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tv   Street Signs  CNBC  October 3, 2017 4:00am-4:11am EDT

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a warm welcome to "street signs. i'm steve sedgwick these are your headlines the catalonian government calls on the eu to broker a split with madrid, while the prime minister lobbies spain's other parties to support the government's approach. hong kong shares rally european commission president jean-claude juncker
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says brexit talks have not produced nouf moenough to move o the next phase >> speeches are not negotiating positions, as michel barnier said last week, work still remains to be done and britain's international trade secretary, dr. liam fox, hits back at criticism against trade talks. >> many of these agreements, we have to do things like look at the quarters which were given by the european union to some of these countries, and work out a way of disaggregating them i never used the phrase cut and paste. it's not correct let's look at the european equity markets there's so much going on at the moment a strong day for the ftse yesterday, having a flatter
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session today. as you'll notice on the right-hand side of the screen no german trade it's basically the day of german unity. so they have a public holiday there today. elsewhere you can see really, really very flat markets on the european session the hang seng boosted into the close by, as we said, financials 2.1% higher is where the market finished 587 points to the good reserve ratio canboosting the chinese market there being a proxy for mainland chinese markets. let's look at individual sectors. basic resources and banks being the most highly performing stock sectors. materials was a strong performer in the united states overnight, which led to the 43rd record close for the dow and the 40th
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record close for the s&p extraordinary figures really for 2017 food and beverages, utilities and media under a bit of pressure in the european session. stock re-ratings are behind some of the biggest moves on european bourses this morning goldman sachs raised the rating on the stock for ari liquide ericsson is trading in the red following a downgrade from credit suisse. pro independence protesters have taken to the streets in barcelona following the police crackdown on an illegal catalonian referendum. regional leaders have called on the european union to oversee mediation with the spanish government to solve the dispute. mariano rajoy has not started
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negotiations there is a call for a work stoppage to protest the abctions of spanish authorities willem joins us from barcelona heightened emotion, violence perhaps on both sides even, but what's happening now the momentum has been zapped a bit. what happens now do we get this declaration of independence what's the next big move >> it's up to the catalan president here according to the details of the referendum law that was passed in early september by the catalan assembly, he would have 48 hours after a vote count is finalized to declare independence he said we will not see a finalized vote count today, but that could happen by the end of the week the 6th of october would be a great day for the catalans to
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declare independence, they tried that 86 years ago. mariano rajoy is under pressure on where to move next. he has two decisions, one is to suspend the autonomy of catalonia, which he is allowed to do he could dissolve the assembly here. the other is to engage in dialogue with the catalan leaders. there are two opposing arguments and two opposing sides within the spanish argument one is his allies in a political party. albert rivera speaking to rajoy yesterday. and the other saying there should be dialogue the strike some say is a good idea the unions, 40 different unions involved in calling a strike they say it will show people in catalonia vigorously condemn the police action we saw on sunday
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we expect airports and train stations to be impacted. universities here to close down. fc barcelona will be closing shop over the course of the day. we saw 15,000 people on the streets near barcelona we may see many more this afternoon. >> willem, thank you very much indeed for that. let's move on. our next guest says a bullish stance on growth from the ecb means the central bank is like to make another qe taper decision in october. marcus shermer joins us. very interesting you say make another decision on tapering they are still buying 60 billion euros of asset on a monthly basis. i'm waiting for something more aggressive for a central bank which is seeing very good pmis, respectable growth number, and unemployment coming down >> the ecb is not aggressive we know that for years you're right, you're citing the good macro back drop which is
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behind the idea of gradually slowing down the pace of asset purchasing they did that once we expect them to slow it down from 60 to 40 that sets the stage for ending qushg e e by td of next year >> oil prices have picked up, that should be a support for inflation. but is that only a temporary support? >> i wouldn't say temporary. oil prices are in a range where they will be staying for a while. between $50, $60, that's our forecast the lack of inflation is a global problem the federal reserve in the u.s. has the same issue, other central banks around the world have issues. if you look at the back drop fo the ecb, you look at sweden where the economy is growing 70%, they are still doing qe >> is the riksbank able to say
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they don't have bubbles? >> i'm based in new york where we have lots of construction but nowhere near as much as here, so i would say there's evidence of low interest rates causing bubbles in the construction sector. >> dangerous bubbles bubbles in the market? in real estate >> i would say bubbles in markets. stock markets are at all-time highs all the time you cited another one -- 46r7b8 >> 43 on the dow, 40 on the s&p. >> the economy sets a new record high every quarter as well we have strong economic growth in many parts of the world >> why not ask for 6%, they might get 3% or 4%, what have you. that is real inflation and engrained inflation into the system, good news for workers but is that bad news for central banks? >> i wouldn't say bad news
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most central banks want to get out of this and normalize policy, but it lacks the inflation catalyst to do it. it's the us economies who beat out the central bank so if you have inflation 25at 2 or higher eurozone, even japan >> you don't have any sympathy for perhaps a more northern european view that actually we are storing up incredibly large problems that the medicine is having some dreadful side effects as well, and wiping out savers at the same time. >> that is true. i'm not sure i would describe it as the northern european view. looksweden is doing. >> let me paraphrase the german view is that more
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accurate >> that's probably right i'm from germany -- >> i have sympathy for it. if i have money in germany or money on a global basis are a demographic between 50 and 65. >> the problem is you asked me why there's no inflation the problem is there's a deep recession. it takes stronger economic decisions to generate that inflation. it's not that there won't, i think we have to wait longer but we're getting to the point where you cite potential wage growth in germany, there's strong construction activity going on in frankfurt. if you look at the expectation of attracting workers from the city of london coming to the eurozone, you see housing construction booming we're at the cusp of seeing that wage growth that will lead to inflation. that's 201920, 2020 story
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right now we have big monetary policy boosting markets, that will start to wind down next year, go away in 2020. that will change things for markets. >> you're native german, i won't ask you about what an incredible political year it's been we had macron, the big potential banana skins for the market. banana skin may well be now. we talk about cataloni


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