at the latest polls, it almost looks like it could be a certainty that biden wins, but we have seen this before in 2016. tina: yes, and many of his in and business are traumatized and haunted by the asst of the undercounting,

we now know, of trump supporters . the posters that i talked to think that these problems have been fixed, for what it's worth. posters do go back and fix their message. but the markets are right and they continue to be skeptical. i do think we have to appreciate the differences between this election outlook in terms of what the polling tells us also theto 2016, and fact that we don't have two third-party candidates like last time, where those tiny percentages ended up making a big difference, and we have very few undecided voters. and that makes the strength of biden's lead more significant, and also the steadiness. i don't really see a lot of swings, in fact. we just shouldn't look at the outlier polls. tonight, andebate

this is a real cardinal rule of the debates, is it what these two candidates do do or what they don't do? is it all about avoiding debacle or is it about being proactive? think with the presidential debates, all joe budden had to do was turn up and not come across as a senile -- all joe biden had to do was turn up and not come across as a senile, doddering old man as republicans painted him. he rose to that challenge. viceressure on this ver presidential debate is extraordinary. who mike sense of pence is. he has been the vice president. kamala harris was a pretty tough debater during the primaries, but given the high possibility that either of them could be the president, given age and pandemic and everything else, i

think people are going to pay a lot of attention to how they come across, and the role of the bp will matter more than usual. tom: a wonderful update. tina fordham with us. driveentioned, we will forward this conversation. we are still to bring you on bloomberg surveillance this morning the 107th mayor of new york city, president trump's confidant and personal lawyer, mr. giuliani, and this of course off this important fox interview of the days ago, when he was coughing. my first question, without question -- is mr. giuliani, how is your health? look for that in the 8:00 hour. this is bloomberg. good morning. ♪

good morning, everyone. bloomberg surveillance. francine lacqua and london, i'm tom keene in new york. we are drowning in politics. we are listening for spain, their announcements, challenges, all of the two stories of brexit and the pandemic, and there is nothing going on in the united states as well. let's digress and talk about the markets. one of our most popular guests, a huge response particular from those looking for yields to drive higher, with steven major. has beenh hsbc and wonderfully persistent, resilient, and accurate on bond yields to a new low near zero balance. steven major, do you reaffirm a lower interest rate milieu, or have we broken that to a tone toward higher interest rates? steven: the short answer is yes,

i have reaffirmed, and the fed confirmed it last night, anyone shouldieves in longer take a look at the long data forward waited above 2% tom. you can enter long bonds now at very attractive levels. forward?far is the bridge out into the future -- can you be so bold, the forward out to 2022? the 10 year forward 30 year is about 2.12. so the market estimates of the very long-run forward grade, the bond market doesn't look the on the election that we are about to face, and it looks through the cycle. when you buy a 10 year treasury you will get 21 cash flows over so next 10 years, and --

when the fed is telling you that they are on hold for three years, and really it has been five, it says to me that we need to take the opportunities when the market sells off, as has just happened. throughout the summer, people have been complaining about the lack of volatility. they have had some, the market has repriced. there is noephen, risk of inflation? is there a risk that we get a very big stimulus postelection in the u.s., and then inflation shoots up? risk ofthere is more disinflation and dare i say deflation. listening to jerome powell last night, i was struck by his focus on disinflation. he referred to technology and demographics. frankly, the central banks don't know how inflation is going to come through. it is just an aspiration. they talk about it but they haven't explained in simple terms to people like me how they are going to get then inflation.

it is just a wish. to me, disinflation looks more likely. cover thee output yet extent of the demand shock exceeds any supply-side pressure some people talk about. so i'm struck by what powell said last night, and that doesn't look like a central bank is moving rates anywhere up anytime soon. i think they will be looking at more stimulus sooner rather than later. francine: we keep talking about europe becoming more like japan. are they going to try to throw everything at it so we don't get a japan-like economy? steven: next year we will see. i don't think the economy is going to be that strong next year, regardless of who wins the election. but if the polls are right and we are swinging towards the blue wave, that is what the polls are saying, not my opinion -- but if

that was to happen, then we will have to think about what kind of economic mix we are going to have. people are talking about spending, but they are not talking about tax. .he u.s. has huge, huge taxing it may not currently have willingness to tax, and to me that changes the whole picture. no one is going to talk about tax right now. it is an election. tom: one final question. we want to continue through the hour with you. with your scenario, does it involve curves steepening that will provide relief to commercial banks? curve: no, i think the will flatten, tom. and banks would like a steeper curve, and the only way they are going to get that is if we go deep negative. now, negative rates are something that i'm pretty sure we will speak about again at some point in the future.

every few months this one comes and goes. imagine what happened if in the next few weeks new zealand or the u.k. comes into negative territory. what you just heard from steven major of hsbc is absolutely extraordinary. i can really not convey the cusp of the debate there. francine,or says -- that is going to be the core theme for q4 and into q1. francine: i want to ask steve what he is expecting with gilts, and german bunds and italian btp's. we will talk to him about the election and we will also talk to him about china. that is at 6:00 a.m. in new york, 11:00 a.m. in london, and this is bloomberg. ♪

ritika: this is bloomberg surveillance. my ritika gupta with your bloomberg business flash. a democratic house subcommittee has proposed far-reaching antitrust limits on technology giants. those curbs could lead to the breakup of tech companies if congress approves. democrats backed by targeted amazon, google, facebook, and apple. it says it can use its control over markets to pick winners and losers.

facebook is expanding its approach to the qanon conspiracy movement. all accountse linked to the conspiracy network. there is a warning that a great polarization may be next. the world's wealthy implies what house cooper, they pandemic could be a catalyst for those who offer digital or tech solutions. on the other hand, a report says -- that other industries may suffer. francine: thank you so much. i'm still trying to get my head around qanon. it seems like a very original, american conspiracy that is not filtered through to europe as much as elsewhere. this is what the data is telling us. the markets are focused on the lack of stimulus in the u.s., and the number of presidential -- that we saw yesterday.

also euro climate. christine lagarde will speak later. 600,u look at the stoxx media companies are sliding the most. tom: the yield curve, let's go over it right now as we have steven major with us. 10 year yield after that breakout, .76%. 30 year bond, and mr. major mentioning the bond out months and months and years, offering a 2% yield, cash bond 1.56%. the curve is steepening. we will continue our discussion with steven major. tonight, the vice presidents debate is at 8:30. our kevin cirilli in utah. ♪ so you're a small business,

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the picture today is less dire. >> recovery has progressed more quickly than general expected. >> we believe back to recovery -- gdp inrms of gdt 2022. >> expansion is far from complete. ofould argue the risks policy intervention are still asymmetric. >> fiscal policy will play an important role in the transmission of our monitor policy. >> this recovery is incomplete and uncertain. >> the birds of the downturn have not been english shared. >> we will continue to project for 2021 a painful and uneven recovery. >> the economy may perform better or worse than expected. the outlook remains highly a certain part because it depends on controlling the spread and effects of the virus. >> countries will suffer

contraction for the first time in about 60 years. imf.ine: comments from the we also had mr. kuroda from the bank of japan. steven major is still with us. we talk about the fed can do, are we once again going to see the limits of monetary policy being tested over the next 18 months? steven: the limits of monetary policy are evident from a number of different countries. the qe is reaching some point of diminishing marginal utility, economists would say. i have always believed the main impact from qe is to signal the intention of the central bank and therefore really force the rates guidance.

right now we're talking about more qe from the ecb and bank of ifland, and i am thinking you have already worked out that it is not going to have much impact, then why not do something else? that is when the debate shifts back. in the euro zone under certain circumstances, the ecb lands at -100. qe.s not just on francine: i need ask about the bank of england because there are reports the bank of england uses are pretty rare operational standing facility. this facility was used was 2011. basically, a way for this facility to be used as a tool to manage any unexpected or frictional payment shocks. what does that tell us about the state of the k economy?

is this the most interesting central bank right now? the nusradon't have front, but there have been occasions when i ways and the count has been used. the u.k. has the ability to use its truce -- truce often status -- true sovereign status. they can run an overdraft as long as everyone is comfortable it will be repaid at some point in the future, no problem. it helps to smooth the cash flows because there were huge tax come in sometimes and huge bill payments that go out or coupon payments that go out. so it could just be part of that smoothing process. again, i've not seen the news so i can't comment for sure. tom: steven major, the video we showed at the beginning of all of the institutional were these providing confidence and direction, we have been doing this since 2000 seven.

maybe the plot has changed but the theme is the same. or we just avoiding clearing markets? this massive disinflation, your discussion of a further visit to negative interest-rate debates and at coming months, is it just we are unable to clear market and book losses? steven: i think that is the point where the cash worth looking into. -- worth looking into. maybe should play the tape from a few years ago while the same people up in the comments side-by-side. i daresay it was held like a broken record. they keep saying the same thing. the definition of insanity to continue doing the same thing expecting a different outcome. ," what is the price -- tom: what is the price to society of that insanity? savers have been denuded of any kind of income stream. steven: the challenge is the

central banks and governments face today have only gotten bigger. some are new and some are old. but the simple point is there is way too much debt. debt can last 20 years has increased at three times the pace as the economy has grown. that is a really scary thought. it tells you you're having to use debt to buy any meniscal bit of growth we get. -- minuscule bit of growth we get. demographics, that could be moving in a different direction soon but it is still very down on rates and inflation. wealth inequality. these are long-term structural there really are beyond the control of the mere mortals that work in central banks. francine: mere mortals can decide whether to go to negative

interest rates or not. this is probably one of the biggest questions we will be facing. will eventually have to go negative? steven: the central bank are only doing their job. they are given a mandate by elected officials and given targets to try to hit, so 2% inflation or average 2% inflation for example. without much hope of achieving half of that, from what i can see in the eurozone and a particular. and at the u.s., it looks difficult to see how that 2% will be achieved. they have to do everything in their power and using the existing tools and everything they want to invent any the meantime to try and that target. that target. until that changes, it will continue like it is. for the current situation a change coming to governments to change the role of central banks. that is a really big thing. it is way out there. it is going to be many, many

years in the future. it is not happening anytime soon. francine: stephen, thanks. steven major of hsbc staying with us. let's get to the first word news. ritika: president trump's promising once he is reelected, he will pass on major stimulus bill that focuses on hard-working americans and small businesses. for now the president has ended stimulus talks with democratic leaders. he accused house speaker nancy pelosi of negotiating in bad faith. democrats have called for 2.2 trillion dollars in spending. the administration endorsed a $1.6 trillion plan. president trump's doctors as he ofreporting no symptoms coronavirus that led to a three day hospital stay. the president is reportedly breathless and wants to go to the oval office. he has been in isolation in the oval -- residents since his return from the president.

debate --ential joe biden's has no debate of the president is still sick with the coronavirus. the u.s. and russia have agreed to extend limit on imports of russian uranium for 20 years. theur ross explained what impact will be. >> effective this will be to strengthen the u.s. uranium producing industry and u.s. uranium refining. but to do it in a very gradual way that does not have any material impact on like tricky utility rates -- electric utility rates for those using uranium. ritika: the u.s. imports about 90% of the uranium eight uses. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries.

this is bloomberg. tom: thank you. futures at 19. john futures up on 76 off that huge drop we saw yesterday. the vix is flat. coming up in the next hour, lauren sauer with a good revisit withon this pandemic emergency medicine at the johns hopkins university. worldwide, this is bloomberg. ♪

tom: good morning, everyone. "bloomberg surveillance." a spirited conversation. a lot going on into the day. tonight, the vice presidential

debate out of utah. kevin cirilli in utah. with hsbc.r with us i must revisit the amplitude and the testing of the negative interest-rate experiment you alluded to in the last half-hour. can we just assume the united states is unable to do that experiment because of our dominance, preponderance of money market funds? steven: you can assume that probably this year, but things might change next year. the technical constraints can be overcome. just think about how circumstances might change next year. that depends on who is the president, for example. it also depends how much the country moves toward using electronic currency. i look at this around the world and i think in new zealand, they seem quite advanced in looking at the technical constraints.

in the u.k., not so advanced but they are looking at it. and it say never. closed to you,s you go down another one. i think that is what happened. quoting robertor frost. i like that. that is an american poet. i want to talk to about negative interest rates as an experiment. that is the financial mathematics. what about the social calculus? what is the effect on new or greater negative interest rates on society? about the cash flow. my colleague larry dyer says to me, show me the money. qe, central banks are doing where does the money go? who does it help? you know the answer to that. it helps the top end of society more than the bottom end.

cuts if itrge red were to happen -- at the moment, this is theoretical. a few months ago, we were talking about this again. with large rate cuts, you get a cash flow boost to the people who need it. they would get money in their hands. that to me seems quite attractive. i am not saying that is going to happen. i am not saying it is our forecast. i'm just going to the permit tatian's. there are some very serious people out there who have thought about this. padpossibility of a diprete -- deep rate cut from the bank of new zealand -- to answer the question, it is something we are looking at as a possibility. markets are about read across and filling out the constraints. we have to work with what we've got. for me, for the u.s. to ignore

the possibility of negative be emulating the possibility of using all available tools. the central bank says it is going to use all available tools to do whatever it takes. well, in that case, they need to look at all available tools. francine: do you still think the dialogue surrounding negative rates here in the u.k. for the bank of the is bluffing? -- bank of england is bluffing? think it isn't bluffing at all. the effect was used quite successfully in the past. we have to be careful with this manyse you do it too times, and no one is going to listen. i think it is serious, the possibility of negative rates. there are all kinds of ways of doing it. locale creative the ecb has been.

-- look how creative the ecb has been. the policy rates used by the ecb .re zero down to -100 academic worky of and stock reports from the ecb explaining how in certain ways this policy has worked. i think the dangerous thing is -- [no audio] francine: and be a final question on what the optimum time --

the labor department is questioning diversity plans announced by microsoft and wells fargo. the office that oversees federal contracts is asking how the company's efforts apply with the laws of race and implement. those companies upset they want to double the number of black leaders and say they won't file -- violate the law to do it. ceoack for general electric

archie's place to put the rocky past behind the company. likely to face as he is the allegations of accounting misdeeds. the company was a good so-called wells notice over possible relations type two and all insurance business. is on the verge of a huge new contract with sirius xm. his new deal with boost his pay to about $120 million. the previous deal paid him as much as $100 million. he is 66 years old. maintaining star power at the time on your are focusing on podcasts. that is your latest bloomberg business flash. francine: has antitrust panel is looking to curb the power of u.s. tech giants, including amazon and google. the most dramatic proposal to overhaul competition law in decades stop and could lead to the breakup of tech companies if approved by congress most of joining us now is alex webb

focuses on technology stories. alex, great to have your take on this. what is the likelihood this goes ahead? report.a pretty damning will these companies be curtailed? alex: i think probably we're going to see something. whether it goes as far as the proposals laid out, it seems unlikely. inevitably, a huge amount will depend upon the election results. republicans have expressed certain amount of reticence. they object to a lot of the proposals, but the democrats seem to be in favor of some of them. i think ultimately, we are not going to see it go this far but suggesting something that goes this far is kind of healthy because it is better to walk down something strong then -- water down something that is strong then something that is already quite weak. the stocks barely move.

i read the wonderful bloomberg summary. i get it. it is the people wanting to breakup horrific tech companies as well. does the public want to break them up? alex: i don't think so. i don't the public is as come visit of these issues as -- are as come visit of these issues as the new you would like them to believe. people's list of priorities given the news at the moment. it does not mean, view it is any less important. thes a huge issue affecting agility of the economy, the democratic process, and something that testing to be examined very closely. i tended thing the lead on this will be taken by europe and european commission and u.s. will be following suit. that was a great question. the public's uni. and a lot of the public like you and i do not know they do with

our data. we're on twitter and instagram but we don't know at the end of the day. alex, i guess this is the main problem of how they use this thing. if there were to curtail some of these big companies, would it be in future acquisitions or with a break them up? alex: these are the two things on the table. one suggestion, they should not be able to do any acquisitions. i think that is slightly overplayed. is the mainece suggestion, and this is what would lead to a breakup, you're not able to sell products on platforms that you run. so if you are apple, you would not be able to sell products and services to the app store that you yourself have developed. or amazon would not be able to sell in the marketplace. tom: i'm going to play judge frye running. film andnk of about would go on that up at harvard. clearly, it would face a cost to

shuttle test, right? alex: absolutely. i personally am skeptical about tool,ability of that as a as a solution. i think it is helpful it is being discussed because then it means that is the kind of worst-case scenario, the what is tempted back from that is still likely to have an effect on those companies, but not clearly as extreme as being suggested now. tom: alex, that is great. i'm going to send you a facebook mug but a search for on google and we will see how that goes. ofx webb on the beginning regulation. this will be an important interview. looking for rudy giuliani to join us, former mayor of new york. seriously, confidant of the president and with all that is going on, that will be most interesting. before that, stephen roach joins with yale university. he has created a firestorm

looking at the trade deficit, looking at the capital flows of america and significantly calling for a sharp drop, weakness in the u.s. dollar dr. roach puts that of a relatively short timeframe, about a year or two. in our roach, must view next hour as well. futures up 16. dow futures up 1.51. the picks flat. yields are higher right now. -- the mix, flat. yields are higher right now. inflation out there. stay with us. ♪

tom: this morning come instability ensues as the dow

plunges 600 plus points. the president swings work together and get it done. vice president biden notes no stimulus meetings, but republicans and/or democrats and in the oval office, by phone, zoom, or carrier pigeon. trump, 70 four. biden, 77. there is a vice presidential debate tonight. kevin cirilli on the watch. the economy needs a jolt. a grim jolt. survey suggests new unemployment. good morning, this is "bloomberg surveillance." from new york and london, francine lacqua. eventful day and what our government is going to do about this pandemic and the slowdown. francine, let's start with spain. we're waiting a plane from spain, aren't we? it isne: but this time part of parcel about the economy and basically they're trying to put in f