italy first of all quite surprising to the not talking all that much about italy considering where mr draghi comes from. yes not just the fact that he's italian also a lot of questions in the question around from journalists about italy and that's of course because there was some expectation that mario draghi and the e.c.b. might in some ways show that they would you know are leaning towards helping italy in some way shape or form but none of none of the sort happened mario draghi said that he personally is confident that an agreement will be found because both sides were seeking a dialogue however this is mainly a fiscal issue and the e.c.b. doesn't deal in fiscal issues it deals in monetary policy and so at this point it's not going to get involved it will however continue to watch the situation continue to watch for possible spillovers should italian banks get into more trouble and should that be the case it may adjust its policy we'll be looking for december to see what's going on you know until now and following the financial crisis the e.c.b. has basically used up all that supply of po

mr. draghi is facing.dace: while the decision is likely to be uneventful, the focus will shift to the press conference and the message coming from the ecb. in technology this downside risks. front and center, the italian showdown between the european commission and the populace in italy. we have also seen some of the economic data in the eurozone turnover, a little bit of moderation as well, ongoing trade tensions. a lot of these items are likely to be highlighted in the media and the press conference later this morning. details, trying to see if your looking at the first hike in september of next year. we look at the month until the first rate hike in the eurozone compared to morgan stanley, they are looking at about 12 months. you see this coming earlier, why? candice: the growth and inflation backdrop in the eurozone is quite constructive. alix: the pmi rolling over. the sentiment indicators not holding up as well? candice: the german confidence indicator also rolled over. definitely alarming. a lot of

mr. draghi with a path out well into 2019. is mr. draghi going to have to blink?think there was a degree of consistency between the forecasts of the ecb with their projections and some of the language. i do think there is a suspicion negativewe don't see a growth in the shorter term, there may be a case to be made that mr. draghi and the ecb could back sooner than that. i think in the context of what we have seen in other central banks where there have been those on a gradual basis, i would not be surprised if the ecb are considering an action earlier than that. that is something the market has yet to take on board. tom: that is the heart of the matter. you do multi-asset studies. within multi-assets, there is the movable force that events will happen. how are you protecting yourself from these macro shocks within investments? >> we really have a portfolio, which i described as high quality. i realize that is a little consensus in a reflection of what we have seen over the last few months. it really leaves us to u.s. access where the federal reserve interest rate

mr. draghi's comments that derailed the markets or perhaps the combination ofhina slowing and the middle east tensions as well? >> i think it' a couple of things. i think rates are rising which makes the gas chromatography of any italian overspending a lot more substantial. it's the facthat mario draghi lianif fit to call the i government out. and it's that the government does indeed have plans for w spending outsit the eu wants. so all of these things say yes th another problem. >> we have always had to take the chinese growth numbers with grain of salt. ears.ve known that for but the markets seem to be sensing that there is a real slowdown going on there economically since they' been my grating to a more consumer oriented economy. you think is happening over there in and what impact does it have on investors here in thenited states? >> the real impact, the real sign there is trouble in china is the chinese government is taking repeated efforts over the past couple of weeks and months to actually strengthen the economy. that's something they do when they are worried about growth. so the

mr. draghi has gone out of his way to say there is support for the moment. mostly of theis italians making. would there be a point where the ecb steps in? may been if contagion starts to emerge. i do think there will be a rescue. we've got somewhere to go before that. vonnie: at the moment, there is some call him in italy. simon stays with us. let's check in on the first word news. courtney: president trump tweeted today that he will cut aid to three central american countries because of the migrant caravan. they were not able to do the job. he warned that criminals and unknown middle east owners are mixed in the caravan. toldrench president president trump that he is concerned about european security if the u.s. pulls out of a nuclear weapons treaty with russia. the president said russia is breaching the agreement and he intends to pull the u.s. out of it. president trump is promising there will be a new middle tax -- class tax cut before the election. republicans said this would help them be carried to victory in the midterms. the policy has turned out to

mr. draghi has any influence over. ecb has to sit and wait to see whether the politics evolves in a way that allows the economic forecast to play out, in which case we will get rate hikes before the end of next year. the policy response with a people is that the bond buying program will anderson, but? it's more guidance that will change? michael: that's our view. the stock of bonds, you don't really need to keep buying them. they would still end the bond buying program at the end of this year, but delayed first rate hikes into 2020. yvonne: i want to bring up a chart showing the btv spread. we can see we are above 300 basis points right now. mario draghi basically saying that they need to narrow the spreads. if it doesn't, how big of a pressure will this have on the italian banks, as well as their funding and budget issue? michael: importantly, because this feeds directly into the lag with the banks and willingness to extend credit. yvonne: so is draghi underestimating them? michael: the assumption is this will be reso

mr. draghi as well.versation with the chief financial officer of truly a beleaguered deutsche bank with the price under nine euros per share. stay with us. this is "bloomberg." ♪ comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. tom: this morning, volatility prevails. of and down, and lower. risk off. the dollar is stronger. thismorgan of j.p. morgan hour. the president goes after chairman powell. from happy valley. and mohammad bin salman will speak. will erdogan speak? this is "bloomberg surveillance." francine, extraordinary to see to see the giveaway and banks this morning. francine: you are right. we

mr. draghi had to say over the weekend, i think ultimately there is a -- which is sufficient in the market ecb would like to be rescued. i do not think it is 350 basis points. >> 400, is that what you would force the as well? what does that mean for the loop between the banks and sovereign debt? >> 400 is entirely possible so long as italy continues with this nonsense. the key point is italy is a problem in the eurozone and it poses systemic risks for the rest of the eurozone. if an economy the size of italy with its current account balance went ahead with its fiscal plan, markets would not care. it is simply that there are rules you have to stick to. if you break them, it means the german taxpayer may foot the bill. the institutions within europe will trust the bond markets will keep the italian government in check and they will signal that if there is a problem, they will help out any other country that is willing to stick to the rules and hope that gets them along. my guess is it will be the next crisis one italy asks, do we stay inside the euro? >> we have some breaking news. >> it's a

mr. draghi has made comments on this. we think the yield curve in the eurozone will steepen.think things will do better and we think value stocks and financials will be those key wants to own in the eurozone during q4. nejra: you also say elevated trade tensions likely to push the yield lower. we are in october. we are wondering whether the call holds or whether it has to do with dollar strength being the safe haven or if it's to do with the euro. guest: great question. my answer is slightly complicated. nejra: we love complexity and nuance. guest: from the trade side and the results back that up. with think there will be less fallout with the nafta countries and even with the eurozone in japan. however, we've had convocations with italy and certainly if you look at the budget deficit that is scheduled for 2019 at 2.4% gdp, that's worse than our economics team was anticipated. we seeing euro weakness on the back of that. our favorite way of playing that is short euro versus len. -- our strategy team is targeting 160. the dollar is a separate issue. is driven by trade, not ten

mr. draghi will be keen to keep rates low.en useful for government fiscal policies because they have a carry trade. they are able to receive money, which they would not otherwise receive. they will also worry about the extent of which, if it reserves quantitative easing, it will drive bond yields up. and then it has gone back to the central banks and let's consider a members of the ecb and falls into real problem areas. i think the ecb will keep rates at current levels to much longer than the market is prepared to accept. nejra: you are very much overweight the u.s. you don't see opportunity in europe. european banks most oversold since 2008. james: i think for a good reason. i look for the finances of the french bank. there's been a dependency on target to an u.s. dollar funding, meaning france is an economy generating -- at the moment. that puts the banks in a risky situation. nejra: what about banks elsewhere? italian banks, some of the banks recorded -- reported this week? interestingly, i wouldn't go to deutsche bank. ger

mr. draghi, what would it take for draghi, for the euro to rally? this is the question. there is no plan b. more from the prime minister. let's get back to juliette saly. she has the bloomberg first word news. juliette. juliette: president donald trump says his responsibility is responding to the killing of jamal khashoggi to the u.s. congress. he added to he wants a bipartisan recommendation on penalties. thelso criticized conflicting accounts from saudi arabia and said those responsible are in deep trouble. was. trump: the cover-up one of the worst in the history of coverups. a bad deal. really messed up. they have the worst cover-up ever. is athould have stopped the deal standpoint of what they thought about it. .t's a bad idea i think it's in big trouble. and they should be in big trouble. juliette: expectations for a meeting between president trump and his chinese counterpart is already being lowered by both sides. larry kudlow said the two leaders would meet "at the g20" but warned they may not even agree on basic principles. they are bracing for a prolonged fight

mr. draghi watching the euro?es from 118. >> it impacts inflation, of course. it is temporary and lasts a year or two. that could be the pressure valve that releases to get the ecb through this. we think there is a normalization trade, but in recent days and weeks i am starting to doubt that given what is going on with risk in u.s. markets and asia as well as the china slowdown. one thing we also are watching is inflation. ine inflation, tom, is 1.9% europe. it has not moved for years. it has gone higher, it has gone lower. we need core inflation to go up. if that does not happen, normalization gets trickier. tom: agreed. that, are you just touming it is totally wired consumer inflation? niel: if you had consensus , you wouldor growth be a bit above trend. pressure should build. that is what everyone has assumed. with these, you are not sure you will have 1.8% next year. you're not that much above trend at all, and so does inflation actually pick up? me bring you to one of our questions we have been asking. with i

mr. draghi said it was a more challenged economy. what is the vector of growth now ?you look at data -- downwards. if you look at data, it supports that. the european economy was never going to sustain those rates of growth. to what extent is this a reverse of trend. the emissions testing have affected the german car industry. conditions are starting to tighten, that is the crisis in italy. if markle is stepping back, europe needs a strong leader given what is happening in italy. tom: neil shearing with us. michael shaoul, i will steal from anybody. single best chart from michael shaoul. we will do that in a bit. a brilliant chart on china equities. morning,news flow this including the ibm transaction, news out of germany. in theup, joel marcus 10:00 hour. this is "bloomberg." ♪ i am a family man. i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesom

central bank santa claus, whether it is janet yellen, ben bernanke, mario draghi after every big parade, there's a guy with a broom mrl was the lucky guy with a brook what would we do, see mario draghi to put rates at minus 200 basis points yeah, that will fix everything >> rick santelli thank you. >>> up next, more from the apple event in brooklyn. jon fortt wraps up everything you heard this morning meantime, dow is up near session highs, near 280. more after the break >>> dow is at session highs. one name that is helping propel that rally right now is apple, up about 1%. that event wrap up across the waterways in brooklyn. let's head out there now to jon fortt with an update. >> morgan, it is rare to see apple up on an event day often you have the sell the news effect let me put into context what we heard from apple today this will event. we expected to hear about new macs, portable macs, and also new ipads. we got that. what happened here is a recasting of the ipad. more specifically the ipad pro as a computing device primarily. apple didn't talk about tablets mow such they compared the ipad proand the i pat line

i understand there have been so many false starts mario draghi should know better than anybody about false starts, so should mr in japan, be mplg gold in your economy takes you so far at some point, maybe the u.s. really was the antagonist in this because their central bank decided, now or never to reverse this and the president doesn't like it mario draghi,doesn't like what italy is doing in the end, central banks did this experiment and in some ways they should get the broom, the garbage can and follow the parade and sweep up after it but in the end, i don't know how it's all going to work out for everybody. and i think that's why we're getting such divergent issues. i mean look at the chinese stock market i understand its tariff. they're part of the edges as everything starts to drain then everything gets magnified every move in the past that the water covered up starts to shine. just like warren buffett said regarding derivatives. when the tide falls everybody gets to see who has been swimming naked in this instance it isn' individuals, to some extent it's not even kormgscorporations, itg economies, medium

summer president mario draghi said that the central bank still sees risks to the eurozone as broadly balanced regarding you know he spat with the e.u. of the country's rejected budget mr druggy said e.c.b. leaders didn't discuss the matter widely and that he personally hoped both sides would find a solution. let's bring in pakistan but it's at the frankfurt stock exchange. let's talk about italy first of all quite surprising that they're not talking all that much about italy considering where mr druggy comes from. yes not just the fact that he's italian also a lot of questions in the question around from journalists about italy and that's of course because there was some expectation that tomorrow a drug in the e.c.b. might in some way show they. you know are leaning towards helping in italy in some way shape or form but none of none of the sort happened mario draghi said that he personally is confident that an agreement will be found because both sides were seeking a dialogue however he said this is mainly a fiscal issue and the e.c.b. doesn't deal in fiscal issues and deals in monetary policy and so at this point it's not going to get involved it will however continu