Protestg a symbolic perhaps, or a wakeup call for investors . Can investors expect more pay for automakers, to deal with the biggest industry shift in many matt . Ecades, matt matt we less than a half hour away. Im excited to talk about that story. Theres so many automotive stories to talk about. Take a look at equity Index Futures. Its a risk on day. Possibility of some kind of tax reform in the u. S. We have equity Index Futures up across the board trade ive got, not the bund yield today. Because i was talking about the smp with someone so sucked skeptical about the continued climb of this index, it forward priceearnings ratio, he thinks its too expensive, especially considering what earnings has done. In yellow, actual earnings per share. Although everybody seems so optimistic about the rise in earnings this year and next, this goes back five years. Were just going where we started. This has been moved to that much over the past 3040 years. Guide . Guy the cadillac story is going to be interesting today. A solid day. Erickson have a difficult time. Lets see what we see here. This week, treating for election weekend. Sentiment, is the bloomberg ballet index dollar index. This isnd ride moving right up. Is the dollar about to break out on the story . Market, the treasury many places not releasing numbers. What we have seen is plus 300 volume increase in treasury futures overnight. The u. S. Twoyear is on the move. Pay attention. Everything theoretically prices off the risk. Theoretically, that is the u. S. 10 year. If this starts to move significantly, a lot of things may be meeting we may need to have another look at those. Lets get a bloomberg first word news update, heres ed ludlow. You and for the eu to shift their senses, celebrex agreement can come by the end of the year. Theresa may signaled she is she could offer more on a bill. The european summit helped find her a deal to sell to skeptics at home. Her counterparts responded with words of encouragement, though no concrete concessions. My position was unchanged by two reduction by theresa mays maysnt changed theresa words. Income trust to what you hear in the in contrast to what you hear in the british process, the process is moving forward. You get the impression that after few weeks, you have to note the project the final product. Both sides of the standoff on catalonia are upping the ante. Finalizing plans to take control of the rebel region, with a Prime Minister set to hold an extra ordinary cap it cached Cabinet Meeting. Independents could be declared within days. Ald trump being chosen being steered towards choosing between john taylor, or another person for the next fed chief. The president has not yet made up his mind, although he has publicly announced to announce the decision before shortly. U. S. Secretary of state has said he sees little hope that a saudi this includes gary cohn as well. U. S. Secretary of state has said he sees little hope that a saudi arabia standoff with qatar will end soon. Rex tillerson blames countries around the emirates for casting doubts on american efforts to mediate the content to mediate the efforts. The comments come days before he embarks on a trip to the region, including stops in saudi arabia and qatar. Japanese Prime Minister shinzo abes Ruling Coalition will lose is projected to lose its two thirds coalition in sundays general election. The most likely scenario is a liberal Democratic Party picking up 297 seats, shy of the 310 needed for a socalled majority. That could potentially slow the push to revise the nation past its constitution. Global news 24 hours a day, powered by more than 2700 journalists and analysts, in more than 120 countries. This is bloomberg. Guy, matt . Across the flash bloomberg. Thank you. Business is entirely normal. A withdrawal of cash from some of the institutions. The big story is not catalonia, its now been in the treasury market. The treasury market has taken a hit. The u. S. Senate has adopted a budget resolution that housed chugach that house gop leaders agreed to accept, which paved the way for tax reform, which could see 4 trillion. This is the dollar. It is touching the top end range,its recent trending above its moving average. Is the dollar about to break out . Mark cudmore joins us now. Mark, a story should not be underestimated. This is the thing the market will trade on today, isnt it . Mark absolutely. I think this will dominate everything else. I think its a positive step. It seems to take, in the market, much more by surprise. This took investors by surprise. Clearly, investors are surprised. You see high in the treasury contract. This is not about asia overreacting, this is a genuine market move. So features the u. S. Session the whole reflationary trade, the whole idea is getting another boost. We are seeing the yield higher, commodities doing well, equity markets doing well. There are stories, but this is the dominant story, very much at risk positive one. A risk positive one. Guy do you buy the dip in treasury here surely you dont believe . They will pass real tax reform. Mark my outcome remains quite cynical about the prospects of tax reform coming soon ultimately, but whatever your view is, this has more momentum in the short term. Yields can go higher in the short term. Somebody doesnt believe in this sustainably, but at the moment, you have upward momentum in yields. If got upward momentum in this got upwardand youve momentum in this as well. Up therk, matt brings dips. Of buying the we saw that yesterday in the s and p. Ive got the chart. Dip yesterday. Cashitions are low positions are low. Weve got some great charts floating around on the bloomberg about google searches. Is that mentality still the dominant theme at the moment . I think it is. I think it makes sense. Cash levels have fallen down within the last couple of years. There still high historically. Overall, it makes they are still high historically. Overall, it makes sense. The bullish framework remains the same. There supportive for a positive case. Its not like earnings have gone flat or negative. We are still seeing Earnings Growth. Its a good story, and there remains excess liquidity. Investors still need to chase assets, returns, yields. To find that this ultimately makes sense unless things this massively changes the game. I dont think theres anything that will do that. I do think traders should keep an eye on catalysts that could derail this whole market before the year end. The base case has to be the bull market keep marching on no matter what. Even a foot dont get tax reform, thats the case as well. Catalonia is far removed from any u. S. Investors, but here, it seems removed from european investors, even spanish investors, as well, mark. Why is that, when we dont see either side linking . Rajoy doesnt look like he has close to ready to talk, and theres a call for party members, another independent proclamation on the other side. Neither will back down. Situation a worrying still. Are going into a situation where, as you say, neither side bet is backing down. I dont think it ends well. The more goes on, the more it will seriously impact rose in spain over the next year. It is like the catalans will accept the old economy, given their push for independence. Its important to the spanish country. Theyve had a lot of tax revenue. One of the big issues why they want more independence is they feel they contribute to much to the budget. Much to theoo budget. Everyone is wondering, will this turn into a serious crisis . For example, theres a push overnight for people to pull tax from the lenders, scary warning on that potential. That remains unlikely. Or, is it going to remain a longterm drive on the spanish economy for the next few months . Thats harder to trade. Yes, spanish yields widened, the ibex weakens, but how far do you do that story . Is is when you definitely shouldnt stop watching. Guy we will leave it there. Thank you very much, indeed. Matt exhibit up to read the ibex, looks like it will underperform a little bit. If got the calculations here. The rest of europe looks like its going to open up about one half of 1 . Looks like the ibex will open a little softer. Budget stocks moving today, caltex will be interesting trucks and cars. Keep an eye on the six Leasing Companies of germany. There talking about residuals, could get moved around this morning. There talking about the risk of residual values. You the we will bring latest from the eu summit. Waking up to another day of brexit maneuvers. The market open is 17 minutes away. This is bloomberg. Guy 14 markets untilguy market open. Lets get a Bloomberg Business flash, heres at ludlow. Ed a 14 drop in profits, earnings before interest and taxes calling for 3. 6 billion euros missing estimates. That has weaker earnings than projected. Troubling its first quarterly profits since both Second Quarter of last year. Full those thirdquarter earnings surged 30 5 after truck sales in north america recovered, and construction and mining agreement in china rose. Texas rose to 862 million, beating estimates taxes rose. Nissan has fallen in tokyo trade, after the carmakers policy control deepens. They will control output at six months. Feetve been producing 1000 they will produce one falcao 1000 vehicles a day for the japanese market. They continue to follow follow policy checks for weeks. Thats your Bloomberg Business flash. Lets focus in on the european Political Risk story. They one of the eu summit on europes leaders, push this more and brexit negotiations. The carrot ofup possible progress and trade talks by december. Angela merkel sounded a note of reassurance, saying there is zero indication that they will succeed. In spain, they caps on Pain Campaign group is calling out supporters to pull cash. Thats separatists consider declaring independence again later this month. Lets get more on both of those stories with nejra cehic in brussels, and maria taddeo in barcelona. , we are going to start with you. What do it nejra, we are going to start with you. What about the turnaround brought by Angela Merkel . Prime minister theresa may ins the eu leaders at brussels last night. We understand for u. K. Officials, she signaled she would be willing to offer more when it comes to the brexit bill. It you previously, she pledged the u. K. Would keep paying the eu budget for two years after brexit, around 20 billion euros, quite a bit lower than the 60 billion euros put forward by the eu. What theresa may also said, or signaled, is that she needs a deal that she can sell back to her electorate in the u. K. One thing about this cap some it is the previously, both the eu u. K. And eu saying, there seems to be a little bit more of a tone of cooperation. German chancellor Angela Merkel sanctions very motivated to move talks Angela Merkel saying shes very motive to move motivated to move talks up. That doesnt mean theres necessarily a time frame, but there was a little bit of a shift in tone as to when talks might move on. Guy its interesting, still comes down to money, doesnt it . What can we expect in change by december . Nejra it certainly does still come down to money. Guy, to the point what we have heard, to that point, what weve heard from some leaders is that the pledges, the u. K. Has made a signal they will make on the brexit bill, need to be turned into more casual negotiation. Mean we areesnt going to move on to trade talks in december. What we have been hearing before today is eu officials were getting ready, going to a point where they would be ready to do that if they made that decision in december. Its kind of still there now. Theres a tone shift. The u. K. Press, when it keeps talking about there being no progress in these brexit talks, thats just not true. Really, a kinder tone from both sides. Mrs. Is a good performance so far. What they bring and maria in barcelona. Let me bring in maria in barcelona. Advocates have called on customers that side with them, to pull money out of banks that have left the area. The cars run on the bank how seriously can we take this . Its a most like a second referendum, if you will. If customers dont do it, they are not with the separatists, are they . Thats a good question. Atmn tell you, ke ha bank casheautious bank bank atm here, we havent had one person who said they are here because of the message and i want to protest, i think this is the way. Thiseres pressure person was telling me they had banka customer with the for years. She wouldnt go into specifics as to how much money she lost, but she said it is a symbolic amount. Naturalpened after the National Catalan separatists go tear aocial year tim, pull money from 8 009 00 a. M. , and protest that companies atm, pull go to your money. Protest companies that are not supporting it. Guy a couple of quick questions. How much to take out for catalan at one of these banks . Im curious to know if theres a number. Second question, what is the timing on this independence proclamation . What kind of a weekend are we going to have here . That the good question. It depends thats a good question. It depends on the bank and cash you have. Its more of a symbolic measure you said. The pressure that we could get clients pulling their money out, they do want to make a point and have it registered. In terms of when will this come, you know that its been suspended for the time being. What we are seeing now, is that both sides are standing on the edge of this cliff, but they are not willing to take the final step. 155, i wantarticle to say again, this could take weeks. It seems that they want to make this final push, but none of them make the decisions first. We will leave it there. Matt nejra cehic in brussels, maria to on barcelona, covering these stories for us. We are minutes away for the market open. Lets get your stocks to watch. First off, daimler out with something that missed the streets, estimates this morning, forerns are cost to pay admissions issues, the fixes, and a drop in sales of daimler cars as well. It seems the diesel problem isnt going to hurt companies bigger companies, but also Car Companies themselves. If you cant guarantee 100 i will be able to drive this car in every city in germany, europe, then why would i buy it . Guy its a lot of people a lot of its a question a lot of people are grappling with. Take a look at this chart. Cars to trucks, matt. A volvo a solid start to the day. It has been driven, excuse the pun, to what is happening in north america. When the market opened in if youd opens in a few minutes time, could be good. Forvotal start to the day volvo, talking about encouraging signs Going Forward. They beat expectations. Take a look at this one. Its going to be, the guidance apparently implies that this is the guidance applies an estimate cuts. Matt . Matt i want to talk abouts was buried here. Hurricane claims around the world will total 3. 6 billion. Thats the estimate from the insurers the total insured , three . 6 billion for itself, total Insurance Market loss approximately 95 ilion u. S. Dollars. Dollars. Lion u. S. Quite claims will affect the business at 3. 6 billion. Watch that stock. Guy lets quickly give everybody an update of one markets will open. The real story and markets this morning is not, unfortunately, happening in earnings, probably not what happening in catalonia. It is whats happening with the u. S. Tax story, which has investors a little bit by surprise. U. S. Markets by up another one half of 1 . Ibex looks like it will underperform. This is bloomberg. Guy met me take you to the e. U. Summit. Juncker dalgaard taking comments. There are plenty of other things going on out there. Arriving this morning. We will continue to get commentary from them this morning. European equities look like they will open firmer. The risk on trade seems to be back, driven by the u. S. Senate, driven by tax. What do you think . Matt european equities look like dax look like the tax momentum has carried over to asian stocks come into europe as well. I think it is work looking at this chart again. I think it is worth looking at this stress debt chart again. The question is, will that continue . Guy market open. Lets take a look at where we are. We are expecting again. Market makers not there yet. We have a pound factor to bear in mind when you think about what is happening in the u. K. Right now. The ibex is opening softer. It seems to be an idiosyncratic story this morning with catalonia. Lets get the details. The texas story out of the United States really sparking interest in the markets. President trump tweeting this is an important part to the tax story. We talked about that earlier. This is a picture on the stoxx 600. It is a broadbased. All of the sectors moving higher across the european equities space this morning. On expectations now and what can be delivered in the senate. We move onto the tougher negotiations around tax over the next couple months. Thats move on to the spanish story. We have maria tipping the us uptodate on what is happening there. How interested are you in the banking story in spain . Working everything is normally in their Banking System this mine. This chart goes back to the end of september. The Political Uncertainty cloud your view of spain . Gilt markets opening up this hour. This is driven by commentary from the central bank governor, mark carney. We have more Central Bank Chatter overnight from the bank of england. John cumin,om raising questions about november 2. Are we certain that is one they will increase Interest Rates or could be coming months be later, the start of 2018 . Guy, matt. This is what we have got right now. Erickson is trading up. Dickson carr phone trading up also. Anglo is up. Rio is up. Interesting considering what is happening with the dollar. I am waiting to see a volvo trade. Daimler i am not seeing in the mix. We will keep an i we will keep an eye on some of these movers. Matt . Matt i get excited just to see the name husqvarna. It gets me revved up. President donald trump achieved the first major steps toward tax reform after the senate adopted to pass plan yesterday a tax code without democratic support. According to people familiar with the matter, trumps advisers are steering him towards choosing jay powell, jerome powell. With us is william hobbs. Lets talk about this tax reform idea. It seems to have gone the market