nejra: like what for example?latforms the trading where they have high frequency trading going on, that is a new world. nejra: you said you will work with firms in january. with any firms that haven't made any real or genuine attempts to be ready, how hardware you come down on them? there will be per message is going out, you have not made any progress. andt turn up on our door asked us to solve the problem in the morning. what we don't want and this is ,hy we have structured the work we don't want to see dislocations on the third of january or the other days thereafter. we have been very much focused on what we need to do to make sure the markets are functioning effectively. nejra: in terms of proportion, you expect to be ready by january 3? there are so many different sectors and subsectors but high proportion yeah. managers met the and it was an attempt to get clarity on the rules. many people are trying to get their head around them. the report said there was no solution, why not? meeting, which the industry c

nejra: a quick question.re you concerned about conflicts arising in the implementation of mifid ii regulation in different eu member states? >> i don't see that. we have already postponed the date of coming into force for one year so everyone knew for a long time, we have agreed in 2014 about what has to be done. it was enough time to implement the systems and there is no blaming that there wasn't enough time, so the blame goes back to them. nejra: mifid ii the lead lawmaker on in the european parliament, thank you for joining us. next we are back in brussels. we will talk about mifid ii and transparency. that conversation next. this is bloomberg. ♪ ♪ nejra: welcome back to bloomberg markets, rules and returns. let's get a roundup of the latest news on financial regulation. >> in jackson hole the world's most powerful central bankers delivered warnings against dismantling tough post crisis financial rules. the trump administration blames for stifled at u.s. growth. mario draghi said it was a particular danger

♪ nejra: how low can you go?alling research prices under mifid ii leave asset managers with a dilemma. back to work for washington, how likely is the repeal of the volcker rule? and what will it mean for u.s. banks? plus, we need to learn the lessons from the crisis. we hear on regulation over banking and the low rate environment. welcome to "bloomberg markets: rules & returns." i am nejra cehic. we delve into regulatory challenges and opportunities around the globe. from mifid ii to dodd-frank, we will speak to those reacting to a new generation of rules. let's get straight to mifid. take a listen. mifid ii is disrupting the world of investment research. in the past, this has been offered as a free service. from january 3, that research will have to be paid for separately. why? eu lawmakers wanted to curb conflicts of interest that could leave investors facing opaque costs. under the new rules investment firms will have to demonstrate they are getting the best execution for their clients when they trade. regulat

i am nejra cehic.ules and returns is the show where we delve into regulatory challenges and opportunities around the globe. from mifid ii to dodd-frank, we will speak to those reacting to a new generation of rules. let's get straight to mifid. the new regulations are set to change the landscape for investment research ahead of the legislation going into effect on january 1. -- january 3. take a listen. mifid ii is disrupting the world of investment research. in the past, investment research and corporate reports have typically been offered as a free service to carry out their trade. from january 3, that research will have to be paid for separately. why? eu lawmakers wanted to curb conflicts of interest that could leave investors facing opaque, steep costs. under the new rules, investment firms will have to demonstrate they are getting the best execution for their clients when they trade. regulators hope this will lead to more transparency and competition. analysts are rushing to prove their worth, and

this is bloomberg. ♪ nejra: live from london and new york, i'm nejra cehic.'m vonnie quinn. this is the european close on "bloomberg markets." one of the world's largest isvate infrastructure firms at the forefront of creating more resilient cities. businessits largest unit, roughly 45% of revenue. 35% andnergy generates 20%. more -- for- on more on this issue is anton phil roe -- is antoine frerot. i want to ask you on the user business of hurricane irma in particular. not so much harvey. irma was your area of expertise. antoine: yes, it was a lot stronger. [indiscernible] we have to find some ways to stop it as quickly as possible. that the total water services, but enough for serving the basic needs. we imported from water all parts are changingand we the plans. we could use freshwater with plants today. vonnie: you're really doing fantastic work in some hard-hit areas from various natural disasters. how does that impact your bottom line when there is something like that? antoine: first of all, what we have insurance. more important, we provide services to

nejra: like what for example?ing platforms where they have high frequency trading going on, that is a new world. nejra: you said you will work with firms in january. with any firms that haven't made any real or genuine attempts to be ready, how hardware you come down on them? >> there will be per message is going out, you have not made any progress. don't turn up on our door and asked us to solve the problem in the morning. what we don't want and this is why we have structured the work, we don't want to see dislocations on the third of january or the other days thereafter. we have been very much focused on what we need to do to make sure the markets are functioning effectively. nejra: in terms of proportion, you expect to be ready by january 3? >> there are so many different sectors and subsectors but high proportion yeah. nejra: 40% of the managers met and it was an attempt to get clarity on the rules. many people are trying to get their head around them. the report said there was no solution, why not? >> this me

nejra: this is nejra cehic. great to see you.the most shorted. how much weaker does it have to go? : i think we do decline in the dollar, the reversal and of the dollar last for a great deal longer before we see it have a lifting effect essay goods prices in the u.s. and what we import. we have to keep in mind that up until january or so of last year, the doctor had depreciated by 16%. post election we saw the dollar rise edit now we see the dollar, back where it was pre-election. we are 15% higher and that is having a depressing ongoing effect. the way i look at it is like how monetary policymakers view it, there are effects from currency and now the dollar has, back, that is -- come back and that is encouraging and dudley said something similar. it is not something that will effect the number for current policy and will make policymakers more encouraged about the inflation outlook for next year. neighbor bank we have top -- neighbor bank is it there -- nejra: is there anything to convince the market, the dot plot will transpire

this is bloomberg. ♪ nejra: you are watching "bloomberg surveillance." by nejra cehic.ick recap on those retail sales out of the u.k. it was a strong beat month on month and year on year, including auto and excluding. sterling spiking 0.6%. 1.3587. the u.k. 10-year yield up one basis point. that is the ftse 100 weaker a 0.3%. airbus has launched its first wide-body jet facility outside europe in tianjin near beijing. it puts the company in a strong position to chase potential orders from a market that is forecast to become the world's biggest within a decade. tom mackenzie caught up with the ceo and president of airbus, and asked about the pivot to china. >> it is the second big investment. in 2008, we opened the assembly line. since then, our market share moved from about 20% to 50%. there is a direct connection between your investments, your capability to demonstrate that you care about chinese industry, and your market access. we have to do that with product. see this investment we have ordernd we have got an for 75 a330's. >> and it is the narrow body that will be p

nejra: thanks.our guest for the hour, max kettner, commerzbank across asset strategist. there is a lot of risk out there. how is this affecting your core asset strategy? is: from the last 10 minutes historically those risks in terms of market pricing are relatively quickly priced out. there is a temporary spike in volatile's and a fleet to save havens, but that is it. this might be bit different because we were already in an environment where the dollar is getting done. we have relentless selling of the dollar in the last few months. we have additional uncertainty now. drops seeing the initial were much higher than estimated. when we compare that to hurricane katrina in 2005, we also had that. we had a temporary decline in consumer confidence. we actually have unemployment claims until this weekend at near record lows. we had consumer confidence skyhigh. the potential fallout even if it is temporary could be quite high. from that angle there will not be any spice tolerance. probably in the short ter

nejra: thanks so much. we just broke that headline from norges bank, keeping its key rate unchanged at 0.5%. let's look at the norwegian krone, strengthening against the 0.5% against the euro, hitting its strongest level in more than a week. also strengthening against the dollar. janet yellen has admitted that the fall in inflation this year is a mystery, but the central bank has signaled it is still on course to raise interest rates again in 2017 and sees three more rate hikes next year. >> what the committee decided at this meeting, to maintain its target for the federal funds rate, we continue to expect that the ongoing strength of the economy will warrant gradual increases in that rate to sustain a healthy labor market and stabilize inflation around our 2% longer run objective. nejra: the hawkish forecast caught investors by surprise and sent the dollar and bond yields higher. what was more expected was the fed's announcement that will start to reduce its $4.5 trillion balance sheet. let's bring in a fu

nejra: please stay with bloomberg. ecb's interest rate decision when it a 12:45 p.m. london time. followed by mario draghi's news conference 45-minutes later. this is bloomberg. ♪ taylor: this is "bloomberg surveillance." in germany outputs stagnated after a strong performance in the first half of the year. production was unchanged since june. factory orders signaled a weaker expansion lies ahead. tellingnaire investor proctor and gamble it needs to modernize and go after neil branton digital sales. he is one of the largest shareholders. he has laid out a 93 page plan for png's future. is your bloomberg business flash. mike: after a devastating attack on a chain of caribbean islands, hurricane irma now battering puerto rico heading towards florida. it could reach the sunshine state by sunday. stilltegory 5 storm is strong, potentially the most expensive in u.s. history. president trump and congressional leaders agreed to debt relief for hurricane spending. is still with us. , hurricane relief is obviously necessary. in

nejra: live from london and new york, i'm nejra cehic. vonnie: and i'm vonnie quinn.is bloomberg markets. it is time for our stock of the hour, and popping higher are shares of fedex. and caught estimates its outlook. abigail doolittle is with us. what is going on? like a big seems divergence. behind the midst of a cyber attack that hit their tnt business, let's take a look at their reaction since the post-market yesterday. this is an intraday chart over the past two days, and we see yesterday after they announced, the stock was down as much as 4%. 16% earnings missed, but shares are now higher, and probably it is because analysts and investors on the street seem to hit --his $40 million $14 million hit is a one time thing, and is not holding it against them. nejra: but what about the caution side of this? to someonedid speak at bernstein. he thinks there could be some reoccurring impact in this. he thinks consensus estimates are a little too high looking at the 2020, 25% growth. an impressive is story, unachievable growth. he remains on the sides. doolittle, thank yo

. ♪ nejra: how low can you go.ers with the dilemma. , howto work for washington likely is the repeal of the volcker rule. plus, we need to learn the lessons from the crisis. we hear on regulation over banking and the low rate environment. welcome to "bloomberg markets: rules & returns." this is the show where we delve into the regulatory opportunities around the globe. we will speak to top newsmakers, regulators and market pretense of vents shaping and reacting to a new generation of rules. let's get straight to the new regulations. take a listen. midid ii mr is disrupting the world of investment research. 3, that research will have to be paid for separately. why? eu lawmakers want to curb interest that could lead investors facing opaque cost. toestment firms will have demonstrate their getting the best execution for their clients when they trade. regulators hope this will lead to transparency and competition. analysts are rushing to improve their worth and investors are growing increasingly select of, then there a

nejra: thank you so much.iss our new bloomberg markets rules with everything related to financial regulation. that airs for the first time in at 8:00n friday evening p.m. london time and through the weekend as well. you are hosting that wonderful new show. tune in, can't wait for that. coming up, latin america's largest economy is trying to jumpstart and we will break that down with a finance minister of brazil. on the get his insight state of the economic recovery we will bring you that exclusive next. this is bloomberg. ♪ nejra: live from london. vonnie: live from new york, this is bloomberg markets. pare announce its buying carbon. pare expand its global presence as a specialty chemical company. it is quite a premium if you look at the close yesterday at $13.20. the parent company does not have to sell shares will stop they will take debt financing for this. you have japanese cyber maker buying calgon carbon which is a to expand purifier their global presence to be a specialty chemicals company. when we tal

nejra: what have you got, vonnie?e have that fomc meeting today, and this is the reason why everyone is so interested in this particular fomc meeting. the expansion of the federal sheet, $4.5lance trillion worth of securities, treasuries, and more, you can see these red bars. these are recessions in the united states. 2001, we did not see quantitative easing so this is the first time it feels like we have been in this qe infinity phase and it is starting to wind down, potentially. that is what we are expecting the fed chair to say it 2:30 and she has her news conference. -- at 2:30 when she has her news conference. nejra: it is a lovely chart, you have both done brilliantly but i'm going to go with sofia because of the work that went into what chart and it is showing us something surprising. up next, howard marks of oaktree bloombergins from the global business forum. ♪ vonnie: it is noon in new york, 5:00 p.m. in london, and midnight in hong kong. i am vonnie quinn. >> i am shery ahn. welcome to bloomberg markets. vo

to deliver more nejra: sets like what?ndrew: the trading platforms where they have high-frequency trading. nejra: you said you will work -- your work until january 3 hits. how hard and how would you come down? andrew: the rest of this year, going out and saying you haven't made any progress. don't please turn up on our door on the third of january. what we don't want -- and this is why we structured the work of the program as it is, we don't want to see it on generally third and we have been focused on what we need to do to make sure the markets are functioning. guy: andrew bailey, you can watch that whole interview on bloomberg markets. our bigger issues facing the financial sector right now. minutes away from the market open. some of the movers. deutsche's come keep an eye on that. a downgrade for deutsche's. stock flying yesterday on the rate story it we'll come back and talk about the bank and what it means for the market open this morning. this is bloomberg. ♪ matt: welcome back to "bloomberg markets: european open."

that is get nejra cehic to take us through the details.: i am starting with the , which is starting alongside equities. below 1%. we are 99 basis points. we saw the treasury yields hurtle towards 2% yesterday. it studied a bit today. yields tracking what happened with the treasury yield yesterday and what is happening in a number of the european bond markets today, heading lower on that 10-year gilt yields. if we look at european equities, heading lower as well, down .6% on the stoxx 600 as well. every industry group lower on the imap. we have financials underperforming. we saw the same in the asian session. part of that could be down to the curve flattening. what we saw on the s&p 500 is the insurers really underperforming on concerns over hurricane irma. utilities and tight underperforming. real estate near the top, interestingly. we have home builders reported in the u k. overall, red across the wheel. this is about correlation between the s&p 500 and the stoxx 600. the had hit the lowest in millennium, as you can see from this at the b

nejra: new figures showed u.k.mer confidence rising to a six-month high though it remains below pre-brexit levels. consumer spending is starting to recover after being held back by faster inflation in the wake of britain's decision to leave the european union. wasain's post brexit policy dealt a blow when the u.s. imposed a 226% tariff on bombardier planes. theresa may spoke out about the move. >>>> we have a long-term partnership with boeing. this is not the sort of behavior we expect with a long-term partner. this undermines that partnership, but on the wider challengere is a real globally today because i think there are aspects of protectionism creeping in around the world. nejra: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am nejra cehic. this is bloomberg. francine: just getting some breaking news out of the u.k. we have a little bit of data in terms of mortgage approval and gdp. consumer confidence, a little bit better than expected. this is wha

nejra cehic?lk about the demand for the safe haven, the 10-year treasury yield steady, but if you look at the 10-year gilt yield, it is edging slightly higher. we are up one basis point, 1.30 5% is where we are on the 10-year gilt yield at the open. money edging out of this rather than into the haven. equities, we talked about risk off, marginally lower on the stoxx 600, down .1% on the benchmark overall, digging into the industry group. a mixed picture here. financial and tech stocks underperforming, materials underperforming. interesting, given we are seeing metals on the rally. outperforming on the upside, health care and energy, energy perhaps not a surprise given what we see with oil. i want to talk about the dax. following theain german election yesterday. if we look at the relative strength index, we are at 67 on this. it is approaching the 70 mark, which signals the dax could be overbought. it last picked up on may 3. it has to drop below 70 for that to be a sell signal. moment, still some

i am nejra.

for that, we go to nejra cehic.me sizable moves in the mid-caps on percentage terms. this, up 15%. this after a middle eastern construction company is said to be putting together an offer to on septemberorting 26, saying where it got the information. we are seeing carillion moving on that. oohoo.com moving down. revenue growth expected around 80%, up from 60%. it is raising its revenue guidance, but investors clearly seeing something negative in these numbers as the stock is 500, and looking at plus this provides an online platform for contracts for different products. business continues to trade strongly, up 4.5% where we are on plus 500. matt, guy. guy: the bloomberg business flash. a company and al merging. it they create a european transportation giant aimed at countering competition from china. siemens all caps rate is making transit cars in exchange for a 15% stake in the of company. we will be joined by the ceo's of siemens and alstom. in late trading after quashing any hope of a quick turnaround at its ailin

i am nejra cehic. francine. francine: angela merkel has won a fourth term as chancellor at her victory was marred by .upport >> a new challenge is in front of us, namely the fact that amd has entered the parliament. we should analyze this very closely and in depth because the one to gain back -- we want to gain back the voters of the amd tried to solve these problems by giving them solutions and certainly the politics. francine: let's get more on all this, chad thomas. chad, what does it mean that angela merkel's clinical bloc that's political bloc needs -- political bloc needs. chad: germany's biggest newspaper is calling this a nightmare victory for merkel and her party. just merkelaving and her party are having a grim meeting on how they are going to move forward. one indication of the bloodbath that has happened here is that her bavarian sister party, one of her key people that were speaking last night representing , she failed to win a seat in parliament. what does it mean for the social democrats

here is nejra cehic.ejra: president trump will today use his address to the united nations general assembly to call on world leaders to confront more free and iran. trump has been critical of the u.n. in the pass and will need to build a broad alliance against the two countries his administration continues the -- considers the world's greatest threat. speaking yesterday, he said red tape and mismanagement have held the organization back. in recent years, the united nations has not reached its full potential. because of bureaucracy and mismanagement. while the united nations on a regular budget has increased by 140% and its staff has more than doubled since 2000. we are not seeing the results in line with this investment. hurricane mary has weakened to a category four. island nations still recovering from irma are bracing for the third storms right in two weeks. separately, the u.s. northeast is expected to take a glancing shot from hurricane jose. already the second costly hurricane season since 1980. the

here is nejra cehic. reporter: siemens has agreed to merge real businesses, bringing together former arch rivals from germany and france to create a european transformation giant. itsens will transform business, taking equipment to alstom, in exchange for a 50% stake in the company. we will be joined by the ceo of siemens and alstom. morning.as jumped this the middle eastern company is weighing a bid. the paper said the move is unrelated to ongoing talks between the british company enmities on firms over sales of parts of the overseas operations . nike shares fell in late trading after it squashed any hope of a quick turnaround and ailing domestic operations. fakes expect north american sales to decline again this quarter. nike's conversation is will also drop in the current period. easyjet is developing a fully electric commercial plane within a decade. right electric is setting its sights on designing an aircraft that could fly 300 235 miles. that is the bloomberg business flash. hascine: president macr

let's open up with nejra cehic.rket opening, the 10-year gilts yield at 95 basis points. we are below that 1% level, down two basis points in today's session alone. we saw yields move lower across europe following the ecb decision and mario draghi's press conference. we are watching -- we saw the gains yesterday down today, down 0.2%. industry group distribution, we saw most industry groups move lower. underperforming, down 0.6 percent, along with consumer discretionary and energy yields outperforming. we are seeing oil heading for its first weekly gain since july. taking a look at this chart, i focused a lot on the fixed income space. the 10-year bund yields and where that is headed. this chart showing the european banks overvalued, relative to on where german yields are. another interesting thing to think about when you are thinking about yields and the 10-year bund yields in particular, this was on the blog yesterday. higher yields are good to the european value stocks, which could rally. good generally for the s

nejra: a lot to do with m&a. schneider electric, up .7%. as 25% after schneider agreed to take control of the uk's's aveva group. a software company, to create a producer of industrial software that comes a year after the last round of talks failed. third time lucky for schneider electric and aveva on this reverse takeover of aveva. moving on to nestle, the confectionery unit said to attract carlyle and pain. gains on nestle on the back of that news. gaining, some headlines crossing about various reactors including a u.k. reactor to return to the grid september 10. guy: german data putting the 53.5, aen, pmi data little better than expected. the number coming in at 55.8. the french number a little softer. but remember, these numbers are still pretty punchy. manufacturing is the biggest number for germany. in the mid 55's around europe, and that is strong data relative to where we have been over the past few years. there is the euro, coming under a little pressure after the french data, down .2%. surveillance is next, mark barton. this is bl

i am nejra cehic. breaking services pmi crossing the bloomberg terminal, written's service -- britain's service sector grew at the slowest rate in august. fell toet says it's pmi 53.2, the lowest since september , a sharperfrom 53.8 drop than forecast. continuing to signal growth, it industry50 markets reports which include manufacturing and construction. the composite index suggests the economy will grow about .3%, matching the pace with the last few months. chris williamson warning the decision to leave the e.u. is weighing on optimism. the services survey showing ed.iness weaken the slowdown in august was most evident in hotels, restaurants, and consumer facing businesses. sector's services growing at the slowest pace in almost a year. still with us, and dini ramakrishna -- nandita a ramakrishna -- nandini ramakrishnan on and steven barrow. yesterday and services today, gradually being lost. momentum, new order, new business ideas, new investment is falling and we are seeing it across the more sensi

nejra: the week started with u.k.makers calling for boris johnson to be fired after he put himself back into the brexit debate. in an article, johnson outlined what he called a glorious vision for the u.k. outside the e.u. that inspired criticism. an e.u. not to be named told spliterg the bloc isn't over brexit and trust michel barnier. the european union will take all the time it did on talks over the uk's exit. two surveys showed confidence among small firms and employs has fallen to the lowest level since the aftermath of the brexit vote. a report by the recruitment and employment confederation found that firms are concerned about filling vacancies in the future. global news 24 hours a day powered by 2700 journalists and analysts in 120 countries. this is bloomberg. francine: now, europe's attention will be fixed on floors this afternoon as theresa may delivers her landmark speech on brexit. the u.k. prime ministers hoping it will push for the stalled brexit talks before negotiations meeting again next week. while

i'm nejra cehic.rancine: the defense prime -- japan's prime --ister shinzo abe what is the feeling among voters about how abe will do? >> interest in the election has increased over the last couple days. today wet and didn't have seen movement in the main democratic opposition party. all of this is adding to the electionty into the coming up. these are not things prime minister abe would have factored in. the questionlls, is how much support can she .ather in the rural prefecture we are getting pictures from the conference at the bank of england. the conference is called independence 20 years on. he has been talking about , and taking tough decisions. still with us, howard shore and stears. guy our bonds and treasury's ready? in current yield levels, no. marketsook at how the are going to react, we would expect to see yields going up in the u.s. , because yields are targeted in the 10 year area. in terms of the reduction in , it has beenroles all about central banks in the last 10 years. away and sayk

. ♪ nejra: the final countdown with less than 100 days to go in the mifid 11. , we speakethod exclusivelyhe head of the conduct authority about brexit and the

nejra cehic shows -- joint this.re seeing a second day of declines for asian equities, not quite as much as where we were yesterday, but they'll the msci asia-pacific index softer overall. you can see more industry groups in the red than the green. if we look at the industry distribution on the imac. some weakness in japanese equities combat some gains on hong kong and china. aversion inome risk the asian session. taking a look at safe havens you are mentioning. you were talking about the yen. it has gained against the dollar, but this chart is showing the nominal effective exchange rate. been february 13, it has underperforming gold, that has risen more than 8% since the same date. gold seeming to be the preferred safe haven since mid-february. yesterday we saw gold outperform the yen and the swiss franc. it -- the spot price rose more than 1%. we were seeing demand for industrial metals. nickel hit a two-year high. copper keeps powering higher. this chart showing how hedge funds have waged there net long positions

nejra: we have a couple of movers here.t with technologies, it session, 28.5% in the the most since 1994. imagination tech agreed to be acquired by the china equity firm, canyon bridge. they would pay 182 pence a share. it is trading right now at 172, 42% over imaginations share price on friday. this offer is the latest smart in the troubled year as the u.k. company was spurned by apple in march, which led to a share collapse. it is up 33.85%, gaining significantly. then i am looking at nets. this is hitting its highest level since 2016, up 6.4% right now. nextirm agreeing to buy four $5.3 billion, adding to a wave of acquisitions in the payments industries. investors are looking to profit from the growth of online commerce. the consolidation of that payments industry and this sale of the danish payments provide a net coming a year after the ipo. i am looking at ncc groups, a different story, different sector, a provider of independent escrow and security assurances. this is down 2%, the most since july and largely seems to

here is nejra cehic. nejra: quite a lot of risks out there.ific index resilient today with gains across the board. a little bit of weakness in japan and south korea. you are seeing how asia's currencies have been on its head. this is a two decade chart showing how j.p. morgan's asia dollar index has quite a strong correlation with the msci asia-pacific index. we have had in asians currency, perhaps signals as a good altar for the region. the dollar index is still 7% shy from a 2014 peak. i find that the momentum still has some room to run and we could see further resilience in the msci asia-pacific index. index is atg dollar a january 2015 low. it has had the longest losing streak since 111. what dollar-yen is showing, a pattern of lower highs. perhaps that means lower downside. you have to take into account what the treasury 10-year yield is doing as well. we are already at the lowest since november 10. some key fibonacci levels being passed. finally looking at the yuan. i have been watching this all week. the strongest level since may 2016.

nejra cehic is standing by.s the nikkei is buting the trend in asia the asia-pacific index is lower for other day, falling from a decade high. some people saying this could be to do with asian stocks hitting expensive. ,his is the asia-pacific index the five-year average is the red line, trading ahead of its historical norms if we look at it on this basis. this is the euro and a new zealand dollar coming through. after the german election and the difficulty angela merkel will face in making a coalition. the new zealand dollar is the worst performing currency against the greenback, the election raising questions of what will happen with the next government. --mentioned dollar strength dollar-yen strength. this chart shows the correlation tightening. some people say the point where we might see downward pressure on the yen is the 10 year treasury yield up 2.25%. that is where we are now because according to some people, they start becoming attractive to japanese investors because they buy dollars pushing down the

. ♪ nejra: how low can you go?s on the costs of investment research? back to work for washington. how likely is the repeal of the volcker rule? and what will it mean for u.s. banks? plus, we need to learn the lessons from the crisis. that is the message from bun desbank. we would hear what he has to say

. ♪ nejra: how low can you go?k to work for washington, how likely is the repeal of the volcker rule? and what will it mean for u.s. banks? plus, we need to learn the lessons from the crisis. we hear on regulation over banking and the low rate environment. welcome to "bloomberg markets: rules & returns."

. ♪ nejra: message from the mountaintop.ent mario draghi joins janet yellen in a warning against rolling back financial regulations. how big is the bill for investment grade research, and who foots it? shining a light in the dark. mythic two, doesn't go far enough in relation there -- regulation therap

nejra: absolutely.e start with the gilt market open. 10-year gilt yields follow the yield in the u.s. lower today, we could have dropped below 1%. we are at 1.0 2% on the 10 year gilt yields, tracking european yields higher. those bond markets -- keep a close eye on the markets. we will hear from mario draghi later. up stoxx 600 overall, pointed percent. every industry group heading higher. i.t. stocks outperforming along with consumer discretionary, materials. risk on in european equities as we saw in asia and the u.s. session yesterday. you talked about draghi day. you talked about the euro. i love what you said about the calls. these are one week risk reversals. yet, look. pricing in euro upside. something to bear in mind when you look at equities as well because of that correlation between the euro and eurozone equities in particular. finally, another chart on equities. i was talking about peripheral bonds with mario draghi. i have done a chart on italian bank valuations. they have risen above the s

. ♪ nejra: message from the jackson hole summit, ecb president, mario draghi warns janet yellen againstbig is the bill for investment grade research and who foots it? shining a light in the dark. mifid ii does not go far enough, says markus ferber.

. ♪ ♪ nejra: how low can you go?rch prices under mifid ii leave asset managers with a dilemma. back to work for washington, how likely is the repeal of the volcker rule? and what will it mean for u.s. banks? plus, we need to learn the lessons from the crisis. we hear on regulation over banking and the low rate environment. welcome to "bloomberg markets: rules & returns."

. ♪ nejra: how low can you go?er mifid ii leave asset managers with a dilemma. do they pass on the costs of investment research? back to work for washington. how likely is the repeal of the volcker rule? and what will it mean for u.s. banks? plus, we need to learn the lessons from the crisis. we would hear what he has to say on regulation, over banking, and the low rate envnt

i am nejra cehic. this is bloomberg. the goldman sachs european financial leveraged conference is taking place and with us is huw pill, chief economist for goldman sachs. >> welcome. benevolent dovish draghi at the end of the speech, am i being overly gracious. i think it is in line with what we have heard in the past and we are not expecting him to see,-- we expect him to moving toward some tapering of asset purchases next year but to draw out taper because given the investment the ecb has made in this emphasis on the sequencing, we will not raise rates until asset purchases are complete, that drawn out process pushes the prospect of the for rate hike into 20 19th it is a dovish story but closer to what markets are pricing. manus: there was no preset level of what a balance sheet should be. to you have a number in mind when the taper is done, when everything is done, where that balance sheet will be? is all aboutr slowing the expansion of the balance sheet. in an ideal world as the fed is moving toward, central bank bal

our real estate editor shirt -- editor nejra cehic, is with us.nd beyond that. nejra: this is been something that has been going on for more than a year at this point. chinese officials have been very in the searchrein we have seen in home prices in china. some of the biggest cities and the harshest penalties and restrictions are beijing and shanghai. we have seen some of the other follow suit with tightening and making sure that as buyers move away from these bigger cities, they are obviously -- there is demand can they are looking to buy. they span out into suburbs, smaller cities, and second-tier cities. now we are seeing a more coordinated rolling out of these restrictions across the board. makes thehat question, where are we in this tightening cycle? sree: everybody is aware that we are coming up on the party congress later in october. one of the key priorities for chinese authorities right now is to make sure that systemic risks and financial bubbles are not emerging in any parts of the market. so, with that looming large, we are definitely

nejra: good morning, manus. index is lower. you are seeing regional benchmark slower in japan.osses also in hong kong. this is the hang seng. after three days of losses, the hang seng is nearing the level that preceded a previous rally. a support level that was hit back in april this year, and also in july when we saw stocks rebound. hong kong stocks are due a correction over the next few months. dollar-yen, this is looking at the technicals. it is trading around the 200 day moving average. overall, money is moving into the yen. .t is gaining brent crude is at $25 a barrel. we have gone higher in the session. is it going to power toward $60? that would be the first time since 2015. it seems what is pushing these games is the tension around turkey and kurdistan. turkey is saying it will stop kurdish shipments through its territory. , we50 day moving average all know that is the golden cross, and it tends to be bullish. manus: let's dig deeper into the oil story. derek halpenny is my guest and the london studio. when you look at that chart on the oil market, getting closer to $60

here's nejra cehic.ies gaining on the msci asia-pacific index for the first session in six. if we look at this month, heading for a monthly decline on the msci asia-pacific index. up to eight straight month of gains. the index also on track for its first weekly decline in seven. as he can see, we started seeing these declines after -- is this the start of a downtrend or just a blip? speaking of, the bloomberg dollar index is headed for its best week since 2017. it is heading for its third quarterly loss though. argument that the dollar downtrend remains intact, and so do the bearish arguments. finally, looking at oil. it is heading for its best month of april 2016, but i am looking at the wti discount to brent crude. the wti brent read that we have seen that widen out over the last few days. u.s. oilhtening as exports rebound following the hurricanes. manus: breaking news coming through. bayer will revise the fiscal outlook for 2017. 24.6%. the company manufactures coatings and insulating materials. cata

nejra: the european equity markets pulling back.sian equity session cap dissolve in positive -- kept itself in positive territory. a couple of interesting threads on how long that can carry on in agree markets. we have the hedge fund founder saying the correction could come merrill lynch found they have seen a big surge in the number of investors taking out protections against the downside move in global equity markets. that is something to bear in mind as we open up this equity market session. we are in positive territory, it seems. moving to theties downside. let us talk about where we are on the fixed-income story because this is the opening of the bond market and data, really important. we have the 10 year government on this chart for you. you can see the move in the month of june to do with the speech that mark carney made. then we see the spike at the far side of that chart, with the data we had gone out yesterday. the inflation data at the core. higher than the market had anticipated. lots of things on the move. we have the w

nejra: let's start with a record high for you group, an independent energy supplier in the u.k., risingnt 3%. up 6.5%. first half revenue, and the company seeing for your ahead of expectations. in terms of the others, it is about rerati8nng. tullow to outperform credit suisse, up 2.3%. stanleyo boss, morgan upgrading itt -- to underweight. the biggest drop in four months, down 2.8%. guy: thank you. up next, ripping up the sterling script. we discussed the outlook of the pound as estimates are revised after the best week since 2009. let me show you this chart. here, i want to show you the move we have seen in short sterling. look at the ride we have seen here. this is the unreliable boyfriend. the market didn't believe, now we have a major pricing story coming through off the back of what peter had to say and mark carney backing that up. is the unreliable boyfriend being believed? morning, story this the nikkei surging past 20,000, big move coming through for the japanese. does that have legs and where should we take economics yet and is that good for the japanese economy? we will discus

nejra cehic for your mid-caps movers. re-ratingte a bit of going on. if you look at this, the u.k.has been upgraded to buy. it is up four point -- 4.6%. atthe downside, i am looking telecommunications. if you open the drop, we saw an 11% drop. this is a wireless tech and services provider, cutting its guidance, and a third-party account firm to perform a review. that has driven the stock lower. the initial losses have moderated somewhat. we are down 5.8 percent. finally, speaking of the rating, looking at talktalk, it basically a double cut from credit suisse here, cut to underperform from outperform, and we are down 5% on talktalk stock. guy: thank you very much indeed. long bmw andng disney, going short tesla and netflix. pentagon strong is the with us. walk us through the trade. patrick: the m w, essentially bmw,ame market cap -- essentially the same market cap your the driver of the world moving towards electric cars. and they have told 47,000 cars to the end of june. that is the last number they announced. carsas sold 50,000 plug-in through the end of july. bmw has the distrib

nejra: some interesting things happening below the surface here.pped as much as 23% in the session. our revenue numbers said the four-year outlook is challenging and revenue will be about 10% lower than the full year 2017. also, not recommending the payment of an interim dividend. that pushing shares lower for lamprell. smiths group, a global technology company, u.k. energy u.k. energyt is a and medical technology and it airportong half due to transportation. it says oil and gas is likely to remain challenging and whitney -- when he came to the numbers, full-year operating profit beat, but revenue missed. onegative view down 3.7% smiths group. ams interesting because we had an -- a report that the customer turnout for the iphone eight launch was muted. fewer people than usual lined up outside the store. might open lower and we have seen that, ams down 1.9%. i'll pick it up. thank you. angela merkel is on course for a record-tidying fourth term in office after sunday's election. while polls point to her remaining in office, there are still a number

i'm nejra cehic in london. let's get straight to the