Will they moved their headquarters from catalonia . You are seeing the selloff continue on the periphery debt, 2 . Ish yields up about sterling, this is one for you, year. He worst of the can headlines get any worse for theresa may . Jonathan i think that is theresa mays cross. David if they can get worse for her, it will. It is jobs day and coming up at 8 30 a. M. We will get september data from u. S. Nonfarm payrolls and Labor Force Participation rate. We will hear from the fed president s. We first want to focus on the jobs numbers and turn to julie hyman in washington, d. C. She will get the numbers before we do and she will come tell us at 8 30. What are you looking for . Julie what we have been looking at, the hurricanes will make this not a very normal jobs report. There will be a lot of what economists like to call noise in this report because of the various hurricanes. Harvey made landfall august 25, irma september 10, and the survey period ended slightly after that. The nonfarm payrolls number, the median estimate of economists we surveyed is for a gain of 80,000 jobs, which is significantly lower than august. It would be a six month low, but there is a lot of confusion over exactly what effect the hurricanes will cause. There is an unusually high dispersion in the as well. 198,000 inspread of that nonfarms payroll estimate, which as you can see from the bottom chart, particularly in the past couple of years is pretty unusual to have that size of a spread. That said, the Household Survey, the actual jobless rate estimate, 4. 4 . There appears to be more consensus around that, and we are looking for average Hourly Earnings to climb by three tents of 1 month over month 3 10 of 1 month over month. If we see a fax from the hurricanes it will be on the lower end of the spectrum, according to economists. It is probably not going to just last one month. We could see the effects happening for the next several months, both depression and rebound. Alix you want to Pay Attention to it that the you have to it 8 30 . Julie yes, yes you do. Alix take a look at the bloomberg, this is the whisper number that people are putting on of what the number will be. There is a steep decline in the last few days. Meyer joined by michelle. Nd of arturo gallo michelle, i get the uncertainty but we had some killer data this week. Why the whisper numbers . Michelle that is a good question why the whisper number would go down. It could be as the Consensus Forecast came in the market kind of naturally slipped down. The dow was good, ism surveys were strong, durable good orders were strong. Suggests maybe a low 2 number versus a one handle. Alix what is your number today . Michelle on top of consensus, 80,000. Alix how are you looking at the jobs number . We have to Pay Attention but we know it will be revised. Alberto we think there is potential for upside surprises. Focused on wage pressure after the positive numbers we have seen in ism over the past few weeks. , during theonths of summer, of bad Inflation Numbers but the dollar was weakening. We could see a rebound effect from that period of weak dollar into inflation, and the market wants to try to guess it from Hourly Earnings. That is key because the treasury market has been stable so far. It is failing to break this 2. 36 level on the 10 year, but a tip higher in Hourly Earnings could make a difference. I want to establish where the market vices going into the number. Trades on any positive surprises and says things are not that good, is that the approach we are looking at . Alberto there is a goldilocks scenario where effectively you are living in a very long expansion into global synchronous growth expansion, so the bull case is that economic volatility, inflation, and policy volatility are low so therefore market volatility is justified to be low. If you look at politics, geopolitics, and some of the imbalances you are seeing across asset markets, you start seeing irrational behavior, companies that issue bonds for dividends to pay back stocks in the u. S. Investment grade market. We are worried that if you see inflation, the goldilocks environment can be broken finally has the yield curve could be steeper, the dollar could get stronger, and a lot of the carry trades would unwind. This is one of the latent risks we face to go from a goalie goalie lockse to more inflationary environment. Goldilocks to a more inflationary environment. Lowering Central Banks the level of yields and volatility of yields and economic surprises. Having said that, there is politics that is volatile and that is the first risk. Military moves between the u. S. And north korea and populism in europe. You have seen catalonia, germany , corbyn in the u. K. The second risk is that you get some inflation his job markets have been tight for a while. It will not be a huge improvement in inflation, but you get a slightly hawkish fed they knew chair and a slightly higher inflation and bond markets, everyone is canduration, bond markets keep the level they are now and we have a repricing. David lets talk about inflation, every month we talk about the average wage. Is that likely to be affected by the hurricane . We know the number of jobs has a wide variation. Is the same thing true for wages . Thatlle it is possible wages are distorted and if you do not see as much hiring than you do not have as much wage pressure on the upside, but you could make the case that certain types of labor related to construction and home building, wages increased. You want to look at an industry level breakdown of wages to help determine where there has been some noise or distortion, and this is the same that you want to do with headline numbers. Try to determine on a breakdown where there is something that looks peculiar where you can gauge the underlying trend versus that noise. Alix does that mean that any kind of good number the market and go, see, it is great, any bad number we will ignore . Michelle if you get an upside surprise to the headline number for wages, the market would be pretty excited, especially since we have seen a string of better data. If all else is equal, the numbers would have been biased lower so a strong number above consensus, even 150,000 which is comparable to last month, would be perceived as a positive surprise. Michelle meyer and Alberto Gallo are sticking with us. We get reaction to the jobs data from alex cruiser of princeton university, rick rieder of blackrock, and gary cohn. We may ask about the fed. This is bloomberg. Jonathan after a week of Political Drama that rattled Financial Markets, the spanish Prime Minister will convene his cabinet in madrid, set to meet with his ministers to discuss his options as the events threatened to spiral out of control. They have threatened to abandon the region. Joining us from the region is maria taddeo. Just get us uptodate on where we are currently. Maria this cabinet meetings you mentioned has are ready taken place we are waiting for the press conference but we are getting a sense from the spokesperson with the government saying, this is your final warning, you have to drop this unilateral declaration now. There is no time to wait, no mediation. Unless you drop it there is nothing to do. Secondly and this is looking to the corporate world, a document would allow catalonians to move their headquarters away from catalonia. They would be allowed to fasttrack if they have to. Jonathan it feels like the separatists have been boxed into a corner and it is difficult to understand how they get out of it. How do they get out of the position they put themselves in without agitating their base in catalonia . Maria exactly, that is why they are so under pressure. This is a story we brought yesterday. Background,e bit of because i know this is difficult to understand when he do not follow it on a daily basis. This platform puts together uppermiddleclass conservatives, and what brings them together is the idea of independence. The moderate side is getting concerned about the Market Reaction and they are saying maybe we can backtrack and step back. Hours, maybe we could have a talk in scale this back. The radicals are saying, we need to go ahead because we have the men mentum momentum. Bute is a lot of division they have backed themselves into a corner because they have no Domestic Support and the e. U. Will not get involved. David he talked about the Market Reaction, what about business reaction . How bad could that be for catalonia . Michelle the Business Community maria the Business Community is extremely concerned. Bankers have put out this statement. They are already under pressure generating profits. Now you get this element of uncertainty and they decided to move away from catalonia. This is a big bank based in barcelona. They operate in the rest of spain. We expect an announcement later this afternoon. Great to maria tadeo, catch up with you. Still with us is Alberto Gallo of algebras. You are running your fixed income fund. It is catalonian regional nominal debt at 3 and a 20 and a similar maturity spanish debt with an Interest Rate of 0 . I wonder which one you would be buying, spain or catalonia . The moment, i would not be buying any of the two. They are 0 both very tied by historical standards. There is a yield ramy them on premium on thed catalan bonds but we are close to the bubble. What is interesting is the banks. They are talking about very solid banks, especially kind so u bank. Xaca obviously there is some noise, but i do not think we are getting even close to a separation. In the worstcase scenario, you have a declaration of independence on monday, which by already triedans and then you have the Central Government tightening the screw on independence. Our view of the solution is more fiscal autonomy for a region which is one of the richest in spain and is trying to keep tax revenues. The rest of the country does not see that in a very good light. Catalonia is too large to become fiscally independent. It would subtract many resources from spain, and too small to be independent from a military and Economic Resource basis. It is not big enough to be fully independent but too large for spain to let it go and become an independent region like the basque country. Jonathan have you been using this as an opportunity to buy spanish bank credit . Alberto there has some been does there has been some widening in the spreads of Spanish Banks. We think the banks in spain are really solid, banks like santander hardly have any loss during last decade, even the crisis. They are very diversified in global. The local ones are also relatively strong and profitable. We have seen the usual tail risk priced into the euro zone where Something Like this happens, that usually the market tends to over and best overestimate this risk. We think there is a small buy opportunity and there could be for a few more days next week, but these banks are solid. Alix where else . All peripheries are selling off in terms of sovereigns, portugal, italy. Where is this creating other opportunities . Alberto i think generally the periphery space has been a bit correlated again in the last few weeks. This year, europe has been a very positive surprise. Everyone was bearish at the beginning of the year and then that le pen loss in france reversed the picture, creating a strong axis with merkel in germany. Merkel will have to form a coalition despite the strong presence of the alternative for germany far right party, but we think that will happen. Catalonia, we are talking about a negotiation, not a separation in our view. Fundamentally in europe there is growth. Growth is coming to the countries that were weaker. Greece and italy and portugal are growing. The credit cycle is turning, tanks are selling nonperforming loans, so there is a continued fundamental backdrop. Even though we do not think macron be able to do everything that was said, we think there will be fiscal stimulus. Also, european equities are still lagging and relatively cheap towards emerging markets or u. S. Equities. David Alberto Gallo is staying with us. Coming up later, we will be joined by gary cohn, giving us the trump administrations take on the job numbers coming up. Live from new york and washington, this is bloomberg. This is bloomberg daybreak, i am emma chandra. Glencore trumped chinas bid to buy oil in southern africa. They agreed to pay 973 million to chevrons business enough africa. Chevron agreed to sell assets to a chinese firm for 909 but 900 million. Shares soared above the marketed range. Switch designs, builds, and operates and has been profitable. The Nobel Peace Prize was awarded to the the agreement was reached in july at the united nations. Powerslds nine nuclear joined in the talks. David what i love about the story is that the correct executive director gets a call saying, you are getting the nobel prize, and she thought it was a prank. She did not believe it until she listened to the announcement. Alix that is amazing. David President Trump was anything but pacific last night at the white house when he entertained military leaders and their spouse is. Spouses. You know what this represents . It may be the calm before the storm. Joining us to understand where the president is pointing is kevin cirilli. What is he talking about . What is he directing this toward . Kevin no specifics from the white house on exactly what President Trump meant, however a lot of speculation about the iran deal because the president also saying he is looking to reportedly decertify the Nuclear Agreement and may congress act on this. That is where a lot of the feedback and fallout merged last night, democrats already criticizing the president on this front saying he is acting on a political whim and trying to fulfill Campaign Promises against National Security interest. Many within congress on the republican side are perhaps more in agreement. What specifically congress would do once the president kicks this their way mains to be seen, but this has definitely kick started an attempt a discussion on capitol hill. David he just hates the deal. Is there a timeline on when he will make a decision on whether to renege on it . We will likely get the official word next week that would kickstart a timetable of about 60 days up in congress for them to have to get something done. We should note that he has begrudgingly had to acknowledge recently that iran has complied with the agreement. He still does not like the deal. David thank you so much. News, a breaking statement from the Prime Minister in the u. K. Speaking to a broadcaster in britain. She says she has the full support of her cabinet. The u. K. Prime minister says the country needs calm leadership and she has the full support of her cabinet. The reaction in the fx market, the cable rate, the pound a little stronger off the lows, down just 2 10 of 4 1 . A marginal bounce, but throughout the week it has been dramatic. The worst week for the cable rate so far in 2017, so the message from the Prime Minister is that the country needs calm leadership and she has support from her cabinet. Alix i feel like when you need to defend yourself on basic things like that, that is a problem. David is the party going to say, step down . Jonathan i do not think that will happen. The cable rate down 2 10 of 1 . Is said Prime Minister to have postponed her visit to china as well, so she has a lot of focus on. Alix she is calm about it. Jonathan she is providing calm leadership in the markets are not buying it. From new york, you are watching bloomberg. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Jonathan from new york, a straighn eighth straight game. Futures pretty muted going in payrolls just one hour away from the jobs number. The story in the bond market lets get to it. Creeping a little bit higher, going up to that number by two basis points at 2. 36. And the fx market, telestrate more broadly outside the fx euro , more specifically against sterling. Week, the2 on the worst week for sterling so far in 2017. The Prime Minister says she has the full support of her cabinet. The market not really buying that at the moment. Of slight bounce off the lows and still down the corridor of 1 . Payroll is 60 minutes away and we will continue our countdown. Lets get you headlines up to the business world. Hears emma chandra. Emma President Trump offered krupnik remarks cryptic remarks before dining with senior leaders. You know what this represents . It represents the calm before the storm. Emma and the president asked what he meant, he replied, you will find out. The president is considering a new strategy to confront Irans Nuclear ambitions. The president would leave a multinational agreement for now, but would ask congress to tighten the law over irans compliance. He called the deal the worst deal ever, but allies say it is effective. Tropical storm nate is taking aim at the gulf coast and may become a hurricane tomorrow. Comingest track has a ashore anywhere from louisiana to florida panhandle. Forced oil rigs in the gulf coast to shut down. Global news 24 hours a day powered by 2700 journalists and analysts in more than 120 countries, i am emm