now, angela merkel is pulling far ahead of martin schulz.oalition government might look like are still way open. our next guest says a potential game changer could be the leader of the liberal democrats. joining us is the deputy director of the german marshall fund here in berlin. let me ask you, first of all about the chances for a martin schulz comeback. it was not too long ago, that his lead evaporated, seemingly for no one solid reason. could angela merkel's lead do the same? >> thank you for having me. that is an interesting scenario because it is true. at the beginning of the year, martin schulz was neck and neck with angela merkel's cdu party. in the last few months, she has surged ahead in the polls. her popularity has dropped a bit, but the cdu is 12 points ahead. there are a couple things that factor into this. one would be the election of president trump. that was an antidote for angela merkel to help her gain popularity in the german electorate because she is seemingly a calm within the storm going on in europe. matt: germany is

juncker martin schulz steps up his campaign to unseat her. -- challenger martin schulz steps up his campaign to unseat her. in the u.s., he saw the s&p and of dow futures starting to turn around. we have green arrows on european futures. if you take a look at the bond

let's talk about her main opponent, martin schulz, confident operator in the european parliament andis the root of that confidence? it is interesting because when he first burst onto the scene in germany earlier this year, there was a lot of hype around him, a lot of expectation that he would do very well. but that has dissipated. the last few months, it is hard to see what that confidence is based on. he still says he stands a chance of becoming the next chancellor. anything is possible i suppose that if you look at the polls, his party, the centre left party, only pulling in the early 20s. so most people are predicting that angela merkel will stay as chancellor. the big question is who she will be governing with. it is unlikely according to the latest poll data that martin schulz will become the next chancellor that it could be that his party ends up in government. and one problem that the centre left spd have had in the last years is that they have governed with angela merkel so it will be hard for martin schulz to criticise the past four years and say that this isn't working and

does martin schulz have a chance of coming back?hings tend to change very quickly when there are so many parties involved. simon: matt, we are looking at it much less than we were six months ago. you take those opinion polls and just six months ago, martin schulz and angela merkel were net connect. nd-neck.neck-a martin schulz has made a decent start. what is most interesting about angela merkel, strong comments over the weekend. the sign of her renewed confidence. she is a politician that speaks when she feels she has to. she has the confidence to put rhetoric alongside what she does behind the scenes. when we had in toward the election, the 24th of september, you will see a bit of a flight to safety, because everyone has dismissed martin schulz's chance. polls will close in but expect merkel to win when it comes to being able to forge a coalition. that rhetoric around the renewal of europe being at the forefront . anna: one of our producers was saying to me, we had a done deal and u.k. elections, didn't we? it didn't go quite as w

martin schulz in tokyo.ion to the aviation industry and chinese carriers are having to way politics over profitability. the big three, china southern, china eastern and airchina, are out china southern, china eastern and air china, are out soon. will events in the world cause a dent in that online? as they pressure south korea over its deployment of a missile defence system. joining me is my colleague. will the south korean tourism industry really have an impact on the bottomline of these chinese carriers? yes, it will, because it is a case of politics over profits. essentially china's big three allied is a china southern, china eastern and air china. let's take a look at a graphic illustrating the size of each. they are asia's three largest airlines in terms of their fleet size and the sheer number of passengers they carry. china southern is the largest, carrying over 70 million passengers this year as ofjuly, with over 500 veins in the f. china eastern follows with 63 million passengers. —— 500 planes in t

juncker martin schulz steps up his campaign to unseat her. -- challenger martin schulz steps up his campaigno unseat her. in the u.s., he saw the s&p and of dow futures starting to turn around. we have green arrows on european futures. if you take a look at the bond trade, we have a three-day chart of the german debt. you can see we have come down in a yield that we are now headed back up. this is the end of friday's trade into today. ,he yield heading back up investors starting to sell a little bit more of the debt and that twitches -- that pushes the yield higher. we will get some direction in about 28 minutes as we get the market open. what kind of direction do you see from that jim and screen? -- screen?creen -- gmm manus: these are the equity markets across asia. we have more risk coming in terms of political theater. we have a reset on afghanistan this evening and south korea having military droves. what risk does bannon post outside the white house? housese outside the white -- pose outside the white house? in terms of linguistic nuances from mario draghi, more from jackson hole a lit

let me ask first about martin schulz' chances.m a little bit he did nott i, but want to spend too much time with the media. it seems like he needs to do more right now because he is so far behind angela merkel. .arcel: angela merkel is fired it is hard to see there could be a fundamental change. martin schulz is fighting. twodifficulty is the parties form a government. germany is doing so well. the economy is booming. everyone has a job. employment is at an all-time high. it is very hard to find issues to disagree between the two of them, and that makes a bit of a "boring" -- election campaign because germany it is in a very true -- germany is in a very privileged situation. matt: you have this massive influx of refugees. re should bee the opening on the right. is the afd able to profit from that? marcel: it is true that inequality has risen. this is an issue. a lot of people on the fringes are marginalized, are frustrated. we have seen them lose in terms of support. they were at posted 20% last year. big influx of this of refugee

what we saw were some of these 's doing the attacking for martin schulz.initive book out about the chancellor and the chancellorship. your chapters within angela merkel take on almost a biblical tone. we have had a hellacious weekend in america over some of the ghosts of a germany past. does angela merkel have the same challenges in her germany? need to worry about white supremacy, white nationalism, or the other challenges of 60 years ago? easy to say no. germany has been extremely efficient in dealing with the ghosts of its past, which are all too apparent. for the past decade, it has been drumming the holocaust guilt and wartime into decades of schoolchildren. german leadership are very clear about germany's guilt. that said, we saw with the refugee crisis there was something of a rise of the far right nationalist anti-immigration sentiment in germany. seere almost certain to immigration -- anti-immigration parties certainly to the right of anything else. disappeared,ctly but it is a different debate than in the u.s. at the moment. francine: thank you s

they will see martin schulz.ail become a and he has lot more aggressive as you saw in the tv interview yesterday in attacking the chancellor. he was soft on that front when he started out in the beginning of the year but now he is presently going after her. matt: is the offering of clear differentiation? do voters know what they will get that is completely different than what they have with the fairly successful cdu? prettyi think voters much know what they are getting with the social democrats. play ishis only card to that she has run for 12 years and i am summary else, somebody new. one thing i would pay attention respondents% of were undecided. that is a huge number that has been common and a lot of european elections we have seen this year. .our weeks to go if it goes one way or the other, it could be a bull for schulz, free democrats for example, or it could go back to merkel's corner. guy: let's talk about the other parties for a moment. i see in the polling, the sep ticking up a little bit. i see the other

meanwhile, martin schulz says britain risks further complicating negotiations by producing a series of papers for a talk. >> in the united kingdom, every day they suggest another proposal. this is for sure, not meaningful. customsre, if a union could help to overcome the main problems, especially the guaranty of the freedoms of the european union, let's discuss it. reporter: china has reclaimed its position as the top foreign owner of u.s. treasuries. china's holdings of u.s. bonds trillion.n$1.15 1/3a and japan account for of all foreign ownership of treasuries. amazon has a $16 billion of unsecured bonds to fund the acquisition of whole foods market. it was sold with the yield of 1.45 percentage points above treasuries. the sale marks the first bond 2014. sale in global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. salek, and this is bloomberg. anna: when donald trump said over the weekend there was blame on both sides for the deadly clashes in charlottesville, he caused a national uproar and ceo's quit his advisory council

you can track that quite nicely with where martin schulz was able to connect as german households becomeore comfortable with their finances. statems unlikely at this of the cycle. francine: do you agree, or do you have to hedge somehow? all the honest, almost major parties have the same kind of money fest. the on the result that could shock markets. we cannot say it is impossible. any other result is pretty much irrelevant. the german economy is doing well and the german market is influenced by the global economy. francine: do german. looking expensive. -- do germans look expensive here? >> no, they are extremely correlated with economic momentum, accelerating or not. the dax is down. demand, call for the we think we are not going to get a consideration and we are meeting new requirements. >> what is interesting on the campaign trail, i picked up on some of the themes thus far that have been quite domestic. matt miller mentioned it. the key element for the market, key, willrly for the be the degree to which he wanted to talk about europe and egypt and the things that are on the macroecon

she has a lead over her primary challenger martin schulz. a 50 stop campaign tour across the country. international agency -- energy agency has cut its forecast of the amount of energy needed from opec. the agency says there are growing doubts that all the countries involved in opec's production cuts agreement are fully committed. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. tom: equities, bonds, currencies, commodities, it could be a real eventful market today. at -35.ures curve flattening, euro churning and oil, 48.19. let's sit on this screen. there is the vix, 17.04. the vix is a 20 average over 20, 25 years. we have had an uncommonly quiet us and market of nine and 10 and 11 vix. we went to 12 with the korean news and blew out yesterday afternoon to 16 and we are now at a level of 16.04. the convention on the street is not to look at percent change -- i know it is a big number, 6% -- what look at the point change and that one big figure m

matt: i thought it was interesting to see a comment from martin schulz, the candidate against merkelerencing michael o'leary. there is no bigger capitalist than this man and i believe in this sense he met capitalists as an insult. it does sound for georgia. -- for george's -- prince -- prejorative. we will carry on with what is happening in barcelona, front of our minds as we digest the horrible events that took place yesterday and this is covenant -- the subsequent shooting. another suspect has been arrested. more on this through the mornings open. six minutes away. this is bloomberg. ♪ theory let us take a quick look at what the fair values are telling us. down by 0.9%. down by 0.8%. the ibex down 1.3% this morning. we are likely to see some market reaction based on spain today. matt: i have a chart here. the size of the moves in the s&p 500 broken down on a daily basis. the red line, anything that goes young that is below 1%. anything above the greenline goes above 1%. we have not had any of these kinds of swings lately and now a week.had two in the last time we had a 1% moved to

the country's closest ally i'm going to merkel has his title to the america first policy well martin schulz promised to remove the u.s. nuclear weapons from germany if he becomes time for with more on the deepening rift with washington has to go into. for years it seemed that you could safely assume germany and the u.s. would be best friends forever but as the trumpet ministration charges forward with its america first approach to foreign policy they might as well be leaving behind one of their closest and most important allies take the rising tensions with north korea for example that has shown a clear divide and opinions trump saber rattle and lashed out with. make it work threats to the united states. they will be met with fire fury while merkel flat out refused to back trump's plan and i have to answer that no i do not see a military solution from north korea i cannot accept that and just this week after trump announced america's old i'm sorry new afghan strategy you know more troops and no end to the war and fight that also didn't exactly line up with expectations it is important that

martin schulz is seen as her main rival — his party is the red line.close now. these other parties vying for third place. then there's lots of other parties — they appear close. as this politico article from today remarks, ‘third is the new first‘. those parties include to the left die linke, the greens and the right—wing alternative for germany. if these polls are correct, mrs merkel will serve a fourth term as chancellor. outside source will be in germany next week, and of course, we will certainly be speaking tojenny hill, al corresponded in germany. here is her latest report. —— our corresponded in germany. don't be fooled by the political calm. germany has survived a turbulent year. it's heading in a predictable direction. the likely winner of next month's election is not as secure as you might imagine. she speaks german translation: i think she abandoned us fishermen, forgot the little people. she only cares about the big industry and what's happening overseas. she should look after her own country. this international stateswoman must please the

it doesn't look like there's any way martin schulz can challenger.as done so well as a world leader, and there are not any crises here other than the diesel issue that would really concern voters. a lot of people see it as a nonevent. jonathan: let's talk about the diesel scandal. how is martin schulz addressing that issue that differs from chancellor angela merkel? is the blame at the door of the government as well? >> they have both addressed it over the weekend. angela merkel has put alexander dobrynin in charge as transport minister. he is seeing as in the pocket of industry. developed ties to the out of industries. martin schulz over the weekend othersout volkswagen and , saying these cannot make profits -- jonathan: i believe we are having some technical difficulties there. cinch, great to have you with us. if he said at the start of the year what the greatest threat in europe would be, many would say democracy. that has not happened during things look good in europe seems to be the takeaway. your point early on his things may not look so good

the social democratic party's martin schulz tells bloomberg the british may complicate negotiations by producing a series of precision makers for the talk. scholes says that negotiators should be left to do their work. iraq is asking the un security council for help and collecting evidence to prosecute islamic state extremists for possible crimes against you manage the. iraq was foreign minister says his government and the united kingdom are working on a draft security council resolution seeking assistance earlier this year. the human rights attorney urged iraq's prime minister to ask the council to set up an investigation into the crimes. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. up, our nextg guest says the goldilocks economy could be upended by three bears in the market. we will explain what those three bears are next. this is bloomberg. ♪ vonnie: as u.s. stocks continued their gradual climb ahead of the latest federal reserve minutes, just in about an hour and 45 minutes, our next guest says investors sh

refugeefending the crisis as martin schulz steps up his campaign. looking back, if the situation was identical to the one in 2015, i still think my decision was right. of course, we have done a lot to ensure it will not be repeated this way. collidesu.s. worship with an oil tanker to near singapore. ship collides with an oil tanker near singapore. ♪ anna: a warm welcome to our flagship show in the city of london. the week we are getting ready for, jackson hole, a lot of job owning at the end of the week. the u.s. and south korea will have drills. what does it mean for the bond market? this is the charlottesville it shows you. yields creeping higher. speculation that cohan could disappear. -- cohen could disappear. the bond market have a week of terminal -- turmoil. 2.2%.t to we broke the 100 day moving average to .28% on the prospect, on the threat of war with north korea. come in retail sales strong and be trump administration basher to the bond market. anna: what with the ballots -- the intrigue and the terror north koreanhe peninsula, there was p

martin schulz who is running against angela merkel in german elections is giving a stick -- a skepticalesponse to the uk's proposal. he said britain risks further compensating negotiations -- further complicating negotiations. >> in the united kingdom, everyday suggests another proposal. this is not meaningful. [indiscernible] help to overcome the main problems, especially the guaranty of the freedoms of the european union. let's discuss it. juliette: britain has said it wants to avoid a physical border or customs check with ireland as a part of any brexit deal with the european union. the brexit department says u.k. in european negotiators need to show "flexibility and imagination." is due toovernment publish a document fleshing out its proposal at noon today london time. china has reclaimed its position as the top foreign buyer of u.s. treasuries. china is holding u.s. bonds notes and builds -- in bills rose. that pushed japan into second place as it stock decreased. the two countries account for a third of all foreign ownership of treasuries. global news, 24 hours a day, powered by 2

also, martin schulz yesterday, challenger to angela merkel in the elections had some negative commentsut golf players around germany. manus: yep, i suppose that is a reality check in regards to what is deliverable. seconds from the start of the european trading day. at 0.4%. a nip lower the rest of europe will be slightly better off. we will talk about jackson hole next. ♪ so we need tablets installed... with the menu app ready to roll. in 12 weeks. yeah. ♪ ♪ the world of fast food is being changed by faster networks. ♪ ♪ data, applications, customer experience. ♪ ♪ which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. less than one minute to go before the start of the european trading day. london is down .6%. u.s. equity futures are all just a little bit stronger. there are some changes going on. a few different bits and pieces. i love this chart. you can see this. as the fed hikes, financial conditions continue to ease. those are not regulation colors. manus: they are not. a

latest poll suggests chancellor merkel holds a 60% -- 16 percentage point lead over martin schulz.n team is where each her campaign team is wary of an election day surprise. probably only influenced those things a little bit, because there is hardly any difference between the parties. joining us here to talk about that is ellen crawford. andrew sheets is with us as well. let's touch on the first point. toot of germans find it hard discern between the policies of the two parties. what would change if the spd one -- won? alan: that looks like a big if at the moment. it would also depend on what kind of coalitions you could form. -- latest poll suggests this suggests it would have to be a four-way coalition. it is hard to see. is, schulz issee to common european policies, perhaps more in terms integrating the eurozone. angela merkel has made some comments about that. she is open to some of these moves by the french president, but the assumption is she would be more open. whether that extends to get sharing is a different issue -- whether that extends to debt sharing is a different iss

when martin schulz came back battle, he was not connect with angela merkel.i and neck with angela merkel. he has lost momentum, and even though she was on vacation, she strong, especially as concerns over things like north korea make it look like the smart choice to have the incumbent ever -- incumbent in office. manus: even if she does when the election, the coalition is the -- is an important part of german politics. we know how they might stack up? matt: you are right to focus in on that at the most important issue. joint with merkel's cdu in this current regime enter first regime, in the middle she joined with the fdp. she has a tendency to occupy all of the middle ground. she takes credit for all of her victories personally or get that credit to her party and for all her failures and mistakes, she spreads that going across the coalition. the spd may be wary of joining up with her again in another grand coalition. just as well, the liberals are fairly wary, because after working with her in her second term, they came back with no seats in parliament. the

martin schulz, the former president of the european parliament, now leads the social democratic partyit heads towards september's german general election. italy's interior minister marco minniti: what do you think of the suggestion that there should be an australian solution to try to stop the wave of migrants coming across the mediterranean? >> what we need are systems of legal immigration to make the distinction between attempting to join the territory of the european union outside the legal framework and the legal frame which is giving hope, not a guarantee, but hope and that's what's missing, lacking in europe. >> reporter: but do you not think that it's worth taking away all the vessels because they're acting as a pull towards europe? >> i think there's a lot of activity of the security forces, but at the center of all our activities first of all is humanitarian aid. >> reporter: at the memorial for those drowned in the mediterranean, another question for the man campaigning to be the most powerful figure in the european union. is there anything more that europe could do to stop

she is the clear favorite to win with a 16% lead over her next biggest challenger martin schulz fromt the party does not want to be complacent and assume they will win. things have shifted very quickly around here. and the cdu were not can now the most important issue is going to be the diesel issue. this in rupp did in the u.s., in germany, it's become a massive issue -- this the u.s., in germany, it's become a massive issue. one in five jobs is in some way connected to the auto industry. that doesn't leave a lot of room for the spd to work against her. for example, the minister on volkswagen's board happens to be a spd minister. they won't be able to push her too much on that issue. they also will not be able to push her too much on the refugee issue since she has done a great job of occupying the center. strengthbeen merkel's on every issue. she holds the center, takes credit for all the victories she achieves, and she manages to spread the blame among her coalition partners. spd right now work in a so-called grand coalition. a big question for after the election whether she wins

breathing in that italian mountain air but she's still way ahead of her main rival as speedy leader martin schulzcouldn't get any hiking sessions in his schedule because he's busy campaigning like any other politician would the former european parliament spokesman even try to provoke a reaction from the chancellor by claiming a germany is not prepared for the future influx of refugees but not only that merkel ignore all of this publication is just effort into making the chancellor shadowboxer courtesy of the local media this is a feeling of solidarity between states has been the most how do they get to this when did it start did it begin with a man whose decision to open borders and he agreed with our partners in a moment when those partners were overloaded i just. want you to describe its and led government in september. i came to the streets of berlin to ask german voters not campaigning is a more subtle and effective form of electioneering when i ask you what you actually paid so it's. right. there campaigning. yeah i'm not so into. it too i can. tell you right now because i think like i'm wor

angela merkel has built her legacy on european unity and her main challenger, martin schulz was the presidenthey will both be very pro-europe. this is one of the issues. voters cannot see the difference. if you are a pro-european voter you will go with one of these two parties. together they get 65% of the vote. pro-europeanll be as an sdc voter. since they are both theeurope that means alliance between germany and france will be prominent as well. ratingsthat macron's are coming down a bit, is that hurting either candidate? >> i think those reports are really telling about what is going on inside france itself. on a pan-european scene or the global scene, is still an absolute superstar. he is seen as a success both politically and economically and i think anyone in europe, anyone in the g20 with the exception of donald trump, wants to be seen as connected. if you go to a g20 or g7 meeting -- they wantpeople to be seen as connected to him. those poll numbers are not an ever asian, they are more of a domestic thing for france. -- those poll numbers aberration, they are more of a domestic thing

at the moment it doesn't look like a nearest challenges the social democrats and the martin schulze going to get anywhere near her despite being almost nailed on to win it's according to the polls after the reaction she received in brandenburg on tuesday night the month can seem very long in politics indeed well the british government admitting now that it cannot deport she harvests you can find out more about this after the break. when else seems wrong. but i. just don't. let me. get to shape out to stay. active. and engaged with equals betrayal. when so many find themselves worlds apart we choose to look for common ground. what politicians do to. put themselves on the line to get accepted or rejected. so when you want to be president. to be this is what before three of them all can't be good. i'm interested always in the water. joining us here or not see the report by swedish police has revealed that in less than two years there's been a dramatic increase in so-called no go zones across the country what officials use the vulnerable areas the problem is in the districts heavily populated

nearest contenders by sixteen to seventeen percent depending on whose polls you look at and with martin schulz and his social democratic party certainly not looking like gaining any ground right now it does seem like she will be returned as chancellor but the still a month ago just yet and of course could be a very long time in politics yet we know that certainly can live from berlin our europe euro chief it are all over thank you. well as peter was saying there the miracles as you can see here in our graphic as well the christian democrats the are well out in front fifteen percentage points there ahead of the s.p.d. the social democrats while the alternative for germany party the f.d.a. is among those trailing the front runners a little bit behind that earlier column braid talked about the campaign and the deadly plot against politicians one of the deputy presidents. it's a plot against the leftist politicians believed to be rooted in germany's migron policy it's something that's been divisive a deeply emotive but now that it's got to the stage where people's lives are being threatened just b