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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Leie.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Something

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Speaker 1: A lot of people forget, Tomas that phase one is

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Speaker 1: about agreeing to withdraw from the European Union. Let's phase one.

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Speaker 1: Then you've got to agree what the future relationship looks like.

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Speaker 1: There's still a lot of work to be done. And

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Speaker 1: as you point out, Tom, an agreement between the EU

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Speaker 1: and the British government. Now we've got to get it

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Speaker 1: through parliament. Headline just crossing the Bloomberg that according to

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Speaker 1: party officials, the DUP won't vote for Johnson's Brexit deal.

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Speaker 1: I want to try and re establish that connection with

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Speaker 1: ros Then Matheson now bloom Big Executive editor for International Government.

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Speaker 1: Great to have you with us. Let's just talk about

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Speaker 1: what's been agreed between part Prime Minister Boris Johnson and

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Speaker 1: EU and why the DUP is still against this deal. So,

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Speaker 1: as you said, we're just getting news crossing the Wye

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Speaker 1: now that the DUP says it won't vote for Johnson's

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Speaker 1: Brexit deal. He's going to put it towards before Parliament

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Speaker 1: in the UK on Saturday. There was always the key

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Speaker 1: question and now the question really is did Johnson jump begun?

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Speaker 1: Did he did he get an agreement with the European

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Speaker 1: Union when he still has got things ironed out at

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Speaker 1: back end in terms of lawmakers in the UK, because

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Speaker 1: it's one thing to get the agreement with the another

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Speaker 1: thing to get it through Parliament. It's unclear if the

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Speaker 1: DUP is still just holding out as a negotiating tactic

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Speaker 1: and with a with a bit more discussion over the

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Speaker 1: next twenty four hours, they might come on side. But

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Speaker 1: what they're saying is fundamentally nothing for them has changed.

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Speaker 1: Nothing in the deal that was announced today has addressed

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Speaker 1: their concerns um and that they won't be backing it

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Speaker 1: on Saturday. That's a significant blow to Boris Johnson at

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Speaker 1: this point in time. Ross what is the big change

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Speaker 1: in this agreement between Primeister Boris John's and the EU

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Speaker 1: and the agreement between Primus the Main the EU And

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Speaker 1: with that in mind, what is the biggest sticking point

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Speaker 1: still for the d u P. Well, it seems to

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Speaker 1: be very much still around the issue of what you

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Speaker 1: would call, in broad terms, the idea of a backstop,

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Speaker 1: and that's the training arrangements that avoid a hard border

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Speaker 1: on Ireland once Braxit takes place. And that's been a

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Speaker 1: key concern obviously of the d u P. And what

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Speaker 1: we've had put forward isn't a way a sort of

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Speaker 1: a version of what the Reason may at one point

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Speaker 1: put forward, which is to have customs arrangements in effect

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Speaker 1: at some point in the Irish Sea and no hard

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Speaker 1: border on land, and arrangements can be transitional that Northern

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Speaker 1: Ireland can scrap them at some point if they disagree. Um.

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Speaker 1: And that seems to be the latest version of where

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Speaker 1: we're at. But the DUP just a couple of days

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Speaker 1: ago was saying that that was still not okay um.

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Speaker 1: And it sounds like Boris Johnson hasn't managed to get

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Speaker 1: them over the line. As a result, negotiations might be

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Speaker 1: finished in Brussels, they will continue at home. Ross great

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Speaker 1: to catch up with you as always ross the matthis

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Speaker 1: and that of blind Back. Well we are fortunate to

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Speaker 1: have with us right now in our studios in Washington.

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Speaker 1: Someone well timed to speak on this for years, I've

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Speaker 1: owned his affiliation with Schroeder's and then on to his

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Speaker 1: work personally for Mark Kearney or Francis Laquax. Speaking with

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Speaker 1: the Governor of the Bank of England tomorrow here in Washington.

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Speaker 1: But John farrells, you know ku Venstein has has taken

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Speaker 1: on new duties for u b S the Union Bank

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Speaker 1: of Switzerland as a senior advisor UH as well, and

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Speaker 1: uh ku von Stein has joins us this morning here.

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Speaker 1: There will be a parliamentary vote on Saturday, which will

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Speaker 1: set us up for the domestic politics. Do you sense

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Speaker 1: within all your reading and all your contacts that this

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Speaker 1: is a general election that Prime Minister Johnson would win

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Speaker 1: in that it will be a leave general election UM

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Speaker 1: or thanks Tom. Look, the it's been very striking how

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Speaker 1: in the opinion polls Boris Johnson's being able to win

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Speaker 1: more support and you know, to get an outright majority.

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Speaker 1: Hidd read about thirty eight percent of the total electorate

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Speaker 1: and he's get knocking on that door. Now. Clearly there's

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Speaker 1: a lot of detail there about how the opposition parties

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Speaker 1: will either tie together or splinter. UM this Saturday is

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Speaker 1: really critical because you know everyone assumed that Boris wouldn't

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Speaker 1: get a deal, and he's come through and reopened the

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Speaker 1: backstop agreement. UM. I think it would be very interesting

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Speaker 1: to see how the DP and the opposition respond and

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Speaker 1: whether they want to tag on a referendum and then

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Speaker 1: we go into a general election with a referendum, or

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Speaker 1: do they try and stall for time. But it's I

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Speaker 1: think the odds now are much higher. Cable fading here,

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Speaker 1: Tom still passing up on the session, but way off

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Speaker 1: session highs. We are up by just a tenth of

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Speaker 1: one percent one pound one. Johns fer a New York

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Speaker 1: on term Keenan, Washington, and again John and I with

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Speaker 1: our coverage of these I m F and World Bank meetings,

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Speaker 1: and where this Hu von Steins of u B s here,

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Speaker 1: let's walk away from Brexit, which is certainly front and center,

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Speaker 1: and there'll be something in one hour different as well.

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Speaker 1: It is a most interesting set of meetings here in Washington,

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Speaker 1: in the heart of the matter, and you've been a

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Speaker 1: student of this for for many decades. Is the multilateral

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Speaker 1: nous of it? There's that I m F logo of

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Speaker 1: a hundred and eighty whatever nations. Is it gone in

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Speaker 1: the Trump world is our multilateralism gone. Look, I think

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Speaker 1: it's a great question Tomaine, certainly the behind the scenes

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Speaker 1: of my conversations yesterday, but really around the trade war

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Speaker 1: and to what extent we can get a resolution to

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Speaker 1: some of the trade war, but whether there'll be a

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Speaker 1: tech war which just just carries on because I think

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Speaker 1: both US and China reviving for supremacy around tech pros

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Speaker 1: and they used in the economy brilliant. What's the ven

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Speaker 1: diagram of the trade war in the tech war? And

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Speaker 1: I guess is there's a little bit overlapped there hugely.

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Speaker 1: But because I but I think what's very clear about

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Speaker 1: the tech is um is there a re establishment of

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Speaker 1: supply lines. So if you if the US is not

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Speaker 1: using Kuawei, you know what will it be doing instead?

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Speaker 1: And so I think there's this ongoing anxiety around big

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Speaker 1: tech and how that plays out. And you know, whether

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Speaker 1: it's Brexit or Europe, they're not quite sure you know

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Speaker 1: which way to turn on this because we're you know,

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Speaker 1: beneficiary of both both large blocks. The heart of this

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Speaker 1: is the mercantilers structure of President Trump, which is fine,

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Speaker 1: it's a strong opinion, and let's be clear, he has

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Speaker 1: a large number of Americans who support not only on

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Speaker 1: technology but on other issues as well. Do you detect

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Speaker 1: a permanence here or is it an amendment of four

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Speaker 1: or eight years? Um. Look, I think there'd be better

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Speaker 1: people than me to judge. But I think I think

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Speaker 1: the big challenge here is how we get a global

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Speaker 1: growth and it's very very clear that the uncertainty from

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Speaker 1: the trade wars has clearly been a dampener on markets

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Speaker 1: and on business activity. I think that we since certainly

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Speaker 1: hope there will be some resolution, but maybe we reached

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Speaker 1: peak populism. It's been very striking also in whether it's

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Speaker 1: whether it's a Boris Johnson looking to do a deal,

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Speaker 1: whether it's the Italian saying they will no longer leave

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Speaker 1: the euro of the Northern League. Maybe we've reached peak populism.

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Speaker 1: But I think these underlying tensions between the big blocks,

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Speaker 1: particularly in a low growth world where everyone wants their

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Speaker 1: ship fair share or even a disproportion share, I think

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Speaker 1: these tensions carry on. Vanina, thank you so much. He

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Speaker 1: is with You'll be as a senior advisor to Mr

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Speaker 1: Mudi right now. This is a thrill. Jason Furman with

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Speaker 1: us with a service to the country as a former

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Speaker 1: chairman of the President's Council of Economic Advisors for President Obama.

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Speaker 1: But maybe more than anyone I know, there's a few

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Speaker 1: others out there playing in the policy pond, but actually

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Speaker 1: figuring out policy and applying it across all of them

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Speaker 1: America that have they have not really trying to think

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Speaker 1: about executing and doing policy. Maybe Rick Michigan up at

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Speaker 1: Colombia would be someone else like that. Before we start

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Speaker 1: in here, adjacent and too shorter conversation and celebration. The

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Speaker 1: other day Michael spent salaurea on our London desk with

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Speaker 1: one Michael Kremer of Harvard University. You know Michael Kremer

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Speaker 1: and his policy action on poverty. What is original about

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Speaker 1: this Nobel Prize for poverty? Something we don't talk about enough. Um,

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Speaker 1: it was a great Nobel prize. Everyone I know is

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Speaker 1: really excited about it. To other people from a college,

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Speaker 1: I don't know what After the flow and Avogate, Boundgy

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Speaker 1: run wanted as well. And what you saw here is

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Speaker 1: has been a really big change in the way we

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Speaker 1: think about development economics, the way we think about helping

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Speaker 1: poor people in poor countries from you know, huge, big

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Speaker 1: dramatic ideas to let's do experiments, let's test, let's see

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Speaker 1: what works, let's see what doesn't work, um, and then

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Speaker 1: scale it up. And that sounds easy. They've been doing

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Speaker 1: that in medicine for a long time. But one the

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Speaker 1: idea to do it UM wasn't an economics but too

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Speaker 1: when you do it in economics, turns out is actually

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Speaker 1: quite tricky and quite complicated to figure out how to

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Speaker 1: design those experiments, how to figure out whether they'll scale up,

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Speaker 1: take them to the next stage. And those three are

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Speaker 1: in the middle of making progress. I'm a question. I

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Speaker 1: mentioned professor Kramer Pascal in upon and her work as

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Speaker 1: well in malaria years ago. Great, why can't we do

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Speaker 1: this in the United States? We're real good extending poverty.

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Speaker 1: Is that we have a Lackey in structure? Is there

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Speaker 1: an Americanism where we can't translate this across our inequalities? Yeah,

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Speaker 1: I mean in that that paper you are, I mean

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Speaker 1: bestal deposit work. I mean two hundred, three hundred dollars

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Speaker 1: per life saved from bednets. Um from malaria you do

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Speaker 1: insecticide treated bednet three hundred dollars per life saved. It

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Speaker 1: is the single best thing one could possibly do UM

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Speaker 1: anywhere in the world when it comes to the problems

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Speaker 1: in America, we are seeing more of that UM. There

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Speaker 1: was something called j PAL that was founded. It's housed

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Speaker 1: in Cambridge, and it was doing experiments on development. Now

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Speaker 1: they're doing some of those randomized trials you know. Here

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Speaker 1: in the United States, you're seeing more of that on

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Speaker 1: you know, preschools. That's something we've done for a while. Now.

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Speaker 1: The evidence is incredibly clear. I don't think we need

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Speaker 1: to collect much more economic evidence that preschool is a

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Speaker 1: great idea. Now it's really up to the politicians to

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Speaker 1: do it. You've seen that happen in some states. Too.

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Speaker 1: Many states haven't expanded preschool. I don't know how we

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Speaker 1: can talk about it. You are a great student on this.

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Speaker 1: I don't mean to interrupt. This is so critical in

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Speaker 1: that with great respect for the halves, distrust government spending.

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Speaker 1: That's an ethos in America, clearly a successful ethos. How

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Speaker 1: do we disperse our knowledge and technology to the haves

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Speaker 1: of America? Yeah, yeah, I mean, just to stick with

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Speaker 1: the one I was on. Whatever trust or distrust you

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Speaker 1: have in government, most of us are quite comfortable with

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Speaker 1: the fact that the government spends money educating children between

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Speaker 1: the age of five and eighteen. You know, maybe we

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Speaker 1: want the money spent differently, Maybe we want more money,

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Speaker 1: maybe we want some reforms. But I don't think anyone

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Speaker 1: debates that the God that we have a stake in

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Speaker 1: having educated citizens. So let's extend that to age three,

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Speaker 1: extend that to age four, same idea. Out of time,

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Speaker 1: we could go, we gotta I gotta come back to Washington,

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Speaker 1: John and and meet with Dr Furman. Maybe we can

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Speaker 1: go see the capital's place that you can come to,

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Speaker 1: come to Cambridge, Massachusetts. All we can see Bruins Canadians.

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Speaker 1: That will work out as well. Jason Furman, thank you

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Speaker 1: so much, of course, with the County School at Harvard

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Speaker 1: and his service to the nation's former chairman of the

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Speaker 1: President's Council of Economic Advisers. Yea, there is just a

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Speaker 1: ton of uncertainty out there. The macro risk persists, as

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Speaker 1: it has done over the last eighteen months with trade,

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Speaker 1: through the last three years with a Brexit situation, and

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Speaker 1: it has just become so finely balanced that one incremental

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Speaker 1: shift one way or another, one incremental piece of news

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Speaker 1: can shift perception quite radically from one week to the

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Speaker 1: next to weigh in on that from New York and

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Speaker 1: Police to say Monama, John joins US now as Global

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Speaker 1: Investors US investment strategist, Mona, let's talk about that, just

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Speaker 1: how finely balanced perception of the global economy is right now. Yeah. Absolutely.

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Speaker 1: You know, I think just a few weeks ago there

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Speaker 1: was a lot of pessimism built into this marketplace, driven

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Speaker 1: by that week p m I number, particularly that came

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Speaker 1: out in the US. Interestingly, since then, and I'd say

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Speaker 1: over the last couple of weeks in particular, we've gotten

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Speaker 1: somewhat incrementally positive news on two of the biggest overhangs

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Speaker 1: in the economy and the globe economy right now. You

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Speaker 1: noted US China trade as one, and then secondly Brexit.

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Speaker 1: These are two issues that have been really lingering and

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Speaker 1: weighing on the markets, and over the last couple of weeks,

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Speaker 1: i'd say we've gotten perhaps incrementally positive steps now to

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Speaker 1: your point, it's always two steps forward, one step back.

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Speaker 1: Sometimes it's been one step forward two steps back in

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Speaker 1: both trade and Brexit. We'll be watching, in particular on

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Speaker 1: the trade side, whether or not we can one come

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Speaker 1: to some sort of Phase one deal, but more importantly

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Speaker 1: whether or not these tariffs that have been the overhang

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Speaker 1: for the consumer and the business investment community can be removed.

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Speaker 1: Those December fifteen tariffs, in particular that way on the

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Speaker 1: consumer are important for US aside from trade and Brexit.

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Speaker 1: I would also just point out that incremental news around

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Speaker 1: earning season thus far, around the yield and yield curves,

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Speaker 1: and then even a potential for p M E s bottoming,

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Speaker 1: have all helped support sentiment and our view. We'll get

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Speaker 1: to the earning center worlder issues in just a moment.

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Speaker 1: Let's talk about the price levels on the SMP five.

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Speaker 1: We found out multiple times this year that life above

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Speaker 1: three thousand points, for whatever reason, is difficult. We've mentioned

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Speaker 1: this several times, Miner, I think you and I have

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Speaker 1: discussed it many times too, and the same in the

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Speaker 1: bottom market for the ten year life below one fifty

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Speaker 1: incredibly difficult. We found that out time and time again

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Speaker 1: over the last couple of years. Do you think we

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Speaker 1: can finally break out of these very volatile trading ranges?

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Speaker 1: Narrow as they might be, but they have been very

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Speaker 1: volatile over the last several months. Do you think we

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Speaker 1: can finally break out one way or another. You know,

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Speaker 1: I think that three thousand level on the SMP is

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Speaker 1: critical and I do feel like we've been hovering at

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Speaker 1: that range for about eighteen months now. When we look

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Speaker 1: towards the end of Q four, you know, we're talking

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Speaker 1: to our teams, we think of three potential scenarios. One

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Speaker 1: is we have some sort of melt up or maybe

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Speaker 1: a ten pc upside going into Q four in particularly

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Speaker 1: those last few months of the year. The other two are,

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Speaker 1: you know, we trade sideways. And the last and probably

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Speaker 1: least impressive for investors, is that we we moved downward

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Speaker 1: in the last or now. Given what we know thus far,

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Speaker 1: the incremental positive steps around trade and and Brexit, the

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Speaker 1: potential for bottoming out. Our base case remains that we

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Speaker 1: can actually potentially see a breakout to the upside, and

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Speaker 1: so I think that's where we're coming from and hopeful for.

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Speaker 1: But data keeps coming in and as you said, it's

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Speaker 1: a weekly adjustment. Well, I think I've mentioned this before.

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Speaker 1: You have one of the coolest undergraduates going Wharton and

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Speaker 1: also computer sciences at Pennsylvania, which folks, is a legendary

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Speaker 1: double major. Are we in the middle of a binomial

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Speaker 1: tree like all of Brexit today, which John has done

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Speaker 1: such a good job of covering. Is it just zero

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Speaker 1: one zero one toggle switch where if we get through

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Speaker 1: these problems, we just toggle switch back to normalcy. You know,

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Speaker 1: it's interesting because both of these issues have such nuances

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Speaker 1: and the devil is really in the detail. You know,

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Speaker 1: even if we get a trade deal, is there an

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Speaker 1: overhang around enforcement? Is there an overhang that President Trump

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Speaker 1: can come in any moment and arbitrarily impostarriffs. Anyway, I

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Speaker 1: think it comes down to the old adage. Markets do

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Speaker 1: not like uncertainty, and so to the to the extent

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Speaker 1: we can eliminate uncertainty in the marketplace. So with trade

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Speaker 1: that would probably imply removal of tariffs, but also some

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Speaker 1: sort of enforcement mechanism, and also businesses should know what

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Speaker 1: kind of you know, tariffs are supposed to be paying,

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Speaker 1: and I think that that type of certainty is important.

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Speaker 1: Similarly with Brexit, you know, is it a soft is

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Speaker 1: it a hard? Regardless, they have a long slog ahead

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Speaker 1: of them. How are they going to get through the

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Speaker 1: next two to five years as well? What does that

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Speaker 1: mean for the European economy and the global economy, and

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Speaker 1: so you know, when you start thinking about the details

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Speaker 1: beyond just the binary outcomes, you start thinking about the

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Speaker 1: potential impacts to the economy and a longer term basis.

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Speaker 1: There are some issues to be worked out, but I

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Speaker 1: do think um those headlines would be incrementally positive. We

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Speaker 1: just want some of these issues resolved. The risk of

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Speaker 1: persisted for so long. I think people are exhausted and

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Speaker 1: just want some clarity about what this looks like in

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Speaker 1: the future. Luckily, we've got a break from these kind

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Speaker 1: of stories through the next couple of weeks as the

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Speaker 1: earnings come through. Just before we let you go, Minor,

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Speaker 1: i'd love your view on the bank earnings that we've

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Speaker 1: had from the last twenty four hours. Pretty decent so far. Yeah,

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Speaker 1: you know, our our take is that it's a positive

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Speaker 1: um and again kind of leads into our story about

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Speaker 1: how Q four could end up being ultimately positive for

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Speaker 1: the markets. But I think a couple of takeaways. Um. One,

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Speaker 1: the banks have been lagging this year, so I think

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Speaker 1: there is some room to to play catch up, and

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Speaker 1: it's interesting that we've seen some of the value sectors

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Speaker 1: lagging in general. Could this be a catalyst potentially for

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Speaker 1: banks in particular to play some catch up in the markets.

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Speaker 1: Number two, what we've been talking about this entire year

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Speaker 1: is that there's a dichotomy between manufacturing and the consumer.

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Speaker 1: I think this bank earning season is really showing us

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Speaker 1: consumer strength is still out there, and I think that's

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Speaker 1: positive for the economic story broadly. So we're positive incrementally

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Speaker 1: on the banks and we think that could be a

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Speaker 1: good sign for economy as well. Morgan Stanby certainly likes

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Speaker 1: the news this morning. The stock does anywhere. The stock

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Speaker 1: is up by more than four percent, Earns coming in

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Speaker 1: pretty solid. Might great to see you, and now you've

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Speaker 1: got to run Mana Mahajan, their Alliance Global Investors, US

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Speaker 1: investment strategist. Let's get to the story for European politics,

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Speaker 1: shall we. We have an agreement between the European Union

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Speaker 1: and Prime Minister Boris Johnson. The challenge for Prime Minister

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Speaker 1: Boris Johnson is getting this agreement through Parliament this coming Saturday.

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Speaker 1: Will he need the support of the d UP if

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Speaker 1: he does so. Far, the Democratic Unions Unionist Party confirming

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Speaker 1: that they will not be able to support these proposals,

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Speaker 1: putting out an emailed statement just moments ago. Sterling is

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Speaker 1: still positive but barely cable. Is that's the pound against

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Speaker 1: the US dollar one fifty one. We had a session

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Speaker 1: high of nineties, so we're well off those levels, so

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Speaker 1: it looks finally balanced. We have an agreement. Tom, can

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Speaker 1: the Prime Minister get it through Parliament on Saturday. If

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Speaker 1: he can't, what's next? What comes next? And I think

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Speaker 1: that's key because a lot of paper assuming that if

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Speaker 1: he can't get it through this Saturday, ultimately the next

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Speaker 1: step is not a hard Brexit. It's an election. Although

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Speaker 1: I'm not convinced either way. Where we are here. We

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Speaker 1: have an agreement, he's managed to get some concessions from

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Speaker 1: the EU. He heads to Parliament Saturday. It's very delicate,

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Speaker 1: and you're not the only one yawning. Who's born and

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Speaker 1: stick its heart of all of this? I read, you

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Speaker 1: know what one vibe. I was ignorant on the War

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Speaker 1: of the Wars of the Roses from like the fifteenth century,

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Speaker 1: just on the War the Roses. So yeah, you know,

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Speaker 1: I'm gonna read Lady Jane Gray next. But you know

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Speaker 1: I'm reading the stuff from like five hundred years ago. John,

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Speaker 1: Nothing's changed. I mean, it's the parliamentary system. You guys

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Speaker 1: go on and on and on. I agree with you.

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Speaker 1: Jane's got Jane Foley has got a system. Jane Foley

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Speaker 1: has got to do this every day. Rubber Bank's head

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Speaker 1: of effects, strategy and senior analysts. She joins us out

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Speaker 1: of London. Jane, your thoughts this morning please on the

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Speaker 1: agreement that is yet to be agreed in the United Kingdom. Well,

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Speaker 1: you know, as you talked about Saturday, we really will

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Speaker 1: be crucial now in Parliament. We know that Boris Johnson

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Speaker 1: needs to get three votes to pass this steal through

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Speaker 1: and there are only two D eighty seven toys now. Also,

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Speaker 1: if we look at some of the comments from Corbyn

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Speaker 1: this morning, Corbyn says he of course is a leader

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Speaker 1: of the Labor Party. Johnson's select deal should be rejected. Now.

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Speaker 1: There will be some rebels within the Labor Party who

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Speaker 1: will vote for a deal. There are a number of

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Speaker 1: Labor MPs that represents constituencies that voted leave in that

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Speaker 1: referendument in twenties sixteen. But clearly there will be pressure

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Speaker 1: on the Labor MPs to reject the steal. There will

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Speaker 1: be pressure from the Liberal Democrats also to reject this steal.

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Speaker 1: So it's far from clear that this is going to

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Speaker 1: get through. So, as you rightly pointed out, the focus

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Speaker 1: should be turning into what happens then. Is it going

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Speaker 1: to be a heart Brexit despite the then at or

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Speaker 1: is there going to be an election? I think almost

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Speaker 1: irrespective of what happens, there will be an election in

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Speaker 1: the next few months. Will Johnson be able to put

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Speaker 1: his deal into a manifesto and say, look, Voctory, there's

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Speaker 1: a deal and Brexit gets done, or will the lecture

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Speaker 1: not by that? And right now there's a lot of

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Speaker 1: opinion polls that suggest that, like you and like me,

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Speaker 1: the elector and the UK are sick of the Brexit negotiations.

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Speaker 1: So it is possible that many people will vote for

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Speaker 1: a party that has a deal in the bag. But

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Speaker 1: on the other hand, Corbin this morning raised the prospect

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Speaker 1: of another referendum, so it seems one way or another

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Speaker 1: we will be at the polls again in the foreseeable future.

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Speaker 1: So sterling is back to where it was in mid May,

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Speaker 1: and I think we've got to go through the different permitations.

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Speaker 1: Let's conclude, just for the premise of this conversation, a

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Speaker 1: basis of this conversation that on Saturday this degreement does

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Speaker 1: not get through Parliament. The next steps are important, as

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Speaker 1: you point out, Jane, to what degree is the downside

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Speaker 1: and cable limited? Given the most people assume that a

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Speaker 1: heart breaks, it won't be possible to what degree is

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Speaker 1: the downsiding cable at this point, given what you know

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Speaker 1: and working through the different permutations, to what degree is

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Speaker 1: the downsiding cable right now limited? Well, a week ago

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Speaker 1: we were trading on about and I think we could

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Speaker 1: potentially be back at if a deal is off the table,

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Speaker 1: assuming the probability of a heartbreaks it doesn't increase. Now,

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Speaker 1: then what happens is isn't the market begins to look

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Speaker 1: to the opinion ples. It begins to look at the

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Speaker 1: probability of a general election. Now if there was a Johnson.

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Speaker 1: If there was an election, the opinion ples are currently

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Speaker 1: saying that Johnson's Story Party would be the biggest party.

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Speaker 1: But although support for his party how increased recently, there

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Speaker 1: is still an indication that he wouldn't be able to

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Speaker 1: get a majority, that there would still be a hung parliament,

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Speaker 1: and there's no confirmation now that the DP would support

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Speaker 1: his government as they are currently doing so. In those circumstances,

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Speaker 1: the opinion polls would become increasingly important. Now if it

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Speaker 1: looked as if he could get a majority, and of

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Speaker 1: course he says that he can, then that would probably

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Speaker 1: be very good for Sterling on the assumption that the

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Speaker 1: deal that he has made would be done. But of

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Speaker 1: course again if the Tories began to talk about a

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Speaker 1: no deal again, then that would be very negative of Stern.

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Speaker 1: And Jane Foley with raval Bank with us this morning. Jane,

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Speaker 1: very quickly, here can you say on interest rates? We

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Speaker 1: hit bottom, we've moved up. On yen, we hit yend strength,

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Speaker 1: we move weaker. Is there a permanence to this latest

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Speaker 1: move even if we're still within range? Well, and probably not.

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Speaker 1: I mean in terms of the yard, of course, there's

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Speaker 1: a lot of geopolitical risk factors that can impact the

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Speaker 1: yen um and certainly, I think in terms of foreign policy,

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Speaker 1: we know that there's lots of geopolitical risks out there.

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Speaker 1: In terms of interest rates too, how much lower can

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Speaker 1: we go? And certainly there's a big debate, certainly within

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Speaker 1: wind in Europe and even Australia now as to whether

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Speaker 1: or not negative interest rates, you know, are going to

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Speaker 1: prevail and be seen in more countries than they are currently. Jenna,

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Speaker 1: want to put you on the spot, just to wrap

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Speaker 1: up this program. Cable sterling against the US dollar one,

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Speaker 1: what do we see first, one forty or one twenty. Well,

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Speaker 1: clearly that depends on the outcome of of Brexit. Even

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Speaker 1: the news that we have right now, I think probably

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Speaker 1: one twenty is more likely if we get this still

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Speaker 1: through Parliament on Saturday becomes more nightly. James fably, very diplomatic,

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Speaker 1: as always, very sensible. Robert back ahead of a strategy

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Speaker 1: and seeing an analyst joining us out of London. Thanks

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Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen

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Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform

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Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast.

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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio.