, icks marginally top left dekes up 1. 55 and the catalonia president stepping back from the immediate declaration of independence from spain. The euro rising for a fourth day. Lets stick with the spain discussion. Se are the share prices this is since they result of the referendum a week last sunday with a todays of trading. Last wednesday eight days of trading. In recenthey fared days. 4 since the ex down 7 10 ofib 1 . Leaving the legal base in catalonia and moving them elsewhere. Just give president in process could lead to the assertion of direct control from madrid. Ibex and index to watch. Great chart. Watch Spanish Companies with strong exposure to the domestic economy. Ood retailer topping 14 the index i want to keep an eye on is the white line, the Morgan Stanley domestic spain index has jumped 1. 6 today. D in theover the perio last month. Given the fact that we have inflation but poor productivity, i probably would look at productivity and the fast disinflation in four years. Central banks hiking rates with the economy some calling week with productivity week weajk weak. Hour 15 and below the g7 average. U. K. , is that hikes rates in november, will do so from a position from weakness, rather than strength. 90 minutes into the trading day in the u. S. , how is it looking . Change across major averages although the dow and nasdaq slightly higher. S p trends very slightly lower. One subgroup of performing today is the transports. Averages transportation up one half of the 1 and approaching again is record. It has to do with airlines in the wake of outlook from american and ual. Today delta and jetblue offering their outlets with Delta Airlines saying fares will improve in all major markets. It says passenger revenue for each deceitful and onemile or unit revenue is poised to gain in the u. S. In the fourth quarter. Rising expenses will weigh on Profit Margins. Jetblue had third corner unit revenue at the high end of its prior forecast. Set to rise 0. 9 . Watching the processors, getting commentary from Morgan Stanley and wells fargo about them, paypal specifically upgraded to overweight from equal weight over Morgan Stanley. The analyst there says the company has a long runway of high teens revenue growth. Renegotiation,t the analyst says there is concerned about that that he thinks are unfounded. If the stock will never the stock will never be cheap again. Lisa upgraded at these are upgraded at wells fargo. Isa upgraded at wells fargo. I will send it back to you, vonnie. Vonnie time to check in on the first word news and Courtney Donohoe. Firefighters have not contain any of the wildfires through northern californias wine country, they killed 17 people at least and destroyed 2000 homes, businesses, and other structures. Four vineyards have been destroyed in napa valley. President trump will make a case that Corporate Tax breaks will benefit middleclass wage earners. The president expected to say that the typical American Household would get a 4000 a race from the tax plan. As advisers say that on an annual basis the annual benefit is closer to 500. The iranian president says that if President Trump goes ahead with his threats to take away the nuclear deal it will be a failure for america, not iran. The president said it would be clear which is the rebellious government and which is the site that violates international rules. Mr. Trump this week is expected to decertify the ironic compliance with the agreement. In the u. K. Company chancellor Philip Hammond is preparing for a no deal brexit, he told lawmakers he will start releasing more money if there are not clear sides of progress and talks with the eu by early next year. The u. K. Wants to wrap up negotiations and move onto a trade deal. Global news 24 hours a day, powered by more than 2700 journalist and analysts in more than 120 countries. I am Courtney Donohoe here i am Courtney Donohoe. This is bloomberg. Mark spain ready to take control of catalonia if the push for independence goes on. The Prime Minister said catalonias efforts to break away from the rest of spain is fraudulent and fruitless. Fairytale. A it is not free and will not be recognized by europe and the world knows it is very highcost. It was a fraudulent referendum on the first of october and cannot go ahead by that amount of people. From lets get the latest maria in barcelona. What happens now . What a 24 hours in barcelona. Yesterday, the catalonia regional president may be symbolic move and said i am ready to set the mandate and for 10 seconds they were an independent republic but he said i will suspend this for talks. There is nothing to talk about that this is a fairytale and his signal is now i am ready to implement article 155. The socialist party just now saying we are totally ready to support rajoy. The liberals saying we need to do this and need to do it now as we have legal grounds. He needs tod explain what took place last night. This is a move to discredit the catalonia president who is facing pressure in catalonia. Vonnie politician fears or from whom peers or from home . A more of a cerebral debate . Question. A good i was at the Catalonia Parliament yesterday and when he said suspended, their faces drop, especially the more radical coalition partner. A lot of them say this is a complete betrayal and not what we agreed on. In the street, i was covering it and people were just they went from celebrating to being in tears. His base, the people who voted, now they feel this is a complete fraud. Time is running out and he is running out of independent options. If he backtracks, his coalition will implode and if he continues with the republic, the spanish trimester will employ this article and he is out of government. Mark thank you from barcelona. How spain will clamp down on catalonia and its effect on the economy, lets bring in david owen. Do you worry about spains prospect in the near term or think that the outperformance will continue . David the outperformance will continue, whether we see a slowdown from growth to 3. 5 to something closer to 2 , 2. 5 . Parallels quebec where we had lotratism movements and a of business relocated out of montreal to toronto in 1970s before the first of their referendums. We have already seen some businesses, banks in particular, make the move. I will come back from the u. S. And i have three days seeing clients and people are pretty constructive on the eurozone. These were fixed income in the actors. Investors. Mark they fixed income spaces where it tends to show, look at the sovereign debt crisis a few weeks ago, the spread which was 19 basis points last wednesday at the height of concern that it points, down five basis elements of complacency . This not worried at point. It is worried about an what happens to banks going forward, do they lose deposits . They concern in the banking sector, they are and dependent on ecb funding which requires the banks to be within the eu. One reason the banks will have to relocate. The spread between spain and italy has been spain is still trading and spain to germany still remains pretty tight. There is constructive options around the eurozone and the ecb still has backing in the system and buying bonds perhaps through next year. Not a reason for the ecb to not taper that quickly and 2018 in 2018. Vonnie this chart has to do with catalonia, if you do not mind. Catalonia job creation versus spain job creation. We have a comparison, you see catalonia accounts for most of the regions export outside of spain. Is that if all of the separatist movements do not create some economic havoc in general . David we will have to look at the data over the next three to four months, the eurozone, more. Essimism about spain growing optimism about the italian recovery. And also with france. Much more optimism there. Spain is an issue. It will remain an issue. It will keep rumbling on. It will not go away. If the eurozone carries on gathering momentum as a whole, that will give confidence, particularly in the fixed income universe that the problem can be contained. Mark david owen at jefferies, we will discuss the euro area and u. K. Economies and brexit next. This is bloomberg. Vonnie live from bloomberg World Headquarters in new york, i am vonnie quinn. Mark live from london, i am mark barton. Between Jeremy Corbyn and theresa may between the progress of brexit negotiations. Everywhere you look, a government in chaos. On the most important issues facing this country, it is a shambles. Brexit negotiations made no progress. We are not ramping up a no deal scenario, we are actively working, actively working with the negotiations with the European Unions to make sure we set up and get a good deal. This government is more interested in fighting amongst themselves than in solving the problem. If there is no deal, we will have to have arrangements with member states. The Prime Minister cannot leave and she should leave. Lead and she should leave. Brexithilip hammond says talks are hurting the u. K. Economy. We are back with david owen from jefferies. Hikeof the doubt is a rate in november, would it be from a position of weakness . David the bank of england announced last year a whole bunch of measures. The rate hike was only one of se in the bank of england another round of qe and the term funding schemes, the banking sectors, those things for the equivalent of cutting the bank rate almost 100. The bankuch more cannot do anything about brexit. In terms of managing the process , that is up for the government and the chancellor. We have a budget coming up in a few weeks. Saw, what was these that i the back has not raised rates when growth has not been. 5 or 1987. Ince at least 1997. Why are they raising rates when growth is not trend level . David i would not put words in their mouth but probably see growth close to. 3 or at best , growing at 3. 4 just 3. 3 a quarter, a growing trend, before the financial crisis, in the labor market, very wages accelerating. Based on a small sample of pay settlements. If late market Data Confirms the trend of wages getting firmer, another reason for them to go. Vonnie as we progress through the brexit channel and negotiating deals between britain and whoever else it may be, do you anticipate that currencies will move sharply . I am thinking the euro may come out of trade talks. David yes, i would highlight, last friday, the u. K. Data released, current account debt is wide now, almost five Percentage Points of u. K. Gdp with traded yesterday saying a separate widening in the trade deficit in the u. K. In august. We rely on financing the deficits and they come through foreigners buying the gilt market. , unless this current account deficit closes and quite quickly, the currency should trade lower anyway on economic fundamentals. Vonnie the british currency . David yes. Vonnie what would that do to the euro and what factors does mario draghi have to be careful about in the next 68 months . David the last thing he wants is a hard brexit before he leaves the ecb. See perfect world, he will a softening of qe in 2018 raise rates in 2019. Ofleaves the ecb in october 2019 and he does not want a hard brexit worried has to solve that problem and do qe again. His interest in terms of the ecb, if the eurozone recovery continues to give legs and evidence core inflation picks up, some ground, that is in courage and. They still that is encouraging. Mark you mentioned core notes, there your is a lovely chart i do not should super court inflation spooked the ecb . David it is very intensive, they still have a bias to continue to want to do more. They need to get mario draghi talked about being a bumblebee that should not fly, he wants the bias here is doing more. Not less in a sense. Mark does that derail the euro zone economy . To firet is beginning on all cylinders and there is more optimism about italy. Recoveries have a habit of disappointing eventually. Theructural change in eurozone or adjusting a sickle go after them which will cyclical upturn . We are getting more encouraged by the eurozone. Mario draghi has to keep doing tv for the first few months of 2018 qe for the first few months of 2018. Vonnie we speak next on liquidity. And roku. Live from london, i am mark barton with your link those minutes away. Vonnie live from bloomberg World Headquarters, i am vonnie quinn. Terry duffy says he moves the elaborated in an interview with our editorinchief. The marketgood for is making sure we do not limit participation to the marketplace, liquidity is critically important. Participation, especially in times of stress, when things are like they are right now, with low ball and not much going on, in times of stress, you want to make sure everybody is in the marketplace that can provide doddfrank or whatever. It would go through the volcker rule, a way was written, i do notdvised, support that and i believe the banks should be allowed to prop trade. There is nothing wrong with it, as long as they are regulated like everybody else. Their liquidity is critically important to the marketplace. And for the security of the marketplace. I did not i did not like to see them taken out of certain asset classes. You can prop trade in u. S. Treasuries on the cash side, but not prop trade in the future side. On u. S. Treasurys you some say that is not good, we are now we went from 47 of the u. S. Treasury trade in the United States at cme, and now 87 of the trade on u. S. Treasury market. When you look at counterparts in europe, 400 of the trade. We are starting to move forward in that direction. Not sure if it is because of the loss or because of the efficiencies of liquidity. We should not have the banks eliminated from the pools of liquidity because, even the we are not moving a lot right now, because that stress will come into the marketplace and he want those people in their vonnie that was cme chairman and ceo terry duffy. Sprint, thes on the proposed merger the push for the merger with tmobile seems draw u. S. Antitrust concerns according to people familiar with the matter. Another run on the dream to create a u. S. Mobile heavyweight but Donald Trumps u. S. Chief what 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. Mark live from london and new york, this is the european close. Stocks finishing the wednesday session with little changed for the second consecutive day. Utility is best performance with basic resources the second the worst performer. President stepping back from an immediate declaration of independence from spain which was the big news of the last 24 hours. Euros shrugging it off with no provocation and no unilateral declaration of independence from the catalonian president. A bit of relief pushing the. Ssue two weeks into the future euro rising for a fourth consecutive today, the best run since september 17. Stepping upy pressure on the secessionist government to back away from starting the process could lead to the assertion of direct control. Analysts forecast the euro will pd the year at 1. 18 financialnc has a this is the yield difference between spain and germany, 10 year yield difference, we were down as much eight basis points in the last half an hour. We have seen a widening a narrowing of the spread, 117. Closer to wiping out the spread differential we witnessed since the referendum eight days ago. It blew out to 19 basis points last wednesday. Coming in close to a handful of basis points as Carles Puigdemont said he wants talks with the government in madrid over the future of his region. The narrower since the end of september. 1. 5 higherbex, today. The spanishibex, gave since the referendum. , lasty 9 10 of 1 wednesday, at the height of concerns, the ibex down 4 . Almost it has remade the losses from midweek last week, down 9 10 of 1 . What is happening . Vonnie u. S. Stocks with little change. A little higher as we await the fed minutes later today. Still trading your records with equities driving higher daily, resilience over the last year despite lack of legislation out of washington. Something is perhaps that worries people and the latest to express those worries is nobel prizewinning economists Richard Thaler who told us yesterday why he is nervous. I do not know about you but i am nervous. It seems like when come investors are nervous, they are prone to being spooked and nothing seems to spooked the market. It just crawls up slowly but surely. If it is all based on the expectations of some big tax cuts, shortly investors should have lost confidence that that was going to happen. Given what has happened so far out of congress. Vonnie someone who is not so far all that worried is the Credit Suisse securities chief strategist at a target for the s p next year, 11 gain from the 2017 target. You heard what Jonathan Thaler said, we have heard it, people are confused and do not know quite this grind upwards is happening in stocks and yet it keeps happening. I want to comment on this thought that the market is all about trump tax cuts. We have done work recently, what a basket of High Tech Companies are doing compared to the rest of the market. They have been largely underperforming. They outperformed a little bit after the election and doing a little better but not a market being driven by a promise of change in washington, it is , courteconomics, the pmi economic looking indicators, not just better in the u. S. But everywhere and the earnings season looks good. I do not think this is about complacency, i think it is about these and fundamentals. These and fundamentals. These and fundamentals. Decent fundamentals. Vonnie middleclass tax cuts would give middleclass tax people more to spend and more confidence in the economy, if that does not happen, we will not see a drop . If you think there is none of this in the market and th