The german lenders rating cut as it struggles through another strategic overhaul. The stoxx start trading in about 30 minutes time. Matt take a look at what we see on futures, equity Index Futures are up. Yesterday we saw the cash trade closed up across the board with the exception of the ftse. Take a look at the moon to trade in the bond trade. We are trading around 48. We had gone up through 50 yesterday. You saw real jump in yields, around the world yesterday, but also here in germany. Now we are back into that range where we have been sitting. Guy . Reachedterday, equities their bid. This morning you have the yen down against the dollar, the kiwi down against the dollar, the swiss franc down against the dollar. You need to take a look at yesterday. You can see on the bbdxy. Today we are coming in and sitting at the backend of that process. We will figure out whether this is monthend listening to whether there is more to it. It is coarser but lets talk about the things we need to focus on. This is some of the stocks sectors and this is where the action is. At index level. Where is the money where has money been moving . Oil and gas, at index technologs over the last quarter, moving out of media, travel and leisure. Of care in there as well Just Health Care in there as well. Health care in there as well. Some of the noncyclical stocks. That has been the story over the last quarter. What does that tell us where the what does that tell us where the equity markets are positioning . Lets get to Bloomberg Business flash with juliette saly. Juliette the Spanish Governments continuing efforts to stop an independence referendum in caledonia this sunday. The rebel administration is rising ahead even after madrid sees 10 million ballots and arrested more than a dozen local officials. Catalonia includes spains secondlargest city, barcelona, and accounts for a fifth of the countrys economy. Japanese inflation has hit a twoyear high amid the tightest labor market in decades. Increased by 2. 1 . Household spending reached beat estimates. Treasury secretary Steven Mnuchin says the republican tax plan unveiled will cut the u. S. Deficit by 1 trillion. Most economists surveyed by bloomberg think otherwise. 21 out of 26 polled predicted it would widen the budget deficit over the next 10 years. Hedge fund manager says the tax plan. Of promises great jobs and spur growth. Support. Ail to spur this is going to be a tax bill for Hedge Fund Managers in florida and the descendents of very wealthy people. It is going to be great for them. Everybody else, not so sure. I dont think this bill is getting done. U. K. , membersthe of Theresa Mays Conservative Party can agree when they think the Prime Minister should quit the they think it should be before the next election. The same proportion said she could just leave the next election in 2022. 38 said [indiscernible] global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Septembers dollar rally stalling at the month. Whether it will resume climbing in the weeks ahead . Or is this a bump in the long term downtrend . A critical thing to think about. Mark cudmore joins us. Affect a month and affect . Es end and that month inflows is why we saw a pause in the correction and the dollar bank yesterday. Where do we go next . Are we going to see a shift in trend . Are we going to see the dollar head back up toward the highs . Is this a small correction on a very stylish downtrend that is gone to quickly over the summer. Ter camp. That latter the currency is so much he. Is still not cheap. Some of the terms of trade have turned more negative recently. Who knows if this tax plan is going to pass . Everybody happened to that is short the dollar . I thought there was a coiled spring affect. Is that no longer a concern . Everybody that is short the dollar . Mark i dont think it is a big concern. The shortterm market is very short the dollar. There might be a little more pain. I dont think this bounces completely overcome i still think the structural downtrend is over. You might get more pain for the shortterm investors. Real money structurally, if you look at where the dollar reserves are allocated, theyre still reserves allocated in the dollar it is, the world are still overweight. That needs to come down. Ive take a look at this bounce is a perfect opportunity to cut down some of the holdings of dollar. There are the test they are the real bigmoney players they are the real bigmoney players. Guy why are the markets not anticipating any volatility around the catalan vote . We have charts we can put up. It just isnt moving. Why is the market not freaked out about this considering some of the little turbulence we have seen and this posing and stential threat to spain posing and existential threat to spain . Maaco i wonder whether like myself mark i wonder whether like myself people dont feel as informed. There hasnt been as much detailed coverage of the issue. No one really knows how to play it. Imagine this unofficial referendum and they declare independence, what happens and then daca the real problem happens then . The real problem is if the police have to take a heavy hand. This is a heavy issue for spain but no one knows how they are going to play it. Are we going to see a canned reaction and a presentation of a much more serious, official referendum . The real problem for investors is a very not fully informed. They are not sure when we will see the stress. Will it be monday . Wednesday . 35. what about the ibex the stoxx have done relatively well. Is this an issue . Will it be an issue like we saw with the ftse after brexit . Exposedthey are not so to simply domestic consumers . Mark a very good question. I am not sure the exact down of the ibex. I do know of a lot of the index has exposure to latin america. That is very relevant. , until thislso catalonia vote, the spain story is one of the Great Stories this year. Spain has been making a recovery from but i from quite a that place. It has gone through some forms and has made good progress. No one has noticed in this catalonia vote has noticed this catalonia vote until the week. Ek until this people havent had time to catch up on a story which seems to have jumped on the radar out of nowhere. It is hard to know exactly how we played on monday. Matt how do i put this together with guy how do i put this together with the ecb . The numbers are not going to get any better from here. In terms of the kind of positioning story, maybe youve had considering markets are discounting mechanisms, you have the bulk of what youre going to get from europe. How does this sit sidebyside what appears to be a great political story for europe . Mark one of the issues we might see is how the ecb will react. One of the stories we have seen is the fact that the fed has gone from several years of emphasizing data dependence to going, ignore the data, we want. O hike rates we might get a similar theme in europe where the ecb those i know inflation is not on target, we need to normalize. We need to remove the emergency Monetary Policy that was in place. That my clearly be the narrative that might clearly be the narrative. There are those issues there. Just set it up, this is not about tightening. This is about normalization. How do you think the ecbs reaction going to be . Guy mark, always a pleasure. Mark cudmore joining us. Later, we are going to bring you an interview with gary cohn. That comes at 12 30 p. M. U. K. Time. Matt, he has been missing in action. Maybe being name checked by the president. Throwing his name back into the ring when it comes to the fed chair. Matt interesting that he says the reason he stayed after he was offended by trumps comments is that he wanted to get this tax reform done. It will be interesting to see if it has any good chance of passing it on to quickly bring you some headlines in german in the german press right now which are not really surprising. Interesting, especially if youre concerned about the deeper euro relationship and schaeuble stepping down from his position as finance minister. We know that he is going to leave the finance ministry and run the lower house of the parliament, the bundestag here in germany. It is a very awful position. A very powerful position. We are hearing from a very reliable paper here in germany that merkels chief of staff is going to temporarily replace schaeuble in the finance ministry. Maybe he is going to take a little bit of akaka a little bit of a vacation because we have a long week in germany because of the celebration of your celebration of Unification Day next week. Spohnhy is it not yet yen . Att he got into a bit of scuffle with some other politicians, little bit of a power struggle. Maybe merkel was not thrilled. He is only steppingpoliticians,a power in temporarily, so it is not a term it is not a permanent term it is not a permanent position. He is a big mover and shaker. Up next, we hear from andrew fca, nothe ceo of the the carmaker but the Financial Conduct Authority about how prepared u. K. Firms are for that iinding method to mifid deadline. This is bloomberg. Manus weve got around 12 minutes before the market opens. Hittingpi numbers just french cpi numbers just hitting. You got a 1 headline youre in 1. 1 cpi coming through at versus a 1 survey. A slight at the french pickup at the friendship pickup. The ecb target of 2 . Lets get to Bloomberg Business flash with juliette saly. Juliette u. S. Regulators are said to release aig from the government oversight ordered efforts central role in the 2008 financial crisis. The council has called unusual lastminute meeting for today to reevaluate the companys designation. While aig is not named in the statement, two people familiar said the council has been working toward releasing it on the label is an important financial institution. Ken griffin seven dell is returning capitaltim griffin seven dell is returning capital as a 60 tighten up its according to people with knowledge, some of the investors will receive all of their money back from the city dell Global Strategies fund by the end of the year. A spokesman said we have routinely made profit distributions in whole or in part across a number of our funds over the past 20 years. The wall street journal is closing down for did print editions in europe and asia. The final print edition in europe will be today with the asian edition ending a week later. The journal which is a part of Rupert Murdochs news corp. , if the your plan to adopt consumers that are getting their news increasingly on their mobile phone. That is your Bloomberg Business flash. Much. Thank you very the wideranging european regulation, mifid to, comes into with, the mayor said down there charity said down nejra cehic sat down with him and asked how far they are from the deadline. We want to make sure that we readyrything we can to be. That has evolved us being out and about making sure firms understand what is needed and what they need to do. I have to say we are not finding deliberate refusal to help so i am reasonably comfortable. A lot to be done as we might expect. We said no straightline, what that really means is the rules come into effect. Our supervision will take over of the markets and the firms. And the firms. We want to make sure the thing is being embedded. I expect to be taken that forward. No doubt we will find there is something that are in better. And adjust things that are going less well. Nejra yet already asked for paperwork to be submitted you have already asked for paperwork to be cemented by july 3. How concerned are you buy the ones that havent . Andrew we have had a good response. T was deliberate the time is come, as it were. We are chasing down a few sets of the industry. Often more it is those sets which is all new. There. To deliver more nejra sets like what . Andrew the trading platforms where they have highfrequency trading. Nejra you said you will work your work until january 3 hits. How hard and how would you come down . Andrew the rest of this year, going out and saying you havent made any progress. Dont please turn up on our door on the third of january. What we dont want and this is why we structured the work of the program as it is, we dont want to see it on generally third and we have been focused on what we need to do to make sure the markets are functioning. Guy andrew bailey, you can watch that whole interview on Bloomberg Markets. Our bigger issues facing the Financial Sector right now. Minutes away from the market open. Some of the movers. Deutsches come keep an eye on that. A downgrade for deutsches. Stock flying yesterday on the rate story it well come back and talk about the bank and what it means for the market open this morning. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Openfive minutes until the of cash trading. Watch Deutsche Bank today because as guide said, it has been just as guide said, it has been released on today. Two days in a row of 2 or 3 gains of optimism for rate rises or less negative rates. Here we see fits coming out today and cutting Deutsche Bank to triple b plus from a minus on a lack of revenue. A need for reinvestment for a turnaround plan. Deutsche bank which is already down 6 this year could fall again at the open. We are back into we are back in two. This is bloomberg. Lets take a look at where the fair values are pointing at towards. Are pointing us towards. Thate looking at a session is probably going to deliver marginal upside for european equities. A few stocks to watch, deutsche, carillion. Matt i am looking at Deutsche Bank versus its peers. Going back through old charts, typing deutsche, and see which he has not. This is Deutsche Bank in white and the Bloomberg European 500 banks index in blue. You can see that for a while Deutsche Bank had come back and was outperforming its peers in the beginning of 2017. It has come back down. Even with the twoday gain we saw, it has come down. We will see if the fitch downgraded its it hard is morning at the open. Downgrade hits it hard this morning at the open. As we have indicated, it is going to be a fairly insipid open. We had data coming out of the u. K. Later. The attention to that at 9 30. The attention to that at 9 30. Atpay attention to that 9 30. Nothing really going on. Below the surface, what is going on . Lets find out. Manus we are for euro inflation data to come out later on. We are waiting for euro inflation data to come out later on. You have pce at of the united states. Below the surface, it is about inflation. Morning, this financials slightly better bid. The stoxx 600 over this quarter is up just under 2 . Basic resources are up 9 . A trifecta across the range of europe. , a euro has been a tailwind headwind i should say for european stocks. When it comes to this week, Political Risk is front and center. A betting man, you would say, over the past three months we cascaded down. I want to put this in context. To five years and you begin to understand. It has been he narrows to bandwidth of trading in spain, germany in almost a year. Minisculenian risk is according to the market at the moment. That may change. This is your gilt market. Gilt yields at the bottom of your screen. Yield comes in 1. 37. Lly flat at stocks are a little bit better bid. Ibm off i am off to radio. Guy looking forward to it. I see be is one of the stocks on the move this morning. It is up. Ubisoft moving. Some of the miners are on the upside as well. And exchanges index changes look like this. Vodafone on the move as all. Hsbc is in the mix as well. The bank had a solid day yesterday. Political risk continues to be a factor. Certainly, we cant ignore. Matt interesting that Deutsche Bank isnt getting hit that hard. I trade i see it trading down. 3 . Lets talk about what is going on in spain. At alone campaign for independence comes to a head on sunday. The administration in barcelona will attempt to hold this referendum in defiance of the Constitutional Court and the Spanish Government in madrid. Investors have so far shrugged off the constitutional crisis. The ibex has outperformed its peers this year while span its spanish spreads have stayed calm. Maria tadeo joining us from barcelona. Why do they want independence from madrid . Is it the majority that want independence . That is a difficult question to answer, because we havent had any recent polls. Them want toof have as a and went to vote. Wants to have a say and want to vote. The point is that there is a lot of confusion as to whether the vote is going to happen. A lot of people tell us they want to vote. The administration, in an active defiance, has called a press conference the day to explain how the sunday vote is going to go. As you asked me how this started, they have always had a distinct history and language, but it can go back to 2012 when the spanish crisis started. Mistreated. Y were that had a lot of impact, and in a way, they feel they would be economically better off. Guy what happens monday morning, assuming the vote goes ahead . How does madrid react . How does it develop in catalonia . Maria that is the big question. Reaction is going to be monday morning. We could say, look, i was right. The rule of law has prevailed and this is a joke of referendum. Of the referendum. It would probably mean a Regional Election would have to be called, because parliament would not be able to deliver on the mandate. However, if we get a turnout on sunday that is significant and a yes vote wins, that would create tension in the market. The market reaffirmed the forecast for the year. They say if we see an escalation ands escalation intention, that is something to look out for in madrid on monday morning. All of thel have angles covered for you right here on bloomberg. Joining us now is freddie lait. The markets seem remarkably calm about Political Risk in europe. Off ine bit of a move the euro strategy. There is nothing there. Is that something because the noneventinks this is a for the market doesnt understand this and how it could develop into an event . 2012, we had011, the eurocrisis. You could see a real reason for economic weakness and markets to selloff, but while you have the tailwind of qe supporting things, Political Risk has become a more diminished genuine worry at an operating level. People speculate around it. Monday morning, im sure the spanish start market would be pleased with an independent result. That brexitway result and trump was not what we expected, markets went through it. As your reporter pointed out, it is still pretty solid. That is true around the world. Underlying, the economy looks presell it. Looks ready solid. Prettys ready looks solid. Matt does that continue with this possibility of the fdp and greens coming into a German Coalition with merkel . Freddie i think the rise of the extremist parties around europe has been ongoing for many years. I think it will continue and is part of a bigger social economical point. Part of which is being led by technology, part of which is being addressed. I think that can continue, that people standing up for labor and the working man will get a greater voice. It is different, but that is one of the big things Donald Trumps campaign managed to resonate with and win in america. I dont think it should be a. Urprise the German Government has always been leading coalitions. I dont think it necessarily means a greater risk premium pricing at this stage. Price in at this stage. It has been a real boost, ife Massive Gains this year you are a eurodollar investor into europe. I think it was a catchup trade. At the beginning of this year, europe was lagging so far behind where the u. S. Had got to. I feel like it has caught up. Better debt, range of ceo talent and far less Political Risk. You are going to stick with us, because we have more to talk about on this friday. Freddie lait, cio of latitude Investment Management with us. Remember, if you are a bloomberg customer, you can watch the show watching tv. Can watch the show by clicking tv. You can message as directly. You can click on radio or event coverage when something is happening. Up next, we are going to talk about trumps tax plan. The ministers in claims it will cut the deficit, but most economists say no way. This is bloomberg. Guy welcome back. Lets take a look at those financials around europe. We are not going anywhere in a hurry. T is the end of september i expect positioning has already been done. We are drifting into the end of the month. We will see what next week brings. Does it bring a resumed dollar store . Dollar story . Matt i think it is going to be important for everyone but me. I am going to be on vacation. The dollar is headed for its best week of the year, and bonds have sold off further as markets continue. Yesterdayhin claimed that the trump plan would cut the u. S. Budget deficit by 1 trillion. A majority of economists dont that and say the deficit would why you know would widen over the next 10 years. Is the cio of latitude Investment Management and joins us on set. What do you think about the possibility of the tax plan passing, because this is where all of the optimism is coming from and the u. S. Market. Freddie i agree with you. To step back, i think the dollar rate in america is one of the key market variables. It is the key thing to watch. In terms of the tax plan, which has been causing that renewal of the reflation trade we saw post the trump election, i see no new information that makes it more likely to happen. I havent read the plan in a lot of detail, but i believe it is unlikely to be budget deficit reducing. Is going to be a fiscal stimulus is it is going to be a fiscal stimulus, it is bad for the debt burden already on the united states. For the possibility of it coming through in its current form, i think it is low in the market has got overexcited. This made the eight shortterm move on the dollar this may be a shortterm move on the dollar. Guy we saw yesterday be dollar softened up. I am going to post a little question. This is exhibit a. This is a question i keep coming back to on a daily basis. This is the data. So it is a longterm chart, down. The market is getting shorter and shorter on volatility. He was the question for you. Here is a question for you. Said the market say the market gets down. People are going to be so out of position on these positions, how does that work its way through . They are going to have to rebalance at the end of the session. People will have to sell what they can. There is a ripple effect. The endnking, we have of the course. We have another course where volatility goes down. What happens when it doesnt . Freddie that is beyond my expertise in terms of futures trading, but what i know is that positioning within the market at for further expectation for the volatility is fuel for fire when it comes. Whatever that match might be that sets fire to it. We saw this in the last few years when you have had a rollover. A rapid rollover until real money buying comes back in. I agree with you. I think you see a bigger gap because it has to get unwound. Some of this will be smart hedge funds. A lot of people are trying to take advantage of the trend. Guy trying to find deals. Freddie trying to find yield by selling call options. Picking its a free risk way to earn capital, but some it actually it is not. There is a risk to Anyone Running that position in their portfolio. Training ctly wrigley trading or any other strategy. Whether directly trading or any other strategy. Part of the tax plan is trying to get companies to bring back from overseas to overseas. Cash from i wonder if the market needs investors to retreat repatriate cash. Is there a lot of that on the sidelines . Freddie there is. If you look at the survey in terms of its spread and depth, the level is relatively high. We are at alltime highs in the stock markets around the world. Yet, it is still a be grudging bull market. That is for one simple reason, stock markets compared to any absolute measure of valuation are expensive. Markets are 10 , 20 overvalued in most regions. They are still cheap on a comparative basis. It is whether or not the market can get comfortable. You saw Warren Buffett making this point that if they are cheap compared to bonds and they would be if you go up 50 basis points, 60 basis people continue to buy these equities, but it is a be grudging move as opposed to a bullishness. Warren buffett said they have a longer duration than bonds. Freddie lait will stay with us. Joerg kraemer speaks to bloomberg. That is next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. I am looking at volkswagen shares right now as we have breaking news from the german carmaker that they are going to put aside another 2. 5 billion euros for recall costs in north america. That is going to hurt thirdquarter profits. Down 2. 75 . Shares volkswagen, negative special item of about 2. 5 billion euros. Those are recall provisions for the north american market, and it will hit thirdquarter profits. Guy lets talk about the thing we talked about yesterday. Manager sitting down with bloomberg yesterday is not wild on the next plan coming out of trump. He has harsh words. Take a listen. This company was supposed to be making money now, and now supposed to be making money by 2020. Im guessing by 2019 we will hear about 2025. This company is structurally unprofitable. Its capital structure is to leveraged. Too leveraged. Guy jim chanos talking. Governor carney is making comments right now. Thinking about putting its foot taking its foot off of the accelerator. Like he is giving another like to that story. That is what the reaction in the pound is right now. The pound is coming down. That is the reaction in the euro. This is the comment here, and it is coming down. Unwind itsing to move. I didnt have it zoomed in far enough. Freddie lait is still with us. To theto come back comments on tesla. You told me in the past you find it hard to find individual , trying to find Investment Opportunities is difficult. Because youo , get better. You get battered. You look at the fundamentals and it looks like an obvious one. What does it tell us about the Broader Market right now . Freddie the fact that people are buying stocks told you there opportunities in the nearterm and people are looking to the future more. That is why the fang stocks are making so much money at the moment. We agree electric cars and a time as a vehicle will be the future. We can disagree on how fast it will happen. Whether tesla is the only one that wins, i think it is now the largest car company in the world by market cap. I think it is a step too far. You are betting against the entire automaking sector of america, germany, china, japan. They are opening billions of dollars in excess of aggregate to what tesla is doing. Youll people like google and apple coming in. You have people like google and apple coming in. We have been looking at the autos in germany over the next 5, 10 years. A couple ofe is years overspent, but we are looking at them. Goingfreddie lait is tuesday with us. Up next, we will talk about president macrons ideal for europe. 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. Matt downward dollar. The ring back the greenback rally stalls. Will the currency resume climbing on hopes of tax reform next week . The catalonia question. The vote for independence from spain is this sunday. We are live in barcelona. Project downgrade. The rating was cut by fitch. Deutsche downgrade. The rating was cut by fitch. Good morning. Welcome to Bloomberg Markets european open. I am keeping an eye on what is happening with the pound right now. Beis unwound, but seems to down thing, not that much. There are the positions. We come back up on the back of these carney comments. They suggest a november hike is coming, which is interesting. 30 minutes into the trading day. Equities going nowhere in hurry. Matt there is not a lot going on in markets that looks like today with the exception of the currency moves. We are only 31 minutes into the session, so keep your hopes up. With al macron was met tepid reception last night from his you country parts from his you counterparts. From his eu counterparts. It gives the development could momentum, and i believe we should enter into deliberations quickly. At first the proposals ares concerned, are there was a level of agreement between germany and france. We must discuss the details, but i am of the conviction that europe cant stay still and must continue develop to develop. Is joergning us kraemer. Let me ask you what you expect from the next German Government, assuming we get a coalition of fdp andand greens greens. Do you think they will force macrons plans to be put on hold , or will merkel find a way around that and continue a deeper union in europe . Joerg i think this will be very difficult for merkel to be able to continue to support mr. Macrons plan. The next Coalition Government in germany is likely to include the promarket liberal fdp party. They made it very clear in their program and their Public Comments that they are against the plans of mr. Macron. To the treaty. They want each country to be responsible for their own finances and not rely on other countries money. Scenario, i am selling proof real debt peripheral that. Is that the story . I think under a three party coalition, which includes the fdp party, germany will be able to make symbolic steps towards mr. Macron, but the government and mr. Macron will not be able to create a meaningful budget. What will be greens bring to the table as far as concerns about industrialization in germany . Has a that a region government working well with the carmakers. Is the federal party going to be just as family to the automakers . You are right. In that region, the home state in that region, they are you are right. This is not true on the federal level. I expect the greens to created afficult to create difficult time for the german auto industry, because they demand to step away from internal Combustion Engine by the year 2025. Guy could you that is going to be the next german finance minister . Who do you think is going to be the next term in finance minister . Joerg mr. Schaeuble was already announced going forward, and i think this was one measure by merkel to create room for the liberal party. I expect the next german finance minister to go from the fdp party. They failed to regain the parliament four years ago. Is then reason for this government before was not able to push through the agenda, because it was avoided by the finance mr. Schaeuble. They have to in command of the finance ministry to put through anything of the program. I expect the next finance minister to come from the ftp liberal party. Fdp party. Matt schaeuble has been promising tax cuts for the middle class. Reform expect real tax germany . Be askedquestion could about the u. S. , and it seems to be just as unlikely. Joerg when it comes to all ,ther areas of policy environmental, European Union integration, they are different as far as the three parties are concerned. When it comes to tax cuts, all three parties more or less promise to cut taxes, therefore something will come, but do not expect a pronounced one. Matt thank you so much for your time. Joerg kraemer, chief economist from commerzbank coming to us from frankfurt. Remember, if you were a bloomberg customer, you can watch the show using tv. Us on twitter. There is a lot you can do on tv. Coming up, we will speak to upmarket sing otmar issing. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Lets get up to the london headquarters to get the first word news. For that, we go to add. The Spanish Government is continuing efforts to stop an independence referendum in catalonia this sunday. The administration is pressing ahead with it even after madrid ceased ballots and arrested more than a dozen local officials. Accounts for a fifth of the countrys economy. Steven mnuchin says the republican tax plan will cut the u. S. Deficit by 1 trillion. Most economists think otherwise. Actuallyicted will widen the budget deficit over the next 10 years. In the u. K. , members of Theresa Mays Conservative Party dont agree exactly when the prime investors should quit, but they think it should be before the next election. In a new poll, 13 said she would quit now or in the next year. The same proportion said she should leave before the next election in 2022. 38 said she should go after britain has left the European Union scheduled for march 2019. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Guy an ecb board member says the inflation Mission Still isnt accomplished in an interview. Meanwhile, in london, the central bank is gathering for a twoday bank of england conference, celebrating 20 years of independence. You have a bunch of central bank celebrating 20 years of independence. My question is, are Central Banks doing a good job, in as much as understand what is happening with inflation . Lets go around from that corner of the bank. Lets go around from the corner of the bank. Otmar issing is joining us. We find ourselves in a situation where we are celebrating the independence of Central Banks. At the same time, they are questioning their ability to do their job at test, keep inflation stable. Are Central Banks doing a good job, whether or not they are independent . I think independence was a decisive step two make the decisions independence from political interference. Yesterday there was a speech explaining why they did that. You are right. Central banks dont really understand what is going on with inflation, and this is a worldwide phenomenon. I personally am not concerned 2 ut inflation staying below in the euro area or in the u. S. It is a strange situation. Central banks were made independent namely to avoid that inflation would rise to former hikes. Two former hikes. Now, the concern is to lower inflation. It is a strange. Guy what is your answer for the question . We are narrow and so many economies. You look at germany, the u. K. Unemployment keeps going down. Why doesnt the curve work . Is one of the riddles. The phillips curve has flattened more and more. Is stillle, the fed. Etting still guessing wages dont rise and drive up inflation. Globalization, weakness of unions, and to fears that employees might lose their chance if wages rise to fast too fast. Matt i wonder what you think about the Central Banks independence. S independence. How would things have played out were out were central but not independent . Otmar i think the bank of england demonstrates is independence every day. I think the global phenomenon problem is that Central Banks are probably exposed to overburdening by high expectations. They once were called master of the universe. This is something Central Banks cant deliver. They are not master of the universe. They cannot finetune the economy. I think they should concentrate on what they have done before, keeping inflation low, constrained, and preserving financial stability, which has become more important. Is the bank of england doing a good job at keeping inflation low and constrained . Otmar yes. Theink the test has come in way of brexit. The pound has weakened. A hard this could be test for the bank. Guy can i ask you a question about the svp in germany . It looks like it will fill the finance ministry role in berlin. It is keen on the growth and stability pact in all of the rules that exist within the eurozone would you agree it should push this line pretty hard . Should those that break the rules have some sort of compensator he factor put into the mix . Otmar i would not go so far. President macron, before the german election, said if the fdp party is joining the government, it is a political death. I think it is exaggerated. In the previous parliament, which has finished its term, the liberal was missing. Guy when you look at the future of europe and think about the future of the eurozone, do you think it is becoming more integrated, less integrated . What do you see the future of the eurozone being . You were one of the key moving parts when we went through the financial crisis and the bailout. Where do you see the eurozone now . I think the eurozone is integrating more every day. This continues the common market. The Senior Market is working, and divergence has declined recently. The expansion policy of the ecb has long reached countries might spain. Countries like italy is one of the Major Concerns for the coherence of the eurozone, but this is mainly due to total lack of reforms in italy. Tore are only minor steps reorganize the labor market. Y, if you look back this must change. Guy you wonder what happens if it doesnt changed. Otmar issing, thank you for braving the weather for us. Enjoy the rest of the day. Otmar issing, the president at the center for financial studies. Up next, we will be talking about the movers in this morning session. We will be talking about volkswagen. Story rearing its ugly head. This is bloomberg. Argentinas president says single digit inflation is in sight for the first time in more than a decade. Speaking to bloomberg, the president says he is committed to reforms. I feel we have turned the corner. Again,growing, and ,ithout fixed Exchange Rate without any price controls, we have been reducing inflation. Your it is going to be lower next year it is going to be lower. I am confident in 2019 we will have singledigit inflation. That is fundamental, because always firstects the people with lower incomes. I need to cut poverty. Our First Priority is reducing inflation. You are almost halfway through your fouryear term. How good it job do you think you have done . I have been working at working everyday from early in the morning and trying to put of talentedood team people, honest, committed, and i think there is a was a learning process. Is working much more. The majority of them either have experience in the public sector. That takes time. Now things are working. We are consolidated as a team. That is unique for the history of argentina. I feel there is a good environment. You need to keep working together, four or five ministries at the same time if you want to achieve reform. In addition to what we did wrong in the past, we have to face a world that is changing all of the time. You have to be open to changing. Reporter argentina has an important election next month. It is effectively a referendum on your presidency. That is how would terms tend to work as a firstterm president. If your coalition does well in the midterms, will you run for a second term in 2019 . Pres. Macri i have been clear since the beginning that i am open to that. I think it is not time to talk about that. I am ready to work until the end of the constitutional term. Reporter the people of argentina, if youre right in this country needs to be on a reform path for years, beyond this four year term, wouldnt you want them to know that you will be there for a second term to keep that perform machine running . That form machine running that reform machine running . Pres. Macri i want them to know they can count on me. I dont think we have to talk about that now. We create new jobs, so i am fully committed in that. I want to be focused on that. We can talk by the end of next weyear what we are going to do n 2019. I think there is plenty of time. Guy plenty of time. Lets talk about the movers this money. Nejra losses work would cut 2017 earnings. An update coming in the First QuarterTrading Statement in november. Stock, weas sold dont know the ident to t it tooken lower after an additional charge. Porsche lower, too. Guy up next, it is surveillance. Matt miller and i are off to radio. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. E. U. Leaders meet under a cloud of issues. Way for find a ward. Economist on the treasury secretary disagree on the impact of the plan on the deficit. A new poll finds most members of mays party want her gone before the next election. Fdas warning. Good morning,