On the agenda . Think north korea. The focus. Trump says just fed focus. Trump says fed focus. Trump says sunday that powell, are in the running. Matt what stock futures are doing in the half hour until the start of trading. You see we are up across the board, not a lot of moves. There is not a lot of directions to riskon riskoff. We dont see a lot of moves in bonds. Not in the bund or treasuries either. Take a look at the argentinian 100 year bond. I have this up on the btv screen. You can access it on the terminal. We can see the yields here at almost 7 and this is one proxy to look at for what investors think of argentina. President won a big boost. His reform agenda [no audio] story is whatst is happening in the nikkei. Abe. In by on a win by you see the yen coming under pressure as well. On a real tear at the moment, the nikkei. The other story i want to draw your attention to, what is happening with the turkish lira which has been hit hard overnight. We have seen more negative u. S. Investments coming out of mr. Erdogan. The bigger question is, is this the canary in the coal mine when it comes to what is happening in the emerging markets . The question the mliv team were asking. Japans shinzo japans shin [no audio] asias secondbiggest economy expand for six straight quarters. It raises others chances of winning another term next year ahead of his Democratic Party which could make him japans longest serving leader and u. S. Secretary of state, rex tillerson, is calling on european allies to support u. S. New u. S. Sanctions on iran. Riyadh aiming to bolster new alliances between saudi arabia and iraq to counter irans growing influence in the region. Tillerson said saudi arabias leaders rebuffed his request to the isolation of the isolation. [no audio] yesterday. Accept major changes or risk defeat. Macquarie,resident, has received a boost after a gain ground after its congressional midterm election. Winlts said he could argentinas argentines largest five districts. Republic, the Party Victory inominant the countrys parliamentary election. [no audio] independence as soon as this week. Lets cross over to our reporter in madrid, maria tadeo [no audio] over the next six months. Roy hasnt given a date. What matters here is the vote if the future vote is done under normal circumstances. The big question is when this gets voted on friday, we know this will get voted, how will they be intimated. It will be very gradual. Yet to be realistic. It is very difficult to swap and administration within 24 hours. A lot of this will depend on what we get in catalonia. Guy if there were elections called in six months time, what will the poll say about whether the current Catalan Administration binghamton when . Administration being able to win . Maria that is a good question. Nothingare getting is would change. This survey pointed out that the proindependence would get a majority in the capital. They would have a somewhat number of seats but they will not get over the 50 of votes. It is not over is not equipped appear just is not a crystalclear situation. Declarespuigdemont independence because he already has once. Would he be jailed . Is and what he has done considered treason isnt what he has done considered treason flacco maria considered treason . Maria that is a good question. Unclear if he has made this declaration. Saying we do know that he has until friday to make a move. The question is is he going to go for that unilateral declaration of independence. He could have a legal test they can have a legal case against him. The Central Government doesnt want to get that picture but it if heepend on puigdemont wants this day in parliament. He still has time to call a regional election. Youe is a question mark, if post this election, article 55 would have to be pulled. Remember friday, will he get that vote . The options for him run out. Tadeo joining us from injured. Lets join mark cudmore. You talked a lot about spain and the fact that the markets are starting to understand how to react. How do we deal this week with this spanish situation . That itam worried hasnt changed from a Traders Point of view. There are a lot of developers happening every day. The one thing that is clear to me is we are not going to reach a peaceful, easy resolution and both slides both sides dug in early on. What iswhat is important [no audio] protests over the weekend and if puigdemont is put in jail, it could cause some real turmoil. What are the next moves youre watching . Is this declaration of independence the most important thing to watch for the euro . Mark i dont know that is such a sudden catalyst. This continues to be negative. I believe it is the most underestimated story overall. Develop. Ues to one of the things in terms of the pointts, it is that 2 Million People defied the government saying this referendum was illegal in the first place. They passed police blockades, wrist violence just risked violence risked violence. This isnt going to go away anytime soon. It doesnt mean we are going to get a development that causes a 2 drop. Weve seen many of these marginal negatives. That is going to continue to be the case. Guy lets have a conversation about japan. Nikkei is up and yen is down. There is a number of issues. Does kuroda continue and does this super majority mean the passing of the cost to she will be desk pacifist constitution will disappear the pacifist constitution will disappear . Mark certainly up for interpretation this morning on the market. [no audio] raises the whole tensions around the. Theres the view that they getting this big vote and kuroda will stay on me to support for super loose policies will continue. Yet has taken it negatively. Yen has taken it negatively. Marketection means the can continue. It is a like a sudden oneoff shift. It means that everything investors were trading off last week, they can keep on trading. Japanese stocks are breaking out and abenomics continues quite negative into yearend. Guy market, always a pleasure. Mark, always a pleasure. Eide data, barclays numbers, ecb decisions. Plenty coming up on the top line function. We are going to continue the conversation japan. We are going to tokyo next. This is bloomberg. Matt welcome back to Bloomberg Markets europe open. We are just about 15 minutes trading. Start of lets get to Bloomberg Business trading. Lets get to Bloomberg Business flash. For that we go to ad load low with a to ad load low. [no audio] interest, taxes and amortization increased to 532 million euros. Missing analyst estimates. Struggling commodity trader, noble group, is stated is selling its u. S. Business. Weekrepayment are due this. It says it expects to report a than one billion u. S. Dollars in the Third Quarter. [no audio] between pilots and executives. The Budget Airline was forced to cancel more than 20,000 fights just flights. 20,000 20,000 flights. That is your Bloomberg Business flash. [no audio] seeelection win with could him lead the worlds thirdlargest economy through the year 2021. Lets go to tokyo and joint stephen engle. And join stephen engle. How much change will we see as a result of this russian mark what will the result of this . What will be priority be . Stephen the surprises where outside with bright skies. These Election Results were in the bag given the disarray the opposition saw over the past few weeks leading up to this snap election. We could say the gamble did pay off for shinzo abe and their coalition partner. As they got that super majority, what is new . I dont know if it is going to be new. More monetary easing, more fiscal stimulus and a continuation of his recipe to get japan to that 2 inflation target. Also of course theres going to be fiscal stimulus on care for the aging and care for the daycare aging and daycare for the children. Lots of stimulus still coming through. Then they are going to have to tackle more the sensitive issues. They have a mandate over the next four years tackle the issues like a rise in the change ton tax and a the pacifist constitution and what to do with north korea. Matt you talk with the pacifist constitution. What does this mean for japanese foreignpolicy . Stephen already he has spoken at a News Conference saying that they are going to continue the policies a little bit harder line now with the mandate on north korea. E wants to talk to xi jinping he will be meeting with donald trump. They did have a conversation last night on the phone as the election victory seemed so not for that super majority. A close relationship with donald trump, conversations with xi jinping, china to rein in north korea. This is one of the main points of the campaign they got him reelected, and that is we must have a harder line on the threat that is coming. Guy a quick question of kuroda. A continuation when it comes to Monetary Policy, does that come with kuroda heading up the boj . Stephen it is either going to be kuroda or someone who basically holds the same views. That is conventional wisdom or even one of the guests we had earlier on saying they could clone kuroda, maybe a slight joke. Somebody along those lines, because this is part of shinzo abes pledge. He wants to continue with his policies, and that means we need to have those accommodating policies from the boj. His term expires in april. We will have kuroda continue on from able or someone who holds the same views. Us. Stephen engle joining thank you indeed. Joining us, well take a look at what could move in todays trading. Keep an eye on phillips which reported a 12 rise. , if an eye on pendragon youre interested in the u. K. Consumer and the u. S. Consumer as well. This is bloomberg. Matt welcome back to the european open. I am matt miller. Take a look at phillips. This company out with earnings that were in line with expectations. Although sales missed the streets estimates, phillips says it is going to remain on track and deliver it plan on the companys ceo. Remain on track to deliver his plan so guidance is unchanged as the Company Continues to sell down its stake in the lighting business that it spun off earlier. Watch the stock which is risen percent in the last year. Guy i want to step into the midcaps but it is a macro view. Pendragon is a new and used car dealer. Morningome through this with cuts around 20 . The recent for that is a slowdown in the used car and the you in the new car market and a writ cross into the used is market in the u. K. It conducting a review. [applause] is conducting a 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. Matt . It shows you the breakdown of the bond purchases. The steepness of this curve is going to flatten. It is a great reference to half. Guy absolutely. 75. 25 is where the ftse is trading. A touch higher. The ibex is a little lower. The bigger news may come later this week. Manus a very good day to you. Oil up, that will possibly move the oil majors. Down. 600 that stoxx 600 the nikkei, the topics, all getting to the equity market story as there will be another push coming from japan. The focus will be on the oil market, all options are on the table according to the joint monitoring unity. Drillers of course in the united they United States fall for the third week in a row. The big week for the financials will be tracking ubs, the euro and what mario draghi says will be quickly important to where we go. It oneu had not seen . 20 the middle of since the middle of september. It is been about a month since you have seen the level. What will be the language that the bank will use . He heation well wont remain low. That will be critically important. Also the details on the maturities of the bond from the European Central bank that they hold. Matt showed you the bond the portfolio of the balance sheet. We want more detail on the bonds that are maturing. Where will the reinvestment take place . Those the questions the book the market wants answered. The market is opening as you say. The amount of turnover in the u. K. Is at the lowest level in a number of years. We expect to update parliament with a challenge. In terms of the legislation coming before parliament. They want parliaments to have the last word on brexit. I am off with caroline. Carolines office week, i am not sure who is on with me. Guy never lonely, never lonely. I need to go into the events and look at what is happening. Crh, all on the rise this morning. And see the index owns what the wages. Continue to watch the story. On the downside, some of the stocks weakening up. Some of the Spanish Banks are trading down as well. Santanders office well. The banks look like they are off. The big moves out there, waiting to see how the session develops completely. Keeping an eye on the political thats the public live in these markets are political events. Matt separatists will meet after madrid vowed to oust them. Charles signaled he could declare independence again within dates. Finally invoked article 55. What are the next steps . He has finally done it. Madrid will the sweeping powers of this region. He will be asked to leave office as deputy. Government being replaced by ministers in madrid. The government in winter it best madrid will get a veto rise to stop them hedging their agenda. A regional step election will take lace over the next x months. We dont know the date of that. He said what really matters is the rule of law prevails. Out theid stress article will be gradual. We have to keep it real about this. Difficult to swap in administration within 24 hours. The question is what kind of resistance we will get from the n regional government. Catalan regional government. What could prevent thats taking place . That is a good question. Out of rajoy has pulled to the nuclear option. Madrid makes it clear this will have to be gradual and the expectations will have to be tamed. For this article to go ahead and be implemented you need Civil Servants in catalonia to cooperate. Coordination between the forces and the madrid forces you at the same time we needed to keep in mind that the caps on government the government is as defiant as ever. You could get a declaration this week and also the government here in madrid, very much an option that is still on the table. Madrid has made it clear it is a big unknown and you cannot just switch the administration for 24 hours. Guy thank you very much, joining us out of madrid here in london. Do i need to apply a discount to spanish assets . How big is it . The point that we see is that there is nothing yet which i dont understand too much. Weve seen what you have presented at the very beginning, spinach equities are only a little bit down. That should not be the case. Within our context we are peripherals versus bunds. What will happen thereafter is a question. In terms of Political Risk there is not enough. The market doesnt understand really what the outcome looks like . It is both created the markets have difficulty with event since understanding what it means. Something the market doesnt really understand how to price may explain why we dont have the discounts. It might come drastically once we have more clarity. Matt this gives you and your clients in it. If the market does not know how to price this gives you a chance to make money. Take a look at this. Here, stoxx 600, normalized may 10 area spanish stocks have underperformed but not too much. Is this a time where you sell spanish stocks as you do not see enough action in the market itself . From a technical perspective yes. Exactly what you were saying but even within the peripheral equity space. Ibex versus ftse. Of performance but not too drastic. It is time to sell spanish equity as they have been from the relatively solid performance of european equities over the last couple weeks. I dont think enough is priced in. Absolutely. From a technical aspect of spenders equities are not safe area reporter is the a place you its all specifically . You would sell it specifically . Simply because those are so international are there sectors in spain you want to sell and some you dont want to get caught selling because they have the International Exposure that the stocks had postbrexit . Some banks in spain have International Exposure among that would probably the banks sector not something that would be affected too much, particularly because that is more exposed to what the ecb is going to be thursday. That is not something i would look to sell. You have some kind of worries about what we have heard in the last couple of days and weeks. Families would put their headquarters. Those were th lets talk about the markets. We got down 100 basis points. We have two factors at work, one of the cap and the second is the ecb. Expectations are that we are going to be seeing less for longer. Smaller purchases coming through. Impact theat periphery and how selective do i need to be in terms of picking my referral trade peripheral rates . Trades . What i would do in terms of risk, probably increase the risk. There is almost no alternative. Lets for longer. There is no way around this. We can sell it is a big surprise prejudice and. Repercussions from a technical perspective tactical perspective. Any kind of think of you get probably good in the periphery. Where to look is probably not spain. The particle story of the italy story has a bit more room. The italy story has more room to run on the positive or negative . If elite italy had independence referendum i this weekend as well. I think they boast past both passed. We are speaking the next 23 months. That is more on the Positive Side so you see spreads tighten and btp spreads versus Spanish Government tightens. Into the elections we need to be more cautious. Lets say the next two or three months, it would be fine. Referendumsto the in italy, that is something i would reckon six months ago. Unthinkable. Six months ago everyone was talking about integration in the European Union. Finally it is coming, what we now have all of a sudden is a referendum with 90 approval in two regions in italy. The populace winning in the Czech Republic over the weekend. Pastis a story of the which convinces me from a market perspective that as we have discussed, a pretty benign muchnse from the ecb, the upside further from here. Matt we still have a lot more to talk about. Across asset strategists with of monday morning. For lived to bloomberg coverage of the future Investment Initiative and saudi arabia. We start tomorrow with the host of topnotch death at the conference putting the ceo of the russian direction the direct fund. And at 4 Atlas Merchant Capital bob diamond. Lots to talk about. A lot going on this week on the market open. This is bloomberg. Matt lets crossover deeper into the markets. Reporter looking in the mid cap space, the u. K. Private hospital operator rising the most in more than one year. Is after it rejected a takeover proposal from its biggest shareholder. They got this last week and the offer values at 1. 2 billion pounds, it said the significantly undervalued prospects. It will it is required to announce by november the 20th whether it plans to make a firm offer. Also pendragon here on the downside. 2013, droppinge the most since june 2016. Carsecline in demand new and used car price correction has impacted this years profits. Essentially it is a profit warning and jeffrey has given interesting commentary on that. Pendragon down 17 . Gkn,ly im looking at upgrading the recommendation to hold. This company produces automotive performance proponents. Thank you for that. Global earnings season gets into full swing. How will geopolitical tensions, the messy divorce, and hurricanes impact result . Chart, we are not seeing the incredible downgrade to earning expectations that we have been seeing in the recent past couple of years. This is 2014. Max,s asset strategists, everybody seems optimistic about earnings. Back to the levels in 2013, 2014, steadily trending upwards from here. Most growth see the for earnings . Perspective,rnings the earnings season will be probably supported. The best it will probably be better in terms of revenue growth, earnings growth. Particularly in the u. S. The proxy is on the downside. Those sectors will probably struggle. Ones not only the more cautious. Guy lets have more fun with effects. Overhear here you can change the currency set of. Done 3 . You have youve done 15 , tell you what is going on with the currency story, bigger spread out. The story. At ive next 20 dollars, the dax you get these numbers here. In fx trade. S are inventory 17 certainly. Seasons, which sectors will benefit, that might make difference thats a difference on relative performance. In terms of both the performance that might make a little bit of difference. Massive callhe this year, the one big thing is getting fx right. The multiasset investors had a difficult time because of the appreciation. Was the massive game changer in terms of overall performance so far this year. Guy sick around. The cross asset strategist up next. Shinzo abe election gamble pays off. What it means in the world thirdbiggest economy. That is next. This is bloomberg. Guy welcome back. Youre watching the european open. Lets talk about the japanese markets, shinzo abe paying off big time. The majority in japans lower half, the super majority. ,is landline landslide win the longest run on record with the path now set continuation of loose Monetary Policy. It is going to impact how fx Market Impact equity markets etc. Max, the impact that fx is having a the overall trade you if you were a local investor, 13 ,ave gone around 30 euro investor 4 . Does that change now . Do you see significant evolution . Are the politics in japan going to change as well . Have still seem quite a bit of upside from dollaryen, more for longer. The opposite from what we have seen and how you described the ecb. It is the same but for longer. In terms of fx markets that is new information. It tells the markets in an environment where centralbank source of thing on the brakes, you see the bank of canada, the fed will likely see the ecb. Perspective central bank is stepping on the break. The bank of japan continuing what theyve done for months and months. That is new information in the sense of we continue what we do it effectively. It has no way other than to go down. Matt do you feel like the yen has further to fall . Guy easily. That will affect the japanese market. The correlation levels are quite diapering and this is still the main driver for Japanese Equities in terms of from a fiscal and monetary perspective. We have not seen much emphasis on the zest x during the campaign but that is because it is such an abstract thing. Guy stick around. More of the conversation still to come. Up, big decision coming this is bloomberg. Matt madrid makes its move. The separatist response area can run for a response. Holidays will changing the passivist constitution be the first item on the agenda . President trump says yellen, powell, and taylor are in the running for the chair. Is it time to buckle up for bond market volatility . Im in berlin on site guy johnson at the European Headquarters in london. Guy lets talk about what is moving. Headlines not a great deal. Unchanged but there is rotation to focus on. Personaland health bid, pendragon, what is on offer this morning . Rotating real estate out. Spanish banks in particular, the ibex is down by half of 1 and the banks seem to be leading that move you lets get a first word news updates. Update. Reporter shinzo abe repaying the lower house of government. The victory paves the way for more altar easy military policy that boosts stocks to the highest level in two decades. The secondbiggest economy expands to this raises his chances of winning another term next year ahead of the liberal party which can make him japans longest serving leader. Planlan separatist cap separatists, the president said it to be ousted within days. His allies are signaling he could clear independence. U. K. Prime minister battle to get brexit legislation through parliament. The new roadblock, the labour eclipsing thes, summit. Theresa mays underlined when given her an ultimatum. Changes to her legislation or risk. A reform agenda has received a critical boost after they gained around in elections. The key battleground of when azeris, his ally, the expresident s affairs critic. The Czech Republic eurosceptic has won a dominant victory in the parliamentary election. The party run by andre who opposes euro members of and has onys blamed paris attacks germany. Blow to another integration in the european and has established a party. Antiestablished party. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. Manus trump is considering john taylor and Jerome Powell for the top job. He also indicated janet yellen remains in the running for the nomination to a second fouryear term. Nicolas, talk is us through what the candidates would mean in terms of banking regulation and how surprised you are that yellen is still on the roster. Yeah, the fact is mentioning her is a surprise because shes not a republican and generally the nominee goes with the party which is naming them. Shehas shown competence and he is highlighting her as well. Whichever candidate gets the job, some form of deregulation or lightening of the loaded for banks. There are various degrees of that. Yellen would be where the most conservative keep it in place. She says the thrust of relations since the crisis was the right one. There are some to pare back a little bit, for example with small banks. Then you have people like powell who is a republican version of it yellen of yellen. Not going to burn the house down andmore of a deregulatory then yellen. Then there is taylor who is an unknown factor. It has not been his main topic area hes much more on the Monetary Policy side. We dont know as much about how he sees the world. Place, the Bank Supervision watchdog. Theres going to be interplay in the future and we will be watching closely to see what the choice means for banking regulation. Theres a lot of stuff that goes into that bucket. Which specific issues are the banks focused on . Across the board everyone would like to see lower Capital Requirements in the doddfrank framework. If you lower Capital Requirement you could do more business with less equity which rep records what banks want to show to investors. Theres also the reporting requirements. If you are a small bank with a hard toquirement it is meet the same standards the big banks do. If i was a big Investment Bank i would be really looking afford dismantling the rules. We have had a lot of noise from these establishments, saying it needs to be tweaked. The question is how far do you go in dismantling that . Wouldohn over the weekend be seen as being in the camp of tearing it apart. Speculativean on trading. Beyou or a bank you would wanting to do more business with hedge funds, trading more. Trading revenue has been lagging last couple of quarters. That is what the big market banks would be focused on. Guy we look forward to your. Ontinued on a big pricee to book premium versus the european counterparts. Theres a bunch of reasons for that. If we do see the financial Regulatory Burden lessened in the United States, a little more onerous. Another reason. With regard to the pricetobook premium. About the miss premium justified. From a regulatory bandh bundective bandh perspective, some being rolled back. In europe it is coming in 2018. It is the other direction. Premium is really justified in that respective. If we think about what that taylor, it bring in will mean higher rates. Absolutely. Curve,a bit of a steeper excellent related to accelerated rate hikes. That is the regulatory point of view. From a treasury market point of view, let me see what i can dig out here. Trading just shy of 2. 4. This is a longterm chart. 2 on the u. S. 2. 7, 2. 8, that, is a big spread in terms of the slide. Everyone at the moment is really focused on who is going to come into the fed. It does not matter. What will matter much more in the beginning of next year is we see quite a bit of upside potential on the core and headline basis. They will not be over to ignore that. For the next story couple of months, not for the end of 2016. That will start from the summer 2017 when we see them fading in a u. S. Inflation and to get only with regard to effects from 2017 see high yearill inflation coming in the u. S. And it will mean on the longer end of the curve, 10 year or 30 year. Priced out a little. That is the number one trader that people are playing. On the long spectrum of curve, theres a potential a lot of the speculative investors will be caught off guard and then you have a curve that can go wrong for those investors quite quickly. Matt from the website predicted predict it, Jerome Powell is still heavily favored. 55 saying he is going to be the next boss. You think he is going to raise rates further . He has never dissented since 2012. If that is the case does the dollar continued to gain . Dollar bearish bets are coming off and it could be time for the market to turn around. I think that is absolutely right. We see a hawkish told compared to taylor. The direction will be the same. With yellen there would be more of a case that it would be gradual and traits that i have laid out now. I think powell and taylor, those investors for 2018 would be much more on solid ground. Dissented, a not hawkish tilt and probably more some things do see coming through with regard to the tax reform over the next couple of weeks. As a european investor, i assume your clients are investor investing from a u. S. Base. Do you see the dollar gaining strength . We actually do like him or the european space, the eurozone. When the dollar is coming back you will see your life and dollar trading lower. Perspective 20 thetes ago, particularly stocks and the eurozone will benefit a lot more. Got the chairh and the vice chair to fill. Maybe taylor and powell. Max is going to stick around. Thank you very much for joining us on radio in around 15 minutes. Tune in if you would like more. Up next, curtain call for catalonia. The separatists refusing to back down. The latest next. This is bloomberg. Matt welcome back, i am matt miller here in the german capital berlin area castle and separatists will meet to consider their response mariano to marianothe rivera boy rijoy. Allies of the regional president have suggested he could declare independence again this week to joining us is antonio barroso, the senior vice president. Thank you for joining us. Do you think he will again declare independence . He did it for eight seconds and suspended that declaration but is he going to do it again at risk of high treason and serious jail time . I think the movement is only going to step up the challenge. Theher that comes in declaration of independence of thatkind that is clearer in the past it remains to be seen. I expect for the movement this to step uparliament the challenge to the authorities. Do you think half the people in catalonia actually support legitimate independence . They want their own tax system, their own currency, their own army . The dont think they have support from the majority of cap catalan. He does not have the to go for independence. Enacted . Es 155 get do you put your own police force on the street . Do you see a lot parliament . Seal off parliament . Becauseis a challenge it has never been implemented in the history of rain. All kinds of lawyers trying to advise of what to do. Authorities the will be controlled from the dread. It will be the spanish democracy dictating this to the police. The challenge will be whether they decide to oh babies rules or challenge the rules or madrid. Guy if you play the long game and the catalan separatists say lets play ball, wait six months, get reelected and end up with another political story on must exactly what we have right now, is that a viable plan b . Or have been backed themselves into such a quarter they now have to do something here and now . They have thehand hardcore elements of the movements, they want to step up challenge because they feel the worse it gets, the better it gets for them. Possibly some independence. Polls, the at the society is fractured. There was a recent poll showed in the elections in january or february or whatever, almost exactly the same as now. It doesnt have any resolution unfortunately. Does he continue to get the full support of the other spanish regions or other European Countries . We are starting to see some independence break from the consensus, a flemish leader is against what he is doing. I cant believe the vast region is behind what he is doing right now. Two levels, want the next, one International One domestic, one to national one international. With a strong nationalist sentiment, there will be an exception in spain. Other regions pushing for independence, then support from ther european members, European Union is ruled by the people that compose the union. In that regard, he is a stakeholder at the table. He will continue to receive the support of the european member states. Have let me ask you about the wider european situation. I think the markets feel like weve dodged a bullet as far as populism after the dutch elections, the french elections, it is some extent germany. We do see the far right in parliament. We do see the far right as a possible junior partner in austria. We do see a far right victory in the Czech Republic. Are we starting to see this decentralization populism get some strength . No. It has always been there and every time there is a major episode such as the scottish movements wille try to exploit it. That does not mean in the wider trend of religion there is every a reemergence. I never thought after mccrone populism would go away. I dont think risk is a linear you you have to look at each situation closely. Ulism many thanks manifests itself in many ways. What progress can we expect . There was expectation that europe was going to take a step forward. Is that a reality . It will be incremental. This is the problem with integration. Every time there is a strong leader there is hope for integration. It has never happened like that. Incremental, reforms over a number of years. Still, theknow important thing is that mccrone has changed his course. The table some blue because they did not want to. I think they will have some incremental change. Why is it going to take as long as it is . This is the Gravitational Center of europe and it is going to take months to form a new government. What does that tell us about the politics of europe . They are highly fragmented. We have seen a number of elections where they are recommended, remover how long it took. The get the netherlands. We parties under huge stress. Parliament becoming increasingly makesnted and that just different forms of government. This is part of the problem because what about treaty reform in parliament . It is going to be parental and very hard to guy thank you very much indeed. Stocks story. Top over to you. Earlier, numbers courtly profits rose 12 . Companyh health care is singing toit the 2016 as well. Basis, thatble number actually missed. That is why we are not seeing a huge gain of shares. Gaining moreing at strongly, 3. 4 . Third Quarter Sales meeting estimates and from the company staying the Third Quarter showed strong market momentum. Hitting a three month high on those shares. This has more to do with a emanate story. Cementived approval from companies to buy the supplier for 3. 5 million. Crh of 1. 7 in this session. Manus thank you very much. With bloomberg television, up next there is so much to go through today. Some of europes biggest banks report earnings this week. Later on interviews with Deutsche Bank cfo that i will go to frankfurt for that because i love frank for it to the ceo of barclays on friday. Two of the underperforming european banks. We will get a picture of how they are doing. Friday we speak to the ceo of ubs, sergio ermotti. Coming up in the financials and that is important because they really drive for drag the equity market depending on how they are doing. Join me on bloomberg you do Bloomberg Radio next. Guy johnson will be there with me as well as max cap. Max kettner. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Francine the lead of the rising stocks. The nikkei hits a record 16 day of growth for another term of outing onyx. The spanish Prime Minister announced his plans to strip power from the n government. Catalog government cap salon catalan government. Good morning, everyone. This is bloomberg surveillance. We have a really packed show for you