This story. We will bring you news on that story. Grounded as well. Monarch Airlines Dancing all flights. Canceling all flights. Help tough will it be for the lowcost carriers . We are monitoring events in las vegas. There are reports coming in all the time. It appears to have stopped within the last hour. We will continue to bring you up to speed with what is happening. Series of events taking place in the city. It will find out what is what the latest Police Situation is. We will update you throughout the program on that. The other thing to notice, 20 minutes to go until at the moment, the failed value the fair value putting us to a rare start. Cashax is going to outpacing outpacing some of its peers. Lets talk about what else we can see out there in the world. We have had some strong tiny stayed overnight. Some strong chinese data overnight. We are happening guess we are watching what is happening in catalonia as well. Lets go to our Bloomberg Business flash update. We start with this developer story that authorities have shut down part of the Las Vegas Strip after receiving reports of an active shooter. The report said the shooting happening happened at the mandalay bay resort and casino. Several teams were sent to the hotel and officers reported being pinned down by gunfire. U. S. President donald trump has used twitter to tell us secretary state that he is wasting his time in seeking negotiations with north korea. The remarks came a day after Rex Tillerson acknowledged that he is committed getting directly with the rogue nation. The move highlights differences between the u. S. Administration on how to get nuclear guess how to get kim jong un to hold his nuclear program. Ukip Prime Minister theresa may heads into her conservative party annual gathering filling questions over why she hasnt fired boris johnson. Johnson has challenged her strategy on leading the European Union twice and the past two weeks at critical moments. Yesterday, make it only laugh and dodge. Cabineti have is a united in the mission of this government come andrew and that is what you will see this week. United in a Cabinet Mission to build a country that works for everyone. Agreed on the approach we take in florence. Britain is likely to forge his first postbrexit deals. Event on then sidelines of the conservative party conference, liam fox said britain is working to adopt 43 trade agreements that it is currently a party to as a member of the you. Chinas official factory gates has risen to a fiveyear high, indicating the efforts to clean up the Financial Sector and the environment. The manufacturing pmi the expectations as a rose to 52. 4 in september, up from 51. 7 a month earlier. In japan, confidence among big manufacturers has risen to the highest level in a decade. The boj survey came in at 22 in the third quarter, up from 17 and the best rating since september 2007. That underscores shinzo abes efforts on the economy as he comes upon a reelection. 0 global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. Guy catalan separatists signaled that they may move toward a unilateral declaration of independence early this week after yesterdays referendum. Government spokesman said hundreds of activists were injured on sunday as they try to stop spanish right police from sundown the vote. He appealed for your support when rajoy refused to recognize the referendum. Referendums been no in catalonia it all spaniards have seen that our rule of law is strong and enforced that a response to those who breach it better reacts when faced by those who oppose it. Dayco guy maria tadeo joins us. Yesterday, as you wetioned, the president said have earned the right to become an independent republic and will be calling on parliament to enact the law which would make catalonia an independent nation within 48 hours. We have a breaking a bit of breaking news, theyre going to be meeting here so we are going to get specific dates and a guidance of how this could happen. Our understanding is if this were to take place, the Justice System however would happen to step in because this is a very serious thing. What we think is before this happens, the justice is likely to step in and he may be told to step away from office are being dismissed. Charges that it is a violation of the constitution. Guy how does rajoy handle this . This . Es he move on from maria it is a pr disaster for the Spanish Government and they know it. They say it has been a double whammy. The catalans went ahead and voted. The yes vote one the yes vote won. Very nasty violence. I was on the ground when it happened. This is something that might roys hes thinks he did the right thing, protecting the constitution and in fact, the Spanish Government thinks a lot of mileage couldve been prevented if the police had done what they were told. A lot of polling stations did not happen. Guy maria, thank you very much indeed. What we are seeing this morning is widening. Spanish government bonds over german bunds. We are seeing a situation in italy as well. Lets go and get a take on what is happening here. Mark, we are seeing a reaction to what is happening here. What do you make of the events over the weekend . In the Market Reaction to them . And the Market Reaction to them . Mark a very little Market Reaction. The ebix is down a bit more spanish bonds are widening but overall, the peripheral bond only widening. The euro is only start is only slightly weaker. Story. Ore of a dollar well we see his investors dont know how to play this. This is not going to disappear. It is not going to go way. Leaders have backed themselves into a corner. They cannot step away from declaring independence without major concessions from the Central Government and investors are very worried about that. The worrying outcome is it might be backing for an official referendum at some point in the future, especially after the civil unrest this weekend. Yet do worry that a large chunk investors know this is going to be a slow burner, it is going to stay on the radar for a long time but they dont have to react in the shortterm. Guy lets move on and talk about the dollar move. Im struggling. Kevin walsh as fed chair, how do i price that in . Im trying to get my head around why the president of the United States would want to put this would want to put a hawk into that position would want to put a hawk into that position . Mark it is a question that a lot of investors are struggling with. You see investors chase are pushed trends as they try to make up as much return for the reset their Balance Sheet or go back to zero. It is very hard this fourthquarter. Trump team to change his mind every few weeks. Trump seems to change his mind every few weeks. We have no real clarity. He did discuss several possibilities on friday but everyone focused on with two , sor board of governors theres a lot of uncertainty around the fed. We have uncertainty about the possibility of stimulus in terms of if the structure investments. Trump, so theres a lot of uncertainty around the said he doesnt belin privatepublic partnership. Question. Uick investors, does the pen can confirm that theory . The export story looking really celebrate now. Mark that is the right message to take. The japanese economy has been doing better. Theres this theme that japans growth has surpassed expectation. You have seen other countries disappoint. Japan is one of those that expectation has been revived up. There are signs of growth. Growth andtrong theres no sign of runaway inflation, but the economy is doing ok. That is an economy that is doing well despite the fact growth the population is shrinking. It continues to be very supportive for equities with a weaker yen. Guy mark, great stuff. Mark cudmore joining us. You can follow the whole team on your bloomberg. Smart analysis, day after day. You can use another function on your bloomberg. You can use it to watch this program. Is the tv function. What it allows you to do is walk through the timeline but also access all the charts that we are using, the data checks, the fox now take, the breaking news. Next, we are going to be talking about what is happening in catalonia. We will work our way through to the market open. Also talking about what is going on in the u. K. Monarch, the airline grounded over the weekend. Thousands of people left stranded. What does a signal about the winter ahead. Well discuss that next. This is bloomberg. Guy 7 46 a. M. In london. Lets get an update on what is happening in las vegas. Juliette guy, we saw this devoting story. Authorities have shut down part of the Las Vegas Strips test strip after receiving reports of an active shooter at mandalay bay. Multiple victims are being transported to hospitals are several swat teams were sent to the hotel and officers reported being pinned down by gunfire. Isbal Construction Materials nearing an agreement according to people familiar. The company could announce a deal as early as six weeks. The agreement may value it at 7. 5 million. A refuse to be john cryan may face pressure from investors. That is according to the sunday times citing one of the banks largest investors. We havent seen any sign of. Rowth in the Investment Bank we need to see this to prove the strategy is working. There of the u. K. Expect brexit deals to reach 5 billion or more. They find it more difficult than anticipated. Hedge fund manager says new reappearing roles on research will result new european rules on research will result in less. Will cause the cost of capital to rise. Resulting in those with less access to the market trading less. That is your Bloomberg Business flash, guy. Guy thank you, juliette. Monica airlines has in place into Administration Come off lights being canceled. It is launching a program to fly 110,000 stranded customers back to the u. K. Chris grayling describes this as the biggest repatriation ever attempted. Ben katz joins us now. Lets start off i want to put what went wrong behind us. What does it tell us about those who remain . Say that wefair to may see the more bankruptcies. The situation we are seeing is with the drop in fuel prices, kerosene sitting around 50. That has allowed carriers to ramp up the capacity with a light of pricing pressure on a lot of the smaller guys like monarch. You are seeing the same kind of restructuring across the entire region. Guy does this capacity disappear echo disappear . What happens to that capacity . Ben l when we are what we are seeing is taking an interest at what they can get out of monarch. The other option is they split it up. The other option is to expand organically. They are goingar to expand and build a vacuum and take up extra capacity. Up. Prices are going airlines clearly hedge. Small carriers tend to be unhedged. The price of oil has started to go up, does that mean with the huge amount of capacity being in , plus rising fuel costs, does that mean this winter is going to be a tough one for the locals . Ben it is going to be an interesting one. We are looking towards ryanair. Ryanair is one of the Biggest Airlines in the world. Their capacity wrapup has been remarkable. Theirin a position pilot situation. It will be interesting to see what impact that has on pricing. We should expect lower yields from them. Well see what effect will be going into the results period for all the airlines. Guy thank you very much, indeed. We are minutes away from the market open. Well take a look at todays movers. Acquisitions. New well deal with the details of that. Plus keep an eye on what these Airline Stocks are going to do. Market open is eight minutes away. This is bloomberg. Guy 7 54 in london. Vegas. Orning in las we continue to monitor events in las vegas surrounding the active shooter story. We will continue to keep you updated as the situation develops in the early hours of the morning in las vegas. We still are relying on a series of reports that are getting more details but still remain difficult to get a full picture of what is happening on the ground. Lets update you on what else were watching. Keep an eye on crh, the consolidation of the concrete sector continues. We are seeing more of it this morning. The average company so were watching the quite carefully. As we mentioned we are watching what is happening in the Airline Sector. This after monarch was placed into administration over the weekend. We will continue to see what the impact is. The rest of the Airline Sector this morning and obviously a place. Rbulent pace at the moment it looks like european markets are going to open fairly flat. Germany is going to be outperforming a little bit at the get go of trade. Keep an eye on spreads, spreads spain to germany. The market open is next. This is bloomberg. Guy the spanish market has opened softer. It is a significant underperformance, down by 1. 31 in percentage terms. You also have the european markets doing very little of it much more pronounced underperformance than the spreads let us to believe. That is the broader picture. We will show you what is happening in the individual points. We have to change here. We have general insurer up in the nordics and you have easyjet and ryan air both rising this morning, up 2. 47 . Monarch is grounded. Direct is trading higher. There is an expectation that higher. Is trading a the downside, you have bunch of Spanish Banks that are weak this morning. You can see that. The pain we felt this morning. We are seeing impact coming through and Spanish Banks are down 2 . Some of the Smaller Banks down 3 or 4 . The weakness is coming into the market this morning. Bonds are part of this story. You see this spread widening. The Spanish Government bonds versus the German Government bonds. There is a ripple affect coming through in bcps. They are widening out over bunds, as well. This follows the referendum in catalonia that was marred by violence over the weekend and is unresolved in terms of what it will mean. Lets talk about what the risk means for various asset classes. How does the market react to a referendum that is unofficial, Margaret White quite a lot of violent marred by quite a lot of violence and is still inconclusive . How do i price that in . Does the euro price it in . Guest as far as the violence aspect, there is no question about it. It adds headline risk. But the Market Reaction is taking the view that it is more of an idiosyncratic risk concentrated on spain as opposed to much of an issue about eurozone or European Union in general. That is the right view in the potentiallyis placing a constitutional crisis, but not something that is really [no audio] guy mr. Macron is looking to drive europe forward. He needs people around him to make that happen. Nevertheless, he needs others to go along with him. That is the premise driving positive sentiments around for eurozone about the french election. If spain is distracted, does that show guest you are right. There is risk their the Spanish Government will be distracted. It will affect how they handle negotiations with regions. That Structural Reforms will take a setback and growth might suffer. Lets not forget spain is one of the fastestgrowing economies in the eurozone right now. You are right, macron has given a boost into sentiment, but we should not forget the soft indicators coming out of the eurozone. They are much better than people initially believed. This is true not only for greece, if you exclude it is actually a pretty wide spread recovery. Setback, but of a i think it is more likely to be concentrated risk as opposed to a fullblown crisis. Guy it is just a bouncing act, really. Learned, if have you Pay Attention to politics, there is strong data pointing you to the ecb taking some action, albeit very slowly, then Political Risk on the other side. Thesense is that it is former that is the bigger story right now. Guest let me say the following. There is definitely the element of Political Risk, but the nature of the Political Risk that the market is sensing and sniffing right now is nowhere near as troublesome as it was a couple years ago. We were talking about this integration of the eurozone. Now we are talking about pockets of isolated constitutional crisis, but nothing that can have a larger scale effect on the eurozone in general. Up the bcps have tightened im trying to get some charts here to get the scale of what we are talking about. This is not the chart i was hoping. Italy, spain, germany and trying to take a sort of longterm. That is the financial crisis. Here withn is, down 120 over germany, 1. 20 over germany, is that too high given what is happening . Guest you can argue that come up but my main point is that you will see a tight correlation between all the various peripheral countries. The point is, the market will differentiate this stands and it will lead to widening spanish spreads that will not necessarily be reflected because this is not being treated as a eurozone general problem, but a idiosyncratic issue in spain. Misfirethis the first that i joined the dot with italy . Guest im not too sure about that because there is a big difference now as compared to 2011 and 25. Of theow in a end Economic Growth is looking better than it was back then and what people accepted expected. There is a risk. Nonetheless, to the extent we get the trickling through a better economic data, into consumers and firms,