anna: financial and political dowsure there down -- bare n. manus: irma and harvey are expected to hit the job report. meanwhile, hawkish comments boost rate hike bets. anna: the calm before the storm. president trump offers cryptic comments as he meets with leaders to discuss a range of national security issues. ministere u.k. prime discusses a former cabinet minister. the pound weakens. ♪

anna: a very warm welcome is friday morning. this is our flagship morning show in london. our headlinesn that we will get the jobs report, but the wells fargo chief economist says uncle up. it -- says buckle up. it will be a bumpy ride. a percent growth in the united states. houston was never fully evacuated. harvey and irma could knock 100,000 jobs off the report. spreadrvey shows the between these two. the gap between these two up, heardis says -- i jonathan ferro say the

jon's.sts -- not mine, anna: this is when you get the state-by-state breakdown on the payrolls, and that will allow economists to strip out what happens in houston, texas and florida. we will get information about the underlying state of the economy then. as we wait for the jobs report, the markets are on the move. the dollar index probably supported again. hawkish comments from fed officials. all of that leading to the sentiment that the u.s. economy has more to play after this increase in interest rates. we are in the highest in three months. manus: that was a strong 1% this month. they will talk about dollars and jobs. the dollar bulls are pawing the

ground. we had a longest rally in the dollar this year. there is something about the data in japan. anna: when we talk about japan later on, we will talk about the policies of euronomics. she has diverse policies to talk about. the nikkei is higher. we have an absence in the markets in asia, so despite the fact asian markets are heading we their highest since july, are expected to be pretty flaccid at the start. another all-time high, volatility at a record low. manus: there is a harmonic convergence between stocks and the vix index. we will talk more about that with our guests, but this is the sixth consecutive record.

anna: let's get the first word news update. here is juliette saly. donalde: u.s. president trump has offered cryptic remarks while posing for photos with military leaders, saying they gathering might represent a calm before the storm. tos was ahead of a dinner discuss a range of national security issues. [indiscernible] this represents the calm before the storm. juliette: the trump administration will formally propose repealing president barack obama's plan to cut greenhouse a mash -- emissions. the initiative went beyond the bounds of federal law, and the environmental protection agency refused to comment on the authenticity of the documents. the party of hope says it will continue taxing the tax reserve.

they have assembled a conservative party to challenge thezo abe's party in general election. opinion polls indicate the party is unlikely to win, but it could prompt the ruling coalition to oust abe as the leader. concernsay is facing after a former cabinet colleague announced he is running to oust her. he has a list of colleagues who want to choose a new leader of the party after may failed to win a majority in the national election. 1500 people were bought a golden escalate during a visit to russia.

that video emerged from the moment the leader of the gulf kingdom exited his plane and stepped onto the special escalator he travels with. but it malfunctioned halfway down and he had to walk the rest of the way. 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 at top . china and south korea are still closed. we are seeing the regional index at a two-week high and rounding out its best week since mid-july. australia closing out the session by 0.9%. you saw the aussie dollar fall. one member is calling for a rate cut. a we switch it over and have look at some of the stocks we have been shrinking -- have been tracking, it is coming through in the casino players.

we have one down by 3% because gold weight in china has been more disappointing than expected. mainland tourists arrivals have been down, so these casino players are under pressure. the best performer on the hang seng index has completed a billion-dollar deal. goodast retailing looking late in the trade as well. this is on an upgrade to neutral. thank you, juliette. the spanish prime minister convened his cabinet today. this is after the squeeze on the government. anna: the catalan president risks european isolation if he pushes forward with the plan for independence. let's go over to barcelona where we have the latest.

what can we expect from the cabinet meeting today? will be a crucial cabinet meeting. know they intend to use it as a warning. let's go back to basics. referendum that no one recognizes. the government will use this cabinet meeting to say, this is our final warning before notification. when you send a formal notification, it means that article 50 is in a meant -- imminent. the government is working on a plan to allow companies to shift spainheadquarters out of without the board, if they think it is necessary. a final warning to the cabinet

minister, and making it easy for companies to transfer their headquarters. manus: tell us about the internal strife. there seems to be divisions with the hardliners. maria: that was a story we put out late yesterday, and we were getting it from senior people within the administration that there are very serious tensions. just for a bit of context, this encompasses all kinds of catal ans. the issue here is they have two problems. the conservatives are saying this could have serious economic consequences, as trades like tech step back. others say, the sooner, the

better. the second issue is that the situation is, how do we do it? is it 48 hours? two we respect the spanish law -- do we respect tehe spanish law? the member, the president was not voted into office. he is struggling to keep this fragile coalition together. anna: meanwhile, the banks and catalonia have to decide -- the banks in catalonia have to decide if they stay or fall out of the european union, or move their headquarters. we are waiting for one bank, i guess. a: exactly. they are saying they will have to move. it is one of those mid tier banks. the last thing they need in a

low rates environment where the market is not what it used to be is to move. most of their business is in spain, and they want to make they maintain their status as a eurozone institution. we hear they are considering the announcement and could probably make it today. manus: maria, thank you very much. is allianz --lucy forest.d --aymeric it seems like the separatists are tapping the brakes in terms of going for succession. markets are the taking, that it is not a done deal, but they are going for succession and the risks that go with that? >> it is a risk premium.

we are careful, we are not reacting on it. if a more pronounced uncertainty rises, it would be reflected in an equity and bond -- it would be reflected in equity and bond markets. improving economic growth in the last few years, so some uncertainty. in a large correction should be seen as a positive. anna: say it holds together and does not lose 20% of its economy in an independent's move, and move,-- an independence and they carry on as before. aymeric: it is interesting to see both parties coming to a resolution. we need to look on the bright side and believe that people

will work together. manus: stay with us. work and when traveling to , you can find bloomberg radio on your dial. the catalonia coverage continues. we will be joined by the ceo of the first company leaving the region. catch that on your mobile device. manus: coming up, we look ahead to today's important u.s. jobs report, how the numbers will be impacted by the hurricanes harvey and irma. anna: and pressure grows on theresa may to step down. how long can she hold on? we will discuss that. this is bloomberg. ♪ manus: this is a live shot of

singapore. stocks are rocking. we have six records in a row in the united states. 0.2%.acific up by let's get to juliette saly. juliette: catalonia's biggest bank is getting closer to leaving the volatile region as customers say a declaration of independence would prompt them to pull their deposits. he will move headquarters. to bank will meet today transfer its registered office elsewhere. no one was immediately available to comment on the meeting. regulators in europe and asia are still investigating standard charter and the role staff may have played in transferring $4

billion in assets to singapore before new transparency rules were introduced. according to people with knowledge of the probe, the bank informed investigators last year about the timing of the transactions and whether the customers' funds had been properly vetted. in casino operators have slumped in hong kong trade after visitor arrivals from ancient -- mainland china disappointed. it fell in the first days of the holiday. that compares to analyst estimates. u.s. employers added the fewest numbers of workers in six months during the month of september. two is due to hurricanes.

the outlet for higher inflation will allow for another u.s. rate hike this year. manus: aymeric forest is the head of investment at schroders. with 80ook at america five quarters of growth -- 80 months of growth, it is a high run. how much value do you put on today's distortion? and its just one number is the trend that has helped recovery, this recovery on jobs has happened at a much slower pace than in other cycles. it is only one number, but we believe the u.s. is recovering nicely. don't forget that 18 months ago, we were in a manufacturing slowdown globally. benefiting from a

synchronized global recovery. the only on the economic side, but also on the earning side. numbersas the growth remain, this is great. but in order to maintain this momentum, we probably need thething else, and importance of fiscal expansionary policy, not only in the u.s. but globally. anna: in terms of this jobs report, i was looking at average hourly earnings and when will we get decent wage growth in many advanced economies. it was interesting to be reminded about year on year growth at 2.5%. that is not zero. it is much lower.

that is probably one of the reasons inflation has not accelerated as much. are lowerur jobs come at the internet industry is growing, the manufacturing industry as well. but we are still confident that there are demographic trends that are evolving in the coming years. thate confident step-by-step, wages will increase. manus: there are a few people on our team who would like to know that. on ours a lovely title stock story this morning, i have moronic -- a harmonic emergence. is an idyllic moment in

markets. how bullish are you on the u.s.? have you taken money off the table, have you joined it? what momentum are you adding or taking away? we are constant on equities, including the u.s.. however, we have a preference for markets outside of the u.s. from a valuation point of view, but also because the rest of the world is catching up. it has expanded thanks to a low inflation number, low inflation rates. focus going forward on growth. we probably do not expect too much expansion in the coming that we are closer to the end globally. betterdo prefer opportunities in other places. europe, for example, where

growth is accelerating. which is also interesting with domestic growth in the last several years. going forward, we will have to be much more selective. your in terms of expectations for the u.s. economy, you mention how important the fiscal side is. what do you think is necessary? some people say the economy is doing ok and does not need a fiscal boost. a lot of focus on the tax plans under president trump. but you also say you believe the greenback has weakened. aymeric: let's go first to the fiscal side. you probably do not want do much stimulus, because at some point people will look at this affect. -- look at this effect. want the expenditure in

investments, and that has been a problem in this cycle. the consumer has recovered a bit, but you want investments to be there. dollar, on the exchange rate, it was seen as expensive at the beginning of this year, meaning you needed not only growth to accelerate in the u.s., but to be much stronger in other parts of the world. in europe, for example, growing at a faster pace. ans combination of inexpensive dollar and the growth differential accelerating in favor of the western world, it should help the dollar remain relatively weak. manus: the single biggest pre-application -- preoccupation

is, will the fed go three times next year? you had john williams last night talking up the rate hike probability. the bond markets have the tightest range since the 1960's. the 10 year yield has not moved much. -- have not moved much. who could be in charge of the fed? could there be inflation with wages at 2.5%? aymeric: of course. what you mention could create short-term volatility. the fed has pointed to a long-term target situation with 2.3%.

the inflation cycles, and on this basis, we see trafficking -- troughing beginning next year. bond market is unlikely to run out of control, but will gradually adjust to an environment where minimum growth will go step-by-step in the u.s.. reset remove --if you from the fed to 200 basis points, that would be the sort of margin that needs to be added over the next two or three years. that means 2.5 over three years. anna: aymeric, thank you. manus: later today, we have gary cohn. he joins the bloomberg team at 2:30.

and we alsonna: have another exclusive interview. coming up, taking on theresa. this is bloomberg. ♪ manus: it is 2:30 in the

afternoon in tokyo. the dollar is a bit stronger. who will run japan? that is the question. political party has run japan for all but 40 years since 1995. markets.k about guy johnson is in the hot seat. guy: european equities expected to bounce a little today. the ftse futures are open. we are expecting the market around 0.1%. force froma strong

the ibex yesterday coming back, putting the squeeze on the catalans in the market reacting positive to that, up 2.51%. the aussie is softer, but it is the u.s. dollar i want to talk about. it is the asymmetry around the numbers. this is the volatility gauge. you can see it is taking a little bit higher. here's the play we could be possibly seeing later today. if the payroll number is week, the market will ignore it and will say, this is a hurricane related issue. if the number is strong, the numbers -- the market will react brutally. but it will only be in one direction. you will get asymmetry coming around the reaction. it will be interesting whether it is a dollar story, which has been a move the last couple of

days, and a treasury story. it looks prepared to break out in the index is anything to go by. volatility is starting to rise. it could be a really interesting --, despite the fact that the market positioning around it is fascinating. anna: a lot of excitement around something that could be dull. the 20th is the key date to watch. we will talk about the payrolls numbers because of the hurricanes. guests -- manus: we get the jobs report guy will talk about -- guy was talking about later on. may is facing growing demands to quit as the uk's prime minister after a former colleague announced he is running of campaign to -- running a campaign to oust her.

there are people who want to choose a new leader. manus: he claims the list includes five former cabinet ministers. forest is still with us. it looks as if a rebellion is down the ring in the form of -- how negative viewsitive does schroders the possibility that theresa may could be out and a leadership before could ensue christmas? aymeric: i am mainly expressing my own opinion. the neighbor volatility around the political picture would not in arceived as positive european scenario front. needs to beernment

andrer on this side, probably means at some point to make some concessions step by step in order to ensure smoother transition on the brexit side. manus: let's put a market parameter around it. this is where mark carney spoke. prospect of a the higher interest rate in the united kingdom. theresa may spoke on two occasions. is notclusion was, it that they sold the pound on her speeches, it was just the fact that she did very little to galvanize this market. the market did not read anything hopeful on that move forward. each time she speaks, we are looking for something positive. not necessarily because of the details of what she said come up a what does it do to her prospect of hanging onto power?

aymeric: if we go back on this longer picture, it looks very cheap. it suffered a lot post-brexit. that has been an issue. it puts inflationary pressure. that is probably why the bank of england tried to talk the pound that there to ensure is some kind of control at this level. inflationary pressure, do not exacerbate it. that goingensure into brexit, the impacts of the negotiations will not the as stringent on the u.k. growth. on loss, the impact companies. i think that is what will matter

going forward. it may be noise on the political side. anna: in terms of the bank of the bankonversation, of england has reduced the chance of an unexpected surprise because it may raise interest rates. how keen do you think the bank of england is to moving in november or at the start of next year? aymeric: we do expect a rate hike. anna: was it just about managing market expectations? aymeric: i think it was managing the pound, in an environment where other currencies were appreciating. bank of england could not let the pound go to aggressively low debt -- go too aggressively low because of the rate of

inflation. we are aware it is a country with a lot of debt, and that will need to be managed carefully as well. the rate hike should not be material, it should be a signal that it needs to manage the pound. its: i should just say, was alberto on his twitter page. humid should on a couple mentioned on au couple occasions, how bullish we haveon the detail been given from the detail -- from the central bank? how bullish are you on europe? aymeric: we have to go back to the data. regions.re the there are some valuation benefits investing in europe, and earnings growth has been accelerating over the last 18

months, coming out where there was no earnings. revised lowereen because of the transfer of the euro. it has a loan term value, and what expect the euro to stabilize around these levels. around 1.20 or below. are aan equity markets different offering for investors. they are diversified in an environment where you have -- european banks could be ok. you mention the support the ecb is providing to markets. a clip of that ifc managing director talking about the managing -- >> i think the case of the bank

of england, i do not want to be to sit -- pacific about the circumstances because it is in flux because of the brexit situation. we support continued accommodative monetary policy. anna: she is talking about the need to support -- for supportive monetary policy from the ecb. aymeric: we talk about the u.s. and europe. anna: how much is the fiscal side delivering already, because i know we were speaking to one guest who said, do not underestimate what they are doing. and how much do you think they need to ramp up? it would be more political pressure in germany to start spending money. we see it in europe and spain, italy, france, portugal. yes, that will be critical.

manus: we are waiting for more german data to come out this morning. had a little bit of a seesaw here and there in terms of how europe is looking. what are you expecting from this earnings season in europe? aymeric: momentum should continue. as mentioned earlier, we come earnings 18 months ago. this recovery should continue in the short-term. we talk about also a stimulus could help consumers in europe. we should not underestimate what has been done in europe with germany, with france going forward. for a time being, we expect it to remain and we expect earnings growth between 8% and 10% next year. anna: thank you very much.

manus: matthew elliott, the ceo of business for brenton, joins -- business for britain, joins us. need to switch off bloomberg tv, you can turn bloomberg radio on the global device -- on your mobile device. manus: coming up, japan's as therties debate election nears and we look at the sticking points between them. anna: catalonia's separatist government faces a political squeeze. this is a crucial one that could develop throw the day. this is bloomberg. ♪ manus: it is 1:44 a.m. in new

york. futures taking a moment of breath, because you have had record after record. six records in a row in s&p. you have not seen that since 1997. it is the longest winning streak since 2013. juliette saly has your business flash. juliette: catalonia's biggest banks are getting closer to living the politically volatile region as customers signal and declaration of independence would prompt them to pull their deposits. will moveas said it its headquarters. xa bank will transfer its headquarters as well. no one at the bank was able to comment on the meeting. a company is -- according to

people with knowledge of the matter, the company has been speaking with potential buyers for the smelter in northern france. -- it a normal production -regulators in europe and asia has. according to people with knowledge of the probe, the banks regulators asked the employees questions early last year about the timing of the transactions. spokesman for standard charter declined to comment. in casino operators have slumped in hong kong trade, as visitor arrivals from mainland china has disappointed.

that is your bloomberg business flash. let's talk about what is going on in china. we had some movement in the rrr, the number of dollars put aside for banks to protect themselves. , we are going to talk about china little bit. what are your expectations around the chinese liquidity story? some said, how does that fit with the country that wants to tighten up on liquidity. there was a fascinating piece on the bloomberg that it does tie and because it is specific to the various banks and the amount of business they do. it will encourage banks to allocate more reserved. that is the future in the china story. the chinese have had a

disaster the last couple of years. they've introduced new tools to from a stimulus point of view. done thishey have year, they took on one side and gave on the other. gave to ationed, they more controlled -- what has been interesting in china is the pollution of the society. the emergence of new china. tiffany'-- companies like tencent. transactions in china, currency transactions, are digital. sees very exciting to potential in china. the government to manage or try to manage is a multistep. manus: let's talk about japan,

because you're the main political parties shaping up against each other. managing editor for japan is stocking by -- is standing by to talk about this. , there is a lovely story, japan nomics.ion reveals yuri that's what is the difference? >> with the unveiling of this manifesto, we have seen more to separate them. that he issues, we know is anti-nukes. he wants to phase out nuclear power. we know he wants to freeze the sales tax. and the manifesto, the interesting twist was that he wants to think about taxing corporate retained earnings. the idea is that by threatening to touch -- two tax worker earnings, companies decide to

put that money back into the wage increases.or there are a few populist measures as well, including making illegal -- making it illegal to discriminate against people who are lgbt. of how theses groups brand themselves, what you consider to be the relative strengths of the different parties? >> one of the big things is charisma. koike is a couple years older than abe, but she comes across as a younger generation entirely. she has a lot of energy, a lot of dynamism, a lot of celebrity, an air of celebrity to her. on the flipside, you have mr. abe who was talking about geopolitical tensions. he is selling himself as one of the few world leaders who can

actually maintain a stable relationship with trump while trying to navigate these difficult channels in asia. ands the party of stability safety, she is the party of dynamism and change. is dynamism and change, it will all come down to tax, and whether the tax rate goes through. they have different propositions for tax. some companies in japan may be worried about their tax brackets. let's raisebe said the consumption tax and some of that money goes to our fiscal problems and some of it goes to social welfare, koike is saying let's freeze the sales tax, keep the money in the hands of consumers. these companies that have benefited for years, they have tons of money on their balance sheet. let's provide an incentive that

pushes the money back into the economy and the hands of the consumers. it will be interesting to see how it plays out for the people, but koike is much more aimed at spurning consumption. anna: it is important to add a note of realism about how well do, because not only does the polling suggest she will not win, but the number of candidates she is building could could- she is fielding have an impact. 192he is only fielding candidates, which is half of the other party. she will not get an outright majority. but if she can take enough votes away from abe's party, she could prompt the ldp to choose a new leader, and she would be open to collaborating with the ldp party e.at was not led by ab her main goal is to cheap enough

influenced -- to achieve enough influence to be part of the next government. manus: let's see what happens. aymeric forest is the head of investment at schroders, and he is still with us. i think it is a fascinating point, she is not in a position to win, but she is in a position to upset the proverbial applecart. with that in mind, the investors have pulled money out of the japanese stock market. have you shifted at all on japan in political risk? aymeric: no, we still see a high priority for the ldp to win the election and for the grand coalition to get maturation. a do not think that should be major issue in the short-term. there would be some additional

stimulus in the fiscal side potentially. we like japanese consumers, the domestic part of japan. last week and that, you needed to change the japanese psyche. have grown for several quarters in a row, and we see the earnings being upgraded step-by-step. the main issue would probably be for next year for exporters. quarter of 2016, the yen depreciated. anna: it is tough to live up to those expectations given the previous record. aymeric: meaning if the yen remains around this level, i would definitely -- it would definitely help exporters. story has beenss the sense that the japanese economy has over many quarters in thelack of success

boj, and that narrow definition of success around inflation. not everyone thinks it is the most appropriate way to judge central banking, but that has been elusive for japan. aymeric: we see a correlation between the yen and equity markets. we have not been as negative as itwere a few years ago when came from the impact on exporters. manus: thank you very much. thank you for joining and a and i this morning -- anna and i this morning. we talked about this in the risk radar, but the one thing that strikes me the most is the british pound down by 0.3%. us --nk of england gives what did mccafferty say last night? we have this story this morning

about gran-- anna: a group of conservatives are calling for her to resign. it seems as though he has around 30, according to our colleague. 48 is the number you would need of tory mp's to call for a reelection. it seems as if the names are a mix of those on the right of the party who want something harder on brexit and those on the left of the party who don't want brexit to happen at all. manus: let's see whether those numbers gather up. anna: the world is keeping its eye on crh. isus: and standard charter said to be probed over $1.4 billion transfer.

anna: if you are a bloomberg customer, you can watch this show using the tv function on your bloomberg. you can get all the charts views on the side of the screen. this is bloomberg. ♪ manus: financial and political

pressures on catalan separatists. the prime minister holds up cabinet meeting today. harveyurricanes irma and are expected to hit today's jobs report. the calm before the storm. president trump offers cryptic remark as he meets with military leaders to discuss issues. anna: next cabinet minister says he is the link support for a campaign to oust theresa may. the pound weakens.

manus: welcome to "bloomberg our flagshipope," show. i'm manus cranny. edwards -- anna edwards. this is really strong. a rebound aced on the weakness we had. the estimate is for a rebound up to 0.7%. we have rebounded up by 3.6%. the bundesbank said the economy will continue on. it will have slightly less momentum. data we got on wednesday

shows the german economy accelerated in september. this is one month's worth of data. my colleagues in germany would want me to mention that. 95.6%, as ryanair has turbulence. when it comes to numbers, profit,r pretax previous forecast that i have was 300 and 80 to 400 and 2 million pounds. it is expected to be at the upper end of the numbers. what will easyjet do? will they buy parts of monarch? do they want to bolster their bases? they could add 24 million pounds

in pretax profits. let's talk about crh. the cement business, made a play for ash grove. it received another bid. crh is responding to that this morning. they made the bid on september 21. crh, this is with regards to this other offer. that be awarehing of the timescales. manus: let's talk about futures.

there is a piece talking about money coming out of the dax. u.s. equity markets were reflected. european equity my are set for a higher open. we will be looking at the job reports today. let's talk about the risk radar. stocks are going higher, and the dollar is hanging onto its gains. hawkish comments are in the mix as well. we might be talking about a rising rate environment. maybe the u.s. economy can withstand that. the nikkei is up. the australian market is doing very well this morning. we are without china, we will see what happens when they come back next week. manus: we have the sixth the cashve record in

market. we have not seen since 1997. a positive return on s&p 500 every month since the election. so many superlatives to choose from. on the vix, -- a quick look at the bond markets. it has been about the spanish bond market. down,elds are coming back a slightly less tense environment. manus: that's go to juliette saly with your first word news. u.s. president donald trump has offered cryptic remarks while posing with photos with military leaders.

he made the comments in the white house dining room. pres. trump: do you know what this represents? the trump administration formally proposed repealing barack obama's sweeping plan for curbing greenhouse gas emissions. to documents obtained by bloomberg news, it will argued the initiative went beyond the bounds of federal law. environmental protection agency declined to comment on that authenticity of the document. tropical storm nate which has shut gas firms in the gulf of mexico has continued to head north that will bring it ashore in the u.s. in the coming days. it is scraping the eastern edge of mexico before becoming a

hurricane south of louisiana on saturday. it may come ashore anywhere from the louisiana to florida's panhandle. hope saidthe party of it will consider taxing the cash reserve. they have assembled an partyative conservative to challenge the democratic party in the october 22 election. opinion polls indicate her party is unlikely to win, a loss of seats would force the ruling coalition to oust abe. he has a list of colleagues who want to choose a new leader of the party, after prime minister made veiled. growing and includes five former cabinet ministers as

well as tories from both sides of the brexit debate. saudi king but 1500 people a golden escalator on his four date state visit to russia. kingdomer of the gulf step onto a special escalator he travels with. it malfunctioned halfway down and he had to walk the rest of the way. global news powered by 2700 journalists and analysts across 120 countries. you can find more stories on the bloomberg. we are seeing stocks in asia holding at their highest level in two weeks. the best week for the msci index. china and south korea have been out all week. hong kong back online today. by nikkei closed higher 0.33%. the aussie dollar came under pressure on reports that one

member is calling for a rate cut. following,e been down by 3% in late trade. after we saw mainland tourist arrival faulk 5.1% in the first four days. cte has risen. we are seeing japanese defense stocks on the rise. machinery closing out at 29%. it has raised its stake in this company to 6.6%. juliette, thank you. spain's prime convened his cabinet later today. , a pressures are mounting

squeeze on the government in catalonia. the catalan president risks economic damage and isolation if he pushes ahead with the plan to declare independence. expect today? what do we think he will proffer today? it is tuesday. he knows he has the upper hand. be, this is your final warning. stop this now. maybe we can talk. you cannot go any further. on the corporate side, we know the government is expected to pronounce that they're working on a new decree for companies based in catalonia to ship their

headquarters to anywhere else in spain. you don't have to do the normal process. you have to move quickly. this decree would be made available for companies that need it. anna:you don't have to do the nl process. what about the banking sector? exactly. it is not one of the top three. will have to move headquarters. we know this is a big bank, one of the top three. the biggest one in spain in terms of branches. the key for them is to send a message to the market to say no matter what happens, no matter whether we get a declaration of independence, we are going to be a eurozone financial institution. we will be backed by the ecb.

expecting an announcement along that line. new reports coming out that two , they are also thinking about moving their headquarters away from catalonia. manus: thank you very much. is cio of global equities, allianz global investors. lucy, good morning. when we talk about catalonia we are pushed in different directions. the bond market is a litmus test we use. of relocating seems to have touched the consciousness of the separatists and given number reality check. is that your reading western mark --

lucy: it certainly helps with the pressure. it is very fragile. with that in mind, a lot of guests talk about have the ecb is backing the market. lucy: manus: can we talk more broadly about europe.

political risk has not gone away. that provokes a response from global investors. what we're try and understand is the flow of money, the data has been good, we know there is going to be a taper going into the new year. at the margins, are you putting more money to work in europe. we favor europe and up ity from the bottom also top down. there are valuations there. there is potential for recovery. this is the discount. this is the dax, relative to the s&p 500, and the discount is quite significant. is that what it is? there is good value. you have big names moving higher. lucy: in a relative sense, yes.

you got more in europe and the u.s.. story, 3.6e germany increase on a month-to-month figure, it was weaker the previous month. data,one month's worth of but how strong is that picture in germany? what is the best way to get exposure to that? lucy: their strength in the domestic sector as well as the export sector. for the german consumer. you got strong property prices, ,o it is a broad spread german consumers don't spend in the same way that other consumer environments. we have seen it shipped for better or worse. lucy: there is a different environment. it was traditionally and export,

but we are announcing a balance. despite social tensions, we are seeing the sun breakthrough, but it is not a clear sky. how bullish are you on a scale ?f one to 10 do you agree we are still on the way up, the momentum is there ended a strong? lucy: the momentum is improving in europe for sure. it is still catching up with where the u.s. has been going. there is more of that to do. that is going to hold that nominal growth everywhere.

corporate sector it is a struggle. anna: thank you. , cio of global equities, allianz global investors. manus: could hurricanes harvey and irma have the number of jobs added last month? speaks tomberg echt.ia l wrecked -- albr this is bloomberg. ♪

manus: 7:20 a.m. in london. everybody is waiting for the the report and what impact hurricanes will have had.

are we stepping back in terms of political risk in catalonia? that is what the market seems to be suggesting. bond yields are flat. the german economy really plays, i wonder if that into things as we start the trading day. key.obs report is manus: that is what we will keep an eye on. u.s. added the fewest number of , you hadn september the hurricanes in as many weeks. the hurricanes that hit the united states late in august and in september likely had a big effect on september jobs report. it could cause volatility not just in september but in the coming months, as they are

continuing to rebuild. added 80,000 workers during the month. that would be about half of the gain of august, and would also be a six month low. it is likely a one-off because of the hurricanes. to serve these that make up the jobs report, for the unemployment rate and the payrolls included the pay. 12.eptember for perspective, hurricane harvey made landfall on august 25, and was followed by irma s truck florida on september 10. the effects of both of those would be during the survey. there is a lot of range in the forecast for the payrolls number , larger than is typical because of the effects of the hurricane. on the unemployment rate we are seeing more of that consensus

around 4.4% match the prior month. in terms of hourly earnings they may have accelerated to 0.3%. i will be in washington covering the jobs report and will bring all the numbers to bloomberg tv. you will have all the details you need to watch later on. u.s. jobs report fairly crucial, but we may have to wait for the underlying picture in the economy. the underlying employment is relatively strong. the wages are very muted.

muted. that is what has kept the fed relaxed for the moment. that is the big debate. when are you going to start , we are not going to learn that today. europe, --s in anna: the consensus is 0.3% increase. that is not the moment -- momentum we need. lucy: it is not what you expect in this stage of the cycle. other structural forces at play? watching,at we are what the fed is watching. i will go for a few facts rather than superlatives. the longest space of winning streak on record, six records in a row. we have not seen that since the

late 1990's. my question is, you manage a lot of money, have you any doubt in the u.s. equity story? two things which are keeping it going at the moment. manufacturing.e that is keeping it going. then people are looking toward -- there is a view if and when that gets through, that will be the last hurrah for the short-term. is optimismer this about lowering the tax rate. that is progrowth. without any delivery untaxed, or an uptick, we stall

or befall? is an expectation about tax reform being built into the market. a month ago there wasn't any expectation. now, the commitment to deliver something is being priced in. if there is no delivery -- manus: thank you. lucy macdonald is cio of global equities, allianz global investors. anna: "bloomberg markets european open" is up next. manus: if you're traveling to work, you can switch from tv to radio. we are live on your mobile device. rising.stocks the british pound to stands out for me this morning. anna: a little politics in there.

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watching "bloomberg markets european open." i'm guy johnson. hurricane warning. the payrolls will be affected by harvey and irma. is the market out of position if the number beats the low expectations? fights or flights?