Conference gets underway. Looks told a hard brexit increasingly likely. We will take you live to manchester. And the constitutional crisis. Proindependence groups call for a general strike. Today as the European Parliament decides it will debate the referendum tomorrow. How will the eu ultimately handle this confrontation . With less we are less than half an hour from the start of cash trading in europe. What are the fair value calculations on the bloomberg telling us about that start . Honestly, nothing to see here is where we find ourselves at the moment. Indications of a flat opening. Not a lot going on. But you have to appreciate where we are. The dax hit a record yesterday. A similar push yesterday stateside on the snp s p. Equities feel on the front foot at the moment. The dollar definite definitely feels on the front foot as we watch it make its climb. Its turn to the gmm and look around the world to see what is going on. The aussie dollar, the rba concerned about the impact that is having on inflation. 2 thiss down by morning, but the bloomberg dollar index continues to rise. Up by. 2 . Equities well bid yesterday. Danish market, swiss market, the ftse 100 yesterday. Fulldoesnt tell the picture as to what we are seeing in the underlying position. We will talk about where equities are going. Its get a first word update with juliette saly. Juliette in the u. S. , the death toll from the Las Vegas Shooting has risen from 50 more 59, while more than 500 are injured. More than 20 23 firearms were found in the suspects room at the mandalay bay report. President trump will make his way to las vegas in the wake of the shooting. The white house has ruled out talks with north korea over it nuclear arsenal. Is white house said the u. S. Interested solely in discussions about releasing u. S. Prisoners in pyongyang. That after Rex Tillerson said the u. S. Was talking to north korea directly through our own channels. Spain has moved on catalonia as the eu refuses to recognize is the red rebel regions bid for independence. It was said the country would use all the tools at its disposal to enforce the rule a lot. It sent the country into its biggest crisis since the end of the dictatorship and threatened to unravel a 40 year democratic settlement. The us trillion dollar dipped after the countrys centralbank left Interest Rates on hold. The rba reiterated that growth and inflation may be slower if the currency keeps rising. The u. K. Foreign secretary Boris Johnson has insisted he is behind every syllable of Theresa Mays Brexit plan, walling into line after a succession of challenges to her authority. After criticism from conservatives at the parties conference, the leadership contender said he is supported supportive of her speech in florence. Treasury, the department is backing the plan. We all agree on the two years. There needs to be enough time for companies to prepare and the government to be able to prepare, but we need to give in and date. It is important to say there will be a transition, but an and deal so people know we are leaving the eu, which is what they voted for. Mps in strasburg will set the focus of talks with Jeanclaude Juncker and michel barnier. On aps will vote nonbinding resolution setting out the recommendations to the eu 27 summit in brussels on october 20. Parliaments chief negotiator will also hold a press conference. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more. Han 120 countries this is bloomberg. Guy thank you, juliette. Riseollar is on the following strong Economic Data from the united states. You also have the prospect of tax cuts and speculation surrounding who will be the next fed chair. Investors not completely convinced. , sodata works with a lag you have to appreciate is a week out of date. Nevertheless, interesting to see. The net are basically short positions, the blue line is the bloomberg dollar spot index. The bars are going in one direction, dollars going in another. The big question is, what is the longterm trajectory for the dollar . And if it is down, what is the impact longterm on the u. S. Positionand its tax and its fiscal position and what happens to the deficit and debt, etc. There is a lot to think about. Lets join mark cudmore from our mliv team. You are a longterm bear of the dollar. How easy is it to step back given the noise surrounding the greenback. I am a structural bear on the dollar and it is clear the momentum is positive. There has been some understanding catalyst for this bang in the dollar. Not only negatives and other major currencies, but also this more hawkish fed and more positive vibe coming out of the u. S. In terms of tax reform. Have we got to a point where we can look at some of the fundamentals . The longterm structural fundamentals seem to argue this dollar rally so far is quite flimsy. One of the big catalysts for it has been the talk about tax reform. We dont know if and when the bill will pass, what form it takes. Even if it passes in the current format, it is unlikely to be a positive for the first currency. It will mean the deficit widens further. Countryalready a that is already indebted, that is not a positive for the currency. Guy what is positioning telling us . The market remains short of the dollar, historically so. If you step back and look at the positioning, what it tells you is maybe a little squeeze is going on at the moment, but also it the dollar even farther down from where we are. Guy first of all, it is important to note the Hedge Fund Positioning in most currencies has a positive direction until it reaches an extreme. We are on an extreme downtime downside. Perhaps a warning sign. We are not as short the dollar now as we were long at the end of last year the start of this year. Maybe it can go further still. While the shortterm positioning is short the dollar, and that is why we are seeing this bounce, the fact is really structural money investors are still very long the dollar. We see the dollars percentage over 62 still and this is as the dollar declines its relative relevance in the global economy. It is the worlds life largest economy, but its size is shrinking all the time. 62 of Global Reserves seems too high to me. There are these structural outflows to the dollar that will continue. That is a longterm thing, it doesnt help you trade in the next two weeks, but something to be aware of. Underway,manchester sterling looks a lot like a fragile currency. Explain. Wek a lot of people believe are about to go into a longterm bond bear market. We had a 30 year less bull market, now we get the opposite. Im not in that camp, but if you are in the calm camp that we get a sustained bear market, you have to think sterling is one of the most vulnerable currencies out there. We had the taper tantrum and the fragile five, but most currencies have seen a major repricing of their currencies, plus improvement in their external bounces and in their fundamentals. Most emergingmarket currencies are safe from the initial sentiment blow. Sterling is very vulnerable. Low growth, terrible real yield, a large current account deficit and very unleveraged and indebted economy. These are not things that inspire confidence. They are the perfect recipe for a true currency conference if you believe in a global bear market in arms. Coming,ong time interesting to talk about a slow runoff in the ecbs positioning. About what is happening and you think about the potential for a turn in assets, equities seem to go from strength to strength. The bond market looks fairly nervous. But you take a step back and look, what is the catalyst here for an inflection . The fed talks about the runoff being like watching paint dry. Are we at a moment here, or is this another head fake . Think we are at a major turning point in markets. I think the structural story of good Global Growth and a lot of liquidity still survives. I think equities dont offer great risk reward in that they have made massive gains, he will be harder from here. There is no reason to turn structurally bearish. I spent this week nervous because massive moves up, but what is the catalyst to move lower . Major catalyst for a proper bear market here, but the trends going to yearend will be harder for equities. We may see much more up and down and a bit more volatility. Guy another question i have been asking a number of people. What would happen if we saw a gap lower on the s p. Whats collett 5 . Five percent. Im looking at vix positioning and you get 100 move on the vix in a day and you feel it with etf. If you were to see an outsized a on the downside, what with the Ripple Effect be . Great question. If you get that gap move, you will see complete carnage in financial assets, but shortterm carnage. There is a knock on effect in volatility, shortened volatility across assets. Leverageall of these funds. They will have to stop at a lot of positions. The correction can be very painful, and you have all of these algos that will be confused by the move. Theou see a gap of 4 , extended pain for the next couple of weeks could be extremely painful. That said, i wouldnt expect it to be longterm. There is still a lot of liquidity in the system and for all of those who are short volatility, there are a lot of people who have excess cash and 10 pullfor a back in equities. In a couple of5 weeks, but i wouldnt expect the bearishness to last for a couple of months. It will be quickly bought into. Guy thank you, smart analysis coming out of the mliv team. Mark cudmore and the rest of the team. You can find mliv go. You can use the tv function, this is what it looks like. Gives you the sidebar of all the stuff we are doing on bloomberg. The functionality, the charts, the break and data and you can ask the guest a question them here. Coming up, bracing for brexit. We will bring you an exclusive interview with a bundesbank board member worried about a hard brexit. Businessiticians and leaders gathering in moscow for the 2017 meeting. Will speak at a discussion moderated by bloomberg. Dont miss that at 11 00 a. M. London time tomorrow. That is coming up. This is bloomberg. Minutes till the market opens in europe are cash equities. Talk about what is happening around the world with juliette saly. Ubs could employ 30 fewer staff in a decade as to elegy advances change banking. We see a lot of contraction in the number of people in our industry. He added that ubs could shrink by that measure, including contractors. Ubers new ceo will be in london for an emergency meeting with transportation authorities to salvage the companys business in its largest european market. The meeting comes a day after ubers manager in charge of the u. K. And Northern Europe said she was stepping down after four years at the company. Declined to comment on details of todays meeting. Tesla has said it struggled to produce its cheapest model after the car debut, setting back elon musks mission to reach mainstream consumers. The automaker built 260 before the quarter ended, less than 1 5 of its 1500 unit forecast. Shares fell in extended trading after that announcement. Goldman sachs is exploring how it could help clients trade bitcoin and other currencies. The new york bank is in talks bank crypto came crypto experts. They say among the questions, the bank is aching to answer is requirementsour and how to understand the risks of the volatile currency. Jeffrey immelt has cut ties with the Company Three months ahead of schedule. John flannery, who took over in august, has been elected chairman. After determining the ceo transition has proceeded smoothly. That is your business flash. Guy juliette, thank you. All eyes are on theresa may at the Party Conference in manchester on brexit. The u. K. Will leave a 20 Million Bureau euro hole unless the block to greece give may sweeping trade deals. Those are the deals she wants. However, a bundesbank board looks says a hard brexit increasingly likely and banks should get ready. Need to plan for a hard brexit. No one knows whether we have one or not, but this is an assumption which is the most likely assumption right now. If you wait until the very last landscapea financial which will change quite e tooically, there ar many risks associated with that. It would be the bank of englands recommendation to start planning early on because if every bank wants to go through the same narrow door at the end of the process, this is going to be a problem. What would be the impact of a hard brexit . Largestthe Single Market for the eu, there will be implications for the economy. Mainly on the british economy, but also on the rest of the eu economy. The biggest changes i look at would be the changes in the Financial Sector are, and the Financial Sector will be very different, it will also be a lot less productive and efficient than it is right now. You will have changes to the Business Model of the financial or. Banks will move, cities will partially there will be new licensing processes. Change tog to be a the way we do financing europe right now. In terms of brexit read locations, what are alternative locations in your view . Having lots of visitors who come to talk to me about that attend from what i get is, the two cities most banks are concentrating on our dublin and frankfurt. Other cities would also get certain relocations, but the core of the international banks, which are repositioning part of their businesses, would go to dublin and frankfurt. So no single city would get all the business. More importantly, the risk would be shared amongst european cities and that is just fine with me and makes all of us all cents. Some people say growth is solid, but if you look at inflation, it is almost nonexistent. Eurois your take on the zone economy right now and where is it headed . Andreas we have had 16 quarters now of growth in the eurozone economy. Is it enough to say it is out of the woods . Andreas it is out of the woods. Thee are always risks on downside, geopolitical risk, risk of the brexit you just mentioned. Have other risk of potential protectionism and isolation coming, but we have problems putting numbers on those risks. There are always risks on the downside but mainly the eurozone is in a much better position after 16 quarters of growth. Employment is high, unemployment has gone down. Investor sentiment and Consumer Sentiment is strong. Which will also transfer into the wages and into inflation, so the forecast for the inflation, the cpi, the Consumer Price later 2019, the where we will be close to our target of 2 . Guy that was an interview with a board member. We will see trading including ubs, the ceo saying the group could employ significantly fewer staff in a decades time. That story next. This is bloomberg. Guy four minutes until the cash open. Stocks to watch, ubs one to look at. The ceo talking about in 10 years time, the bank could employ 30 less staff. The spanishon banks, the ecb was in touch over the weekend to check in and make sure they are ok with the catalonian story. Expected to bounce a little bit today. Catalonia a less dramatic story Going Forward. Getting rid of the whole handful of the bp be shares, so that might dip a little. The open is four minutes away. This is bloomberg. Guy a few minutes until cash opens for european equities. You have to appreciate the background for this story. At the moment it looks like we are only going to be up. 1 , the dax down a little bit. Happy unity day. Record. Hit a today we are holding fire at the getgo. Keep an eye on wpt. Ubs as well in terms of its future as a wealth manager. At asay, we are looking sluggish start. The story will be interesting. Lets take a look at these numbers. We are going to be working out to beginning of the session this morning. About 74. 4. Back not really adding much momentum. Dax expected to open in similar form. We are drifting sideways. Is the reflation trade back . Manus the reflation trade actually has started before the trump tax announcement was made and started back in early september. As for his European Equity markets are concerned, treason to deal with the catalonia risks. There was barely enough votes in to gotalonia parliament for independence at the end of the summer. Markets as you can see, energies softer along with the material. Japanese equity markets at a twoyear high. The dollar is a stronger. It really is going to come down to do you believe that europe carries through with the global reflation trade. You, whereontext for were you in 1997 . We have not seen a run of games gains in global stocks. Global stocks have hit the sixth quarter of gains. You are seeing the fear index, the white line ratcheting lower, down for a Third Straight week. Options,hreemonth volatility is lower and that is pervasive across all markets. Is catalonia the canary that reminds us that there still is political hubris at play in europe into italy of next year . Theresa may will speak tomorrow. Or is johnson has been told by a variety of sources to pipe down. I could use the other phrase but i am off the Bloomberg Radio and i want to have a job. Seeing a pump in the periphery. It is nowhere what you saw the height of the crisis. The bottom of your screen you can see on. 34 . Are off to take the daybreak market hour. Guy looking forward to it. Im sure its going to be a great show. The oil stocks and banks seem to be driving up this morning on the upside. Hsbc on the move. Looks like we are going to be seeing personal clarifications at the senior level. Santander is trading higher as well. The spanish bank coming back a little bit. Ubs is trading higher as well. On the downside we have British American tobacco. It is Trading Software as well. Another chart as well to give you this chart here. At 2011 thatatio tells you a lot about where the market is positioned right now in terms of the recovery we are seeing in europe. It tells me what we are seeing in the dax as we continue to hit records. Give you a sense of where the record the market is going. Definitely having an effect on the rotations we are seeing. A second day of gains for the factory data yesterday to supporting the case of further rate hikes, focusing on who will be next. We think in the next few weeks is the reflation trade back on and are we going to see this 30 year bull market that we have seen starting to turn tail . The reflation trade back and what are the implications . Im not sure it is back in the same way it was at the start of the year. If you go back to 20162017, huge amount of moment and in the economy from very low growth in 2016. Ons at the same time we were looking ,orward to some trump policies increased government spending, relation, im not sure some of those things are in the same force today. Your screen shows some reflation trade in terms of the change in style is coming through. Just a little bit. This is the shape of the curve effective. We have stiffened up a little bit but in the context of the last year that move looks puny. Fixed income investor, around the world, particularly given what we have gone through, better Economic Growth in potential for inflation back in the system. They look shallow. I think that has got further to go, that charge. The reflation trade is back. Of lift trade, something we need to think about . The fed is scratching his head trying to figure out what that means. Nonetheless it is going to crack on, raise rates. It may even go three times next year. I think the Central Banks would quite like to see underlying bond yields go higher because it will effect economies around the world. Certainly that is our view as a company. We need to look out for is that it doesnt disturb those equity prices because if you have a higher discount it should be a lower equity price. That has been leading to higher earnings and that has been supporting equity prices. For markets that is the best outcome. Guy wheres the value in fixed income . There isnt a great deal of value in fixed income. Cash Interest Rates on the floor starting to rise. Peopleery low and most from here, you look at credit spreads of 2014 levels. To prefinancial crisis levels. It is hard to find value. If you look at outcomes, the higher risk assets have been the best performance. Guy the rate of change is important. If im in a position where i think rates are going to get higher, that is fine for my portfolio because i can role in higher yield bonds and effectively roll our way through. To get a short sharp move how is the bond market set up for that . Higher,ates gapping having lower quickly. How do people react to that scenario . The think that one of biggest risks markets right now is inflation. If inflation does come through that in the way the feds say it might think Interest Rates might go up more quickly than anybody ever expected. I think it will be bad for equities and bonds. That is the worst Case Scenario in my view. That bonds are effectively kept up is to keep to have a geared position. How would you describe the set up right now . Our people comfortable with their positioning . Have you had to give up significantly . How does the balance work and the correlations between the asset . I would say people say that i thinkets are a in bond markets people have been positioned for bond yield rises for some time. One of the most popular trades has been around seven or eight years. The short duration but high yield. You dont have much duration. Manynk that is where markets are today. The position which you might day yeare get from a third treasury. Guy stick around. We do have a conversation happening right now. I think it is in strasburg. There is Jeanclaude Juncker. There is there. Andre talking about brexit Jeanclaude Juncker is saying there has been insufficient progress in brexit negotiations. Movednsufficient progress to next phase which is talking about the trade deal. Over the u. K. Cannot go Michel Barniers head. We are going to maintain the point of contact being michel barnier. Unity amongst the individual nations. Jeanclaude juncker saying it is too early to start raise to. Very clear ahead of the big summit coming up. Coming up, we are going to carry on talking about what is happening with brexit towering over the party. Or toeing the party line after challenging the premise her. Boris johnson now backs theresa may on brexit. I wouldnt put a lot of money on the fact that he would have made ikind of speech you would have put a lot of money on that fact that he wouldve made that kind of speech. We will see exactly what orest johnson really thinks. This is bloomberg. Guy lets take a look at the big movers. Here is near a. Nejra he suffering popular is reviewing a 1. 9 billion takeover bid from pai partners. This is a French Private Equity Company raising a previous rejected offer. An offer that reference to said it is now seriously considering. It said that in a statement today. We have seen the shares gained 8. 6 . It is heading for the highest close since 2015 if it continues gaining on this level. Euros. 7 5 19. 75. Were looking at cocacola hbc. One of the bottlers in the cocacola system and the ceo of cocacola hbc did die monday. That is the news we have had. The company putting that out in a statement today. The stock is down 2. 9 on that news. Downgraded to reduce from hold and the stock is down almost 2 . Performances on the hbc 600. Guy thank you very much indeed. The spotlight will be on Boris Johnson when he addresses the conservative carvey the conservative Party Conference today. He says he is behind every syllable to the brexit plan. Falling into line, apparently, after challenging her authorities. We will see. Anna edwards is in manchester. Anna thanks so much. By nickye conference morgan mp. Did morning to you. Thank you for joining us. My colleague was talking about more slots and falling into join Boris Johnson fully into line. The conservative Party Cabinet . I hope that is what were going to see from or us. That is what is needed. A unified cabinet position on these very important negotiations. Were all we are all basically behind. Think he is speaking this afternoon so we will see what he says. The briefing says he will be loyal to every last syllable. Of course, we will see exactly what he says. The proof is in the pudding and what he does not right. Does this take away questions about leadership in the conservative party . I know the signs have been talking about maybe she wants to launch a bid. Are there other contenders warming up in the wings . I dont think so. It is generally agreed that brexit may is to deliver 2019. The Party Members or early leadership contest, i think that will be regarded as something that is unhelpful when we have critical negotiations for the future of our country. Anna if we end up in another election earlier than planned who would get your backing . I think we will have to see what happens. I think it is can be difficult for theresa may to be the next general election. I expect that election to come anytime soon. I dont expect that election to come anytime soon. This is apartment that is working, will be up to get things like the drawl bill through. When they get back to westminster from last week, i think that actually people outside the westminster Party Conference seeing can you get on with these negotiations came he , can you talk about things we are interested in . Anna on the transition in particular, about two years seems to the phrase we are hearing a lot the British Chamber of commerce continue to save three years. His three years possible . All these things are up for negotiation. It is welcome at the Prime Minister confirmed there would be transition imitation. That depends on where we get to in march 2019. Must havelief that we a deal. It would be a disaster to walkway with no deal. It is important that that critical principal has been agreed. It is not all going to change in our story 19. In march 2019. Anna what are you most confident in getting through . We are bringing the law from europe into the english legal system. Is it done on the floor of the house of commons or these things happen without proper scrutiny . I think this is so important what is happening now. It is actually right that you are able to sift the importance of it and say this is important, this one is actually technical. Broad sympathys for that position. Anna are you working across the aisle . Working with moderate parts of the labour party . There are discussions. Where not putting our name on aging on anything from the liver bench. That is not what we want to be doing. It is important for the conservatives to make clear their positions on this bill. Anna working across the aisle, where is the room for the middle in u. K. Policies these days . Weve been covering the labour Party Conference and writing atut the long lines getting conservatives. Wheres the room for the middle . Theres a real appetite for the middle. When i go on the doorsteps in my constituency that is what people want to see. There is always a Party Conference and appetite for Party Members to look for the characters. Jacob is a very eloquent speaker. I think we are much better as a party when we are stronger. When we appeal to the central ground of politics. I was writing an article reading an article called the Evening Standard about the holdings and i think that we need to be thinking hard about how we address those misconceptions. If that is what people think we needed to do better about explaining what we stand for. Anna one of my colleagues is ting about how the u. K. Theresa may has pledged we will bridge the budget gap with the eu budget. When will that money be paid . Perhaps that could be withheld . Is that something u. K. Can use as leverage . Possibly but i get the impression the eu wants to negotiate early and theresa may is right to have indicated that we will make our budget conservation. It is right. Isn is a country is a a country that pays what it agrees to pay. I think some kind of tradeoff because payoff would distract from the bigger issues. Sort out the money and the right eu citizens in the u. K. And british citizens in the eu, those are big steps forward and i hope the eu will respond in kind. Anna think you very much, joining us here at the conservative Party Conference. Guy thank you very much indeed. Anna was talking to nicky morgan. Plenty of other things on this subject happening simultaneously. Jeanclaude juncker and barnier are making a number of comments, saying and repeating that it is too early for brexit talks to move to phase two. That is what he would have to say. The bill remains one of the key sticking points at this point in time. Theresa may has been at the same time speaking to the bbc this morning. She has a packed schedule this morning obviously. She is confirming that Boris Johnson will be speaking hundred later today. He does not speak for the British Government on the suspect subject of brexit. An inch the morning for british politics as ever. It is an adjusting time for the british economy. , i wantfixed interest to get a quote from one of my colleagues from the mliv blog earlier on. He is talking about the u. K. Minimal growth, negative real yields, highly leveraged economy, large deficit creates the perfect recipe for a currency crisis. If rates elsewhere start to climb, how vulnerable is written britain . To an extent. The economy has faced many headwinds. We have driven up the economy in consumer spending. There are doubts as to how much further that can go. Government spending, little room for that from here. Unless of course we get in and a new government and they have different plans. Businesses might be holding back because uncertainty we uncertainty regards to transition. Is oblem with exports with regard to sterling crisis i think the reasons you mentioned, the current account deficit that has to be funded by overseas investors, i think clearly that look at where we are. We are close to low points. The racist. Heap on guy the reason sterling has bounced is because of this expectation which the bank will raise rates as early as november. Would that be a policy mistake . I think it is in terms that it does not need an Interest Rate rise. Ive simply with reasons why they want to do it. It might feel this is the only chance. What else can they do it . They may feel they want markets, there are twoway risks. Interest rates can go up as well as down. I dont think it has any effect on inflation so i dont believe it should be targeting that. I think it may be one and done. Guy we had a conversation about the fact that possibly we may see a recession at some point. We will see one, whether it is in the future or not is the question. The reason why the u. K. Economy looks ok at the moment, i would argue, is because we have a global expansion. A reasonably coordinated synchronize global expansion. Look at the numbers of the eurozone, the data looks solid. If that would start to run its course and come back to the rge soros or when the tide goes out you see who is swimming with no clothes on. If the u. K. Finding itself in the position at the moment . Some of that but from earlier, the assess of the u. K. Economy for the last two years has been generated in terms of consumer spending. Maybe 70 of the economy has been very strong. My point there again is that they cant go on longer and in some ways u. K. Can look vulnerable for the next year or two. hard brexit pretty brexit. What is priced in now . With all policy uncertainty with tories and labors, not clear what anybody is trying to get to. I think it is somewhere between the two. Guy stick around. And you very much indeed. We continue to get flashes coming through from Jeanclaude Juncker. The u. K. Cannot go over Michel Barniers head. Talking very much about unity in this session. The main theme still seems to be, this is very clear from Jeanclaude Juncker, there has been insufficient progress at this point in time to merit a move to the second phase of talks. There are still serious divergences with the u. K. According to michelle barnier. He says the divorce bill along the main disagreements. We will carry on the conversation next. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Guy we continue to monitor what is happening with dollar. The greenback gaining on economic hope, tax form expectation. The u. K. Conservative Party Conference gets underway. Hard brexit looks increasingly likely. The catalan constitution prices. As they decidee they will debate the referendum tomorrow. How will the eu handle the confrontation . Good morning, welcome, im guy johnson. Im in london. We continue to monitor strasberg. One lawmaker talking about the fact that theresa may should sack Boris Johnson. For stocks and does not speak for the u. K. When it comes to brexit. Anyway, interesting that debate is making its way over to strasburg and the European Parliament. It is used today in germany. As result of which, no trading on the dax. We find ourselves around europe, the ftse 100, having flats. The ibex is bouncing a little bit. Yesterday under pressure as result of what is happening in catalonia. Talking of which, spain has moved to turn the screws on catalonia as they refused to recognize the bid for independence. It Justice Minister says will use force at its disposal including suspension of content the atomic. The crisis must be dealt with under the spanish constitution. Lets get more from roderigo alibaba roderigo. What is the latest and how is it going to evolve from here . The latest significant news cannot yesterday night following the news the meeting the Prime Minister had with position parties. One party cannot and clearly requested that the government intervene and take control of catalonia. That is what we are expecting from that. We are expecting liberties as to whether they will push forward and seek the independence immediately or whether they will extend this and get it brokered to brokerdeals as madrid and barcelona. Meeting yesterdays train the Prime Minister and opposition get a sense of open direction here . No. One liter cannot and very strongly said the government 155 whichoke article allows them to take control of the region such as catalonia. The other later, deciliter, the socialist party, came out and said what was required is more dialogue and a consensus to reach a solution. Is there a sense of disappointment that the eu was not playing a larger role in this process . Eu,eemed time tight, the im wondering how that played into the situation in catalonia and more broadly in spain. Greatguetied is a definition. Disappointment may be bigger in catalonia. I think it is also at an early stage. There definitely going to try to take this from abroad. Spain at this stage is more focused on internal politics and domestic politics and i dont think they really they are not interested in taking it continental if i may. Guy thank you very much. Roderigo joining us out of madrid. The ecb paying attention to what is happening in spain. We understand it has contacted the spanish bank to get a sense that all is ok as the situation evolves. The bank may take a slower for longer approach for ending its qe program. Subdued inflation means policymakers will have the opportunity to move more gradually. Investors may become more patient as conditions normalize. The ecb finds itself in an interesting position. It is struggling to make its inflation target, inflation doesnt look like a massive issue right now. The market is very called. Very subdued if you take a look at what is happening. Take a look at what is happening , the volatility gets lower and lower. The opportunity to taper at a very gradual pace and reduce, reduce, reduce over a much longer time. Is that the kind of scenario we should be imagining . Target, ion, the main think they should hit the target in the next three years. 2017 by their own productions. Economic growth, a huge amount to the capacity. He dont expect wage growth to go anywhere. Whether it was concerned about shouldon, the idea they be in their asset personage the best purchase is absolutely right. Markets can take that in a good way. It is interesting, now starting to talk a little more and taking it around 70 . Still incredibly elevated. Central bank scratching their head, wondering if they look at the types of measures up on the planet. Why we are not getting the inflationary wage spiral story would normally expect if it were to operate. The implement rate is just so high in europe, a huge amount has been taken up before wage oflation shows any sign inflation. I think the two comparisons are very different. If you think about what that means for out asset allocation, how do you play that story . You can slowly rotate your bond market to generate the return. Search for yield. Equity has the highest earnings yield. We also recognize that equity valuations are not cheap. Because that is what we talked about before, you have a benign centralbank environment. Help equities, corporate bonds, we do recognize that we are eight years into a Economic Cycle quite long in the tooth. Back to the catalonia story, that kind of scenario that we are talking about here, this very Long Duration rolloff, that would encourage you to continue to tide the periphery over the core . Is that way to make a turn . It is been the right trade for the last five years. Youve not seen reason for that to continue. Is normalization elsewhere. Maybe that can pull up some of the core yields in europe more. Generally it has been the right for the desk for italy and spain. Think every much indeed. Thank you very much indeed. Joining us in about 20 minutes time at 9 00 here in london. On, were going to keep in e. Coli on the companys progress. Talking to the ceo next. Nice eyebrows. Guy this is the open. Lets get the first word news update. In the u. S. , the death toll from the Las Vegas Shooting has risen to 50 mean that 59. Please found firearms on the 32nd floor of the mandalay bay resort and casino. President trump will visit tomorrow to meet survivors and emergency workers in the wake of the deadliest mass shooting in modern u. S. History. The white house has ruled out talks of north korea over the nuclear arsenal. Reporters nowtold is not the time to talk, adding the u. S. Is interested in discussions over freeing citizens held by pyongyang. U. S. Wasrson said the talking to north korea directly through our own channels. Spain has moved to turn the crisp the screws on catalonia. Says it would use putything in its cisco its since the country into the biggest crisis since the end of the dictatorship. Dippedtralian dollar after the Central Bank LeftInterest Rates on hold. The rba integrated that inflation may be slower than forecast of the currency keeps writing. The benchmark rate has been kept at a record low of one point percent. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. Guy . Guy thank you very much. Ipo for 10iggest years. According to a new report, you why projects that the european activity should be strong in the Fourth Quarter based on a relatively strong economy. Joining us from helsinki is the companys ceo. Congratulations on the ipo. In q4 joining us today. , we werehe question kicking this around in the newsroom, you have a bunch of s inanies that have ipo the tech sector. These are companies that have essentially a single product that has driven them to the heights they have achieved. Why is rodeo different to these companies . How do you progress book on best beyond the angry birds how do you progress beyond the angry birds story . Rovio, we look at have highquality games. We have an extremely strong brands. Experience and free to play experience that we have inhouse is that a worldclass level. Excellent cross promotion capabilities all in all. In that sense we are in a great position with all of these experience and the strong brands that we have to grow further. Guy youre not going to use the money to make acquisitions. This will enable us to use more efficiently m a. What is missing from the portfolio, what would you like to get going . We have to really be careful when stepping into this area. Have a very clear strategic understanding of what we need for our operations to grow further. At this point of time, there could be possibilities to acquire a new exciting ip for example. Or new technology. From are examples potential emanates. Guy you are talking about what drives those gains. Not necessarily. It can be Something Else as well. Guy the Growth Numbers you have been posting are impressive sales have grown 90 year on year. Thatme a sense of trajectory Going Forward and whether or not those kinds of very impressive numbers are going to be maintained. We have said in our guidance fasterr aim is to grow than the western market. That is what we are looking at at the moment. I wish you to be Something Different but that is the site that was given us. Guy ok, so, maintaining yourself ahead of the markets. In order to do that you have to figure out new ways of generating extra revenue from users, from players. How do you do that and how do you go the next mile in terms of generating the extra bit of yet ut of those we want to make sure that we p on track with, uh [phone ringing] monetizing the players better. Guy excellence. We will leave it there. Think you very much indeed for getting through that phone call. Rovioo of entertainment. Up next, the movement trading. The banks are on the move as well. Watching very carefully what is happening there. Politicians gathering in moscow for Russian Energy weak. By bloomberg. Ted it dont miss that conversation at 11 00 london time tomorrow. Guy welcome back. You are watching the open, all according tosa may senior british officials, the u. K. Will leave a 22 billion too whole unless they agreed the trade deal she wants. Under a stone rate is worried. A hard brexit looks likely and banks should be worried. The banks need to plan for a hard brexit. Nobody knows whether we will really have one or not but it is an assumption which is the most likely assumption right now. If you wait until the very last landscape, financial which will change quite drastically, there are too many risks associated with that. It would be our, as one of the bank of englands, recommendation to start planning early on. Wants to gok through the same narrow door at the end of the process this is going to be a problem. What is the impact of a large brexit . There will be implications for the economy. There will be of locations for the economy. Mainly on the british economy but also on the rest of the economy. Changes, i look at, would be the changes in the Financial Sector. The Financial Sector will be very different. It will also be a lost less. Thanks will move as part of their Business Models. Sensing processes, it will be supervision. It will be a big change to the way we do finance in europe right now. One of the alternative locations . Visitorsving lots of who come to talk to me about that. Banks concentrating on dublin and frank for. Other cities will also get certain relocations but the core of the international banks, which are repositioning part of their businesses, would go to dublin and fractured. No one single city would get all the business. More importantly, risk would be shared amongst europeans. That is just fine to me. Reporter the rest of the economy is real as well. Some people saying growth is solid. When you take a look at inflation it is all most nonexistent. Very very weak. What is your take on the eurozone economy right now and where is it headed . Of subsequent growth in the euro code the eurozone economy. Is it out of the woods . It is out of the was. There are always risks on the downside. Geopolitical risk, the risk of brexit we just mentioned. We have other risks of potential protectionism and isolation. Where you really have problems putting numbers on those risks, there are always risks on the downside. Maybe the eurozone is in a better position, up to 16 quarters of growth. Employment is high. On implement has gone down. Investor and Consumer Sentiments are strong, which eventually will also transfer into the wages and inflation so the forecast for the inflation, for the cpi, for this Consumer Price inflation, in the latest of 2019 will be close to our target of 2 . Guy interesting stuff. Exclusive interview with undress. The stock market, lets figure out what is happening. Nejra interesting commentary on through on ferguson. This is the heating and plumbing business. The shares have rallied most since march. This after the Company Announced a 500 Million PoundShare Buyback along with the for your results. One of the best performers on the stoxx 600. ,ake a looks cash take a look all commenting on the outlook for ferguson and the buyback as well. On the downside we have been seeing Systems Trading lower. Cut 2. 2 as it has been from neutralized credit suisse. Im looking at wpp. A couple of things coming through here. Morgan stanley completed the sale of shares at an accelerated look bill. Also, wpp is the largest shareholder in the japanese ad agency. Capital has made a 1. 3 billion bid for the japanese agency. Wpp sees that as too low. We dont have a comment from wpp ,ut ashares seems to be moving down 1. 8 . One of the worst performers on the stoxx 600. Guy what are watching for the rest of the day . Partyk. Conservative conference continues to offer plenty of opportunities to what is going to be happening. We have speeches from brexit secretaries of trade, Boris Johnson, we will be looking for all that. Trump donald trump visiting puerto rico. The scandal surrounding his relationship with her to rico, something that will make headlines. Richard smith due to testify on capitol hill. Something to pay tension to as well there. What else are we watching . Keep an eye on the pounds. It will be interesting to track it through the speech this morning. That is where the eurosterling sets. First up next is surveillance. This is bloomberg. Francine the debate over gun laws rages in the u. S. After the deadliest mass shooting in recent american history. President trump also visits puerto rico today. But dollar gains on economic hope with tax reform expectation and fed chair bu expectation. Dana moves to tighten it grip on region. How will the eu handle the confrontation was also dealing