welcome to "bloomberg markets." vonnie: here are the top stories coming from the bloomberg and around the world. payrolls in september, the jobless rates hit a 48-year low. we look at a tight labor market and the impact of hurricane florence in the september data in moments. then, what the jobs reports mean for fed policy. we hear exclusively from new york fed president john illiams this hour. and supreme court nominee brett kavanaugh awaits judgment. the senate has scheduled a make or break procedural vote in just 30 minutes. we'll bring that to you when it happens. let's get a check at the equity markets. eleanor is here. we are looking at the dollar

and crude, i see. eleanor: just reaction we've seen from the jobs report this morning. interestingly now, crude is turning higher but still off the $75 a barrel. the dollars, you're seeing a weaker dollar. the yields are continuing to climb higher as equities continue to grind higher as well. i want to take a look at the bond market. taylor: gtv go. we are looking at the biggest 3.06 to anges from the 3.22. one tweeting if you see two consecutive closes on the 10-year above 3.25 that would be a long-term breakout pattern. the last low was july, 2016. the story has been in the bond market. we can't forget about equity. we are 30 minutes into the u.s. trading session. mostly everything higher.

real interesting is the nasdaq and the tech stocks continue to lag. of course, upon reports china launching a hardware attack on some of the u.s. companies. i want to look at some individual movers. anything like the dow and s&p 500 are green, i want to take at some of the losers in some in particular. photonics, preliminary earnings added to some concerns and some fuel to some other bearish calls that were seen in the sector. costco off by about 3%. making good investments in immerse and digital but might be weighing on margins in the near term. guy. guy: taylor, it was a difficult legacy coming out of asia overnight. they were on pressure because of the tech story. the ftse 100 trading 23.79. one factor behind that what's going on with the pound today. remember, the pound goes up enerally the ftse goes down.

it's an effect that we see coming into the force today. we had an interesting week for the guild market. the german 10-year, we are up by two basis points so that's a continuation of a theme we've seen taylor talking about with the jobs story. remember, you have to think about the treasury market and bond market on a hedged cyberspace. you get better value in the bond market than treasury market and that's what we're paying attention to. 30.o dollar, 1. vonnie: the unemployment rate fell to 3.7%, the lowest since 1969. wage gains eased slightly. illustrating the impact of hurricane florence. joining us, julia coronado, founder and president of macropolicy perspective.

welcome, julia. those comparisons to the late 1960's, are they meaningful? julia: not terribly. the 1960 earks the labor market was a very different labor market. we think we have the fact we have an older labor market and educated work force means the natural rate of unemployment, that is the unemployment rate that will create inflation is a lot lower than in the past. 3.9%, 3.7% today isn't the same as 3.7% in 1969. vonnie: are we in danger of running hot on the economy? julia: no. if anything hurricane should put pressure on wage growth. it ticked lower on anual basis. there really isn't signs of hiring constraints. you take out the hurricane effect, we're running around 200,000 on month on job growth. that's strong. we hear employers complaining they're having trouble but we see no evidence in the jobs data and wage growth is subdued which you means there is no inflationary pressures or

tightness that's starting to constrain and maybe worry the fed. guy: julia, if i didn't have to worry about the payroll numbers what about the trade numbers? will it encourage the president, i would have thought, judging by the comments we got from mr. pence yesterday, i thought it would encourage the pair of them to continue with the narrative on trade and china. julia: well, unfortunately, this is sort of the classic story of crowding out when. when you put in a bunch of fiscal stimulus and full employment, you have to import some of that. domestic is strong but we don't have the capacity necessarily to produce it all. we have one, we're importing a lot. we have potential disruptions from the trade wars that will intensify in the coming months. it's not going in the direction the president wants. that might lead to some frustration and i definitely think we are not going into the direction immediately of a solution and a conclusion to the conflict with china, in

particular. guy: julia, where does this leave the fed? i listened to the chair. pretty amazed the economy he had in front of him. it's going to take a lot to blow him off course, isn't it, in terms of the rate hikes penciled in. the question is, do we need more? julia: we don't need more. the fed's plan looks perfect. they will march steadily towards neutral. they will watch the trade wars and possible emerging market disruptions. tightening overseas in global financial conditions that might spill onto our borders, nothing yet. but right now it looks like the plan is to keep going. you take a look around and right now everything looks goldie locks. chair powell wondered how long can this go on? for now it doesn't seem like anything will get in the way. vonnie: what do you make of the bond moves this week? how much of the higher in elds, we're now 16 basis

points between the 10 and 30 spread? how much is that growth expectation, technical factors? julia: it's a little bit less than half of the move. we are seeing recovery in expectations which is subdued. there is more anticipation, yeah, the fed will meet its target. half is yield based on the strong run of data we had. you know, it's sort of long overdue. we've been puzzling why the yield curve was so flat given the strong economy and a patient fed. and so we sort of topped higher. the market doesn't adjust in linear ways. e fact we're closer to 3.20, 3.25 on the 10-year, given the federal deficit that's only going to keep increasing so lots of supply pressure pressuring the long end of the bond market as well. vonnie: do you see the mid terms throw something into

here? julia: it could. i don't think it will derail any of the things that are currently in place. i don't think it will bring a lot of fiscal austerity, for example. that's already put in place, no fiscal s are running on austerity. the stimulus should remain in place. the trade wars should remain in place because that's driven by the executive branch and there's very little that congress can do to check that in the near term. so i think for now it really doesn't change the dynamics. just intensifies the political noise. as we've seen the economy is pretty resilient to political noise. guy: julia, for global fixed income portfolios, the dollar curbsy hedging remains a crit -- currency hedging remains a critical factor. once you put a currency hedge over the top of it, where is the dollar going? julia: well, that's a good question. we've seen a pretty large

correction in emerging market correction, have we've seen the bulk of the adjust? and vis-a-vis china and europe, those are different stories. i think for now we should see the u.s. economy continue to outper form because of the domestic stimulus. we should see the trade wars put some downward pressure on the chinese currency. so i think the dollar might still have some room to run here in terms it of overall on a trade-weighted basis we could see some appreciation. guy: in terms of kind of where policy ends up, where do you have the terminal rate? where does this process end up? how quickly do we get there? at the beginning of the conversation you sounded pretty comfortable with a payroll number that, as you described it, pretty goldie locks right

now. how long will it take to get to the terminal rate? do you think the risk lies, the upside, downside, currently where the market has it priced? julia: i think the market, in terms of where i look at the world, it is not far off the mark. i think what we're going to see as the fed continues to march forward is some tightening in global financial conditions. we've already seen some slowing in the global economy. and really the toll that the trade wars are going to take on real economic activity is going to happen very gradually with a lag. so i think by the middle of next year we could be seeing a lot less bouyant conditions, some slower hiring numbers, some slower growth numbers, more volatile financial conditions, tighter financial conditions, stronger dollar, higher rate. so i think all of that could lead the fed -- the fed right now is carving out a wide room to do whatever it takes depending on the data. i don't think that they are determined to, as some people

say, hike until something breaks. i think they want to get a few more hikes along and then sort of cautiously look at the lay of the land. so i don't think the market is badly priced for what i expect the fed to do which is somewhere around neutral, take a pause, and look around and gather more information. vonnie: julia, what will be your question to john williams who's coming up in about 20 minutes? julia: well, i think in terms of is how worried is he about a 3.7% unemployment rate? vonnie: done. that is julia coronado, founder and president of macropolicy perspective. thanks. and coming up, our exclusive interview with john williams, president of the new york federal reserve. julia's , trade, and question. bill gross joins us at 11:00. this is bloomberg.

>> we welcome everyone joining us on bloomberg television and radio around the world. i'm the international politics and policy correspondent michael mckey. joining us this morning at the new york fed is the president of the bank. in his first interview since coming across the country from san francisco, john williams, thank you for being with us this morning. john: welcome to the new york fed. great to talk with you. mississippi valley: 134,000 jobs reported this morning. do you throw it out there as a hurricane influence number? john: i see as one important indicator to follow. continued strong job growth, we saw some pretty positive revision the previous month and seeing the unemployment rate come down. continuation of a really strong

economic -- strong u.s. economy and good momentum going forward. michael: lowest since 1969, 3.6% unemployment rate, does that scare you? john: lots of jobs. these are signs of a strong economy and good economy. when you think you in terms of inflation, we are not seeing inflationary pressures now. this is a bit of a goldie locks economy. low unemployment, strong job growth. this is good. michael: average hourly earnings dropped 2.8%. the philips curve still very flat? john: i would say relationship between inflation and unemployment is always a little bit ten with us than we think from -- tenous than we think and wages, wage growth generally around 3% or a little bit below that consistent with a strong labor market but, again, i see positive signs

there. we're seeing earnings grow, jobs grow and stable inflation. michael: when do we see wages rising up to feed into inflation? john: well, again, we're watching for that. i'm watching the data carefully. we are not seeing signs of that. we'll see the unemployment rate to continue to edge down this year and next year. i expect it to get below 3% next year. i see continue rise in wage growth and that's consistent with a strong economy so i am not worried about inflationary pressures, at least for the next year or two. we want to have to sustain this economic expansion. we want to keep it in good balance. we don't want to see inflationary pressures pick up. haven't seen those yet but obviously watching closely for that. michael: you're sang wind. in the past week bond yields have risen. how do you comperpt that? john: the market participants, at least from my perspective, are seeing strong u.s. economic data. we are seeing a number of

indicators show the economy is growing at a pretty strong rate and there's momentum going towards the end of the year. so people are looking at strong economy. tiply associated -- typically associated with a higher interest rate. that's the way i interpret it. i don't see the market telling us they're worried about inflation. i think it reflects the strength of the u.s. economy. michael: well, jay powell said on wednesday, quote, we may go past neutral but we are a long way from neutral at this point. what did he mean by that? john: neutral interest rates have gotten attention over the years. of course, we don't know what the neutral interest rate is. if you look at my colleagues, you know, from our recent estimates, you know, people put that at about 3% for the short-term interest rate. we are a little above 2% for the fed's target. we have a ways to go to what we think as neutral. we don't really know what that is. we are getting closer and we'll

continue to get slowser to a range of neutral over the next year. my point is neutral is just one piece of information that we think about when we think about monetary policy. we talk about wage data, inflation, job growth, g.d.p. growth, we look at a lot of indicators, both in the u.s. and abroad. neutral is just one of those. it's an important one, one i follow closely. to me it's one piece of the puzzle of thinking about monetary policy. michael: a lot of people on the trading desk were looking at neutral as the load star, what you said friday, for where the fed is going. at some point you will stop raising rates. what will tell you you're there if it's not the neutral rate? john: the neutral rate is one of the components. it's what we think a normal interest rate would be. you have to look at the indicators of how strong the economy is. are we growing faster than a sustainable pace over time? are there inflationary pressures building or in fact, you know, is inflation not at

our 2% goal? it's what i talk about more normal monetary policy, tracking data. we are data dependent. think where the economy is going and try to keep us at a sustainable pace. that could be slightly above what people think or somewhat what people think is above or below. it is achieving our goal of maximum unemployment and price stability. michael: when you are not using neutral anymore, what are you using? people are concerned that you're going to be reacting to data that is old rather than data that tells you what is going to be coming in. john: again, i would say neutral or our idea is still a component of thinking where the economy is and where policy is relative to our longer run average. i think we'll go back to what we always do, look at where are we in terms of the 2% inflation goal. right now we are at it in terms of underlying inflation. that's good. also, where are we in terms of the labor market and growth

compared to what we think as a sustainable pace of growth? and can we -- we just want to keep this economy strong, keep inflation around 2%. and get that nice balance that chair powell talked about in his speech. michael: how far above 2% would you let inflation run and for how long? john: so i think about inflation being somewhat above or below our target, first of all, inflation does move around for various reasons. so it doesn't bother me if it's a little bit below or a little bit above. so when you ask the question, if it were a few tenths above on a 12-month chain that wouldn't be worrisome. the question is, is the economy on the medium term in a sustainable -- a sustainable path and are inflation staying around 2%? the best thing we have on our side here is inflation expectation is really anchored around the 2%. the public expects that. i think that's why the philips

curve seems to be pretty flat. what we need to do is keep inflation on average around the 2% rate. michael: what sort of conventional wisdom in the markets that the fed kills them by tightening rates too far and restricting credit? the dot plot suggests the fed will tighten above where neutral might be. why shouldn't investors worry that you'll go too far this time? john: well, obviously we know the history. we -- in my view, i don't want o choke off the expansion. it's getting close to the longest expansion in u.s. history. i'd rather reach that mark and set a new record for that. you look at the projections that my colleagues and i when we wrote them down, they do -- when we do see funds rate moving somewhat slightly above this neutral but not enough that i think it's really about tight monetary policy that would risk choking off or stalling the expansion.

i think we're trying to get this balance right. keeping expansion going but making sure it's on a sustainable pace. michael: there are some members of the committee argue in order to achieve that it's good to stop and look, take a pause. what do you think of that idea? john: my own view here is that we're continuously updating our views on the economy, watching the data. honestly, several times a day, looking at financial market conditions, looking at global conditions. i don't ever take a pause in my monitoring and analysis of the economy. i don't think of monetary policy as taking a pause. i do think we're going to obviously reassess where the conomy is, re-evaluate where the right path for policy is over the next few years but that's not going to be on some table or based on being around neutral. it's just about trying to get this right. adjusting our views in line with how the data revolving and where we see the economy going. michael: well, the dot plot shows the committee coalesced

around four moves and expectations in the market is you'll do something in december. there's a significant range of outcomes for 2019. the median is three but there is an equal number of people who are at two and at four. what's your expectation? john: well, i think if you look at the center of the range of my colleagues' projections from a recent economic projections, i think these are really pretty reasonable views the economy is likely to go and where policy needs to go in terms of sustaining this expansion. you know, you asked me, where is the federal funds rate going to be at the end of next year? it depends on the data. will things happen between now and then that will affect our decisions? i can't really make a prediction. is one answer better than the other because it will really depend on the data. if the economy continues on the i think a gradual nk

path, rate increase for the next year or so is the right course for us to keep this economy going and keep inflation near 2%. michael: the people who risk money based on what you are going to do have basically felt you have been too optimistic how strong the economy is going to be and how low inflation will be for quite sometime. are they wrong? are they going to have to come up to your viewpoint? john: well, i think all of us are learning from the data and learning from talking to each other and there is definitely times where there's been a separation of use of a lot of market -- the economists versus maybe my own view but honestly, it's not about being right or wrong. it's really about seeing how the data evolve and which view gets more support from the evidence. right now i think the evidence is pretty convincing. we have a very strong economy right now with solid growth. i exact real g.d.p. growth to be at or maybe above 3% this year. 2.5% next year. that's a very good economy. i'm pretty confident that's what it's going to look like. again, we will all learn from the data and how the global economy evolves, how financial

market conditions evolve and revise our views. michael: do you expect much faster inflation next year given the strength of the economy and rising oil prices? john: i don't really worry about underlying inflation. of course, the top line inflation number will move around with energy prices. that's just kind of math, in a way, but i don't see any clear signs either from wage growth or other signs from the data or the surveys, strong -- upward inflationary pressure so i expect inflation to pick up a 10th or two over the next year or two but not much more than that. michael: well, your boston fed colleague said people are finding it easy to raise prices, something we haven't seen in years. what about companies in the second district? john: we are hearing some of that, too. now, again, if you go back the last few years and our conversations and others, we heard the opposite. inflation was running below 2%. a lot of businesses said to me

and to others, it's really hard to raise prices. it's such a low inflation environment. we've seen inflation move up to 2%. we are hearing more kind of these story, it's a little bit easier to pass through cost increases. again, that's why i will be watching the data closely and continue these conversations with business and community leaders to hear what they're experiencing and what they're doing in the situation. michael: are they telling you as they told the boston president that they will use tariffs to raise prices as an excuse? john: when you talk to business people they have their own experiences and their own kind of actions they're doing. definitely there are some talk about, well, in this environment where my costs are going up a lot, i really have no choice but to raise prices and i guess telling their customers or others, that's why they're doing it and helps people understand. yeah, hear a little bit of that.

michael: spent quite a bit of time talking about trade and tariffs. what's your view on that in terms of the economy and inflation going forward? john: so far the actual actions in terms of the tariffs and the agreements that have been made or been negotiated don't have a first order or major impact in terms of growth or jobs or inflation, in terms of my view of the economic outlook. clearly boost some prices and boost inflation by a small amount. but in the big picture this isn't a major factor influseflunsing the economy. i am concerned if we have a significant rise in tariffs both here and abroad or restriction on trade, that would have a larger effect. we are doing a lot of analysis and study of those issues to make sure we understand that depending on what happens around trade negotiations how that might feed back on the u.s. economy and how, you know, we can best achieve our goals in that happens. michael: we're talking with new

york fed president john williams on bloomberg television and radio worldwide. let me ask you about a couple quick other worry points. the yield curve, everybody was scared about the yield curve inverting. now with rates rising, no longer worried about something like that? john: well, it is interesting, right, with the 10-year treasuries moving up quite a bit in the last few weeks. we are nowhere near an inverted yield curve. to my mind this is kind of the normal pattern you'd see during a cycle like this. the fed obviously raising short-term interest rates. because the economy is doing better or we're closer to our goals. at the same time market participants reassessing their interest rates down the road. i don't see any signs from the yield curve today or looking at the near term suggest to me we are at risk of a recession. in fact, again, going back to my forecast, i think the economy is on a pretty strong run right now. i'm not that concerned about the possibility of a recession in the near term based on what

we're seeing today. michael: emerging markets, as the dollar gets stronger, as you raise rates, they suffer. any concerns there? john: well, again, this is something we and i personally watch very closely. in terms of what's happening emerging markets, how the rise of the dollar and higher interest rates affects their economies. clearly in some cases it is having an impact on their economies and we watch that carefully, try to understand both the effects on those countries but also the feedback onto the global economy and our economy. when i think of u.s. monetary policy, we have a domestic mandate, maximum employment in the u.s., and price stability in the united states. but as a very important central bank and global financial system, it is important for us not only focus on doing our job very well, because that's good for the global economy, but also to communicate effectively, clearly to the markets here and around the world about what our thinking is, what are plans are, our

economic projections and meet with our peers around the world, help exchange ideas and perspectives so that we're being as predictable and clear bout what we're doing and to basically avoid unintended or unnecessary volatility or disruption. michael: john williams, thank you very much for joining us on bloomberg television and radio. we're going to send it back to you. guy: thanks to our new york fed president john williams and, of course, bloomberg's mike mckey. vonnie. vonnie: guy, we are waiting a make or break cloture vote in the senate for supreme court nominee brett kavanaugh it could down to two republican holdouts. we're joining with bloomberg's chief washington correspondent live on capitol hill. senator mitch mcconnell about to ask for the vote to take place. now, this is a procedural vote. kevin, tell us what happens this morning.

kevin: well, cloture vote is what we're anticipating to happen within the next couple minutes. senate majority leader mcconnell is going to take the vote. a cloture vote is a vote to have a vote. it's the last procedural hurdle ahead of the final vote for judge kavanaugh to the supreme court. so this is just the final step. now, we're anticipating a majority party line break here. some of the key senators we're watching ahead of tomorrow's final vote, anticipating it makes to the final vote is muir could you say key, senator collins, senator flake, joe manchin, who is up for re-election in the mid terms. candidate donald trump carried that state by more than 40 percentage points during the presidential election. he's in a tough spot. he's undecided. senator susan collins, a republican centrist from maine, she's also another key undecided. she anoinsed she will vote yes on -- she announced she will vote yes on cloture but will not announce her final vote

until 3:00 p.m. today. senator susan collins say she will announce whether or not she will vote for judge kavanaugh to the supreme court. republicans can only afford to lose one republican faction because of their slim majority here in the senate. so that puts a lot of interest on the likes of senators collins, flake, and murkowski. all three of whom haven't said one way or the other how they will vote. now, earlier today, judge kavanaugh taking out an op-ed in the "wall street journal" saying he perhaps didn't have the best temperament during his proceedings last week when he testified following his accuser dr. christine blassy ford's testimony. he said he was asking acting as a father, a son and a husband during his testimony. that, i'm told by sources here on capitol hill, was really geared toward those centrist republicans who are still making up their minds. vonnie: so this morning's cloture vote is really a vote to end debate on kavanaugh. it is likely to pass but that

doesn't mean the same senator is -- the vote to have debate ended will vote to advance the supreme court nominee. lisa murkowski is one of those and she said she didn't have a chance to hear all the interviews and that 46-page report. what happens between, say, 10:40 or 10:50 or whenever the cloture vote finished and later today, tonight, before tomorrow's vote, kevin? kevin: i spoke with an aide to senator joe manchin and he said he is weighing carefully every facet of the decision. he was spotted going into that secure location that senators will have up until the final vote to review that document, the f.b.i. report. it has not been made public. democrats have urged some top line report to be made public but it has not been made fully available to the public. these senators are weighing this decision. for someone like senator lisa murkowski, she's got the base of her party, the conservative

base in the state of alaska which is very much in line with president trump. but then another faction of independent voters, largely native american population, who have come out against judge kavanaugh's nomination, according to local reports in alaska. so each of these senators that we talk about, all four of them having to really hyperlocalize this issue and having it weigh on their constituents. someone like senator susan collins, for example, isn't up for re-election until 2020. but she could face a challenger from the right, the current outgoing governor, coveragor lepage, who has been a staunch ally to president trump. and donald trump jr. campaigned with the outgoing governor who is rumored to have senatorial ambition. you're absolutely right, and i do want to stress this point. it's almost like a civics lesson, so to speak. this is just a cloture vote. you could have a situation

where someone votes for cloture but ultimately does not vote in favor of judge kavanaugh. so particularly for our global audience, i would note this is just the final procedural step ahead of what is expected to be a confirmation vote tomorrow. in -- the supreme court will hear a host of different economic cases, on a host of laws, including labor union cases that have deep impacts, not only here domestically but reverberate throughout the global economy. guy: kevin, thanks for that. interesting to hear the process this story goes through. can i ask you about sort of what's going on around this story in washington? "the post" with an editorial, maybe kavanaugh is not the right guy. we are starting to get details coming through. let's get back to that. >> provisions of rule 22, the standing rules of the senate do hereby bring close debate on

brett m. kavanaugh to be an associate justice of the supreme court of the united states signed by 17 senators. >> ask it be waived. >> is there objection? without objection. the mandatory quorum call has been waivered. the question is, is it the sense of the senate it that debate on brett m. kavanaugh of maryland to be an associate justice of the supreme court shall be brought to a close? the yeans are mandatory -- the yeas and nays are mandatory. the clerk will call. >> mr. alexander. >> aye. >> mr. barrasso. >> aye. mr. blumenthal. mr. blunt. mr. booker. mr. boozman. mr. brown. >> no. >> mr. burr. ms. cantwell.

ms. capito. >> aye. >> mr. cardin. >> no. >> mr. carper. mr. casey. mr. cassidy. ms. collins. mr. coons. mr. corker. >> aye. >> mr. cornyn. ms. cortez masto. mr. cotton. >> aye. >> mr. crapo. mr. cruz. >> aye. >> mr. daines. >> aye. >> mr. donnelly. ms. duckworth. mr. durbin. >> no. >> mr. insy. >> aye. >> ms. burnes. >> aye. >> ms. feinstein. ms. fisher.

>> aye. >> mr. flake. >> aye. >> mr. gardner. >> aye. >> ms. gillibrand. mr. graham. mr. grassley. >> aye. >> ms. harris. >> no. >> ms. hassan. mr. hatch. mr. hinrich. >> no. >> ms. heitkamp. mr. heller. >> aye. >> ms. hirono. r. hoeven. ms. height smith. >> aye. >> mr. inhofe. mr. isakson. mr. johnson.

mr. jones. mr. kaine. mr. kennedy. >> aye. >> mr. king. ms. klobuchar. >> no. >> mr. kyl. >> aye. >> mr. lankford. >> aye. >> mr. leahy. mr. lee. mr. manchin. mr. markey. ms. mccaskill. mr. mcconnell. mr. menendez. mr. merkley. >> no. >> mr. moran. ms. murkowski. r. murphy.

ms. murray. mr. nelson. r. paul. mr. perdue. >> aye. >> mr. peters. >> no. > mr. portman. mr. reid. mr. rich -- mr. reisch. mr. roberts. mr. rounds. >> aye. >> mr. rubio. mr. sanders.

mr. shotts. mr. schumer. mr. scott. >> aye. >> ms. shaheen. mr. shelby. ms. smith. ms. stabenow. mr. sullivan. >> aye. >> mr. tester. mr. thune. mr. tillis. >> aye. >> mr. toomey. >> aye. >> mr. udall. r. van hollen. mr. warner. ms. warren.

mr. whitehouse. mr. wicker. >> aye. >> mr. wyden. >> no. >> mr. young. >> aye. >> affirmative, alexander, barrasso, blunt, boozman, burr,

capito, cassidy, collins, rker, cornyn, cotton, crapo, ruz, daines, insee, ernst, fisher, flake, gardner, graham, grassley, hatch, heller, even, heitsmith, inhofe, isakson, kennedy, kyl, lankford, mcconnell, moran, ul, perdue, portman, reisch, berts, rounds, rubio, staff, cott, shelby, sullivan, thune, tillis, toomey, wicker, and young.

>> mr. manchin, aye. >> senators voting in the negative -- baldwin, bennett, oker, brown, cant we will -- kantwell, cardin, core tes masto, duckworth, durbin, instein, gillibrand, harris, heinrich, chobe collar, leahy, merkley, murkowski, murphy, urray, nelson, peters, shotts, smith, stabenow, tester, udall, warner, warren, whitehouse, and wyden. >> mr. sanders, no. mr. lee. >> aye.

> aye. ms. hassan, no. >> mr. jones. o.

r. johnson, aye. mr. schumer, no. r. donnelly, no. ms. hite camp, no. vonnie: the senate has the votes to advance the kavanaugh nomination. this was a cloture vote to end debate. we will now look for senator mitch mcconnell to call a full vote at some point. likely tomorrow. interestingly, we had 51 ayes. one of those, democrats, joe manchin of west virginia.

vulnerable democrat who is up for re-election this year. one of the noes was senator lisa murkowski, a republican. now, we're going to hear later on what susan collins is going to do in terms of the full vote. in terms of advancing past debate, she voted aye. let's get to bloomberg's kevin cirilli who is on capitol hill. 51 ayes to end debate on this. kevin, what else did we learn from this vote call? kevin: now there will be a vote tomorrow, a final vote. judge kavanaugh clearing his final procedural hurdle ahead of the vote tomorrow. you mentioned senator joe manchin, the centrist democrat from west virginia, who's up for re-election in a state that candidate donald trump carried by 42 percentage points. he ultimately voted to move forward to a final vote. now, i want to be clear here that he could ultimately vote against judge kavanaugh, but many folks are going to be carefully parcing these votes.

republicans lost one senator, senator lisa murkowski, a centrist republican from alaska. she voted no on debate. many people will anticipate that she will be a no in terms of final passage, in terms of getting judge kavanaugh confirmed tomorrow. but senators susan collins, jeff flake, the latter of whom is retiring, both voted yes on cloture. they are the two key swing votes. republicans can only afford to lose one republican. looks like they lost senator murkowski. so a lot of folks going to be paying careful attention to senator susan collins, who will be announcing her decision, her office says, at 3:00 p.m. this afternoon. then more attention placed on retiring senator jeff flake. remember, he was the one who worked across the aisle with have chris coons, to the one-week review by the f.b.i. jedge kavanaugh, one step

closer, clearing the procedural hurdle. final vote sometime tomorrow. voim and, kevin, just to point out that steven dennis, one of the congressional reporters, said that joe manchin voted yes to move forward to nomination. we don't know the outcome of tomorrow's full vote. for the moment, our thanks to bloomberg's kevin cirilli. guy: yeah, you can follow us on what is taking place in tliv go. , there is a explanation surrounding what's taking place in the senate. let's turn our attention back to the markets. climbing the k. highest in two years. brexit agreement may be near. liam fox said he would accept an imperfect brecksis -- brexit

deal and try to fix it later. charlotte, what's behind the moving stuff? we talked what's happened with the treasury markets. ow is that moving in the guild space? they are essay may talked about as you -- theresa may talked about austerity. >> we had this wider global selloff. of course, that is part of this move as well. and then may giving a pretty strock signal she plans to end austerity. there are different moves on that so far. we have some people saying, you know, she also pointed out in the same conference speech that to increase ng to increase borrowing. and it really comes down to whether you believe that, whether you think that's possible. yes, certainly there is an issuance dynamic at play. there's wider global factors.

of course, there is a dynamic between brexit and whether the bank of england hikes again. guy: absolutely. just talk to me how the market is positioned right now? charlotte: what we've seen kind of widely across the past few months is that people don't -- they don't love guild right now. you're getting one of the lowest level of yields in that european bond space and also what's different from, say, a market like germany, and you got that risk concentrated on the u.k. side. we got a lot of political risk which i'm sure we discussed several times on here. you know, it's not just brexit its self-. it's around the government. risk. what we found investors we've been speaking to recently have said they are not being adequately compensated for that risk. we've not seen that change with the move we have so far. people really haven't changed their views.

it's something that will start to change if yields creep higher. vonnie: charlotte, are u.k. yields moving at all in terms of u.s. yields moving higher? is this a very, very different trade? charlotte: you know what, i think, yeah, part of the move is definitely that move. it's definitely hard to break it down exactly. what we do know is we did see a move this morning on the brexit headlines. it is important to note that that's not just about brexit itself. it is people thinking ahead to what does that mean for the bank of england's next move. guy: just looking ahead to what is going to take place next, international investors, how -- there's an interesting dynamic at play at the moment which is currency hedging. there is a -- you are getting a very different story if you are a european investor or u.s. investor depending if you're investing in treasuries or

bonds. currency hedging is important here. what's the pound story doing to into rrency hedging story the market? complicated question. charlotte: yeah, i would say with this one, it's a difficult one because we have had a move in the pound recently and so what we're seeing with the market is things are kind of influx at the moment and where you would normally have that die namic of safe haven, that's not always what investors are thinking. and so there is a bit of that at play. also, again, you're probably not thinking about the current value of the pound. you're thinking ahead of that brexit deadline next march and where is this going to go. guy: excellent. charlotte ryan showing what's going on in the market.

charlotte ryan joining us. focus. for futures and larry joining us from the c.m.e. larry what kind of impact did the payroll number have down there? larry: you know, not much. i mean, a lot less than expected. the borrowers rate is really high for this number given the 10-year yield has rallied 10 basis points. right now people are squaring positions. realizing full well that china's been closed for an entire week and how those -- ou figure off-shore r&b is 6.90.of that's usually a prophecy for flattening curve. and considering hankson down 4 1/2. people are wondering whether this is an expansion of the range or if yields are going where they need to go before

the data says they should, it's as simple as that. do i believe, also, that this is a very good point on a flattening trade, especially 2.10, given how resilient it's been given how yields have risen this week. guy: ok, talk to me about -- if -- am i picking some of that back up again? what is the short-term play here? larry: i think it's a psychological level. again, people think it's an expansion of the range. you consider where the 2.10 spread was given how much -- the long yield has gone up, it's a good place to reinstate that at this point. i'm seeing that right behind me as we speak. guy: larry, great stuff. larry shover, s.f.g. alternatives joining us from the c.m.e. vonnie. vonnie: well, taking a little bit of a tumble in the last few minutes this as we get a debate

cloture motion which passed. in other words, the u.s. senate has voted to advance brett kavanaugh, supreme court nomination after weeks of harsh debate. the number was 51-49. it sets up a final vote tomorrow expected, mitch mcconnell, senate majority leader is expected to call that tomorrow. a few little surprises, rhaps, republican senators collins and flake voted to advance. joe manchin, who is in a highly contested area, voted to advance. this does not mean the judge will become a justice. it just makes it a little more likely. this is bloomberg.

guy: i am guy johnson. vonnie: i am vonnie quinn. this is the european close on bloomberg markets. the top stories we are covering, tightening up. the payroll data shows economy running out of workers. unemployment is at lows last seen in 1960. they 10 year yield touches a seven-year high. in a moment, we're going to speak to bill gross. unilever backs down. shareholders refused to back the plan. musk lashing out, tesla stocks drop. is his deal with the sec at risk after he describes it as the short seller enrichment commission? we're getting new surrounding the british pound, that the e.u. is ready to offer a supercharged trade deal.