Euro Weakens to 17-Month Low; Bolsonaro Takes Lead Over Lula in Brazil Election

VONNIE: GOOD MORNING, I'M VONNIE QUINN WITH YOUR BLOOMBERG BRIEF. THE EURO WEAKENS TO A 17 MONTH LOW AS POLITICS AND FISCAL STRAINS KEEP BOND INCURRED THROUGH MARKETS UNEASY. ALSO NARO TAKE THE LEAD IN THE FIRST ROUND OF BRAZIL'S ELECTIONS. ANDY YEMEN LAUNCHES A FULL-SCALE MILITARY CAMPAIGN TO RETAKE HOUTHI-LED AREAS AFTER WEEKS OF RISING TENSIONS IN THE REGION. THE TODAY CHECK ON MARKETS AROUND THE WORLD THIS MONDAY MORNING. WINNIE: IT IS A PRETTY POSITIVE DAY FOR ASIAN STOCKS AS INVESTORS TRIMMED THEIR BETS ON THE FEDERAL RESERVE RATE HIKE THIS MONTH, GIVEN THE SOFTER U.S. JOBS NUMBERS. SOUTH KOREA MARKET IS ACTUALLY A HOLIDAY TODAY. FOR TAIWANESE BENCHMARK YOU'RE ACTUALLY SEEING THAT IT HIT ANOTHER FRESH RECORD TODAY WITH THE HELP OF TSMC, UP BY ABOUT 3% AFTER ELON MUSK CONFIRMED THAT THE COMPANY IS IN DISCUSSION WITH TERAFAB. WHERE YOU TAKE A LOOK AT THE WEAKNESS IN THE REGION IS ACTUALLY IN SHARES IN HONG KONG AND IS UNDERPERFORMING, AND THE LACK OF FLOW AS THE MAINLAND CHINESE MARKET IS STILL ON A HOLIDAY. AND WE ARE SEEING PRETTY SUBDUED NUMBERS COMING THROUGH FOR THE GOLDEN IN TERMS OF TRAVEL AND SPENDING, SO THAT IS WHY YOU ARE SEEING THE NAMES IN THE REGION ACTUALLY FALLING AS WELL. VONNIE: LET'S TAKE A LOOK AT WHERE MARKETS STAND AROUND EUROPE AND WE BEGIN WITH CRUDE BECAUSE THEY HAVE BEEN CONFLICTING REPORTS WHETHER THE PIPELINE WAS ACTUALLY FLOWING. MARKETS STILL AWAITING MORE CONFIRMATION OF THAT, BUT WE ARE ABOVE $100 A BARREL THIS SESSION EITHER WAY NEW YORK CRUDE ABOVE $90 PER BARREL AND GAS FUTURES ELEVATED ONCE AGAIN ON 75 EUROS PER MEGAWATT HOUR. MOSTLY IT IS A SLIGHT UPDATE ACROSS EUROPE, SO YOU HAVE THE STOXX 600 RELATIVELY HIGHER. FRANCE, A DIFFERENT STORY. SCHNEIDER ELECTRIC PROVIDING A DRAG. THAT SAID, THE CAC MIGHT BE UNDER A BIT OF PRESSURE ANYWAY WITH BOND YIELDS IN FRANCE CONTINUING TO RISE AND THAT SPREAD 147 BASIS, ABSOLUTELY NO OVER THE. FUTURES IN THE UNITED STATES ARE POINTED MODESTLY LOWER. THAT IS A REVERSAL OF WHAT HAPPENED HIGHER. WE DID HAVE AT RISK: AFTER THE NASDAQ OF 1%. TODAY MIGHT BE A DIFFERENT STORY, GIVEN ALL OF THE TENSIONS AROUND THE WORLD ADVISING UNCERTAINTY. THE TWO YEAR YIELD IS DOWN A CALL IT BASIS POINTS. THE 10 YEAR YIELD AT 5.26 AND THE 30 YEAR YIELD AT 5.62, SO NO REAL MOVEMENT AT LEAST THIS MORNING. WE ARE GOING TO HAVE A LOOK AT THOSE EUROPEAN ASSETS JUST TO SHOW YOU HOW INTENSE IT IS GETTING IN FRANCE. IT HAS TRADERS ON WATCH, ALTHOUGH WE ARE A COUPLE OF THE FIGURES AWAY FROM THAT RIGHT NOW. THE FRENCH 10 YEAR YIELD UP ANOTHER THREE BASIS POINTS TODAY. CREEPING EVER CLOSER TO THAT 5% IN FRANCE. UP ABOUT A QUARTER OF 1% GENERALLY IN EUROPE. FRANCE, THE ONE EXCEPTION. LET'S GET THIS AN INDIVIDUAL MARKET MOVERS NOW. JUSTINE A: LAST WEEK WE TALKED ABOUT GOOD NEWS FOR ANOTHER NUCLEAR ENERGY PROVIDER. BLOOMBERG NEWS REPORTING THAT THE TRUMP ADMINISTRATION IS PREPARING A ROUGHLY $4 BILLION LOAN PACKAGE TO THIS TRIP. THE STOCK IS UP QUITE A LOT PREMARKET TODAY. OF COURSE, THAT IS ALL ABOUT AI, FUELING A LOT OF DEMAND FOR POWER. WE ARE GOING TO BE TWO OUT OF THREE ON AI TODAY. THE NEXT ONE, SCHNEIDER ELECTRIC ANNOUNCING A $22.6 BILLION DEAL TO BUY INDUSTRIAL SOFTWARE FOR PTC. THIS IS ALSO ABOUT SCHNEIDER TRYING TO STEP UP ITS INVOLVEMENT IN THE AI BOOM. DOWN QUITE A LOT WITH ANALYSTS DOUBTING THE SIZE AND THE FINANCING OF THIS DEAL. AND PTC, OF COURSE UP STAGGERING 34%. LASTLY, NOT ON AI, POSSIBLY A CONCLUSION TO ONE OF THE BIGGEST ITALIAN BANKS DEALS EVER. TO RECAP A LITTLE BIT, PASSKEY DOESN'T WANT TO BE BOUGHT BUT YESTERDAY WE GOT THE NEWS THAT THE LARGEST SHAREHOLDER HAS SAID THAT THEY WILL TENDER THEIR SHARES, SO IT LOOKS LIKE AFTER ALL IT WILL GET ACQUIRED SO WE CAN SEE YEAR DATES FOR BOTH STOCKS TODAY. VONNIE: JUSTINE A, THANK YOU SO MUCH. ALSO COMING UP THIS HOUR, RBC CAPITAL MARKETS. LATER WE ARE GOING TO LOOK AT HOW THE DEBATE OVER DATA CENTERS IS SHIPPING THE MIDTERMS WITH NICOLE TURNER. LET'S CAST -- KICK THINGS OFF WITH HOW THESE CONCERNS ARE WEIGHING ON THE EURO. JOINING US NOW IS THE GLOBAL HEAD OF FX STRATEGY. JUST HOW SERIOUS DO WE NEED TO TAKE THIS RIGHT NOW? COULD THE EURO DROP BELOW 110? >> STARTING OUT BY FIRST SAYING THIS IS ONE OF THE LARGEST MOODS WE SEEN AT THE ASIA OPEN AND A VERY LONG TIME. WE CAN'T FIND A 100 COULD MOVE SINCE PRETTY MUCH BREXIT. I THINK THIS GIVES YOU CONTEXT FOR QUITE HOW SERIOUSLY PEOPLE SHOULD BE TAKING IT. BUT ON THE SIDE OF THAT UP UNTIL FAIRLY RECENTLY, FX WAS REALLY NOT MOVING. INVESTORS ARE UNDER POSITION AT THE MOMENT. ALL OF THEIR FOCUS HAD BEEN ON RATES. AT THE MOMENT PEOPLE ARE STRUGGLING TO JUMP ONTO THE MOVE BECAUSE WE'VE COME FAR SO FAST. ULTIMATELY THOSE WILL MATTER IN THE LONG RUN, BUT IN THE SHORT RUN WE ARE LOOKING AT KEY TECHNICAL LEVELS. WHETHER WE CAN BOUNCE BACK UP AND A CLOSE ABOVE THAT MIGHT SIGNAL SOME SHORT-TERM RELIEF. VONNIE: HOW MUCH HAS THIS TO DO WITH THE FRENCH SITUATION AND HOW MUCH IS TO DO WITH OTHER CATALYSTS? THERE ARE SO MANY OF THEM. >> FRANCE IS OBVIOUSLY THE KEY FOCUS, AND WE'VE SEEN THAT IN RECENT WEEKS. IT DIDN'T TO THE SPILL OVER INTO THE EURO BECAUSE LIKE I SAID, THERE'S BEEN SO MUCH PAIN IN THE MACRO SPACE. AS WE STARTED MOVING, WE'VE SEEN PEOPLE PILE IN, CONTINUE TO PILE IN TO LONG CARRY TRADES AND NOT FOR THE GET AGGRESSIVELY POSITIONED IN EUROPE. IF YOU WANT WHAT IS GOING ON ELSEWHERE, FOR ME, THE KEY TO WATCH AT THIS STAGE IS THE SWISS FRANC. LONG DOLLAR SWISS IS ONE OF THE MOST HEAVILY POSITIONED TRADES OUT THERE. AND THAT IS NOT FULLY MOVING. YOU ARE NOT REALLY SEEING ANY MATERIAL. AT THE SAME TIME, WHAT HAPPENED IN BRAZIL WILL BE HELPING THE CARRY TRADE. PEOPLE ARE WATCHING THE EURO, THE FLOW IS GOING THROUGH NOT JUST RELATED TO FRANCE, BUT IT IS NOT FILLING OVER THE BROADER FX PRINTING. VONNIE: IT DOES SEEM TO BE PRETTY ISOLATED EVEN IN THE BOND MARKET. THAT IS RELATIVELY UNCHANGED FROM LAST WEEK. IT IS PRETTY ELEVATED, BUT AT THE MOMENT IT IS SEEMINGLY CONTAINED. HOW MUCH RISK ARE WE OF CONTAGION? >> HERE'S THE THING TO WATCH. IT'S NOT SO MUCH CONTAGION. A FEW PEOPLE WERE TALKING ABOUT SPAIN THIS MORNING TO GET THE PRIME MINISTER: A SNAP EARLY ELECTION, AND SO SOME PEOPLE ARE NOW FOCUSING THEIR EYES THERE. THE SITUATION IS VERY DIFFERENT. WHAT WE HAVE AT THE MOMENT AND FRANCE IS HEADING INTO THE ELECTIONS NOT JUST ABOUT WHO WINS THE NEXT ELECTION, THE FACT THAT VERY DIFFICULT POLITICAL CHOICES HAVE TO BE MADE REGARDLESS WHO WINS. SOMETIMES IN THESE SITUATIONS YOU ALMOST NEED THE MARKET TO FORCE THIS DIFFICULT POLITICAL CHOICE AND WE ARE NOT QUITE THERE YET. ONE OF THOSE CASES WHERE IT ALMOST HAS TO GET WORSE BEFORE IT GETS BETTER. >> WHAT IS THIS MOVE IN >> THE EURO TELLING YOU? AT THE MOMENT, IT'S TELLING ME THAT PEOPLE HAVE LARGELY MISSED THE MOVE AND NOT MASSIVELY POSITIONED YET. WE TRACK A POSITIONING THAT IS NOT SPECIFIC TO RBC FLOW, BUT IT IS A REALLY GOOD OVERVIEW OF THE MARKET AS A WHOLE. WITHOUT US TELLING US AT THE MOMENT IS THAT YES, EURO SHORTS HAVE BUILT UP, MARKETS AROUND 50%, BUT IT IS STILL SMALL RELATIVE TO OTHER TRADES OUT THERE. IF YOU TRULY BELIEVE THAT FRANCE IS GOING TO COME UNDER MATERIAL PRESSURE, WE HAVE TO UNWIND 2025. VONNIE: HOW MUCH IS THE ECB WATCHING THIS AND GETTING CONCERNED? THE ECB HAS ITS OWN PLANS. WITH THIS BECAUSE THE ECB TO CHANGE PLANS, OR WITH THE ECB BE PURELY FOCUSED ON THE ENTIRE EURO AREA AND WHAT INFLATION IS DOING? >> FRANCE IS THE EURO AREA'S LARGEST ECONOMY. AND ALL OF THE TOOLS THE ECB HAS AT ITS DISPOSAL ARE NOT REALLY THAT WELL YEAR TO THE SITUATION. SO CLEARLY THE ECB HAS TO TAKE INTO ACCOUNT. I THINK THAT'S WHY PEOPLE ARE QUESTIONING WHETHER THE ECB CAN BE THE HEIGHT AS FAST AS HIS PREVIOUSLY PRICE. AND AT THE END OF THE DAY, YES, THERE IS AN INFLATION PROBLEM, OF THE SECOND-ROUND EFFECTS ARE NOT THERE. I THINK THEY WILL BE VERY ATTUNED TO THE FACT THAT THE GROWTH OUTLOOK DOESN'T LOOK THAT SPECTACULAR. IT'S QUESTIONABLE WHETHER THEY CAN BELIEVE DELIVER THAT MUCH MORE. VONNIE: OBVIOUSLY THIS FISCAL DETERIORATION IS IN A DIFFICULT POSITION BUT THERE ARE PLENTY OF OTHER COUNTRIES IN EUROPE WITH LOTS OF PROBLEMS, LOTS OF DIFFICULTIES. EVERYWHERE FROM GERMANY TO ITALY TO SPAIN, AND BOND MARKETS AREN'T REACTING QUITE SO STRONGLY THERE. >> I DRAW A REAL DISTINCTION BETWEEN ITALY AND SPAIN, THE KEY OTHER LARGE ECONOMIES THAT SOMETIMES ARE IN FOCUS. ITALY HAS A SMALLER DEFICIT AND A HIGHER DEBT BURDEN BUT BOTH SPAIN AND ITALY HAVE HAD REASONABLY GOOD GROWTH. YOU CAN QUESTION WHETHER THAT IS GOING TO BE SUSTAINED GOING FORWARD. IN ITALY, YOU HAD A REAL BENEFIT FROM E.U. FUNDS WHICH ARE NOT GOING TO CONTINUE GOING FORWARD. SO YES, THE GROWTH OUTLOOK MIGHT LOOK WORSE, BUT FRANCE IS A MUCH LARGER DEFICIT AS A STARTING POINT. IT HAS A POLITICAL SYSTEM WHICH DOESN'T REALLY LEND ITSELF TO BIG, DRASTIC POLITICAL CHOICES. WHOEVER WINS THE NEXT FRENCH ELECTION, IT'S NOT CLEAR THEY ARE GOING TO HAVE THE POWER WITHIN PARLIAMENT TO THE DELIVER THE FISCAL CHOICES THAT NEED TO BE MADE. >> THANK YOU SO MUCH FOR JOINING. TO ALL THE TOP STORIES TRENDING ON THE TERMINAL THIS MORNING, SPANISH PRIME MINISTER PEDRO SANCHEZ HAS CALLED AN EARLY ELECTION FOR NOVEMBER 29 AFTER PARLIAMENT REJECTED HIS GOVERNMENT HOUSING PLAN. HIS PROPOSAL SOUGHT TO FREEZE RENT, PROHIBIT ADDICTION OF VULNERABLE PEOPLE AND REGULATE SHORT-TERM TOURISM APARTMENTS. SANCHEZ FACES NATIONWIDE PROTESTS OVER HOUSING COSTS ALONG WITH CORRUPTION CASES AND A MIGRATION CRISIS. NVIDIA PARTNER REPORTED THAT ARE THAN EXPECTED QUARTERLY REVENUE. SALES ROSE 47% TO $95.4 MILLION. THE COMPANY HAS BENEFITED FROM THE GLOBAL BILL THAT OF CLOUD INFRASTRUCTURE. SHARES OF FRENCH CONGLOMERATE SCHNEIDER ELECTRIC FELL THE MOST IN 18 MONTHS. THE $22.6 BILLION ALL-CASH DEAL IT SCHNIDER'S ACQUISITION YET. THE TRANSACTION GLAD ENGINEERING SOFTWARE FOR INDUSTRIES INCLUDING AUTOMOTIVE, AEROSPACE AND MEDICAL TECHNOLOGY. RIGHT-WING SENATOR BOLSONARO PULLS AHEAD OF THE INCUMBENT IN THE FIRST ROUND VOTE. VONNIE: THIS IS "BLOOMBERG BRIEF" BUT LOOK AT THE RESULTS NOW IN THE FIRST ROUND OF BRAZIL'S PRESIDENTIAL ELECTIONS. BOLSONARO SURGING TO A SURPRISE LEAD OVER DESILVA. THE RACE HEADED TO A RUNOFF NOW, OCTOBER 25. HIS BOLSONARO NOW THE DE FACTO FAVORITE TO WIN OCTOBER 25? >> YES, I THINK THAT IS THE GENERAL SENSE THAT WE GOT FROM THE PEOPLE WE SPOKE TO LAST NIGHT. IT IS KIND IS SEEN AS HIS RACE TO LOSE AT THIS POINT. HE IS SO FAR AHEAD AND HIS ALLIES MADE SUCH A GOOD SHOWING IN CONGRESS AND SENATE ELECTIONS AS WELL THAT HE IS NOW LARGELY SEEN AS THE FAVORITE. VONNIE: MARKETS CLEARLY CHEERING THE SHIFT TO THE RIGHT. OUR MARKETS ASSUMING LOWER INTEREST RATES? WHAT ARE THEY ASSUMING? >> IT'S A LOT OF ASSUMPTIONS AT THIS POINT BECAUSE MUCH LIKE HE HASN'T OUTLINED HIS PLAN FOR THE ECONOMY, THE EXPECTATION IS THAT HE WILL LIKELY FOLLOW THE PATH THAT HIS FATHER STARTED JUST A FEW YEARS AGO, WHICH IS A SMALLER STATE, SEVEN OFF GOVERNMENT ASSETS, RELYING MORE ON THE PRIVATE SECTOR. LABOR REFORM, PERHAPS. FISCAL REFORMS REALLY IS THE MAIN CONCERN FOR MARKETS. BRAZIL HAS BEEN SPENDING MORE THAN IT CAN THREE YEARS AND YEARS. THE DEFICIT IS HIGH. AND INTEREST RATES ARE VERY HIGH, AS YOU MENTIONED. WE ARE 13.75 FOR INTEREST RATES AND HAVE BEEN STUCK IN THE DOUBLE DIGITS FOR A VERY LONG TIME AND THAT IS OBVIOUSLY CREATING A LOT OF PROBLEMS FOR COMPANIES TRYING TO REFINANCE THAT OR FAMILIES MAKING CREDIT TO EXPENSIVE. SO THE HOPE IS THAT HE WILL COME IN AND WITH A MORE MODERATE SPENDING PLAN RATES WILL FINALLY BE ABLE TO FALL AND IMPROVE THE ECONOMY OVERALL. >> THE LEFTIST MOVEMENT HAD BECOME THE DOMINANT POLITICAL FORCE. HOW HAD THE ECONOMY FARED? I HAD ASSUMED THAT CERTAIN SOCIAL SITUATIONS HAD GOT BETTER. UNEMPLOYMENT WAS DOWN A LOT. >> IT IS AN INTERESTING DYNAMIC BECAUSE IF YOU JUST LOOK AT THE MACRO INDICATORS, THE ECONOMY IS NOT DOING THAT POORLY. COUNTRIES GROWING STEADILY. NOT AMAZINGLY, BUT IT IS GROWING. BUT THE PERCEPTION THAT PEOPLE HAVE ABOUT ESPECIALLY THEIR CONSUMER POWER, HOW MUCH THEY CAN SPEND HAS HER THE FALLEN. PEOPLE JUST DON'T PERCEIVE THAT THEIR LIVES ARE BETTER AND THAT COULD BE BECAUSE THEY ARE INDEBTED. HE HAS LOST A FEW PROGRAMS TO TRY TO GET PEOPLE TO RENEGOTIATE THEIR DEBT. THERE IS ALSO A PERCEPTION THAT A LOT OF MONEY IS GOING TOWARD BETTING MARKETS WHICH HE IS ALSO TRYING TO CLAMPDOWN ON AND JUST THE PERCEPTION THAT THINGS ARE MUCH MORE EXPENSIVE THAN THEY USED TO BE AND MONEY IS JUST NOT GOING THAT FAR. YOU NEED TO WORK THREE OR FOUR JOBS TO MAKE ENDS MEET, AND I THINK THAT IS REALLY WHAT HAPPENED YESTERDAY. HE SAID WE NEED TO KIND OF SHIFT PRIORITIES AND SEE WHAT WE DO THE NEXT THREE WEEKS AHEAD OF THE RUNOFF ON OCTOBER 25. VONNIE: THERE WILL HAVE TO WATCH THINGS VERY CLOSELY. THANK YOU SO MUCH FOR BRINGING US THAT UPDATE. YEMEN'S INTERNATIONALLY RECOGNIZED GOVERNMENT HAS LAUNCHED A FULL-SCALE MILITARY CAMPAIGN TO TRY TO RECAPTURE TERRITORY HELD BY THE IRAN-BACKED HOUTHIS. ABEER, WE ARE GETTING REPORTS THAT THERE WAS SOME KIND OF OPERATION. CAN YOU GIVE US THE LATEST? >> SO THE LATEST FROM SAUDI ARABIA IS THAT THEY ARE LAUNCHING THIS FULL-FLEDGED WAR. OF COURSE WE TALK ABOUT THIS IN THE CONTEXT OF THE ALREADY-EXISTING WAR BETWEEN THE TWO SIDES. IT'S IMPORTANT NOW BECAUSE IT IS IN THE CONTEXT OF THE WIDER CONFLICT THAT IS HAPPENING BETWEEN THE U.S. AND IRAN, BUT IT LOOKS LIKE THE SAUDI'S HAVE HAD ENOUGH. THIS IS NOT ONLY TO REGAIN THOSE ASSETS THAT HAVE BEEN SEIZED OVER THE PAST MONTH OR SO, BUT THERE IS ALSO INTENTION TO WIPE OUT THEHOUTHIS. IF HISTORY IS ANY LESSON, THAT REMAINS TO BE SEEN. THAT IS WHEN THE SAUDIS HAS PUT AS A TIMELINE, THAT IT WILL TAKE A COUPLE OF WEEKS FOR THIS OPERATION TO BE LAUNCHED. WE ARE ALREADY SEEING SIGNS THAT THE SAUDIS HAVE ALREADY HELPED WITH FIGHTER JETS FOR THE RECOGNIZED GOVERNMENT IN YEMEN, SO YOU ARE WATCHING THIS HAPPEN IN THE MIDST OF A WIDER CONFLICT THAT IS NOT ENDING. THERE IS NO NEAR END IN SIGHT. THE LATEST, PRESIDENT TRUMP SAID THAT IRAN IS IN FOR THE BAD SHAPE RESPONSE SAID WE ARE WILLING TO GO BACK TO DIPLOMACY BUT WE ARE ALSO WILLING TO CONTINUE FIGHTING. SO YOU ARE SEEING BACK AND FORTH YET AGAIN A NEW DEVELOPMENT ON THE RED SEA, ANOTHER CRUCIAL WATERWAY THAT WITHIN REPORTING ON THAT SAUDI ARABIA HAS BEEN RESORTING TO TO GET CRUDE EXPORTS ACROSS THE WORLD. VONNIE: AND BRIEFLY, WHAT IS THE STATUS OF THE EAST-WEST PIPELINE THAT WE KNOW? THIS AFTER THE CEO OF ARAMCO SAID BUFFERS ARE RUNNING SCARILY THIN. >> YOU HAVE A BUNCH OF REPORTS CIRCULATING THE MEDIA OVER THE PAST FEW MINUTES SUGGESTING THAT IT MIGHT HAVE BEEN AFFECTED BY AN ATTACK, BUT BLOOMBERG REPORTING JUST MOMENTS AGO, CITING A SOURCE OF THE EAST-WEST PIPELINE IS FUNCTIONING. WE REPORTED OVER THE WEEKEND THAT IT WAS BACK AT 80% CAPACITY, EXPORTING ABOUT 6 MILLION BARRELS IN TOTAL, 4.5 MILLION IF YOU WERE TO DISCOUNT THOSE SPARROWS THAT GO TO SAUDI REFINERIES OR REFINERIES WITHIN THE SAUDI KINGDOM. YOU ARE SEEING BRENT CRUDE PRICES REACTING TO THOSE CONFLICTING REPORTS BUT AGAIN, BLOOMBERG REPORTED SUGGESTING WE ARE AT CAPACITY. WE ARE STILL SEEING CAPACITY FROM THE EAST-WEST PIPELINE. VONNIE: OIL JUST TURNING NEGATIVE ONCE AGAIN. COMING UP, THE PENTAGON WITHDRAWS ALL U.S. BOMBERS FROM A U.K. AIR BASE. ALL OF THAT AND WHAT ELSE IS MAKING HEADLINES IN YOUR FRONT PAGE NEWS, NEXT. THIS IS BLOOMBERG. VONNIE: THIS IS "BLOOMBERG BRIEF." TIME NOW FOR YOUR FRONT PAGE NEWS. FIRST UP, THE NEW YORK TIMES REPORTING ON THE U.S. RUSHING TO WITHDRAW ALL 10 B-1 BOMBER FROM AN AIRBASE IN SOUTHERN ENGLAND AFTER ONE OFFICIAL SAID WERE THREATS OF AN IRAN-BASED PLOT AGAINST THE INSTALLATIONS. NEXT UP, THE WHITE HOUSE IS MONITORING REPORTS OF A SUSPECTED LATE DEATH AND RELATED QUARANTINES IN RUSSIA. ADMINISTRATION OFFICIAL AXIOS RUSSIA THEY HAVE NOT CONFIRMED THE CASE BUT I MONITORING OPTIONS. IN THE FINANCIAL TIMES SAYING GLOBAL DEAL MILKING -- DEALMAKING FELL BELOW $1 TRILLION FOR THE FIRST TIME SINCE THE TRADE WAR LAST YEAR. VONNIE: IT'S 5:30 AM IN NEW YORK CITY, 10:30 A.M. IN LONDON. LET'S GET YOU SET UP FOR THE DAY. THE EURO WEAKENS TO A 17 MONTH LOW AS POLITICS AND FISCAL STRAINS KEEP MARKETS UNEASY. BOLSONARO SURGING TO A SURPRISE LEAD OVER PRESIDENT LULA IN THE FIRST ROUND OF ELECTIONS. AND HE YEMEN LAUNCHES A FULL-SCALE MILITARY CAMPAIGN TO RETAKE AREAS AFTER WEEKS OF RISING TENSIONS IN THE REGION. LET'S TAKE A LOOK AT MARKETS THIS MONDAY MORNING AFTER FRIDAY'S JOBS REPORT IGNITED A RISK ON RALLY. WE BEGIN WITH OIL LIKELY TO BE A SOURCE OF TENSION ON RISING GEOPOLITICAL TENSIONS IN THE MIDDLE EAST. BRENT CRUDE HAS REVERSED SOME GAINS EARLIER. THERE WERE REPORTS THAT THE EAST-WEST PIPELINE HAD BEEN ATTACKED. WE'VE NOW CONFIRMED THAT ACTUALLY, FLOWS ARE GOING THROUGH THAT PIPELINE NORMALLY AND THAT COST OIL TO REVERSE ONCE AGAIN, SO WE ARE LOWER NOW, BUT STILL ELEVATED. EUROPEAN GAS FUTURES ABOVE 74 EUROS PER MEGAWATT HOUR. IN TERMS OF FUTURES, WE ARE SEEING A SLIGHT DIP. WE DID GET THAT 1% GAIN FOR THE NASDAQ AFTER THE JOBS REPORT ON FRIDAY STARTED OFF THE WEEK WITH JUST A LITTLE TREPIDATION, EVEN IF THERE ARE SOME STORIES OUT THERE, FOR EXAMPLE, AN ACQUISITION ATC GETTING ACQUIRED BY SCHNIDER AND SO ON. YIELD-WISE, THE TWO-YEAR IS AT 4.80, ALMOST 4.81. THE 30 YEAR YIELD 5.62, SO BOND MARKETS JUST NOT MOVING FROM THE ELEVATED YIELDS OVER THE LAST COUPLE OF WEEKS. LET'S GET TO SOME INDIVIDUAL PREMARKET MOVERS NOW WITH JUSTINA LEE. JUST TINA: I HAVE TO RESTOCK SCANNING ON THE BACK OF THE AI BOOM THIS MORNING. BLOOMBERG NEWS HAS REPORTED THAT THE TRUMP ADMINISTRATION IS SET TO ANNOUNCE A ROUGHLY $4 BILLION LOAN PACKAGE TO THE NUCLEAR ENERGY PROVIDER. OF COURSE THIS IS ALL ABOUT UPGRADING THE U.S. NUCLEAR CAPACITY TO POWER A LOT OF THOSE DATA CENTERS IN THE AI BOOM. AND SECOND OF ALL, THE TAIWANESE GIANT AND ALSO SERVER ASSEMBLY PARTNER FOR NVIDIA JUST ANNOUNCED QUARTERLY REVENUE THAT HAS BEAT ESTIMATES AND WAS ALSO UP 47% YEAR ON YEAR. WE CAN SEE A POSITIVE REACTION AND ALSO A LITTLE BIT OF A POSITIVE READ ACROSS FOR NVIDIA. LASTLY, CEREBRAL SYSTEMS. SAM ALTMAN TWEETED ON FRIDAY THAT CEREBRAL'S IS A VERY IMPORTANT PARTNER FOR OPENAI AND THERE IS STILL DEEP ENGAGEMENT OVER THE FRONTIERS. CEREBRAS UP QUITE A BIT AND THE REASON IS THAT IT HAS BEEN DOWN OVER THE PAST FEW MONTHS AFTER SOME REPORT THAT OPENAI MIGHT BE MOVING TO SOME NVIDIA CHIPS AND CLEARLY THIS TWEET IS BEING SEEN AS A POSITIVE SIGNAL FOR THE PARTNERSHIP WITH OPENAI. VONNIE: THANK YOU SO MUCH. SOME STOCKS WE NEED TO WATCH TODAY. THE EURO FALLING TO A 17 MONTH LOW, MOMENTUM AGAINST THE DOLLAR AT THE WEAKEST IN A DECADE AS POLITICAL AND FISCAL RISKS IN THE REGION ESCALATE. WE WERE SPEAKING WITH ELSA EARLIER WHO SAID SHE HADN'T SEEN THIS KIND OF MOVE AT THE ASIAN OPEN SINCE PERHAPS BACK AS FAR AS THE EURO AREA CRISIS. HOW SERIOUSLY DO WE NEED TO TAKE THIS MOVE? >> I THINK IT IS A PRETTY SERIOUS MOVE. PRETTY SERIOUS INDICATION OF WHAT IS TO COME IN THE COMING MONTHS. I THINK IF YOU GO BACK IN HISTORY AND LOOK AT HOW THE EURO HAS BEHAVED, IN THE PAST 15 YEARS, IN THE THREE OR FOUR MONTHS BEFORE THE FRENCH PRESIDENTIAL ELECTION, IT HAS ALWAYS WEEKEND. THIS TIME IT IS A PARTICULARLY CONTENTIOUS POINT BECAUSE ONE OF THEM IS A DEEP EURO SKEPTIC AND THE OTHER IS CANCELING FRENCH DEBT. THAT IS BASICALLY SAYING, PLAYING JIGGLY POKER LEAGUE. THAT IS NOT GOING TO GO DOWN WITH INVESTORS AS WE'VE ULTIMATELY BEEN SEEING. I THINK THIS HAS GOT FURTHER TO DO. YOU WILL SEE CREDIT DEFAULTS WIDEN, YOU WILL SEE FRENCH YIELDS SPIRAL AND YOU WILL SEE THE EURO WEAKEN. THE EURO IS A NEGATIVE SLOPE TO FRENCH YIELDS. VONNIE: WHAT CAUSES THE MOVE TO BACK OFF A LITTLE BIT? WE ARE NOT GOING TO HAVE ANY CLEAR DIRECTION FOR THE FRENCH ECONOMY FOR QUITE SOME TIME. WE ALREADY GOT THE BUDGET. DEBATE ON THE BUDGET MAY BE LATER THIS MONTH, BUT WE ARE NOT GOING TO KNOW WHAT POLICIES ARE GOING TO BE ADOPTED FOR QUITE SOME TIME, GIVEN THAT WE MAY EVEN HAVE A CHANGE IN LEADERSHIP. >> THAT'S RIGHT. THE FRENCH MARKETS ARE IN NEED OF A CIRCUIT BREAKER BUT IT'S NOT CLEAR WE ARE GOING TO GET ONE. AS YOU MENTIONED, IT IS A 2027 BUDGET AND THERE IS NO INCENTIVE FOR THE POLITICAL PARTIES TO AGREE TO HOSTILITY MEASURES. YOU ARE ALREADY SEEING THE FRENCH PROTEST IN SCHOOLS SO IT DOESN'T LOOK LIKE THERE IS GOING TO BE CONSENSUS ON THE BUDGET. THE SECOND ASPECT IS THE CANCELLATION OF THE FRENCH DEBT. IF YOU COMBINE THOSE TWO THINGS, THE MARKETS WILL BE LOOKING FOR A CIRCUIT BREAKER UNTIL THE ELECTIONS ARE DONE AND DUSTED IN APRIL, WHICH IS WHY I THINK THIS MOVEMENT HAS GOT FURTHER TO GO. VONNIE: THE OTHER PLAYER HERE IS THE ECB WHICH IS UNLIKELY TO CONTINUE TIGHTEN POLICY AT LEAST AS MUCH OF ARE TRYING TO PRICE IN. WHAT HAPPENS WHEN WE DON'T GET THE HEIGHTS THAT MAY BE MARKETS WANT? >> EXACTLY. THAT IS ANOTHER FACTOR THAT IS GOING TO ADD THE EURO'S WEAKNESS. THEY ARE PRESSING AND 90 BASIS POINT OF TIGHTENING FROM THE EUROPEAN CENTRAL BANK OVER THE NEXT YEAR. EVEN IF YOU LOOK AT THE MOST HAWKISH MEMBERS OF THE ECB, THEY ARE TALKING ABOUT THE ECB NEUTRAL RATE IS AT 2.50, WHICH IS WHERE THE DEPOSIT RATE IS CURRENTLY. MILDLY RESTRICTIVE RATE IN THE WOULD IMPLY 2.75 OR AT THE MOST, 3%. THERE IS NO ROOM FOR THE ECB TO BE RAISING RATES MUCH FURTHER THAN THAT BECAUSE ESPECIALLY IN THE ABSENCE OF SIGNIFICANT SECOND-ROUND EFFECTS FROM THE MIDDLE EAST CONFLICT. I THINK THAT THE MARKETS ARE BARKING UP THE WRONG TREE, HERE. VONNIE: HOW MUCH FLIGHT COULD WE SEE? OBVIOUSLY WE ARE ALREADY SEEING SOME. HAVE TO FRENCH BOND MARKET OUTSTANDING IS OWNED BY FOREIGNERS. DOES THIS SPREAD TO OTHER COUNTRIES? >> NOT AT THE MOMENT. TO SOME EXTENT, ITALY IS BEARING THE BRUNT OF IT AS WELL. WHERE WE SAW FRENCH SPREADS OVER GERMANY WIDENING SIGNIFICANTLY LAST QUARTER, THE INCREASE WAS MUCH LESS PRONOUNCED. BUT THERE WAS SOME SPREAD WIDENING. BUT IF YOU LOOK AT THE OTHER ECONOMIES LIKE SPAIN, THERE'S LIKELY TO BE NO MOVE AT ALL IN THE SPREAD. I DON'T THINK THERE IS A CONTAGION AT THE MOMENT, BUT WHAT I WOULD WATCH FOR IS THE CLUSTER AFFECT OF FRENCH BOMBS AND THE EURO. >> AND AT THE SAME TIME WE ARE GETTING DOLLAR STRENGTH AND ALSO THE FED BEGINNING TO INCREASE INTEREST RATES STARTING WITH WHAT COULD BE THE NEXT CYCLE. HOW MUCH DOES IT MATTER TO THE EUROPEAN MARKETS IF THE FED GOES AGAIN IN OCTOBER OR DECEMBER OR WAIT UNTIL NEXT YEAR? >> WELL, I THINK TO THE EXTENT THAT THE FED KEEPS RAISING RATES, I THINK THAT IS GOING TO WEIGH ON THE EURO EVEN MORE. THE YIELD SPREAD DIFFERENTIALS BETWEEN THE RATE SPREADS, INTEREST RATE DIFFERENTIALS BETWEEN THE U.S. AND EUROPE ARE REALLY SIGNIFICANT. AND AS THAT WIDENS, THAT WILL CERTAINLY PUT PRESSURE ON THE DOLLAR. I THINK THAT WILL BE A FACTOR WEIGHING ON THE EURO. BUT I DON'T KNOW HOW FAR THE FED IS WILLING TO GO HERE. THEY MAY GO ONCE, THEY MAY GO TWICE, BUT BEYOND THAT, I'M NOT SO SURE. VONNIE: SEEING THAT THAT IS AN IMPORTANT FACTOR TO WATCH. THANK YOU SO MUCH. TWO OTHER TOP STORIES TRENDING ON THE TERMINAL THIS MORNING, BOLSONARO HAS TAKEN A SURPRISE LEAD IN THE FIRST ROUND OF BRAZIL'S PRESIDENTIAL ELECTION. THEY WILL FACE-OFF IN A RUNOFF OCTOBER 25. LOCAL MARKET ARE EXPECTED TO JUMP AT THE OPEN. AT LEAST RISK ASSETS. YEMEN'S INTERNATIONALLY RECOGNIZED GOVERNMENT HAS LAUNCHED A FULL-SCALE MILITARY CAMPAIGN TO RECAPTURE HOUTI-H ELD TERRITORY. SHARES OF FRENCH CONGLOMERATE SCHNEIDER ELECTRIC ALL IN THE MOCON 18 MONTHS AFTER AGREEING TO BUY BOSTON-BASED SOFTWARE FIRM PTC. THE DEAL IS SCHNIDER'S BIGGEST ACQUISITION YET. COMING UP, DATA CENTERS A HOT TOPIC FOR MIDTERM ELECTIONS WE’LL DISCUSS THE IMPACT ON VOTERS. THIS IS BLOOMBERG. IT DEFENSE DEPARTMENT OFFICIAL SAYS ALL U.S. BOMBERS DEPLOYED AT THE ROYAL AIR FORCE BASE IN THE U.K. HAVE RETURNED TO THEIR HOME BASES. THIS FOLLOWING A SUSPECT IN ATTEMPTED TERRORIST ATTACK LAST WEEK. THE NEW YORK TIMES REPORTED THAT THE WITHDRAWAL WAS CARRIED OUT WITH UNUSUAL SWIFTNESS AND URGENCY AFTER NEW THREATS EMERGED THEY PLOT RELATED TO IRAN. JOINING US FROM WASHINGTON IS TYLER KENDALL. THIS IS A VERY UNUSUAL OCCURRENCE, DONE IN ABSOLUTE HASTE. WHAT MORE DO WE KNOW ABOUT THE THREAT? >> AT THIS POINT WE DON'T HAVE THAT MANY DETAILS, THOUGH IT DOES UNDERSCORE THAT ALLIES ARE REALLY REMAINING ON HIGH ALERT OF ANY POTENTIAL FURTHER SUSPECTED TERRORIST ATTACKS. A U.S. OFFICIAL TELLS US THAT THE BOMBERS THAT WERE REMOVED ARE NOW BACK AT THEIR HOME BASES IN THE U.S., THOUGH THESE OFFICIALS HAVE GONE TO LENGTHS TO UNDERSCORE THAT THE PERSONNEL THAT OPERATE THESE AIRCRAFTS ARE READY AND ABLE TO CONDUCT STRIKES ANYWHERE IN THE WORLD AT A MOMENTS NOTICE, SO THAT THREAT DETERRENCE IS STILL THERE. THIS DOES TAKE CRITICAL EQUIPMENT OUT OF A PREFERRED LOCATION. THIS AIRBASE IN THE U.K. HAS BEEN USED AND AUTHORIZED FOR USE IN THE CONFLICT WITH IRAN. WE DID HEAR THAT THIS COMES ON THE HEELS OF THE U.S. DEFENSE SECRETARY SAYING THAT THAT SUSPECTED THWARTED TERRORIST ATTACK HAD BEEN LINKED TO IRAN. THE U.K. DEFENSE SECRETARY SPOKE TO BLOOMBERG OVER THE WEEKEND AND SAID IN PART WE ARE STILL EXPLORING WITH OUR POLICE AND SECURITY SERVICES A RANGE OF LEADS AND POSSIBILITY BUT AS THE PRIME MINISTER STATED, IT IS VERY LIKELY ARE BOND WAS RESPONSIBLE. WE SHOULD ADD THAT WE ARE STARTING TO SEE THINGS ESCALATE IN ANOTHER FRONT WHEN IT COMES TO THE CONFLICT IN THE MIDDLE EAST, AND THAT IS NOW THE INTERNATIONALLY-RECOGNIZED THE YEMEN GOVERNMENT BACKED BY SAUDI FORCES TRYING TO LAUNCH THIS OFFENSIVE TO DETER THE IRANIAN-BACKEDHOUTHIS SO THERE IS A LOT OF RISK OF ESCALATION RIGHT NOW WHEN IT COMES TO BROADER CONFLICT. VONNIE: WE'D LIKE TO HEAR MORE OF B12 BOMBERS WILL BE REDEPLOYED IF A THREAT PASSES. THE AI TASK FORCE, OBVIOUSLY IN RESPONSE TO SAFETY FEARS PERCOLATING THROUGH THE VOTING COMMUNITY. >> EXACTLY. THIS IS THE TRUMP ADMINISTRATION TO QUELL VOTER CONCERNS THAT THE ADMINISTRATION HAS A HANDLE ON ARTIFICIAL INTELLIGENCE EVEN AS WE SAW LAST WEEK, THE WHITE HOUSE REALLY REAFFIRMS IT ONCE THE COMPANIES AT THE CENTER OF POLICING THEIR OWN TECHNOLOGY. THE DIRECTOR OF NATIONAL INTELLIGENCE WILL BE THIS WHITE HOUSE TASK FORCE ON AI RISKS. IT HAS BEEN CALLED A SUPER INTELLIGENT FORCE AND WILL HAVE 120 DAYS TO REPAIR A REPORT ON THE RISK FACTORS AND NEXT STEPS WHEN IT COMES TO THE GOVERNMENT ENGAGEMENT ON AI INCLUDING FOR BOTH COMPANIES AND CONSUMERS. PRESIDENT TRUMP IS OUTLINED THAT WILL BE OTHER NAMES INVOLVED AS WELL AS THE CHIEF TECHNOLOGY OFFICER AT THE PENTAGON, UNDERSECRETARY ANDREW FERGUSON AND THE DIRECTOR OF THE OFFICE OF PERSONNEL MANAGEMENT. LAST WEEK WE SAW PRESIDENT TRUMP OPPOSED THE RANGE OF TECH LEADERS, NEARLY TWO DOZEN OF THEM WITH A SIGN THIS ACCORD, BASICALLY PROMISING THEY WILL CONTINUE TO MEET ON A REGULAR BASIS TO REVIEW BEST PRACTICES REGARDING AI, BUT IT IS NOT A BINDING AGREEMENT EVEN THE PRESIDENT TRUMP SAID THAT IT WOULD BE AKIN TO A CONSTITUTION. SO WE WILL HAVE TO SEE WHERE IT GOES FROM HERE BECAUSE TO YOUR POINT, IT IS VERY CLEAR THAT VOTERS HAVE GROWN INCREASINGLY CONCERNED BY THIS. A NEW POLL FINDS SEVEN OF 10 VOTERS SAY THAT THEY WOULD PREFER CANDIDATES THAT FACT STRICTER GUARDRAILS. VONNIE: THANK YOU SO MUCH. FOR MORE ON HOW THE DEBATE OVER DATA CENTERS IS THE MIDTERMS, NICOLE, SENIOR FELLOW OF GOVERNANCE STUDIES AT THE BROOKINGS INSTITUTION JOINS US NOW. NICOLE, THE PRESIDENT CONSTANTLY TOUTS THE ECONOMIC POSITIVES FOR COMMUNITIES OF THE DATA CENTER BUILDOUT. IF THAT MESSAGE GETTING THROUGH TO THE VOTING COMMUNITY AT ALL? >> I DON'T THINK SO. I THINK THE PRESIDENT IS MORE OPTIMISTIC THAN COMMUNITIES ARE RIGHT NOW. 72% OF PEOPLE SAY THEY DON'T WANT A DATA CENTER IN THE BACKYARD AND THE PRESIDENT CONSISTENTLY SAYS THAT WE NEED TO PUT THEM THERE BECAUSE WE HAVE TO BE COMPETITIVE WITH CHINA. I THINK THERE IS A MISMATCH BETWEEN THE PRESIDENT'S ASPIRATIONS AND WHAT COMMUNITIES ARE TELLING US THEY ACTUALLY WANT. VONNIE: THERE ARE 300 LOCAL MORATORIA ON DATA CENTERS NOW. HOW MUCH IS LOCAL ACTIVISM PLAYING A ROLE IN WHETHER OR NOT CONSTRUCTION BEGINS? >> LOCAL ACTIVISM IS HAVING A GREAT IMPACT ON CONSTRUCTION OF NEW DATA CENTERS. PLANT DATA CENTERS ARE PROBABLY GOING ON, BUT THE NEW ONES ARE BEING STOPPED BY BIG TOWN HALL MEETINGS AND PEOPLE RUSHING AND FILLING INTO GYMNASIUMS. THE U.S. SENTIMENT RIGHT NOW IS REALLY HIGH WHEN IT COMES TO DATA CENTERS AND I THINK THIS IS ALSO GOING TO BECOME A MIDTERM ISSUE GOING INTO NOVEMBER. PEOPLE JUST DO NOT WANT THESE DATA CENTERS IN THEIR BACKYARD AND IT IS SHOWING UP IN A NUMBER OF MORATORIUMS BEING IMPOSED ACROSS THE COUNTRY. VONNIE: WHEN IT COMES TO THE MIDTERMS, HOW MUCH IS THIS A REAL FEDERAL PROBLEM AND HOW MUCH IS IT MORE A DISTRICT PROBLEM WHERE PEOPLE MAY NOT VOTE IN MORE LOCAL, STATE LEVEL CANDIDATES? >> PEOPLE ARE MAKING UP THEIR MIND RIGHT NOW BEFORE THEY GO INTO THE BALLOT BOX TO SUGGEST THAT IF A CANDIDATE IS ACTUALLY SUPPORTING A DATA CENTER, THIS MAY BE A TURNOFF FOR THEM, AND QUITE DISTURBING AS TO WHERE THEY WANT TO PUT THEIR VOTE. WE ARE SEEING THAT IN PLACES LIKE OHIO WHERE THE PRESIDENT WAS RECENTLY TALKING ABOUT THE NEED FOR DATA CENTERS. THE COST OF GAS, THE COST OF GROCERIES, THAT PEOPLE ARE GOING TO VOTE THEIR CONSCIENCE. IT IS REALLY CLEAR THAT WHAT IS HAPPENING IN THE AI SPACE IS A DISCONNECT BETWEEN WHAT NEEDS TO HAPPEN AS A COUNTRY AND AS A WORLD AND WHAT IS HAPPENING LOCALLY IN RURAL AND URBAN AMERICA. AND I DO THINK PEOPLE ARE GOING TO OUT SOME CANDIDATES JUST BECAUSE OF THEIR OPINIONS ON DATA CENTERS. VONNIE: DO WE KNOW HOW MUCH MONEY OR POLITICAL CAPITAL SOME OF THESE COMPANIES ARE POURING INTO THE MIDTERMS TO ADVANCE THE AI AND DATA CENTER AGENDA? >> I'M SURE THERE'S A LOT. THE AMOUNT OF MONEY ACTUALLY GOING TO DATA CENTERS THEMSELVES. JUST THIS WEEKEND AMAZON ANNOUNCED A $1 BILLION DONATION TO COMMUNITIES IN WHICH THEY ARE BUILDING DATA CENTERS. I THINK WE ARE GOING TO SEE MORE OF THAT GOING INTO THE ELECTION, WHERE THERE IS GOING TO BE TECH COMPANIES SUPPORTING AREAS WHERE THEY THINK THEY ARE RIGHT FOR THE TYPE OF INSTITUTIONS THEY WANT TO CONSTRUCT. THE TECH COMPANIES HAVE BEEN PRETTY CONSISTENT IN SUPPORTING THE PRESIDENT AND HIS AGENDA, AND I THINK WE ARE GOING TO SEE MORE OF THAT GOING INTO THE ELECTION. VONNIE: AND HOW MUCH ARE WE ALSO GOING TO SEE CANDIDATES CHANGE THEIR MINDS VERY PUBLICLY? WE'VE ALREADY SEEN THE COUPLE, THEY WANT TO GET REELECTED OR THEY WANT THE CANDIDATES THEMSELVES TO GET ELECTED. WE COULD SEE MORE OF THIS. DO YOU HAVE AND I ON ANY STATES THAT MAY HAVE AN IMPACT? >> I THINK IT'S GOING TO HAPPEN IN THOSE STATES WE SEE VERY LARGE DATA CENTER INVESTMENT. WE ARE SEEING THESE RACES SHOW UP IN PLACES LIKE OHIO, GEORGIA, TEXAS IS ACTUALLY SHOWING UP ON THE MAP. I THINK THE KEY THING FOR AMERICANS RIGHT NOW IS THAT THEY WANT TO SEE SOME DISTRIBUTION OF THE WEALTH OF THESE TECH BILLIONAIRES. THEY ALSO WANT TO MAKE SURE THAT THERE IS CLIMATE TRANSPARENCY AND ENVIRONMENT ARE CONCERNS ADDRESSED. THEY WANT TO MAKE SURE THEY ARE NOT SIGNING OFF ON THE ENTIRE COMMUNITY VS. MAKING SURE THERE IS BETTER COMMUNITY BENEFIT. I DO THINK THERE'S GOING TO BE A LOT MORE SCRUTINY, A LOT MORE DISCERNMENT AMONG PEOPLE IF THEIR CANDIDATE IN PARTICULAR HAS A DATA CENTER VIEW. I THINK THEY ARE GOING TO CHANGE THEIR MIND AND BOWED DIFFERENTLY JUST BECAUSE OF HOW TERSE THIS BIG ISSUE HAS BECOME. VONNIE: YOU MENTIONED POCKETBOOK ISSUES LIKE HIGH OIL PRICES, FOR EXAMPLE. ON THE ONE HAND IT IS NEGATIVE OBVIOUSLY THAT THERE ARE HIGH OIL PRICES AND PRICES AT THE PUMP GOING HIGHER. BUT ON THIS PARTICULAR MATTER, MAKE IT HELP BECAUSE PEOPLE ARE MORE LIKELY TO VOTE THEIR POCKETBOOK THAN ANY OTHER ISSUE? IS THAT CORRECT? >> THE AFFORDABILITY ISSUE IS REALLY BIG. DATA CENTERS HAVE TO GO INTO LOCAL COMMUNITIES BECAUSE THEY HAVE TO PLUG INTO THE ELECTRICAL GRID. RIGHT NOW WE GET A VERY RURAL AREA MEANING YOU CAN BUILD ONE OF THE HYPERSCALERS WHICH CAN BE SEVERAL FOOTBALL FIELDS IN SIZE, BUT IT ALSO REQUIRES ELECTRICITY , PRIMARILY BECAUSE THEY ACCESS TO THE GRID. BUT GUESS WHAT, THAT TRANSLATED THE HIGHER COST FOR CONSUMERS WHO SEE THE ELECTRICITY BILLS GO UP. IN AN ECONOMY RIGHT NOW WHERE PEOPLE ARE TRYING TO FIGURE HAVE TO MAKE ENDS MEET, THEY DON'T NEED ANY MORE STRAIN ON THE BUDGET AND WE HAVE TO BE CAREFUL GOING INTO THIS ELECTION WHEN DATA CENTERS ARE NOT INFLATED -- CONFLATED WITH OTHER ITEMS THAT HAVE GONE UP IN TERMS OF PRICE. THE COST OF GAS, THE CROSS -- COST OF GROCERIES, AND JUST THE GENERAL SENTIMENT OF AI GOING FORWARD. VONNIE: THE WHITE HOUSE STILL WANTS TO TALK AT THE RATEPAYER PROTECTION PLEDGE. HOW FEASIBLE IS IT TO ENACT THIS AND TO HAVE AI-RELATED COMPANIES PAY THEIR FAIR SHARE? 6 >> THEY SHOULD DEFINITELY BRING THEIR OWN POWER. THE CONVERSATIONS WE ARE HAVING NOW IN CONGRESS WHICH ARE REQUIRING DATA CENTER COMPANIES TO THE BILL FOR THE ELECTRICITY THAT THEY HAVE REALLY MEANS A LOT. BUT THE WORK THAT I DO, I ALSO THINK IT IS GOOD FOR DATA CENTERS TO HAVE AN INVESTMENT IN PUBLIC INFRASTRUCTURE. THE GRID IS ONLY GOING TO HOLD SO MUCH. IT IS GOING TO GO BEYOND ITS CAPACITY TO CARRY ANYMORE DATA CENTERS ON THAT NETWORK. WE ARE SEEING THAT RIGHT NOW IN NORTH VIRGINIA. I THINK IT IS REALLY IMPORTANT THAT THERE IS A CONFERENCE A STRATEGY, A SERIES OF BILLS THAT WILL ADDRESS NOT ONLY THE POWER CONCERNS, BUT ALSO ENSURE THAT COMMUNITY RESIDENTS ARE JUST MUCH MORE ENGAGED. THIS IS A HOTBED KITCHEN TABLE ISSUE RIGHT NOW AND IT IS IMPORTANT THAT WE ALSO THINK ABOUT THINGS LIKE WORKFORCE. WE UNDERSTAND COMMUNITY DEVELOPMENT AND OTHER THINGS WE ARE GOING TO MANAGE. VONNIE: THANK YOU SO MUCH FOR JOINING US THIS MORNING. COMING UP, WE ARE GOING TO GET YOU SETTLED FOR YOUR TRADING WEEK. THIS IS BLOOMBERG. VONNIE: WE GET IM SERVICES DATA AT 10 :00 A.M. TODAY, UNIVERSITY OF MICHIGAN CONSUMER SENTIMENT DATA FOR OCTOBER ON FRIDAY. WEDNESDAY WE GET FED MINUTES BEHIND SEPTEMBER'S RATE HIKE. IN FED SPEAK THROUGHOUT THE WEEK. SOME MOVERS BEFORE THE BELL, QUALCOMM ON THE TECH FOLDING CHIP TECH. IT IS A WIN FOR HUAWEI THAT ALSO CLEARLY BEING SEEN AS A WIN FOR QUALCOMM. PTC WITH SCHNEIDER ELECTRIC. THAT COMPANY UP ABOUT 36%. AND SAM ALTMAN SAYS CEREBRAS IS A CLOSE PARTNER OF OPENAI, SENDING THAT STOCK UP MORE THAN 6%. HERE IS YOUR MACRO OUTLOOK. WE HAVE FUTURES POINTED SLIGHTLY LOWER RIGHT NOW. NEW YORK CRUDE HAS REVERSED SOME GAINS AND IS AROUND ABOUT $90.67 PER BARREL. WATCHING THE EURO TODAY AND THE POTENTIAL TO DROP BELOW 110 AND 10 YEAR YIELDS JUST WHERE THEY WERE AT THE END OF LAST WEEK.