>> building a dialogue. catalogs -- ted alonso for nothing -- catalan's for no affairs chief -- >> we will be there. lire crashes. the turkish currency tumbles. we are live in his gamble. thanks -- market reopened after the holiday. brexit talks.s --

she will tell eu negotiators it is your move. a very warm welcome to the program. this is bloomberg. >> we have a treat for you. catalonia. in and a diplomatic spat between the u.s. and turkey. let us talk about this turkish story. caught in thes asia fx witching hour. countries are vying with each other. they canceled their mutual visa

program. normally it is 25 ticks. times itst to 60 average. if you thought of electronic trading was going to save you and give you transparency and efficiency, do you know what it did? they switched the electronic trading off. we take that threw two the risk radar. was down 6% compared to the earlier closing. relations are deteriorating. we have the chinese shanghai market as well. they are back in the room, playing catch-up with hong kong. wentong kong listing

higher. that is feeding through to the chinese market. we still have closures over in asia. a lovely piece on the bloomberg this morning talking about the reserve. they have compared that to greenspan. a full swag bag relative to the rest. it will be a big week for the s&p. record after record coming through. we will rehash the jobs data and take a look at what that means for the fed. the wages saving things. we will discuss that with our guest through the program. germany's angela merkel has

agreed to an annual cap of 200,000 migrants into her country. policy follow from the recent election. she had previously resisted demands from the more hardline party. the concession of allows her to pursue talks on a coalition government. opec's secretary-general says restrictions are rebalancing the oil market but further steps may be needed next year. expires in term march and there is a growing consensus that extraordinary measures may be needed to ensure prices through 2018. u.s. vice president mike pence has walked out of an nfl game after a number of football players decided to neil during the national anthem. the 49ers are the team of the

former collin kaepernick. tweeted thatident i will not attend any event that does not dignify our flag and our soldiers. the u.k. prime minister has triggered speculation that she may shake up her cabinet to reassert her authority and end the ministerial infighting. times thate sunday she wants the best people around her. borisoning the future of johnson who is seen as being out of step with government policy. in japan, support for the tokyo 's fell. that is down from 19% from about

a week ago. global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg on top . a check on the markets in asia. japan, south korea, and taiwan because ofe the -- the holiday. aussie sharemarket rising for a second straight day. about a seng slipping third of 1%. investors returned from the golden week break with stocks opening a touch above the 3400 level. trading shy of that. chinese start for the stocks for october. look at the banking share. much us to do with the rally in shanghai. in hong kong, discretionary

stocks dragged the most but staples fared well, it mainly dairy. a record high in hong kong. mantra group. manus: our top stories. cut salonember of the administration has called for a dialogue with spain. he warned that all of europe faces economic challenges unless a resolution is found to his region's standoff with madrid. >> we will be at the negotiating table. if they want to come to the negotiating table, we will be there. we have always been there. there is no reason not to be there. whatever the situation is.

anna: sheet -- he was speaking to bloomberg's maria. come from the meeting expected to take place this week? maria: they will reconvene on tuesday. senior see how this official says there is still time to talk. but, the truth is that the cut administration is running into a deadline. last night, the regional president said look, there is nothing to talk about. i think this vote is valid and we are going to enact that. what will get from the regional administration? a unilateral declaration? or will it be symbolic?

the administration is keeping vague.the -- things manus: maria, what do you think of the demonstrations over the weekend? it was a show of force with unity in spain. is by no means clear-cut support for independence. yesterday, we saw thousands saying that we do not agree with you, do not do this. time, the president has been appealing to the silent majority. he said i know that there is a silent majority. i know that there are people here that do not want this. anna: maria, thank you very

much. joining us now onset is michael sneed. good morning. are you looking to this that ultimately is fixed with a combination of conversation and devolution? >> what is interesting about the spain topic is that it has a backdrop where investors saw at risk. since then, we thought it would be quiet sailing. -- this going forward talk of independence is going to remain in the background. that will remain on people's minds. pressing --is most if you look at the catalan

government, it has been shut out of the debt market since 2012. it relies on madrid. how do you find yourself? separation.nd >> you are completely right. it is the same with the banks within catalan. they require funding from the central bank of madrid. -- financial anna: you favor a short euro position. based on fundamentals. this tension does not help. >> when we look at some of the gauges we have to try to measure how much political risk is driving fx markets, the amount is small. that suggests that if the risk was to come -- was to become

more prominent in the fx market -- : that is what makes you favor the short euro. >> the euro has benefited from the positive momentum that we have seen through growth and inflation. we think the pendulum has swung too far towards europe. in the u.s., the market is to has a mystic. as we have more discussion of tax reforms in the u.s., the pendulum could swing the other way and some of these long europe positions. manus: many are speaking about this clause. wargame and your disaster plan in terms of what might happen. what would happen if article 155 were to be invoked? where we think that in the markets you will have

more political risk taking president. this is where the situation starts to get much more serious. what does it mean for the funding of the banks and the catalan government? if you do have an election in catalan if they decide to proceed with independence, will -- many more more different views of independence. when you take a poll of the region, the number of people favoring independence comes in just below 50%. the result that you have from the referendum is larger because many forces did not support the referendum. once you go down that line, the story becomes a much more balanced. anna: thank you. much, michael.

michael is staying with us. manus: if you are traveling to work and your leaving now, join us. round five of brexit talks get underway. anna: turkey and the u.s. suspend visas. the lira slides. we had to istanbul for the latest. manus: stabilizing opec markets. additional steps to sustain recovery into next year. that is next. this is bloomberg. ♪

♪ anna: "bloomberg daybreak: europe and "bloomberg daybreak: ."rope

the hong kong market in retreat. thatof the other markets are closed including japan. china is back from golden week celebrations. the nobel prize for economics is announced at around 10:45 a.m. u.k. time today. manus: and we get the minutes from the fed meeting and the president is tentatively scheduled to give a speech on u.s. policy on iran. >> deutsche bank ceo has yet to meet his company's largest investor but is planning to do so. there is a 9.9% stake in the german lender. been avoiding the meeting. two previous attempts to arrange the meeting has failed.

new ceo andected a has asked the bank of england to make the appointment. times,ng to the sunday the london-based bank's board approved this decision. a spokesperson declined to comment. chinese bank shares have surged on mainland markets. that is after the central bank's decision to cut the lenders reserve ratio. trading started after the week long holiday. the construction bank also rose sharply. fired weinstein has been by the agency he cofounded after allegations of serial sexual harassment. the company says the dismissal of the allegations

that came to light. that is your bloomberg business flash. two is been bolted emerging-market investors have been given a reminder that politics can ruin the best laid plans. lows.ra plunged to record in the lowest -- to the lowest level against the dollar. anna: relations between nkara aren and a at their lowest level. good morning. what led to this? it seems to have come slightly out of the blue. definitely, rising tensions between the u.s. and turkey. late sunday, the u.s. embassy in ankara said it was suspending

visa services effective immediately. the turks released a similar statement. weekled to this is last turkey arrested a turkish national could work at the u.s. consulate saying he allegedly had links to the failed coup attempt against the president that took place last year. turn ofa surprising events. a few weeks ago, the u.s. president praised the turkish leader saying that he was becoming a friend of his. where thatus see hand of friendship reaches across to resolve the issues. work and- we come into

suddenly there is a global, international issue between turkey and the u.s. the shows you how febrile risk is. this is the spread. normally, 25. it has blown up i 1500. 1500. anna: the fx witching hour. markets has and the become very condensed. that happenevents outside of normal trading hours, it can lead to low liquidity and the spreads widen out. came out and it was largely unaware -- and the markets were largely unaware. anna: is this happening more?

the -- it isely largely that volatility has declined this year. when bald -- when volatility decreases -- increases. a means that when you get shot to the trade, -- manus: can we take you back to friday when most of the world was trying to divine what was going on. take off the top level distortion and we look at employment in the u.s. falling to a 10 year low. i know there are many distortions. lift that, was it a bullish report?

so much so that december is a slamdunk for the fed? >> it does read as a very bullish report. there were distortions and there was an error around the household survey. looking through that, it does look like a good report. anna: it seems like the hurricane is the fed cover to go ahead and act in december without too much questioning. read at is difficult to the moment. if they think the bigger picture justifies the move, there is a lack of transparency that enables them to do that. >> a note of caution. headlines are strong. when you drill down, a lot of that was due to the inflation components. be ank we do have to

little bit careful. nevertheless, this is showing that the u.s. is running very strong. whether they this, move in march or december. manus: i know you're focused on the fiscal side. the bond market is closed. i'm going to talk about it anyway. anna: going back to 1988. manus: one-way traffic in want yields. say gross with say -- would the jobless number is the lowest since 2001. we are about to break a critical level, 2.4%. do you agree with bill gross? >> we completely agree. we are looking for the curve to steepen.

anna: you are quite interested in the u.s. fiscal story. how much of that is dictated by what is delivered fiscally or have you seen enough to justify that? >> we think it will be largely on the fiscal story. our forecast for the next 12 months, we are looking for more normalization in the world. is a window of opportunity in the next 3-6 months. manus: michael sneed is from bnp paribas. surge. -- the banks we bring you the latest market

action. way?t open the we will discuss. this is bloomberg. ♪ is this a phone?

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guy: 2:30 the afternoon in tokyo. building up to election fever. dollar down, the we have been falling for a couple of days. it is the beginning of a bigger move. let's have a look at some of the stories that made it into today's edition. the tacoma expect between the united eight. country plunged the suspended non-immigration visas with each other. guy: the u.k. prime minister

theresa may reported that she may reshuffle her cabinet after the meeting with leaders this weekend. from john major saying the more radical with policy. she should be brave enough to put boris johnson outside the cabinet. the question is how much more of vexation would she have for him outside as opposed to in? anna: maybe she should give him a different role. a diplomat saying the 27 not quite as united as we rigorously thought. daybreak focuses on hsbc. andbank pick a new ceo asked for permission to make the appointments. sophie has a quick update for us. good morning. taken away.

sophie: asia stocks are rising for a second day. plenty of major benchmarks -- you have large caps in china rising almost 1.5%. retreating for the decade high we saw friday and the shanghai is trading 20 point five of the key 3400 level. playing catch-up after stocks rose last week in reaction to the factory gauge hitting the five are high. triple, cut in an effort to cut back as this is. that is a dovish hint of a central bank policy intent. some of the mornings earlier gains, icbc gaining 2% after jumping the most two years earlier. lender second-largest rose as much as 4.3%.

they have turned more positive after spending one year being cautious. the risks have started to unwind. the latest reserve cuts are going to further. buy.have upgraded tcb to icbc is the topic among chinese banks. that is a look at what is moving markets in china after the long week break we have seen. thank you, the latest on the market. china's return after golden week. rallying at the central bank's decision to cut the lenders reserve ratio. the people's bank of china said it will cut reserve requirements. in 2018.banks what are the indications?

we have the banks playing catch-up this time. >> that is right. certainly the compass it playing catch-up the shares in hong kong. this announcement was made september 3. it will not take hold until 2018. the vast majority of china's banks, certainly all of the major ones and that is why you are seeing the shanghai following the pen saying. encourage these unders for more credits to small businesses. they provide the bulk of tax revenue and employment. up until this point it is the essay we. that is trying to rebalance that approach. as 150d funnel as much billion u.s. dollars liquidity into the system.

we did hear from analysts saying this was surgical easing. it did not point to a radical shift in policy. they will maintain their prudent policy in the lead up to this big political event, the congress that kicks off next week. manus: tom mackenzie in beijing. think sophie did a great job. the golden rush. that movement for chinese stocks, i read one article that said the 1990's was when alan greenspan would cut rates. is the shins on put. it would you agree with that? managepboc is helping to

deleveraging in china. in a different way that we tend to think of deleveraging in europe and the u.s.. the support isto growth is strong. inflation is rising. normal rates are going up at slow rates. that is helping to support risk appetite. >> some of your links being cited in china. some people saying is this the start of something? you don't think this is the ?tart maybe we see slower data from the china economy and u.s.. >> i think we could triple all caps coming forward. depending on the performance of the economy. one thing we are keeping an eye on this as we go into the winter there is a lot more pollution controls that are going to be put in place in china then we have seen in the past. this could potentially not

economic growth. we did see more monetary easing. manus: the foreign-exchange reserves today, do your member how obsessed we were? let's really obsessed with that. rocks, balance has declined by 10%. also our session as well. the explosion in wealth management. -- confirm this is a progressive step in rebalancing? >> there has been a lot of progress. you can see it really ramped up in 2016. the pace has really slowed down in 2017. initiatives that help the leverage some of the

local banks and property developers. promoting the use of social housing and public money being used to help finance that. anna: what are your thoughts to play to the middle class? we don't seem to be at the end of that story at all. i was looking at ticket sales at the box office during golden week, up by more than 50% record levels. just one example of people with more spare time and the cash to spend on us. >> mostly by looking at countries in the region which really benefit from china's imports increasing. looking at korea, taiwan, thailand. base that willng increase by foreign companies being able to sell goods in china. manus: you talked about pollution controls in effect.

we got the new home sales in beijing. the lowest since 2009 in shanghai. 78% to 178 units. again, i wanted to what extent these kind of backdrops are something more about a slowdown in china and perhaps the data. the holy grail's property. keep building up and they will come. --that is the oversupply of that we have seen in the last few years. we need to go through the process that you get more balance. new social housing is important because that is allowing more of the population to get access and help increase the demand to fill the supplies you anna: thank you

very much. he stays with us here on daybreak: europe. go, radioi, tv on the device.your mobile you cannot escape anna edwards and me. leaving catalonia, fearing a legal limbo. the catalan official says that won't be enough to start -- stop the frustration. manus: he spoke in barcelona. >> 15 companies including cash and bank, one of the biggest banks in spain, the regional powerhouse that it is, has left. don't you think this is a major sign of its and 30 -- uncertainty? that bymebody believes in capsing the economy

on and, spain or europe will be saved, it is simply misreading the reality. the reality is the productive sector is not moving away. ofre is some announcement thinking systems. >> they are regulatory. it is happening. it is not just an announcement. it is going to happen. >> we're talking about headquarters. headquarters is not the market. you think that they will pronounce to the clients? >> for the market has been a don't you findto it don't you find it concerning that 15 companies

have left within the referendum? concern or uncertainty? >> i insist. if there isow that use of violence to repress the democratic will of the people this causes uncertainty. is notuses uncertainty the will of the people to vote, it is the repressive nature of the state trying to impede it by force innocent people. of, creates a lot obviously, uncomfortable reactions to this. if somebody wants this 11 when we in the had the risk -- 2011 when we had the risk. this is not going to simply affect the economy. it will affect the spanish economy. something suitable for

all those actors? i don't think so. anna: may seeks to continue brexit progress. the latest on the u.k. coming up next. this is bloomberg. ♪

manus: live shot of new york. , you had the fed minutes this week, the imf of the world bank meeting. a huge number of financial delivering nevers in the united states of america. would it be the minutes that the market focuses on the most? let's get across to sophie. she has the business flash. sophie: deutsche bank ceo has yet to meet his company's largest investor but is planning to do so.

the spokeswoman says he will sit down with the chinese conglomerate which has a 9.9% stake in the german lender. he has been avoiding meeting them since the holding in march. according to a person familiar attempts toter, arrange talks failed. john flat head of retail banking and management to be the new ceo and has asked for the provision for the appointment. bank scoredased approval after the arrival of the new chairman last week. hsbc spokeswoman find two comments. chinese bank shares have surged on markets caging up -- catching up in hong kong. trading was started after the weeklong chinese holiday, icv jumps the most in two years. china's construction banks also

rose sharply. harvey weinstein has been fired by the agency he cofounded after allegations of serial sexual harassment. dismissaly says his is in light of new information about his conduct. the 65 euros has already stepped down after the new york times reported settlements to at least eight women claiming harassment. thank you. qatar is said to be considering raising $9 billion from international bond markets as the nation seeks to replenish profits. yousef joins us with a story. why is qatar looking to raise funds right now? yousef: it has a $200 billion spending bill that it also needs to address individual term.

again, sources we have spoken to are talking about $9 billion. trying to narrow it down, what is the best timing for a sale? what will make up for the shortfall from regional demand? look to asian investors to fill the shortfall. it also comes again at an arguably good time in terms of global markets. abu dhabi came with $10 billion in that's followed the saudi bonds. mohammed barkindo, he said the words were extraordinary measures to stabilize the market. what does he mean by that? of threw itust sort out there. we have to look at that. extraordinary measures after eating -- meeting with the indian oil minister off the back of why the consideration about a possible extension. he wasn't saying they may have

to take extraordinary measures to sustain that kind of momentum. the agreement expires in march, then they look in real time weather an extension is warranted. the uae minister has been speaking as well. he says he is optimistic about the upcoming meeting and it says again they will find consensus. conflictr russia-saudi laid the groundwork for a lot of corporations likely to come. anna: thank you. yousef gamal el-din, u.s. markets -- markets middle east. you can give up-to-date with what we are doing by using the tv function. you don't just get the regular video seem best string but you also get the functions we are using. everything manus pulled up next year. you pick from that and use those charts should you wish to. you can ask the guess the question as well. manus: let's talk but the u.k. because theresa may will press her case for progressing budget

talks. this as negotiations presume -- resume in brussels. just days after she fought her. attempt to remove weeresting that last week were talking about leadership of the conservative party. over the weekend, it seems to be a long time in politics. today, the focus really turns back to the eu negotiations. our reports say that there could be emerging with the netherlands and denmark. others looking to not move things forward in that direction. to stick with priority issues. is this something that is going to change the narrative? >> i think we needed to keep in mind that the clock is ticking. we are now within 15 months of the deadline to be triggered.

that means we need to start seeing progress. so far progress has been very slow. there is starting to be more political emphasis from both sides that we need to make advancements. manus: i wonder to what extent progress can be defined. let's talk about the pound, it is not progressing. let me take that off. on daybreak.asking in the poundsnts history. last week was a tortured week, down 3%. party.s a chaotic tory what does it take for sterling to recover if at all? our brexiteers are out over the weekend. doresjenkins, nadine saying the chancellor should be years, the hard brexit are beginning to rear their heads. >> what i thought was

interesting about the moves in the pound last week was that it was driven entirely by political risk and that is something we have not seen for a while. it has been the bank of england as the main driver. that is a big concern because aat is saying even if we get decline in the political sentiment and we get recovery in the pound, its performance is still going to be held hostage to how you pay data performs over the next few weeks. the market is now almost completely in a red hike in november. we are retail sales, inflation, industrial production. the market expectations for november rate hikes as well. that undermines the pound even further. anna: what do you think the bank of england should and would it do? >> they should not be raising

rates. one of the reasons for that is the outlook we have for inflation. when you look at the pointonships the turning needs to be about now. that means going forward inflation in the u.k. is likely to soften. as you unwind these fx. if that combines what we are seeing on the activity data that means this is not -- this is not the time we should be basing rates. we were taught last week that this is the -- quite exacting guidance on bbc radio practically. credibility comes into play if they don't execute what they said with the next room remove last year.

extraordinary assistance last year. >> the rat rest wise this is i think the message is guidance. we had guidance in the bank of england in order to encourage people to go out and stimulate. manus: by gosh they bought cars. >> now we are seeing the opposite. it is a warning that rates can go up and the house should have -- should not have leveraged to much because the cost could increase in the future. you? this that work for strategies andt seeing how much they set out expectations for the markets are at how much they promised versus suggest. is it working for you? >> using the data retail sales we have had so far had to remain strong in the u.k.. because very surprising

not only is credit declining but real wages in the u.k. have fallen back into the negative territory. if you have started to see the guidance come through in the data, like car registrations, those recs have fallen back. the micro strategists from bnp paribas. we keep our eye on a couple of different stories. approvalof england for to come in as ceo. >> keeping an eye on the deutsche bank. their plan to ease client transitions. that story playing high on the bloomberg is mine. biggest operator, offering one point 2 billion australian dollars.

we keep an eye on that as well. neither side in spain's unity crisis seems to like backing down. head of foreign affairs. this is bloomberg.

manus: catalunya square and affairs chief calls for talks with spain. always going to be at the negotiation table. to start negotiations we need to know that we are negotiating. if they want to come to the table he will be there. anna: live in istanbul. banks lead the gains in shanghai on the pboc reserve ratio cuts. markets reopened after golden week holiday. theresa may speaks in westminster.

she will tell negotiators it is your move. manus: welcome, our flagship morning show in the city of london. anna: welcome to the program. at 7:00 in london and 8:00 in germany. industrial output rises by 2.6 percent, well ahead of the estimate of an increase of 0.9%. we get strong data coming through from the german economy. in august.ded the economy benefiting from global demand. all again, after a summer -- lull. well ahead of estimates.

a fairly volatile set of data. jumps the most in six years. i'm showing the most vigorous of upward twins -- trends. let's show the european equity futures. they are set for a higher opening because we see eight littleton around. up .2%. record after record. u.s. just a snippet lower. london down five pips. the dax gives ongoing. anna: a mix handover from the asian session. some of the moves they've seen in markets of the last four hours. the chinese market rebounding after the holiday. up by 1.5%. the turkish lira really on the move, down 2%. asia fx witching hour.

the release -- the legendship deteriorating between the two countries. certainly that is something we are continuing to watch us morning. it blew out to 1500 pips in the overnight session. bring back in voice broker i say because that switched off the machine that one juncture overnight. just switch the machine off, don't worry about liquidity. you are looking at a turnaround. what would theresa may do? will she go for a cabinet reshuffle? over to message be europe, you need to respond? we lost 3% in value last week. anna: the bond markets opening this monday morning. we keep our eye on the spanish bond market last weekend. that is what we were seeing volatility.

one of my colleagues is writing, france and germany with closer cooperation. let's get across to sophie who has the first word news. sophie: manus in the united states, a senator has said donald trump's reckless threats toward other countries can set the nation on the path to world war iii. the chairman of the senate foreign relations committee told the new york times that the president treats his office like a reality show. the comments came after a series of insults between the president and the senator. his support will be critical to the president on tax reform and the iran nuclear deal. angela merkel has agreed to an annual cap of 200,000 that migrates to her country. it is the first policy fallout she the recent election

previously resisted demands for a migrant limits. it allows for talks on a coalition government. saysmed barkindo restrictions are rebalancing the oil market. barkindo says there is a growing consensus that extra -- extraordinary measures may be room hard through 2018. she may shake of her cabinet to reassert her authority and in -- jeopardy. she is not want to shirk a challenge and wants the best people around her. johnson is seen as being out of step with policy. the support for tokyo's governor

fell in the weekend poll. 13% of respondents said they would vote for her party in the lower half elections, that is down from 19% about one week ago. , less than two weeks away may be losing steam. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. checking in on the asian markets here. the regional benchmark will change with several benchmarks line at the hands saying flipping .4% after hitting a decade high friday. chinese markets after the golden week break, a large gap rising 15%. 3400 points level.

you had banking shares really leaving that rally in shanghai. shares earlier jumping the most in nearly two years. in hong kong you have discretionary stocks seeing the most entertainment. this after the association said the golden week of revenue was ,aughed at hna kaiser travel retail sales grew as a lower pace. property stocks in hong kong today after new home sales dropped to the lowest level since 2009 and sales in shanghai lunch 28%. down over 3% today. the latest you for a the markets in hong kong senior member of the ministration has warned all europe faces damage unless a

solution is found. manus: the foreign affairs chief of caps on the us government we will always be at the negotiation table. to start negotiations we need to know the partner. if they want to come to the table we will be there. we have always been there and there is no reason for not being part of the negotiation table. i think always politics is the answer. that is what we demand. good morning. neither side wants to back down. how likely is that to actually take place? >> very unlikely because what we know is the central government, what he wants from the administration is for them dropped the independence immediately. there is no question. nothing is going to be talked about unless the word unilateral

is dropped. -- two more ofde the parliament, we don't know what to expect. we know he will not be talking about the referendum, but the agenda is not set. most radical the sides of this coalition, a very stable coalition that he is leaving. to claimto use this the independence of a pre-catalonian. we know that the more moderate side and is this community is now taking him to drop the word. very little answers but the idea talks is outll be of the table. madrid will not accept this. manus: certainly they can go to the point of invoking article 155 that is a whole other set of permutations. what could come the regional

government meeting expected to happen this week? from the interview you have just done, it sounds as if we are moving towards negotiation rather than snap situations? >> definitely. the interview we did, he said we are not concerned about leaving. that -- it is already creating a lot of damage and we know three more are going to be talking about potentially moving away from catalonia. we also know the tension increases because of the more -- let'sdicals are saying carry this momentum. again, the? , i think this is relevant, could be whether we get a declaration of independence or is this a symbolic move to make this.

it is a way to keep both sides happy. unilateralng to be negotiation of independence? are they going to tiptoe run the issue like they have for a whole week now anna: that is strategy at markets, great to see you. week,urned to the potentially dominated by this conversation. is this something that remains at the side of your mind because of the ecb from the market perspective. does the start become something more substantial/ >> fascinating how markets react to this. had potentially negative events in europe throughout. most of the time markets have looked through it.

this particular case it is clear , we have a widening in spreads. it did not hit a hectic level. thebviously that is where ecb backstop comes into play. there has been some reaction and we get the next week negotiations or escalation. even though it is a regional phenomenon. pragmatic and folding with their feet to go. also thinking about redomiciling themselves. 7.7%.on the reform at ,s this not the real reality

the reality of economics. companies can turn on a dime. 20% can disappear very quickly in terms of beer gdp and strength. massive problems to the bank is whether they get access to ecb. the ecb is the backstop of providing in the eurozone. at the micro level it looks complicated but the micro level, having access on a monday morning is a very different question. the german elections, if you look at the latest. i had two months of negotiation's to form some kind of government. does the german governments work are markedly different to you because of the influence even if they are not in the room/

room? i think spring much as they were -- are things pretty much as they were? >> i think there was a lot of optimism that merkel and macron would work together and push a pro-european reform agenda. that shocked -- not quite as pro-europe, questioning some of the things that macron is questioning. it is a little about sentiment. anna: the data has been good. corrects that is true. i think one of the reasons we have had this big swing is not -- it has been growth.

growth has been the catalyst for this. is true that sentiment has strong awful long way from very worried earlier. manus: we have a little bit more to get through. for the next 30 minutes we will explore more -- the next 15 months. anna: political risk hits the lira as relations escalate. manus: speaking to spain's energy and technology division. this is bloomberg.

anna: it is 7:18 in london. the euro is flat against the dollar. 117.27. brexit negotiations continue this week. how will those relationships around the eu 27 shape up more

about that later. we will be heading higher at the start of european trading day. markets not ason play today. the japanese market of the chinese market back in school. the banking sector playing catch-up in today's session. manus: you have your 10 year government bond yields in germany versus spain. the separatists remain on the top line -- maybe too much good news is possibly priced in this catalonian situation. down of three pips. anna: let's get up-to-date with the business flash. sophie: kicking off the deutsche bank ceo, yet to meet his largest investor but is planning to do so. the spokeswoman says he will sit down with the the chinese conglomerate for a 9.9% stake in

the lender. heras been avoiding leaving since the group raised its holding in march. two previous attempts to arrange talks health. hsbc has reportedly selected a hat of management to be the new ceo and has asked the bank to make the appointment. approvesn-based bank the equipment after the arrival of mark tucker last week. spokeswoman declined to comment. chinese bank shares have surged, catching up with the gains in hong kong. after the central bank's decision to cut the ratios. after the weeklong chinese holiday, icbc jumps the most in nearly two years. the nation's second-largest lender rose sharply. ryanair chief operating officer michael hickey is leaving after

almost three decades at the company. his exit comes as the cancellation prices entered the fourth week with no signs of easing. pilottched response to a shortage, floppy holiday planning, it has enraged customers and auditions alike. harvey once dean has been fired by the agency he cofounded after allegations of serial sexual harassment. his dismissal is in light of new information about his contacts. the 65-year-old had already stepped down after the new york times reported settlements with eight women claiming harassment. the emerging markets investors have been given a reminder that politics been ruined that can ruin their plans. the lira lunch to a low. the lowest level against the dollar since january. --anna: citizens

looking to visit the other country. the metro strategy -- macro strategist, the lira down 6%. it has recovered just shy of 2%. a sharp reminder that the lower volume hours are a reminder of how risk could come out of nowhere. >> risk has been ever present. only red box. what that is reflective of is the fact that there has not been contagion. we had political problems in brazil this year. africa. each of those occasions, the e.m. risk was contained. it was contained in one country. the interesting thing to watch was the asset flows came rushing

back in area afterwards. everything has been short-lived. >> alberto is getting an awful lot of -- awful lot of shutouts. talking about bubbles. you can go on the daily profit. talking about things. he is making comparisons. bitcoin $33 billion market. michael, are you worried that we are in bubble territory? the foundation of alberta's piece is the low rates have propagated bubbles. are there bubbles? are difficult to define. it is interesting, that we call this market environment bubbles of everything. out on thegure it relative basis which is cheaper than others. is quantitative easing,

fueling much higher value. of course -- of course it is. if you look at the new money coming in from the asset market, it is still all really robust. robust --turns are a are robust. right now, you have no choice but to invest. anna: what is your latest thinking on inflation in the united states pretty decent wage -- united states? pretty decent numbers friday. there's a lot of distortion in the data. where do you look to for a clear guide as to where inflation has long to in the united dates -- states? >> we collect a lot of on flying data -- online data, unfortunately that is also distorted. september weren of very sharply but our read on

september is that online prices and the united states, certainly stronger. it looks like the inflation day will be stronger than expected. manus: where do you want to be? we have seen earnings expectations from the s&p grouping upgraded. beginning to see what has gone on in the third quarter. this is the euro stoxx 50 blue, how don the you look at markets in terms of allocation? >> look on earnings is the one thing i said. pointned about at some growth recovery is being sold in the way that will have a recession. we have already had the earnings recession. the whole point about the bubble valuations are

justified. so far with earnings, it is suggested they are. allocation,regional my main concerns is just that if sentiment -- sentiment has been negative on the u.s.. i think there is going to be a reversal. anna: more bullish on the united states. the s&p heading new all-time highs. the earnings justify those kind of valuations. thank you very much. the head of microstrategy at state street global market. manus: the turkish -- the turkish lira something to keep your eye on. it is idiosyncratic. day isrite story of the the electronic trading platforms. i'm not a machine. anna: the european open is up next. guy johnson and matt miller speaking to a representative of

germany's green party on german politics. if you have to turn off bloomberg television you can put on bloomberg radio. this is bloomberg.

>> monday morning and welcome to "bloomberg markets: the european open> your first trade of cash coming up shortly. i'm guy johnson in london. matt miller is in berlin, after a well-deserved week off. what a re-watching this monday morning? the lira pluning as relations with the u.s. deteriorate. it takes two to tango. the catalan foreign affairs c