is that causing some division within the ecb? >> it's quite clear that decision would be reached in october. whetheratter perceptions may be, everyone is quite an agreement that they want to exit the carla program very gradually and carefully. not to jeopardize the progress. our reporting has shown that this compromise might lead to extend the program for nine months at the pace of 30 billion euros per month, which is par for what's been happening so far. vonnie: how would it be distributed among countries? we've already seen the ecb run up against its limits. you see the p is very different for different countries. alessandro: the ecb has been size and the economic the populace never country. this is a hard limit and it's very unlikely they will reflect this. distributed onbe this, and depending on availability. mark: giving an end date to the program, september 2018. are we hearing the whole of the ecb is behind that? or is that according some division? but september could well be the end date. alessandro: that's probably way t

so the ecb has to taper.e something else in mario draghi's toolbox he can use to try and boost the inflation number, like forward guidance, or some other type of tool? has compared to other central banks, virtually unlimited powers in order to implement the necessary to hide its inflation objective. we take it as a given that for technical reasons, self-imposed constraints need to reduce government, that for example, there are many other things they could keep purchasing. one approach they could be adopting would be to increase the purchases of other assets. increase the purchases -- they could start purchasing bank debt for reasons that are not that easy to justify. they have excluded quantitative easing they could embark on quantitative easing with asset classes. they have a lot of ways to go if they wanted to seriously raise inflation for the primary mandate. about talk percent, is that a problem for mario draghi? >> this relates to a combination of fed an ecb policy. the currency implications for ecb and

dust ecb is in a good place. -- ecb is in a good place.o-year spread not for 230 basis points and bit.again bunds catch a i am wondering how euro-dollar can be up here with a spread that wide. >> we have done a lot of work on this. it is more than just the two-year but on the long end. when qe is being slowed you are sliding up.end after the french election, huge equity inflows into europe, that will sustain growth as well. your chart is showing it is more than just fixed income, there is the equity market and with the political stuff in europe calmin g down as a whole, that has been the support for euro and that is why you have this detachment from where rates should be. the euro rate should keep steadily heading higher so that is the long-term story. 2017 was a positive story and the politics has been defined by what happened in france, but to what extent will 20 be defined by italy? jordan: i love to look at these consensus tail risks. when it comes to the italian election, if they get through this reform on how the election harder, tha

germany, what is your expectation from the ecb -- jeremy, what is your expectation from the ecb?have a range of scenario by strategist. what is your thinking? >> one hesitates to agree with economists. from 60 it will be cut 230. we think were talking about a six-month extension, perhaps a bit more aggressive. there is certainly a move towards a nine-month view. half, extending for six months, then coming back to adjusted. the other variable is the sequencing. i think it will be relevant. we talked about the removal of positiveing implications as well. thes: you wrote a piece language mario draghi used, that rates will remain low well past the horizon of bond buying. window toave this take the deposit rate back to zero? could it be that aggressive? how aggressive do you think it will be? >> it will be interesting in terms of the language mario draghi uses in that removal. buying,y reduced bond he did not talk about that as tapering. anna: it was not a taper? >> it is semantics. he will use that same argument when it comes to the reverse in the negative deposit rate. it was a stra

does it influence the ecb at all? at the moment, it will not be a key focus for the ecb. the key focus will be on the economy and inflation and how they will pan out this tapering plan. between sizebate of tapering and the timeframe over which they will continue the next stage of quantitative easing. all things will be in the air. the markets will listen closely. jon: let's start with mario draghi and how he will navigate in the news conference. >> it is a local issue. if you look at spanish bond will look to that. if there is no disruption in markets, he will put that issue to one side. issue, thebecome an will get more interesting. it is remarkable how quiet the market has been about this issue. >> how important is it they signal there will not be a rate hike until 2019 and how does it affect how long extension goes for? chris: it is important they don't rush. as they pull that forward, it will concern markets. there is no sense that will happen. data has been softer than it was three or four months ago. this. not pushing hard on it is very gentle. they have been trying

bank researchhe on ecb dynamics. how important is this thursday ecb meeting?nt. we had basically negative interest rates for so long and the market is only pricing. the ecb will raise in 2020. if the ecb pushes that earlier to 2019, it could have invocations for the whole european union. francine: tom has been talking about nothing else. we are looking forward to having a conversation with you shortly. torsten slok. stay with us for live coverage of the investment future. will talk about u.k. brexit. that is tomorrow. this is bloomberg. ♪ ♪ taylor: this is "bloomberg surveillance." fiscal is close to a deal to buy broadsoft according to people familiar. a deal could be announced today. broadsoft has a market value of about 1.7 billion dollars. commodity trader noble group warns that it is says -- set to post a loss in the third quarter. at the same time, it has agreed to sell most of its business to reduce its debt. noble group used to be asia's largest commodities trader. now it is having trouble gaining access to financing. shares are down about 90% since 20

marc: the ecb is very much about transparency.ay, they tried to guide market expectations. what they want to do is avoid disruptions to the market by having small buying continuing well into next year. for me, that means the divergence continues. the balance sheet will shrink by 30 billion this quarter. it will shrink by about 150 billion the first half of next year. the ecb balance sheet will expand by 180 billion euros this quarter. at 30 in six months billion, that is 180 billion to expand by while the fed is shrinking. of: what do you make persistence of low-level political risk in europe? obviously we have the czech republic election. not a huge country on most people's radar, but then electing a eurosceptic populist, the issues in catalonia not going away, looks like it will be an explosive week potentially there. we have elections coming up early next year in which the five-star movement and the northerly appeared to be doing well. scarlet: do not forget brexit, too. joe: end the ongoing mess with brexit. the economy seems

. >>> good morning it's thursday, ecb day, the all-important day when we're hearing about the ecb's plans for tapering we have one other central bank that's come out with a report. not just the riksbank, but also the norges bank. i want to show you what's happening to the european markets. this is how we're looking. we're probably unchanged we can bring up the heat map there you go inching slightly to the upside dominated by earnings today. banks especially they're the biggest faller on the sector al basis let's show you how we're shaping up for the trading day these are the indices. we're pretty much all in the green, only with marginal increases to the upside. the ftse 100 up by 0.25% the xetra dax up by 0.2% still some caution ahead of that ecb meeting and no major positioning or risk taking in the markets. i mentioned the banks, they are underperforming. let's get to the biggest fallers when it comes to sector basis. banks, one of them to the down side on the upside, household goods and basic resources doing better. >>> back to the banking sector shares in deutsche bank are down in ea

persuade theeem to ecb very much. have people who understand the dynamics which are going in some of that weaker countries and they're are able to play that up. i think germany may say quite a few things on the surface but their influence, they are up against a lot of people in the committee who have a differing view to what they do. -- raiseced the point the point early, the chair of the ecb will be changing soon as the debate is on. mark cranfield, thank you for joining us. scott teal will stick around. tv , mliv , plenty to watch out for. we will talk about the banks and talk to the cfo of santander, deutsche bank on deck. the banks are up today. this is bloomberg. ♪ guy: we are about to open these markets. cash is going to be opening in a minute's time. headline level, everybody is waiting and watching. it is all about what is happening in frankfurt today. the markets are incredibly cautious. what is interesting, if you take volatility,ernight it is fairly low. it is the third highest. you are not pricing

the ecb function on the bloomberg, the adjusted net flow as it stands right now. -- the ecb is buying more than is issued and more. the short bunds is a tough trade. kathleen: absolutely, but the rules have to change at some point because if there is a scarcity in bonds and at the same time you have unrest across europe, you still have italy and spain to deal with, they may not want to be driving yields that low. so i think they have to be careful there. i think asia is something we want to talk about, with china asserting itself and abe's election, they are looking at changing the constitution and a a military buildup happening in asia. that an investment will pull money away from the u.s. jonathan: interesting: and into -- interesting, and into where? kathleen: back home in japan. jack: can i jump in before you leave europe? wasone country you did not the u.k. jonathan: we will get there, don't worry. jack: we are not quite out of there yet. for us, the best place we had short duration has been in the u.k. it is a much more open economy. the lower pound has cont

jonathan: how difficult will it be for the ecb to pull out? that we do not have ecb qe over the last week or so. what kind of move could we have seen in the bond market? how difficult will it be to take a step back? oksana: how difficult will it be for the ecb to take a step back? they will react to the economic picture on the ground. that continues to strengthen in europe and specifically, spain. spain has been one of the stronger areas. so if the fed continues on their trajectory, that will give the ecb some cover. they have made comments that are very clear that they are headed in that direction. jonathan: luke, what options are on the table for the european bank as they change their quantitive easing policies? there seems to be two options they are debating. one is you can drop qe by $20 billion and extend for a shorter duration of time. or you can drop by a lot more and extend duration by a lot more. so qe can run longer that a smaller rate, or run at a bigger rate and have qe run shorter. given the politics, do you think the weight of in

in europe, there was nothing new from the ecb.riedt his options open, to give the taper as dovish lee as possible, but the markets have gone, this is exciting. at a time when you have this narrative shift, it is not the time to worry about long-term fundamentals that have been driving -- drawing your dol lar higher. years, we haveo a proper correction in euro-dollar on our hands. bundswhere do you see the going? we are stuck in a range were even if we move down to four or up to 46, we still don't seem to be able to get out of it. what is going on with the incredibly low german bund? i'm going to disappoint you, matt. i'm not sure if we break out of that range soon either way. yields are just not going to go particularly far and , globally webunds have had a run-up and i think that might be coming to an end. whoever we get as fed chair, i think it is hard for 10 year yields to climb much further. yellen or powell, it will be seen as dovish. we have this premium priced in and that will come out. if we get taylor, it will be hawkish

as you can see, pretty much flat against the euro and the yen as courtney mentioned, focused on the ecbecision coming out on "squawk box." oil prices have been flat, again not doing too much exactly flat this morning. oil prices down a half percent yesterday. today just fractionally lower. 52.2 for wti. >>> we just got some new comments from the saudi crown prince he says the aramco ipo will still take place next year and the valuation of the company could top $2 trillion. the crown prince also said that saudi arabia is working with all oil producers to rebalance the global oil market. >>> david einhorn is calling a comeback he says value investing is poised to make a significant recovery like it did after the dotcom bubble. >> from time to time when value investing gets out of focus, people question, hey, is this ever going to work again the last time it happened was around 1999 when everybody was talking about eyeballs like the new paradigm for investing. and that didn't end very well. >> joining us on the cnbc news line, guy adami, "fast money" trader how are you? >> very well how ar

mario draghi is leaving the ecb in 20,019. 2019. manus: do you think he wants to get to zero before he goes? david: yes. if he does, job done. they can go to alyssa cycle are perhaps now in a position they are coming through with a passive investment policy. weeks,y, in the next few we are going to have to hold portuguese paper. there athanging out that issue. the ecb does have the back of the system at the moment. i think that's important. how much did this come back to the amount of money that german corporate subsisting on and not investing? how much is that part of the story? the situation for the ecb is it doesn't really know at one point germany will fire up. germany is running this monumental surplus. again ands got bigger that should really be happening. companies invest. in germany their running about to have percentage points of their gdp. at some point, germans companies hopefully see a reason to invest. the eurozone could be growing at almost was 3% year-over-year. strange but true. if germany steps up to the plate , we

all about the ecb.oday.s up by 2% ireland and italy, france and germany all rallying on the back of the news from the ecb. it has cut its bond buying program to 30 billion euros per month from january and will extend it through september. it cap its pledge to step up or .xtend buying further if needed the proceeds of maturing debt will be invested for an extended. netod after the end of its asset purchases and stressed lending to banks will be conducted at a fixed interest rate and with full allotment for as long as needed. these currencies falling against the dollar with the biggest decline in the euro today since december last -- look at declines in the bond market in europe today, spain third year by eight basis points and the italian 10 year down by six basis points. not just about the ecb today, lots of earnings to tell you about with barclays shares hammered, down by 8%. declining since the day after brexit and they posted a 34% drop in fixed income revenue in the third quarter. wall streets'avera

nejra: looking at an ecb chart. see any form of announcement of tapering from the ecb, but how they will go about it at what details they will give. the percentage of the total boj holdings and these have come down, not just from 2008 but since 2012. an interesting question, how much affect globally on liquidity on the markets the ecb tapering will have? tom: a perfect time to speak with henry kaufman. you know him. forget about dr. doom and the syllabus of years ago -- silliness of years ago, think about interest rates at a broader view of american finance. joining us is ms. adams who has given terrific perspective on the equity markets. wonderful to see you. are you enjoying 89? >> i wasn't 90 last week -- was 90 last week. tom: what did you do for your birthday? >> we had the whole family over and i rented a boat and we sailed the east river. it was a beautiful weekend and a beautiful day. tom: i thought maybe you would give a third tunnel to new jersey. this is the legacy and the business of henry kaufman in ame

germany -- the ecb is buying more than it issued and more.es have to change at some point because if there is a scarcity and bonds and at the same time you have unrest across europe, you still have italy and spain to deal to bethey may not want driving yields that low. they have to be careful. i think asia is something we want to talk about, with china asserting itself and abe's election, they are looking at changing the constitution and a military buildup happening in asia. that an investment will pull money away from the u.s. back home in japan. jack: can i jump in before you leave europe. the one country you did not mention was the u.k. jonathan: we will get there, don't worry. place we us the best had short duration has been in the u.k. it is a much more open economy. the lower pound contributed to some inflation even of the growth has not been great. that has been a better way to play the short developed market. jonathan: i got a question from a bloomberg user. inflation the- is only answer for the german long end? jack: i think it is. i

i think that would be a mistake that the ecb will not make.hoes the ecb have troubles in its arsenal -- arsenal tos in its survive the next recession? is it well-equipped enough to fight the next recession? >> you are asking all the right questions, and this one is the most difficult. it is too early to say, but i think the path of least resistance is to use the same tool as before. the new focus this week will be forward guidance on the reinvestment policy to keep the balance sheet at a constant size. just like the fed has been doing in previous years and core guidance when it comes to policy rates. i think the response will likely -- the main rate is at 0%, and it will likely remain low into 2019. their believe will be first answer to the recession. mark: frederick, great to see you. frederik ducrozet, senior economist at pictet wealth management. vonnie: time now for your bloomberg business flash. $625 a share. $1.9 billion in total. services toication businesses in 18 countries. a big transaction in the insurance industry today. ae hartfor

why the ecb might be looking at a short-term taper. wi-fi do has disappointed. -- fido has disappointed. more on that next. ♪ ♪ asia, this is daybreak i'm betty liu in new york. yvonne: i'm devonte man in hong kong. man in hong kong. is as long as the inflation out what improves. sincero falls the lowest july. let's look at the reaction now. michael, welcome. you have to give it to mario to execute this taper without the tantrum and manipulating markets. was it to dovish coming from draghi? ecb pretty much hit the nail on the head in terms of expectations around qe, the 30 billion per month. it is a survey of clients. it shows it is pretty much what they consensus was. it was much more dovish and there was more unity than expected and they are happy for the economy to run hot in order to help stoke up inflation. yvonne: kept saying it doesn't suddenly stop although the other scoop said they could be stopping next year. what does that mean for raising rates? some say they might not be able to do that until 2020. would he allow that? it'

the ecb has spoken with the boe and the fed next week.e look at whether any of the central banks are in for a major surprise. where european equities are trading right now under 30 minutes before the end of the friday session. down by one point 5% today, we had the catalan parliament voting to implement an independent state. spain senate giving spain the power to take control over catalonia. the plot thickens, the imf down by 1.5%. the stoxx 600 is up for the six week in seven. the euro down for a second consecutive day, over two days since the ecb announced the whole roster news yesterday. the euro down almost 2%. the biggest today declines in september. we have the 10 year rising today. , weerday, with the reverse saw european bond yields declined on the back of the ecb news. i just want to get to ubs today, chief executive sergio ermotti reposting expectations for a share buyback. he talked to down the prospect of dividends increasing proportion of the profit. we saw shares lower by 1% and also subdued client activity in the fourth qua

jonathan: a difficult will be for the ecb to pull out? but for can we do not have ecb qe?ind of move could we have seen? how difficult to take a step back? oksana: for the ecb to take a step back? they will react to the economic picture on the ground. spain has been one of the stronger areas. if the fed continues on their trajectory it will give the ecb some cover. they have made comments that they are headed in that direction. jonathan: options are on the table for the european central bank has a change their quantitative easing policies. they seem to be two options they are debating. one is you can drop qe by 20 billion and extend for a shorter duration of time. for you can drop by a lot more and extend duration by a lot more. qe can run longer that a smaller rate, for running bigger right and have qe run shorter. do you think the weight of interest from the governing council might be to extend it as long as possible? be.: yeah, it has got to i would say we have italy coming up and we have austria still bubbling away. we have not got a fully formed government in the neth

who matters more, the ecb or the fed? >> when we talk about quantitative easing, the ecb matters more. the fed has already been clear by what a plan to do with that. lisa: how many hikes do you think we going to see from the fed next year? >> i think we are going to get a quarterly base going forward. growth backward -- even though inflation is below where they would like it to be, that is the norm. above 2% aboutly a quarter of a time -- a corner of the time. you still need to take some insurance out. if you wait until you see inflation, it is too late. particularly because everybody is piled into more risk. this is the problem, markets seem less liquid than they used to be a cousin of the lack of volatility. if the fed does something and goes hard, they're more likely to break the system. everyone is sticking with us. coming up, the auction block. walmart sells bonds to refinance debt as it battles against amazon. ♪ ♪ >> this is bloomberg real yield. this week the u.s. treasury sold nearly $190 billion in bonds. we will

gdp and the ecb decision.us around the table, michael collins, bob michele and marilyn watson over in london. guys, fed chair janet yellen said to be back at the white house, returning just a day after her interview with the president of united states. that's according to a person familiar with the matter. some choppy market action off the back of that. this fed race is very difficult to interpret. as an investor and market practitioner, how do you view the headline risk around all of this? mike: it looked to me like somebody assumed she was there for a follow-up interview. that she is the front runner. i don't think that is the case. i think she is told she will not be the fed chair and will be allowed a chance to step down. i lookn: bob michael, if at that situation, 24 hours later, this will get replayed. we could all sound really, really stupid. why shouldn't he give her the job? bob: i think mike pointed out there is the whole regulatory issue. you want somebody in there that will be a bit more balanced.

the ecb has to be aware of that.known for pushing ahead regardless of what other parties think. it's not a popularity contest for them. but still, they don't make policy are, what their plans within a vacuum. they have to be aware of criticism around this. they will find some way to say, the existingtackle npl's we're going to do it in a way which will not occur a cataclysmic event. guy: we will leave it there. thanks so much. out of frankfurt. i'm just getting my tv ready. i want to show you what this function does. you can see the charts. then what you can do is use the functionality to pull out some charts that we will be using onset. plenty of options that. market checks. connect with matt and i, do it directly on the terminal. novartis gives the business more time. our interview with the company ceo coming up next. this is bloomberg. ♪ ♪ guy: 42 minutes into the session area novartis trading down. it is funny to give its eye care division another year and a half rebound before deciding to spend the business

in europe, there is the ecb meeting and the crisis in catalonia.ning us is david kelly from jpmorgan bonds to help us navigate that. dow, we record for the see the s&p and nasdaq push higher. it has to do with the earnings. caterpillar hit a record. they are showing growth, not just beating estimates. how encouraging is that western mark -- that? summerwe see an indian in terms of the economy and earnings. going into next year, earnings growth looks good. exterior,ond half of you will see rising wage costs and interest rates. economic growth will slow down. investors need to maintain their discipline. people need to be cautious. julie: we can trot out all of our winter is coming references. i want to take a look at the bloomberg. up,of the things you bring it's the idea of valuations being stretched. the yellow line here is the average. we have an above average or quite some time. that doesn't mean we are going to come back down. david: that's right. a terrible timing tool. they are good at telling you about long-term returns. this is about 13% abo

an ecb spokesman declined to comment.n the u.k., opponents of brexit say they will soon be british government if it fails to release internal reports of impacts on leaving the european union. they have asked for 57 studies that cover 85% of the economy to be released in 14 days. it comes as u.k. talks with the you have reached a deadlock. ophelia has strengthened into a category two hurricane. current forecast ofck, it could cost millions dollars. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. matt: thanks very much, juliette saly there with your businesses. the u.s. yield curve has collapsed. the rate seems a far distant memory. the japan yield curve is no steeper than the u.s. for the first time since we 15. there you see a picture of both of them. is this a sign to be bearish on the u.s. economy? but the bring in mark cudmore, joining us out of singapore. our, joiningg in us out of singapore. what is this mean? why is it happening? mark: i think it shows that

it will be what happens to the ecb and boj.has been the gravitational pull that has been holding down those treasury yields. until you get the sigrid nice move up globally, it is very difficult to break that bull market. we would say that you should watch out and do not get too excited about the breakdown of that 30 year trend. thethose investors making moves that peter was talking about, out of the bond etf's and into equity etf's. alix: moore issuance from the treasury, and the fed pulling back from their investment program, there is an investment here which could affect yields. >> the problem is that as soon as you get the dollar picking up , then you start to get downward pressure on prices. the lack of pricing power -- you have to get the inflation coming through. you have to get the wage numbers motoring more aggressively. you need unemployment down to about 3.5% before driving up the inflation rate which will motivate the higher bond yields. a willingnesse from policymakers to let things go much more aggressively than wh

of the rules for asset changes from the ecb. trillion.e already have 1.8 trillion in the central bank balance sheets. so the meaning is the potential for additional asset is today limited. we can say from that perspective that much of the moving is behind us now. to some extent, we can say there is a drive for the issue for the european central bank and the cycle being very positive nowadays. vonnie: yes. eric: we can trust there will be an additional need after this move. mark: why so dovish? if it was slightly on the board oversight given the data, which is showing the economy has gained traction, why did draghi feel the need to fear on the board oversight -- veer on the more dovish side today? eric: there is a major challenge, which is to keep the level of interest rates across the curve under control. we have to recognize that there is a need to get out of the negative interest rates that still are the rule on the very short end of the curve, but also, not long-term yields to whatase too fast and avoid has been the situation in the u.

i want to start with the ecb.did get news overnight giving more details about what their tapering plan might look like next year as they tear back their monthly purchases. i'm struck by the fact that the market rallied. people bought bonds on the idea of them buying fewer bonds. can you explain this? insure, the consensus going to the last night was that the ecb would probably finish tapering around the second half of next year. what's been talked about now is a little bit beyond that. i think that is why you saw the rally. we are not surprised by that. we came into the year feeling constructive on the eu. we actually went along the air and felt it was underpriced. -- the year and felt it was underpriced. and now we have seen them recover quite well. the growth has been pretty good inflation is ok. , still not on target. but at this point, we actually think growth is going to decelerate a little bit. we don't think is going to reach the eu's forecast. we think growth could be even less than 1.5%. as a result of th

don't fight the ecb. does that still show the same thing? >> it does the real message, look at the power. when you look at fixed income, you have today's returns are stunning one of the reasons for that is just the power of influence. when you look at central banks locally, that will be at least until this time next year. the fed is reducing the ties >> what does it mean for your investment strategy then i guess you want to steer clear of any government bonds. we've heard that for a long, long time sings the start of the year essentially isn't it surely the slow week slim pickings outside of the bond space aren't valuations being driven up that we can go into a bund or a treasury right now >> when you look at fixed income, the lesson from this year is that there was life in the old bond market. look at bonds that benefit from growth two obvious sources there. the first actually is local emerging market bonds and then the second is corporate bonds. corporate bonds are a high yield. >> what about converging market bonds. that sounds all well a

how do you get a compromise between the hawks on the ecb and the doves on the ecb? such a thing as a compromise? maxime: i think it is possible and if you look at their statement, no one is against tapering. no one is for a rate hike so they are pretty much on the same line. i think the six month 40 billion option is the most compromise because if you look at the 40 billion, it is gradual and .llows to phaseout qe the open ended will please the doves but will not bring it closer to six months. xime, in the u.s. we have our dots which one could argue could -- have depriest and them -- decreased in importance. how important is the forward guidance? maxime: i think it is much more important than the tapering. the forward guidance promises to keep interest rates at a low level well past -- is very important. we think it is very important as draghi said. he will probably stay firm on the guidance and if you look at 2019, has mandate in october 2019, he probably will leave the ecb without ever hiking rates. julie: when you look at that as his legacy, perhaps, what kind of

i do believe ecb are the backstop, they will do what it takes. we will see a massive correction before that happens. that does not mean there will be a tradable correction if something bad happens. in asaying we are powerless situation where there is a potential for negative turn. it might see the euro drop a long way and bonds set off before the ecb have to do something drastic. a region in spain is trying to pull away and try to separate and it is unlikely they will succeed but if they get any is an incentive or motivation for other regions to separate. this is a bad situation for europe. i am surprised that european assets are not reacting. we have seen spanish growth forecast downgraded because it will hit growth and the longer it runs on and the more chance it gets, the more attention there is, the more growth will be impacted. still a negative for european assets. matt: i want to point out as we commemorate the anniversary of black monday today, the dow again reaching record highs here 30 years later. there is a great macro view on daybreak

jonathan: the ecb is meeting next week.t to unveil potentially -- what they are going to do with the qe program. do they cut it for an extended period or extended for a longer period? michael: they telegraph what they will do a little bit last week. their staff came out with a report that looks like they will cut the purchases from $60 billion a month to something less, presumably $30 billion a month and extend that. it is supposed to expire at the end of this calendar year. extend that through september of next year. jonathan: this is just remarkable from deutsche bank. seven times net issuance. that is the ecb's activity in this market. how significant is that going to be? bob: is going to be pretty significant, but they will still be buying 3.5 times the net issuance. they will still be distorting the markets. i think it is not the next nine months where they will cut the purchases in half. it is the nine months after that. you really have to get about a year from now to figure out how the markets are going to revalue. j

that was part on the ecb. when do you expect to see the political risk their being priced in if at all? >> already you see the spread over bunds and the german market. have a political unrest. it is not entirely priced into the spanish market. over time you would expect the situation in barcelona and madrid does get further resolved. you would see that matching up with the market. you have to be avoiding these idiosyncratic risks in a region that does have a lot of potential. matt: thank you. there's a lot of news here for a friday. let's get some of that in the bloomberg business flash. >> nissan has been conducting its inspection process. according to a person familiar with the situation, the finding will be part of a report of external investigations. the report will be submitted ahead of the company's results scheduled for november 8. amazon has reported third-quarter sales and profit that tops analysts estimates. the results insured investors they can not disrupt their e-commerce with whole foods. the com

ecb is the movement and the , going to be analogous to that.eeting, what is the pace of -- we know the direction . if we move further along, you know the direction. you know the direction in japan, a little bit slower. , there ision in china going to be more of a tightening of credit. the complexion of the world we are in is changing in a profound way. asry decade, practically, defined in characteristics. the 1960's was a. here -- the 1960's was a period of strong growth. a very lively conversation. dalio.ray coming up on the show, twitter showings signs of life in its third-quarter report, and the positive news is giving the social media company a needed jolt. rd underlying numbers all they are made out to be? ♪ vonnie: welcome back -- buffalo wild wings soaring today, making it our stock of the hour. shares are up 20%. it is the result of an improved outlook outlined in their latest earnings report. emma chandra is here. to be concise, boneless chicken wings are back. they've done better than expected. getting customers to opt for the boneles

the ecb have also announced that ben stokes has had the ecb have also announced that ben stokes has hadrew strauss is trying to bring clarity to the situation but what they have done is named steve finn, the fast bowler in the ashes squad, he was not initially, there, so they have named a replacement, even though ben stokes is still in the squad, they have not suspended him yet, even though they have said that ben stokes and alex hales are not available for selection. not available for selection until further notice. there has been an outcry about this? yes. many people asking why ben stokes was out on a night out until 2.00am in the morning when on tour. we have had confirmation from the ecb of different disciplinary proceedings, going into the behaviour of that squad. three players, jonny bairstow, liam plu nkett three players, jonny bairstow, liam plunkett and jake ball have been fined and warned for unprofessional conduct is what the ecb are saying. so when you look at this, is this damaging to their chances? well, a lot of people would say that ben stokes is not only england's best

carney repeating policy errors o f tehe ecb and boj.hey are talking about the ecb of 2008 and 2011. could carney repeat the errosrs of those central banks by raising rates next week? >> they have delivered a lot of insurance, i would say, immediately after the vote which helped a great deal. i think they find themselves in a situation which is fairly strictly. the supply side of the economy is definitely sliding down, and i think will continue to slide down in 2018. the demand side of the economy, which is essentially consumption, and foreign trade, is growing still at a brisk pace. so, you need to rebalance these two, otherwise you will find yourself having to hike as the economy slows. i think they have a window of opportunity now, maybe to touch on the breaks and see what happ ens. in february we also see some of the credit measures rolling off. that might at the margin be another restriction. i think it is appropriate. that they have a nice opportunity now. and they'll take it. now, whether they will regret it, who knows. but for th

if you look at the back drop fo the ecb, you look at sweden where the economy is growing 70%, they are still doing qe >> is the riksbank able to say they don't have bubbles? >> i'm based in new york where we have lots of construction but nowhere near as much as here, so i would say there's evidence of low interest rates causing bubbles in the construction sector. >> dangerous bubbles bubbles in the market? in real estate >> i would say bubbles in markets. stock markets are at all-time highs all the time you cited another one -- 46r7b8 >> 43 on the dow, 40 on the s&p. >> the economy sets a new record high every quarter as well we have strong economic growth in many parts of the world >> why not ask for 6%, they might get 3% or 4%, what have you. that is real inflation and engrained inflation into the system, good news for workers but is that bad news for central banks? >> i wouldn't say bad news most central banks want to get out of this and normalize policy, but it lacks the inflation catalyst to do it. it's the us economies who beat out the central bank so if you have inflation 25at 2

what are we expecting this week from the ecb?ate on the survey from economists that suggests they will cut their monthly outlook from 30 billion euros. what are your expectations? david: expecting them to go down -- explicitly. we will get the 30 billion or 40 billion monthly bond purchases. it is all about what is the trade-off between the buoying of monthly purchases. if they are able to say that we are going to scale back our asset purchases, but that is going to be extended out of september -- out to september beyond, that is sending out a powerful statement that we don't getting the potential for a rate increase coming out of the ecb into we hit 2019. when you have it anchored in negative territory, that is a powerful easing. one of the challenges they are like to face is the ecb keep their optionality. what they are going to try and do, we will keep on doing these if inflation were to pick up and that is a difficult messaging. , 6230 --e market issue 60 to 30. inare going to see the shift september, the end of qe and then a

the ecb will start withdrawing stimulus.ill become clear when it policy decision is announced tomorrow. mike is still with us. has adifferent because it different economy to the u.s., but there are parallels. mike: they have a challenge. inflation just below 2%. they have a bit of a problem on that side. they also have a problem with some self-imposed limits. they are running out of bonds to buy at the current pace. our expectation will be that they will try and trend the middle ground, to indicate they will slow down, then they will keep buying bonds until september of next year. there's a question mark as to the phraseology. our expectation is they will say that we have flexibility to keep buying if we want to. there are some hawks on the committee who would rather they say, we are done. there's a bit of a balancing act on the committee. our expectation is they leave the door open if they feel the economy needs more stimulus. francine: i know the replacement of mario draghi is 18 months away. do they start trading right no