♪ spain in limbo, the rest of spain guessing on when independence will be declared. trump saystorm, puerto rico could wipe out instead. -- wipe out its debt. leadership debacle. are reportedly calling for a letter to resign -- for the the prime minister's resignation. >> from react to russia, saudi asg to the president putin, they seek to extend an agreement curbing oil supplies. ♪

>> a very warm welcome. this is "bloomberg daybreak: europe. " >> welcome back from manchester. great job. politicians will miss you. [laughter] welcome. talk about this other scenario. it's interesting that this hasn't been battered on the back of theresa may. have a look at this. theory be on the dollar. quarters,e past six the final quarter fears rallied on average, 3%. if you look at the data, the adp shows this format, services

rocking it out at a 12 year high. market is the least heiress since 2013. the history, the dollar -- dollar rally, if there is a fare hike, and this is still at 63%, this might the your benchmark of rest -- of reference. was: let's see what happening overnight. we not going anywhere in a hurry. big way on the stock market, bond market, the dollar. u.s. sing the mention of private jobs, american services -- -- u.s. saying the mention of private jobs, american services. lots of nice stories reporting the general melt up we have seen and markets. the dangerous, monotonous picture across the screen. shocking drop in sales. said in the headlines,

the saudi king and russia -- oil prices heading for the worst thing since july, trading at a low. >> depends on if you are a bowl or their an this market. extension of a deal for opec -- by march 20 18th should be at least>> until the end of 2018. those are putin's comments. virtually unchanged when it comes to equities. standing by for first word news. juliette: puerto rico faces a government shutdown at the end according to the islands treasury secretary , called onnot a congress to provide billions of dollars in emergency funds. on tuesday, president donald trump suggested they might like out its $74 billion in, called , saying the authority beaten down and mark bonds. president trump has said he has quote "total competence in his

secretary of state -- confidence in his secretary of state pickup state."tary of rex tillerson consider resigning and referred to the president as a more on. he said he is never considered leaving his job, and was committed to the role. the u.s. has once off the greatest commitment to end their trade deal. necessaryto start the amendment after the second round of talks concluded in washington. no announcement was made regarding how the five-year-old amendment, onebe man said he would work to resolve outstanding implementation issues. the saudi king is beginning a historic first -- and historic first visit -- an historic first visit to russia, to extend an agreement curbing oil supplies. king solomons visit to moscow ahead of talks with u.s. president trump early next year underscores a shift in strategic

direction by saudi arabia, as russian influence in the middle east expands, following putin's military intervention in syria. the bank of england's head of supervision says a brexit transition deal must be reached by the end of the year. a ceo also said that although prime minister theresa may has alleged two-year transition period after march 2019 the eu clear." "it's not yet global news 24 hours a day, powered by more than 2700 journalists and analysts, in more than 120 countries. you can find more stories on the bloomberg. asian markets ranging now, you can see the msci asian index there. topics down by 2/10 of 1%. close to that 10 year he high -- we still have markets closed today in china and south korea, along with hong kong.

the fx 200 closing out, only higher by just under five points there. a good rally coming through in singapore today. front runner in the region. in terms of stocks, qantas is nearing a record high. this is after it was upgraded its goldman sachs to a buy, $6.86, a 21% increase. cars --l company and this company was supposed to make screens for iphones. this company was supposed to make screens for iphones. that's sharp. asahi raised its bid prices for the first time in 10 years. in the fiji -- msu j sees this as a ¥12 billion use -- yen boost. manus: catalonia's president

ssing on if and when he might declare independence. talks, while keeping king philippe a the six condemnation 24 hours earlier -- seeking referendum on sunday. tothe king made his speech government that has been a catastrophe to catalonia, and ignores deliberately the millions who do not think like them, it doors deliberately those who have been -- ignores deliberately those who have been victims of police violence. anna: our reporter maria has the latest. good morning. it called for dialogue. how should we interpret this? of dialogue might he be referencing? >> no wonder markets are getting this of dialogue might he

be referencing? . it has become a guessing game. it's difficult to read. we are seeing a basic 24 hours -- we're going to go ahead and declare this, whether you like it or not, to actually stick -- take a step act. we want to get some kind of mediation. the question is, mediation from who? the regional president, keeping this very vague. we do not know what to expect. we are expecting this announcement not as a deck -- for background information into this is a trigger, what to expect. again, none of that. incredibly vague. again, but tone has completely shifted, he has made a u-turn. we have a lot of question marks. ofus: you're right, a lot

guessing. there's been interventions from the king. retrying together support trade where are we in terms of what he can offer of guessing. to even remotely de-escalate this?\ >> exactly. li na rajoy is not going to is not- we know rajoy a going to offer an amendment -- a referendum. there's going to be no referendum, they need to stop this now. an of this started in illegal referendum that no one accepted. feels it's pretty much emboldened here. brussels is not stepping in. the violence that happened, they did say look -- the constitutional order must prevail. he said, they definitely have the upper hand. we know that they will make a move -- they will not make a

move. the catalans don't know where to go from here. they are not sure if they are ready yet, or who, if anyone would recognize this independent republic. anna: what are the wider implications for the economy? economies -- economists remind us to keep looking back, maria. maria: exactly. the fundamentals, like you mentioned, are pretty strong. over 3% on an annual basis. outperforming the euro area. we are getting lots of good job creation, unemployment has fallen back. they're saying something the markets and one community doesn't like. this friday.ing snp, everyone expecting this to improve. that did not happen. -- here in spain catalonia, a lot of banks, it's a source of concern.

they don't like what they are seeing. it's a framework it's very vague. we don't know what the administration is doing. maria.all right, we will see you throughout the day. the e-cig windows at 9:00 a.m. -- we have a special interview at 9:00 a.m. on bloomberg television. anna: robert bank is with us -- jane, good morning. this?s your thinking on we have seen spanish yields bonds are rising. there's nervousness in the market about the french banking sector. as maria points out, there are many questions and few answers. 1/5 of think it's about the economy. i think what we know were generally about fiscal uncertainty is that markets don't like it. earlier in the week, you point

out that it's a negative event. it could complicated the budget to 2018. that point of view, if the ,onfusion carries on for longer the longer the potential impacts on the economy. comesrse, this confusion as the week after the result of the german election. if it what we have had is this political calm europe. it's now gone. look to thee italian elections. with the back in europe now. >> it's under the radar. but now this is certainly one to watch. >> that point john just released this morning, saying that europe could see another rupture. this is about taking back against europe. it's talking about the checks, the very eastern european

states. this is a side to the euro-dollar trade, but the euro has not exactly been frightened by running horses. >> when you look at the summer -- when you look at eastern european things, like you said, they are not particularly frightened. what we have right now is this perception, that we've got strong growth. money is very, very cheap. this perception of this perception of opportunity. of course, you mention the u.s.. that floats the boat a little bit more of europe. now, with elected growth argument is lending support -- we feel like the growth argument is lending support trade the market begins to worry, that's when i think the card will do this. anna: we mention the ecb card a number of times this week. the populace -- the populist

pressures, or populist rise we are seeing in europe, not all of it is anti-europe. the catalonian example is one that is not. the afd is a vote against the european apparatus if you like. cap ohlone and is quite different. >> is correct. give them something that didn't exist 18 months before the election. populism, thea acceptable face of populism, but one that once reform. there's different faces of this. but of course, macron does say they will come -- this will come back with a fed -- vengeance. >> we are also going to get a eittle bit of an insight her -- there you go. what are we looking for their? r there?ing -- four

how illuminating could this be? >r we know that tapering will come next year. even though draghi has issues, i think the market expects this to improve. >> david bloom here. going to paraphrase. he talked about the first part sex- and almost had the drugs-rock 'n roll of europe. would you agree that the first part -- first fast and the furious, that's what we talked about -- everyone kept saying it was the speed with which we moved. to a flat line from here? needs to be something emphatic in terms of tapering.

>> i say so. the good news is in price. the dollar.down in you had the beginning of this year, a very long dollar position. now, that extreme positioning has been rectified. i think it's correct. is 120 -- my forecast for the month is 120. anna: thank you very much, jane. we should mention, every time we talk about the vote on sunday, we've seen it around the world -- the government claims they are counted more than 2 million votes for separation. that has not been independently verified. the n still haven't presented a final result. may's speech,up, people interrupt the prime minister's annual address. we discussed the country's

leadership, and what it means for brexit. anna: trump, puerto rico, and $3.8 trillion markets. --will focus on a rocket rocky vote and lucky day. this is bloomberg. ♪ -- rocky day.

inus: 1:20 in the afternoon singapore. it will shut their -- beautiful shot there. markets, moving towards the jobs report. flatlining for stocks at the morning. business flash, juliette saly standing by. juliette: manus, goldman sachs has agreed to leave offices any new building and preferred. the head of -- u.k.'s departure from the european union. a tower is being built in the city's financial district. it is renting about 10,000 square meters of offices, about

enough for 1000 workers trad. u.k.'s miller entertainment approached seaworld entertainment about a potential deal. they made a bid for part of the company, which could be a hurdle to the deal, is seaworld prefers an outright sale. they've also received interest from other possible suitors. preventatives from both companies declined to comment -- representatives from both companies declined to comment. anna: prime ministers theresa may's speech yesterday went wrong in ways that no one could have imagined. big moment -- the british people get this when they lose their job. the prime minister's woes were recounted by cost -- by person that left her struggling to

continue. >> 30 lawmakers, i'm prepared to sign a letter calling for theresa may to quit. -- one is prepared to sign a letter calling for theresa may to quit. -- ihe headlines of their sort of walked away and thought look, how much longer has she got? this is something bloomberg.com does beautifully this morning. it talks about a leadership test . they talk about iain duncan smith, gordon brian lived on for three years. can she survive, are you more gamy? she wasn't going -- aware that she is going -- >> she wasn't aware that she was going to survive anyway.

was, exactlyalways when will she go? will it be before christmas? yesterday, christmas had gone up. no one had really anticipated she would be there for the next no one had really anticipated she would be there for the next election that was always in the price. . a political manusmanus: 55%, no. anna: >> in that could direction. there's a lot of negativity -- in that good direction. there's a lot of negativity surrounding it. anna: what is your base case of the politics, and how it intersects with the brexit timetable, jane? you throw in the question about how long she last and what would happen after she goes, whether we would end up in another election. you sort of try and map that onto the brexit timetable. it'll looks messy. >> that's right>>. there's a lot you have to do. that weakened position, if there

is another election, the participators we would have -- would give -- would win. corbyn could be the next prime minister. cabinet, thathe party won't want another election. anna: what would happen to u.k. assets, capital flows, if we saw the election of jeremy cabinet ? >> well, we party scene part of that come out. after june, sterling did we can. the market is looking at the division within here. conservative party almost pushing the country towards a corbyn victory. this is something undermining the value of sterling. a good month in september. there is currency -- for the bank of england. really, the outlook of sterling

is undermined by political divisions. his swing to them -- a swing to the left -- after the next election is possible. manus: round five begins, what is it, 334 words out of 7000 word speech on brexit. that disappointed a lot of people. the data, let's talk about the bank flipside for sterling. pause on shows long the back of what we see.what we have put together here is a pmi versus the gdp. bloomberg intelligence has run the numbers. they say this as well -- well below what has been previously hiked. the data is not on their side, but inflation is. >> as you say, the data isn't. in a way, that means some credibility in the economy is in

question. if he hikes interest rates, the markets will say, this will be unusual. marketoesn't hiked the -- manus: unreliable again. anna: is it one and done, unwinding the emergencies. they haven't had that language just yet. >> the market will never say that they will do one for a long time. there's a lot of people, people who are perhaps low income who debt, ite amounts of will savings rate and the u.k.. it's very low. jane, think you very much. we will bring you our exclusive interview with the spanish economy minister. join donate -- join the bloomberg team at 9:00 a.m. u.k. time. anna: up next, puerto rican

bonds take a dive upon presidents -- the president's comments. how much should markets rely upon his word? this is bloomberg. ♪

2:30 in the, afternoon. some of the polls are showing an increase in support for shinzo abe. the party will certainly play out over the next couple of weeks. yen unchanged. 112.74 is the current. will it move? >> the dollar story seems to have gone to sleep for little bit. the question is, does it regain traction? that's what the market will pay attention to. starting off on equities. taking a look at where we think we will go. calculations putting us to an

inconclusive start for the day, doesn't really give us a sense of direction at the moment. you could see ftse 100 barely changed. we did yesterday, the spanish market down by nearly 3%. that will remain firmly on -- the ibex on spanish government and credits as well. the foreign exchange market, pretty much gone to sleep. that appears to be the story.aussie dollar is on the move this morning. everything else, nothing to see here. we're waiting for direction a little bit later on.the bloomberg dollar index and gray .when you see the soul: hearing gray, it tells you that the market -- columnu see this whole here in greg, it shows you that the market is on the move . that rall that we ar. column here inthat rally seems to be s. what will provide traction? i urge you to look at speakers going up. look at the events column here.

this is one of would focus on. isording to bookies, this second in terms of the favorites list. 2:10 londonter on, time. he speaking in new york. back to you. anna: this is what we are watching for the rest of today. the european conference in soon. will be open would also get the accounts of last month's ecb.y meeting for the manus: it will come fast and furious. that gives you a little bit of insight. bank of england, the chief makes an address. russia, one member there speaks. anna: puerto rico's bonds plunged to a record low yesterday, after president trump said the commonwealth -- the commonwealth might wipe out his

debt. the drop remains a remarkable move in an otherwise stagnant market. manus: jane foley is our guest post this morning. the prophet once the story up. as trump takes aim at widows and orphans this affects puerto rico,, detroit, california. he was saying wall street might just have to suck it up, and i am paraphrasing, but this is incredible, isn't it? this is a $3.8 trillion market that he literally lampooned yesterday. >> again, how much does he understand about this market? thatnk we know by now trump says a lot of things that perhaps he shouldn't. really i think, but he knows about this market is quite small. ago far to say -- that trump says a lot of things that as far to say he knows little about the dollar. anna: the white house going to say we shouldn't taken so

literally. curve forbig learning markets and all si classes -- all asset classes. frightening. we've gotten accustomed to that. manus: one of two lines coming through here. with that king salman meeting with mr. putin -- we've got king solomon meeting with mr. putin today. they say they are not discussing russian participation in an iranian ipo. saudi arabia and russian have come and energy interests, and the talks on energy corporations are ongoing with russia. there's an interest that they will extend that deal. anna and i started the day with this. dollar.uld be buying the oldla every fourth quarter, it rises

by 3%. we just talked about trump. it suits trump to have a soft dollar, but here we are. the data says we get a rally in the fourth quarter. do during the rally? >> i do think we get another -- do you join the rally? >> i do think we get an upward direction. earlier, it could go very far. the market didn't want to extend. of course, if we do get some positive surprises on the fiscal front, then that could push the dollar further, but the market remains skeptical. i'm talking about tax reform. trump and various republicans have indicated we can have tax reform a christmas, but very few people in the market are prepared to believe that. if we get a surprise, the dollar gets higher. are you really going to buy that? anna: what the fundamental of where we go on the fed story -- what about fundamental of where we go on the fed story?

jenna fischer pegged the question of why wages -- pegged the question of why wages begged -- anna fischer the question of why wages haven't increased, and talked about higher inflation. >> unemployment is declining all the time, that's when wages will go up at some stage. anna: some people saying it's gone, it's dead. structurally things have changed. it's a question of timing. >> who knows. one thing that we do know is that this breakdown of this relationship between the and wagement rate inflation is not just a you must story. we see it in the u.k., australia, japan an extreme example. moving across different nations, we can't deny it. we know their structure issues.

we don't know which ones are having the greatest effect. the issue for the market is, well, there several. fisher was never hawkish. if he goes, are we having a more dovish fed? we know there are so many empty seats on the board. but, if trump does want another dot -- a softer dollar, he's going to put doves in those positions. the market was thinking that marsh would take that job, now maybe it's powell who is the next fed chief. they're so many different variables. ultimately, it's difficult to buy in to the fact that trump -- the trump administration will have a much stronger dollar. manus: how much differentmanus: -- difference does it make whether it is powell? at the end of the day, the distance between three hikes, -- it's notd 2018

as if you're going for greenspan 1994 hikes versus one not that polemic. it doesn't matter the intonation on the head of the fed. >> maybe not>>. as you point out, if we do get that at the end of this year when inflation is subdued, the market will think, that's what -- that means we will have less hikes over the cycle. again, you're right.nobody believes we are going to get an aggressive interest-rate hike. again, another reason not to perhaps get too bullish on the dollar. anna: is it a political reason for him to go to somebody hawkish? on the one hand, it might slow the economy. he's talking about high growth rates. but on the other hand, maybe he's talking to a face of people who are older and have savings and are frustrated. do you see the politics of why you choose a hawkish fed? >> on the margin, yes, you could

swing it that way. i think generally speaking, because trump wants to make a success of his trade policy, it's difficult to imagine that he's going to put somebody in there who's going to strengthen the dollar. manus: when you see x tillerson coming out yesterday to deny -- rex tillerson coming out yesterday to deny press reports in the morning, do you think, on the trading floor, do you talk about the ability of trump? he's had some pretty substantial with in the past number of weeks, not in the least las vegas, the most tragic test -- the latest with in the t of the presidency. how much conversation is there around the world -- around the room? h thereau -- less now than theress now was a the start of the year. people are quite confused. there was a lot of talk about whether or not he could sustain.

that talk is still there, but people have become accustomed to a president that has gone through the summer, fighting a .ot of different crises the expectation is that that will prevail. , there's less conversation, a bit more acceptance about the way this is. anna: jane, think you very much. staying with us on the profession think you very much -- thank you very much. staying with us. you can listen to us on the radio in london. with the sit down radio team to talk about brexit. manus: coming up, vladimir putin hints oil cuts with opec could ast one been suggested, saudi arabia's king solomon starts his visit to moscow. we hear from the russian president, next. anna: investors and, that's what the just said. the headline. spain is guessing if and when

the president will declare independence. uncertainty in the region. where life barcelona. this is bloomberg. -- we are live in barcelona. this is bloomberg. ♪

manus: 1:44 a.m. in new york. you're watching bloomberg. 14% in 17 days, haven't seen this since 1990, 1928 if you want to go back. let's get a business flash. alice by late. my memoryll you what, place havoc. juliette saly never plays havoc with the business flash. juliette: [laughter] goldman sachs has agreed to

lease offices in a new building in frankfurt, ahead of the uk's department from -- departure from the european union. google has unveiled the second --eration of its departure deeper into the consumer market. the company introduced two new

versions of the pixel smartphone,, a new premium laptop and new models of its own speaker. a new schedule -- gadget was introduced. the uk's theme park miller entertainment has approached seaworld about a potential deal. miller, with -- which runs not --ds, could might might not be able to make the deal. representatives from marlon and seaworld declined to comment. that is your bloomberg business flash. very much. you firemen putin says russia is extending a deal with opec -- president vladimir putin says russia is extending a deal with opec curb oil supplies.

what we were able to do to is forh opec i believe, the benefit of the whole global economy. we other -- whether we are going to extend this or not would depend on markets. i am not really miss out, but we are going to act upon a realities and 2018. >> it sounded like me like -- it sounded to me like you would be in favor of extending this at the end of march. that's not far away. putin: ipresident think this is possible, and you know this quite well. it is very important to atertain caution in such public forum and statement. many countries who didn't join -- they are quite responding to what we are doing today in reducing in our production.

to the extent i heard, the public is stated that it is ofsidering the possibility having producers join our efforts, in the part that is being controlled by the powers who have made such a statement. this, ands aware of understands the need for such a joint effort. i shall repeated again. we will have to look again at the way the global energy makes this in march of 2018. we maintain context with our key general,with opec in and administrative's are nations. with that, will have the honor and pleasure to receive the king of saudi arabia very soon and russia, and undoubtedly, we're going to talk about it, so we are maintaining this constant dialogue. i shall repeat it based upon the realities.

in march 2018, we will assess this, but i don't rule out anything. must question on this. everyone in this room, of course, likes stability. everyone in markets likes stability. if you were to continue this -- continue production this. cuts, could you see the extension of cuts lapse -- last into next year question -- last into next year? >> i'm saying that we don't know yet whether we are going to extend or not. we don't know until when we will extend it. once we decide to extend or not to extend, that is when we are going to decide on the time frame. overall, speaking about the extension towards the 20 -- end of 2018. anna: that was letterman putin.

manus: let's stick with u.s. petroleum exports ahead of record highs. the hour.rt of here, we have putin, england's but there could be an extension on the table. that's possibly something to think about. the meeting of saudi's, the king is up there today in russia. how about oil markets now? >> yeah, manus. you have talk of a possible expansion -- extension for an oil agreement, overnight we got data from the united states which shows crude exports reaching a record high. global marketsng are complicating the global equation. jump into bloomberg with me. i want to show you listen a little bit more context. -- g #btv 4831.

you are looking at boosted oil exports by 4.5 6 billion barrels a day. let me quit the telework that has been done by 11 members of opec over the last nine months in terms of a reduction. that's a significant, manus, this latest move is. look at commentary from the iea as well, ahead of recent price gains, should not be celebrated as a victory just yet. there's more challenges down the road, and also energy saying that supply declines are likely to keep pace with dropping them to the first half of 2019. anna: meanwhile, yousef, good morning to you -- the saudi king , a historic visit to russia today. do we know a little bit more about the visit -- what the visit is not about? yousef: yeah, the latest comments we have, it will not be about a participation of russia and the saudi-aramco ipo. as much as they are seeking a

common extension on opec and non-opec agreement, it's not going to come down to anything more substantial that -- they meant. -- all theld be questions about possible delay, about where they're going to list about, how the process will go, but valuations of course. oil prices on here. yet onherance is just that front. anna, manus. much.ink -- thank you very jane foley has been listening to putin, yousef. this is what opec has done in terms of production, and likewise with russia. . see, the saudi's have done a lot in terms of their production.putin says that the global -- it has done the global economy a favor. it's doing its best to hold above the $50 line.

what's it mean for currencies? >> visual emergence of this conversation we have seen, whether or not it's finally going back into balance, oil. conversation so many times. it's difficult to come into the -- oilat oil research will research. for markets in general, yes, oil has a two-year high. in general terms, historic terms, it is relatively subdued. perhapsl of the market, not a strong tote. anna: really around the 50 level. $49.94.-- related currencies, i know you keep an eye on the is trailing dollar, we can this morning -- australian dollar, weekend this morning. >> we can come back to the weight inflation argument

what we saw last night was week reflecting data. of course, if you go back just a few weeks, with comments from the governor, indicating that he was in no rush to hike interest rates. the movement for other central to move a more hawkish tone, he was not going to follow suit. weight inflation has been a record low levels, despite the fact that the employment in the labor market hasn't been bad. how do you anticipate the market will pick up when people have not seen that weight -- wage inflation? at the end of the day, you do get some re-trailing, a sense of the market that will ensure a little sketch on inflation. manus: let's broaden it out to to be crf. we've touched on this a couple of times. this is total return. in the past month, dollars stronger.her,

people are moving off -- closing up some positions, of trade in the lira and others. they are closing these positions. stronger. do think that's a smart move? i look at spirit to date -- you can correct me. only you. [laughter] >> what you see is strength in em. what we saw at the beginning of last weekdo think that's a smar. no wonder. , she could remember hike interest rates at the end of the year. it's always a negative time -- negative sign for markets -- emerging markets. during the course of this year, emerging markets have seen the fed hiking interest rates. there's a perception that hiking interest rates slowly is an -- ation of a recovery

recovering world economy. this is something that will continue. anna: manus pulled up this chart, emerging market investors most fearful since november. fargo.us: wells >> what we saw the last couple of weeks, warning interest rates could go up again by the end of the year. i think that was why investors turned sour. generally speaking, that chart is much more green than orange, indicating that generally speaking, dropped rates. >> think is so much. --manus: thank you so much. remember, if you bloomberg customer, not only can you want to show, he gets everything on the right-hand side. you get charts, btp's, and ask -- btv's, and ask the questions. anna: up next, guessing game,

the region's president about whether the yield will declare independence. when and if. we were in barcelona. we will have the latest news. this is bloomberg. ♪ is this a phone?

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manus: catalonia is president willif and when he .eclare independence leadership debacle. 30 tori lawmakers are reported ready to sign a letter calling for her resignation after she floundered in manchester area anna: the saudi king to meet historic putin in a

meeting. manus: welcome to date in europe , our flagship morning show. i am manus cranny. anna: it has gone 7 a.m. in london. measure flat. many of the markets are closed area the nikkei in action but that did not give much of a steer. by .01 of 1%. it does not give us much to play with whom we get to europe. manus: your dealing with a dax market. you're dealing with the spanish market which is idiosyncratic risk. you are seeing the spanish market drop yesterday dropping by 2.85%. the biggest one-day drop since

2016. you're seeing quite an aggressive reaction to the let's talkversation, about the risk greater. get talked about the asian session not giving us a great deal to do with. let's have a look at the race -- risk radar. , rising bycoming in three points. this is according to a report. the aussie dollar 78 29 but the rba again, we're seeing the aussie dollar at -- missing estimates. a little bit pressure and that say the risks are anna: on the downside. this is a continued focus on

spain. concern about spanish equities and spanish banks. we will get more details in just a moment from barcelona but a lot of questions and few answers about where this heads next. what will the next move be following what we have from the catalan president yesterday. this is 10 year government debt in germany. breaking news coming in, this is a business that is giving some comment. the group plans to raise $1.5 moscow in a london and ipo. it minds base metals. manus: it is controlled by [inaudible] when you have that king salman in russia meeting the saudi's and mr. putin talking on bloomberg on a panel talking about the oil market. london is the destination for an ipo. anna: some new energy with ace metals, natural energy and hydro and solar energy generation.

really interesting as we talk about brexit and where they want to list. let's get a bloomberg update. >> kicking off with puerto rico facing a government shutdown according to the treasury secretary who is calling on congress to provide billions of dollars in emergency funds. president donald trump had suggested the beleaguered u.s. its $74alth wipe out billion of municipal debt extending puerto rico's already to new lows.k donald trump has said he has total confidence in his secretary of state. the comments came in response to an nbc news report that rex tillerson had considered resigning over the summer and referred to the president as a

more on. in a hastily arranged news conference tillerson said he had never considered leaving his job and was committed to the role. the u.s. has won south korea's agreement to amend their trade deal which america has blamed for increasing its trade deficit. the plan to start the necessary process for amendment after the second rocks -- round of talks. no announcement was made regarding how it might be amended. said he willizer work to resolve outstanding issues. the saudi king is beginning an historic first visit to russia by a monarch of the gulf kingdom seeking an understanding with president vladimir putin to extend an agreement curbing oil supplies. the visit ahead of planned talks u.s. president donald trump underscores a shift in strategic directions by saudi arabia and russian influence in the middle east expands following the

military intervention in syria. the bank of england's head of supervision said a transition deal must be reached by the end of the year. woods, ceo of the prudential regulation authority said that although prime minister theresa may has pledged to secure a two-year transition after brexit on march 2019 the issue is not yet clear. such an agreement is seen as key to providing assurance as they prepare for life after the u.k. withdraws from the european union. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . let's check in on asian markets. a listless day with south korea and china off-line. one a look at what is going with australia. the asx 200 is ending the day flat and a big mover with the aussie dollar sliding to an 11 week low after the dismal retail

sales and the topix lower. technicals are flashing over but indicators are there for the topics as the nikkei 225 and losses after a positive start. heating the r.b.i. scaling back on its growth forecast. some stocks to watch, a saudi, planning to boost prices for some alcoholic beverages and in sydney, qantas. goldman raised stock to abide. good news fromo taiwanese makers of electric -- electronic parts for autos. that is a month them jumping to a record in taipei on this prospect. manus: thank you. a couple of interesting lanes coming through especially on the top story at in catalonia.

two major banks, earlier we saw this at 630. they might -- may moves the headquarters, they are headquartered in barcelona but they may move the headquarters in the case of the cattle and. one of the pharma companies are ready to take this kind of move. they are the third-biggest ranking catalonia. anna: the reason behind this is they want to operate within the eu and they have made it clear that they would not automatically be in the eu and there was the question of relationships with domestic customers. let's get the latest on what has been happening in catalonia. the president has kept the rest of spain guessing on if and when he will declare independence.

quick sticking made his speech, the politics of the government that have been a catastrophe and doors the millions of catalans likee -- who do not think them. it ignores the catalans who have been victims of police violence. manus: a very good morning to you. in the speech he called for dialogue and this is where the market has been hanging on for hope that he is talking about dialogue versus an impasse. how who is going to mediate in this situation? investors do not carlos has trade, gone from if you like the leader of an independent nation to we should take a step back and try to get to some dialogue.

who is going to mediate? wasadministration or -- hoping that there would be some kind of offer to mediate from the european commission. that has not happened. this is a domestic affair. the responses not they wanted and that could be the response why we had this massive u-turn. anna: we are getting these comments coming through from various spanish newspapers talking about whether banks based in ursula network catalonia are choosing to move their headquarters. this is a live conversation in the markets. the implication that any independence claim would have on the banks that operate within catalonia. >> exactly. yields have been -- the ibex is down but pressure on catalan banks very at they are -- banks.

most of the business is in spain. if you look at it in terms of branches. this of the economic reality, the banks have been under pressure. ,ith a have access to the ecb would it work that way? a lot of questions we're not getting answers. the administration is very vague. it is beginning to kick in. manus: thank you very much. the catalan government is claiming to have counted more than 2 million votes for separation but they have not been independently verified for four days after the referendum. they still have not presented the final results. anna: we will bring you an exclusive interview with the economy -- economy minister.

it will be fascinating to hear what he has to say about spanish assets and the spanish banking sector at this time. joining us now, stephen cohen. taking part in a panel discussion on the future of management. glad you are in the building. we will come to the subject of etf's but your general thoughts on the european investment story. aroundat you see catalonia and the concerns around coalition forming in germany, does this question the call we have had in european is that what has been allowed to happen to european stocks? guest: the german situation is a more important driver of where the eu goes than what we see in spain. spain is idiosyncratic and we have not seen any real flow as of yet. we have -- it is still coming

with a backdrop of what is possible. the growth environment is positive, it is a broad growth story. .omestic growth has picked up we are talking about the ecb starting to remove purchases. our lesson of the last five or six years is that it depends on the backdrop of which they have and when they happen in a calm backdrop it can smooth its way out and that has been the reaction. manus: maybe it is subjective. i do not look at it as being a smooth situation when banks are looking at redomiciling. you begin to think about if you were a customer of a catalan bank would you want your money there? aggressivelyctly punching out. it plays two point. what do you need to see in the spanish story to i can park that risk? guest: as in put it aside?

it needs to -- you would need to see something along the lines of where talking about the eu getting involved in trying to repair the relations between catalonia and the government. you would see that the steps by the government are making everyone feel this is the domestic situation. the concern is if people feel this is another precursor to the eu starting to fracture. and the eu wants to do everything it can to avoid any impression around that. it makes sense for them to he getshat the high -- the support he needs. anna: this is an important point when comparing it with tensions around other political stories. you are here because you are talking etf's, how big is your

growth expectation around european etf's given what we are seeing, a positive story with the absence of political risk up to now. what has that done for the etf world and your expectations for it? guest: it has been another global etf's.r you are seeing a couple of drivers that drive gross expectations. you have -- there is a regulatory drive which is around how do people manage their money? oft greater transparency trading, you will start to see etf's being printed on exchange and see all the trades on something like bloomberg and that allows people to have more confidence in using these different tools to invest. the european investor backdrop helps as well. a lot of that drive of how do we which ay out of cash

lot of people are focused on into investments and etf's benefit alongside other products. manus: i am always trying to debate, to the flow of money that will come into european equities are where we are. we talked about the dollar and the flow of money, is that accelerating as you go toward the end of the year? guest: it slowed a little bit in q3 but it has been steady all year. we have seen is given the backdrop,op -- investors are heavily underweight, so we have seen that very steady march of money coming back in. the difference is while european investors have remained focused on european equities u.s. -- that haso were to the for little bit and that could be because the euro has had a good run from here.

and we are around currency allocation. anna: thank you. coming up. manus: u.s. stocks rose for a a seven session but u.s. investors are nervous -- are they nervous about the green on their screens? bloomberg speaks to spain's economy mr.. -- minister. this is bloomberg. ♪

mass: welcome back to daybreak europe. london.0 in stocks this morning flat. you're seeing a little bit of movement again in the spanish government bond yields, 1.70%. the u.s.ut records in equity market.

anna: here is sophie camera did. sophie: goldman sachs have agreed to lease offices in a new building in frankfurt as it seeks [inaudible] on the tower that is being built in the financial district. it is renting 10,000 square meters of offices and employs 1000 workers. a spokeswoman declined to comment. deutsche bank's head of investment is leading -- leaving the asset management unit as the lender reorganizes the business ahead of its planned ipo. said that toau others will cohead the investment group. a spokesman declined to comment on behalf of the company.

that is your bloomberg is this flash. fors: the s&p 500 is higher 15 of 18 sessions. how long can u.s. equity sessions rally? if we talk about this great number that we have, we have not seen this kind of a run in u.s. equity markets, they happen infrequently. it is 14% in 17 days. that kind of momentum is phenomenal. without aappen catalyst? guest: over time you will need to see some sort of follow-up actions. one of the reasons, there is definitely a buying back into the reflation story. the hopes around tax have been priced out of the market. we have seen over the last

couple of weeks that potential to come back in as a factor. this is going to run into trouble otherwise. we are talking about the fed. the market on the back of the cpi data we had in the first half of the year dovish around what the fed would do. they probably do more than the market is pricing. there are some headwinds coming up or lack of tailwinds. if we do not see that follow through the reflation trade. anna: where does that leave the dollar? does that mean the dollar gets back to its positive omentum we saw in some temper? the summer has been jury for the dollar. dreary for the dollar. guest: we could have a nice autumn for the dollar. the dollar can move up. if you think about we have this

a lot of the weakness was concerned over any type of fiscal followthrough and was on tradeck of the cpi we had we saw that improve in september. we think that was temporary. that would give a bit more support to the dollar. you do not necessarily have a strong dollar run. manus: tom keene caught up with stanley fischer. not quite sure with the complexion of the federal reserve will be. stanley was convinced inflation is coming and the great debate is due the old models still work a genuflection to stanley fischer, he is a gentleman of an era which banked on those older models. guest: that remains a big question. if you look at the moment, clearly we think inflation picks

up because they were transitory effect. there is a fundamental weston about how much deflation do we have given in the industry is now that are driven by disruption technology. we continue to think that is a big theme. even if inflation does come back -- manus: does that continue with the kind of lastly we have seen? guest: we have seen technology impact the industries. what is the impact of inflation on markets and bond yields go up. mentionedinating you technology. we are seeing it in asset management. the price was given but this is a low cost investment service. we will see more of this type of

thing within the investment community, do you think? asked: i think we will. the shift is thinking about how to deliver everything through digital means is a global phenomenon and investments is one of those. whether -- i think this thinking about how can we be more efficient and how can we help investors manage money and coming back to our earlier discussions a lot of the regulatory shifts will push greater transparency drives toward investors. why to know what am i buying and what am i paying for. manus: thank you. anna: that will do it for us. the market open is next. we speak exclusively to spain's economy minister about the catalan referendum. what will he have to say about the options for the government and about the banking sector and what it should or should not be doing or thinking about doing. we talked about that earlier.

manus: that is one of the headlines from the newspapers considering where they want to have their headquarters. stocks set for a lower opening. digital radio is were you can get us as well. thank you.

guy: welcome to bloomberg markets, the cash opening. the first trade of the day coming up on this program. what are we talking about this thursday morning, the catalan credit morning as bloomberg will ring you an exclusive inner -- interview with spain's economic minister. a game of thrones, jerome powell gaining favor in the betting markets as trump's pick for fed chair. will his speech after