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tv   Street Signs  CNBC  September 5, 2016 4:00am-5:01am EDT

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. well come street signs. i'm carolyn ross. i'm -- backyard backlash. german chancellor angela merkel suffers an embarrassing election defeat as she's pushes into third place. teresa may makes a move on migration. calls for a dramatic shakeup saying more modest reforms improves britain's relationship with the eu. >> i think the british people were clear about is that they don't want free movement to
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continue as it has done in the past. getting a good deal in trades and goods and services is also obviously important for us. >> about plans to raise capital at the same time as rival mont bee pesky. and says they're overdone. >> i believe the shape of the italian banking system is certainly not worse than that of many european countries. the ftse under performs. modest gains. investors await data after france's services sector outshines germany's. good morning everyone. you're watching street signs. let get straight to economic
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data in the form of eurozone pmis. it came at 52.8. the forecast was 53.1. this is a slowdown -- slight slowdown from the month of july. let's get to the composite pmi at 52.9. again, lower than forecast. and also lower than what we saw in the month of july. i do want to tell you that the eurozone business growth is now at its weakest since the start of last year in august. we did get the regional pmis. france, italy, those were a little bit stronger. germany was -- amt reversal of what we're seeing -- many have said it's the most interesting data point given so much surprise on the strength of the manufacturing. everyone saying, wait a minute, you have to look at services.
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it's not all about sterling there. we'll bring you that one in about 30 minutes. about an hour into the session here. we're looking at modest gains. higher by 0.2%. we look at the overall stoke of europe. keep in mind, we saw large gains into the weekend around multimonth highs. it was gaining momentum even before that nonfarm payroll print which did suggest they won't be hiking rates. we'll get to that in a little while. this is the view. the ftse is 00 relatively flat. the french cac 40. let's give you a view of the sectors. investors continue to watch the move in commodities. especially in oil prices. a big watching point last week. moves to the up side in wti and oil and gas.
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also seeing metals moving higher. lifting basic higher by 1.3%. banks off by .4 of a percent. financial were a big winner on wall street last week amid the rate hike expectations. did get a dip once the payroll report came out in the morning time on wall street. karen? >> let's get back to the top story. angela merkel's party was pushed into third place in northeast germany. the result is seen as a backlash against the chancellor's decision to allow more than a million refugees to settle in germany. we knew that the party was going to gain ground at the expense of the established parties. but this is worse than expected. >> reporter: yes, this is worse than expect. the recent polls were already indicating that the cdo will see a crushing defeat.
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the cdu was never strong in the northeast. nevertheless, the afd overtaking them as a serious blow to angela merkel. a wider perspective. what does it mean for national politics. angela merkel, increasingly more pressure to change course in her politics, perhaps to admit a mistake she has done last year, perhaps to say we'll change it or whatever. i don't know what she has to do, but she has to change something according to many analysts that i've been speaking to. most likely, she will also be the next candidate for chancellor here in germany. the general election is coming up as soon as next week. there's no alternative candidate. but increasingly, tensions inside the cdu as well she's not doing the right thing. i guess, in order to appease those tensions, to get the cdu again back unified, she has do a
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lot more than just saying we'll get it done somehow. that's one of the ramifications from the elections up there. also, looking at the afd, interestingly, they are actually in the position to activate not only voters from other parties but also voters who have never voted before. somehow the participation rate surged 10% in that tiny state up northeast. that is something they've already seen in other federal states in germany. so i think it's the same phenomenon like at the brexit vote or the uk and now with trump in the united states. the afd is managing to activate people who never voted before and are depressed when it comes to traditional politics.
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>> senior vice president at -- the afd party is able to gallon van ice voters in germany. one of the headlines this morning in germany is how many more setbacks can angela merkel take? to what ex tekt will she have to change her approach? >> she has changed her approach in the last couple of months. this has been going on over a year. she has steered back. i think the overall line, she's been unwilling to change. i don't think she's going to do that. there are other elections coming up. expect this to be wuchblt most challenging campaigns that she's faced but she's far from being replaced. >> why won't she change her language? the last couple of days she's admitted some mistakes. do you think she wants her legacy to be for her to be doing the right thing, not to be getting more in the hole? >> in the end, she's a politician. politicians don't like to admit,
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like all of us, that they've been wrong. that's precisely the situation she's in now. at the end of the day, her party doesn't like to admit they had it wrong. again elections coming up it's not the right moment for change in leadership right now. >> you mentioned she doesn't want to admit she's wrong. but the national polls haven't moved in her favor. >> they have also not moved against her. one, they're nowhere near that. they're generally symbolic state. they have been for 15 years. point 2, more importantly, is there any challenger within her alliance of christian parties, who could credibly threat tone take over from her. at the end of the day, there's no one near. >> strong remarks last week coming out, not just on the immigration policy but taking the strong stance on other policies, saying they've broken down. they said some feeling on the
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ground, perhaps he misfired, he went too far speaking against the establishment. >> wouldn't be the first time. what this tells us at the end of the day, the election year is about to start, probably started with yesterday's result. expect more noise. but at the end of the day, the centrist party. >> we know the afd has been trying to attract other voters, the disenchanted people of germany. there have been so many blunders too when you look at what happened with the refugees with many of the marches, with the very bad rhetoric coming out of some of their officials. it seems to me like afd is like trump. there's so many blunders, they can always recover. why is that? >> the rise of populism across democracy, i think they were right, we've seen it in the brexit vote, you see it with donald trump as you just said in the u.s. i think there is huge potential to show -- for the voters who
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have been -- i think that's a new reality in developing policy. >> thanks for -- you're going to stick around. we'll talk more with him. plenty of political risks into the busy autumn here. looking at italy now, italians are warming up to cast their votes in the country's referendum which is expected to happen in october. but a simple yes or no answer contrasts with its very complex question. this is the question. to translate. it is a ballot on constitutional reform aimed at streamlining italy's political system. it's seen for as a -- mateo reigns i will step down if he doesn't win. we caught up with -- who suggested that renzi should not have staked his future on it. >> i think that was ill-advised
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on his part. you will have -- he's now pouring a lot of water into that wine, which for a tuscanian is not so -- there are many merits in this change of constitution. i agree with most of them. there are also some problems, i believe. in particular, i think it would have been preferable to eliminate the senate altogether rather than filling a new senate of representatives of the region of political class, which has not -- for four months in recent years in italy, including in terms of honesty.
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to me, whether italy gets the new constitution or not is marginally important but not a matter of life or death. first of all, it's not true that under the current constitution italy is -- nongovernable. the fact that mr. renzi himself in two years has done many things. one can discuss the quality of some of the measures, but has done a lot of things proves that even under old constitution, the existing o existing one it is possible. >> julia joins us with more. they're saying renzi should have made this promise to step down. sounded extremely confident the referendum would go in his favor. >> when i did speak with prime minister renzi, he also seemed
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to suggest still that if this doesn't go against him, it would be a rejection of his policies and the reforms that he's tried to enact. in which case, he feels like his position is untenable. fast forward to when he was talking about the referendum and if it actually doesn't go his way and we don't see this path, nothing will happen. the suggestion is, having not only distanced himself from the referendum being the confidence on him, but he's also suggesting, hang on a second, perhaps they won't resign after all. this is kind of interesting. but i also say fort presence of the bank of popular and -- i asked him if he was also concerned about the referendum. >> do not attach to that whether it's important that everybody seems to -- >> why? >> first of all, because we are another referendum a few years ago, i think it was 2006 or
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2007. basically nothing happened. it went in the direction of not accepting the constitutional reform. >> in this case, the prime minister said he'll resign potentially if he loses that vote. >> i'm not sure. >> yes, he did. are you suggesting there's been a u-turn of some sort? >> no, no. >> he's indicated. >> yesterday i think he said that nothing will happen if no wins. >> yes. >> so might -- i will try to under-play that referendum. for one basic reason. because italians have to decide on the subject matter. >> yes. >> it will be very unwise to transform a constitutional referendum into political election. >> which is kind of what was done in the beginning.
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>> i agreed at the time and i would disagree now. >> we have to -- >> the constitutional referendum is not proposed by government. government has nothing do with constitutional reforms. constitutional reform has -- so let the people read if they want to read and then decide on the constitutional reform. that's all. >> political uncertainty aside, renzi is dealing with the aftermath of a major earthquake and the ongoing refugee crisis in europe. plus, he's facing a basket of economic problems from the second quarter to a full blown banking crisis. still with us is the senior vice president of at that nay owe. >> where did renzi get it wrong in the first place? to make it personal? >> i think the personalization was the big problem. i think he realized that and trying to distance himself from
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it. the damage is done. people look at this as a popular vote of confidence on renzi. i think it's too late to roll back on that. >> what if it's rejected? what happens to it sflie. >> nobody knows. do we go to early election sns if we do, under which electoral system. under the way they've -- this constitution would change the electoral system for the upper house. would renzi resign immediately? are we looking at national unity government? it's all up in the air. >> would he even resign? >> impossible to say right now. but i think as you said a couple of minutes ago, i think he finds himself in an increasingly untenable situation in case it's rejected. >> he said look we've had this before, aka him. even if renzi does resign, it doesn't necessarily mean we have to go to elections. let's not forget, we have to
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contain bond yields even in this environment. he was like the -- the media and press in a story. actually it's not. >> that's the angela merkel question. where is the challenger within his party? there is no one. >> it's about constitutional reform. do you think the voters make that decision or do they say this will have an influence going to the polls? >> hard to avoid -- he didn't want a bond hold or issue before this vote. he made this a confidence vote effectively by suggesting that it was about him. clearly, he tried to distance himself. that yesterday for me or what we heard from him on friday is the clearest indication that perhaps he's not willing to go the full distance and resign oot -- i think maybe he'll argue that he's not the kind to sit down at the pivotal moment.
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>> the time for the economic picture in italy. last week we heard that italy didn't grow in the second quarter and the outlook is bleak for the third quarter. italy has little wiggle room forever budget flexibility according to the european commission vice president. it can only get better for italy from here. >> right. that's what we've been saying for a decade or since they joined the euro i think. italy is the one country to watch. i think the germans, we just talked about it, in a position to give in massively on the margins, yes. we've seen it with spain and portugal. expect more of the same. >> thank you so much cars ten. senior vice president at teneo. julia, thank you so much for that, too. great work. sticking with it, trading in and out of positive territory this morning after the bank's ceo said he is not worried about raising capital at the same time
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as rival. you can see the shares are higher by a quarter of a percent. they're expected to launch a cash call for up to 8 billion euros in 2017. plus, stay tuned to hear more from cnbc interview with president of the bank. he says investors should not only be worried about the banking problem in the italian banking sector. find out why. we'll hear from the feds of the wt o and the eocd why the protections of policy are out. we'll be back in two.
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welcome back to street signs. convincing an increasing disillusioned public that the
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globalization benefits are for all has been at the g-20 summit. let's get out to eunice yoon who is in china. eunice, it's been a tough summer for proponents of free trade when you look at the aftermath of the brexit vote and the rhetoric out of u.s. election race as well. what can g-20 leaders actually do to renew faith in globalization. >> excruciating summer for all these leaders. their priority for this g-20 summit is to manage the risk of the rising protectionism that we've seen seeing throughout the world. the countries here have been trying to really raise the profile of that and get those issues addressed. one of the main spokespeople here have been very concerned. because what they're seeing is
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trade growth, even before the surge of protectionism hasn't been able to really come back up to the levels seen before the global economic crisis. that's been worrisome for many of the experts seer. this is what some of them had to say. >> it makes all the difference in the world that trade growth is at or below the same level of growth as the gdp of the world, when it should be double. trade growth is below 3%. it should be at 6 or 7% and act as a locomotive. what are we seeing? look like we're going backwards. >> in general, i don't want to stick to that particular situation, but in general, protectionist measures, especially unilateral measures, they're not helpful. protectionism is contagious. that's the reality. one thinks that one is winning
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when we slap tariffs or imports to another country and we think we win. all right. so we diminish the imports and the competition here. but you lose when you expert because the other companies will introduce barriers as well. you win with one hand, you lose with the other. we cannot look at this in a very simplified form. we have to look at the bigger picture. >> reporter: ahead of the summit, the michlt imf warned it may have to downgrade its outlook again this year because of all these concerns. it's cut its forecast to 3.1% for 2016. the chinese president in his opening remarks addressed some of these issues head on. they really needed to take action and avoid what he called empty talk. now, of course, the leaders of the g20 are still at odds over exactly what that action is supposed to look like. in fact, the jean claude younger
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has been calling on china to address a very key issue for all countries here. that is the -- what they're seeing in the steel industry. many in europe as well as the u.s. blaming china saying china has been the one dumping a lot of excess steel into the global markets unfairly as they say. depressing prices and harming their own producers. and so the voices here have been arguing that china needs to be able to take some action and do something about it. what we're going to see and what we're expecting is that the capacity in steel is going to be addressed in the communique. although the countries, as you can imagine, with 20 of them all in there, with their own interests, are haggling over the actual language in the final communique. back to you. >> eunice, thank you so much. meantime, let's bring you up to speed with the biggest corporate stories. european tal coe will exchange
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shares for the outstanding percent of french sfr that it doesn't already own. the plan is to simplify the ownership structure and has been backed by both boards. the chairman of -- has announced a partial sale or ipo for the british unit 02. the move should happen either at the end of this year or early in 2017. you can see the shares is about 1.2%. coming up after the short break, it is the big one. how has the uk's key services sector -- following the brexit vote. all the important figures right after this. don't go away.
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welcome back to street
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signs. i'm nancy and i'm -- >> backyard backlash. german chancellor angela merkel suffers an embarrassing defeat as her cdu is pushes into third place. >> a move on migration rejecting calls for a shakeup. saying more modest -- >> what i think the british people were clear about, they don't want free movement to continue in the way it has done in the past. getting a good deal in frads in goods and services is obviously important for us. >> a volatile morning for uni-credit shares. they give assurances to raise capital at the same time as monte dei paschi. >> they say to focus on italy's lender is overdone. >> i believe that the shape of the italian banking system is
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certainly not worse than that of many other european countries. >> good morning. welcome back to street signs. as promised, we'll get the data as soon as it breaks. >> just out. sore to i interrupt you here. pmi, 52.9. wow. another big jump here. versus a july print of 47.4 and the reuters poll called for a number around about the contraction and expansion line of 50. that is the strongest gain on record. a massive rebound for the construction, manufacturing pmi and also for the services pmi. let's look at sterling dollar again. it's rising on the back of the better than expected data. 0.4% on the day.
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essentially, the boe is in the -- doesn't seem to be the case. >> you might say it could reduce to the -- in fact, we're seeing more of a rebound in the -- >> would it trickle through so quickly? >> i don't know. it's usually a -- knowing the boe has your back. it is interesting, we spoke to people yesterday, last week on manufacturing and construction pmi and they said yeah, yeah, yeah. wait for services. here we are. we should note that the market data has noted they say q3 growth looking weak and wait until december for the real indication whether or not we're headed for lower growth or outward con strax. many more months to come. >> i'm looking at the reaction on the back of the stronger than
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services -- futures fallen by more than ten -- the ftse 100 slightly extending its losses because, obviously, more easing is reduced somewhat. the ten-year uk yield at 0.7. in fact, the yield hit ate four-week high on friday. it was up 16 basis points to 0.75. we hit 0.5% just after the brexit referendum results came out. it is definitely some tightening here. >> absolutely. let's give you a wider view of how european markets are reacting. several pmi reports are out this morning in europe. fairly confident reports excluding germany. a tad below forecast. nevertheless, we're seeing optimism continuing after the strong gains we saw for european equities on friday. the picture for the german market and -- higher by .3%. the mid hire by a half a percent. the ftse 100 has been under performing. we were looking at weakness in the uk banks to say the least.
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deutsche bank has cut its -- both stocks down in the neighborhood of 3%. nevertheless, we did see a sharp gain in the neighborhood of 2% for the ftse 100 just on friday. >> britain's teresa may has eliminated a dramatic near term shakeup of immigration policy. they would lose preferential access to the uk. favoring a modest reform to safeguard to the extent possible britain's single market rise. speaking on the bbc, andrew marshall said she would be pushing for the best possible conditions fort uk. >> the european union does enable us to do is yes, to say what the british people are clear about, which is they don't want free movement to continue in the way it has done in the past. they do want to see controls of movement of people coming in from the european union. but people also want to see the job opportunities, to see the economic opportunities and so getting a good deal in trade and service -- in trade and goods
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and services is also obviously important for us. >> speaking to cnbc, at the reform in italy, zam brus cass was asked about the consequences of brexit and what it could mean for the europe's financial sector. >> this discussion is premature in this case. uk needs to make strategic decisions in its future relations with the eu, namely, within or outside eu internal market. and also -- not even started yet because uk has not filed a formal notification. i would say it will be a part of discussions, i'm sure, but it's premature at this stage. >> is there some reason the uk ultimately doesn't have access to the single market and has to negotiate separately because it wants leeway in other things,
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like the free movement of people. are we looking at applying to access sector by sector, which looks and sounds pretty laborious. >> access to the internal market, it's really for uk to decide. it's clearly the conditions, the -- condition of respect for freedoms, with ee suspect of euros and the relations. >> once uk has made this choice nor financial sector, being within internal market is. more simple.
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>> internal market, it means more far-reaching changes for financial sector. >> we're joined by allen miller, founding partner at fpn group. got to get back to the -- has the boe gotten it wrong? >> there's been a continuous discussion on whether shaving interest rates when they're already virtually zero really is slightly pointless. as you said before, it's more about confidence and there is a lag for the measures -- making fundamental changes in the economic growth. it's probably a conservative thing to do. maybe investors going to have to use the whole armory and looking at the numbers we've seen today. >> what does it mean for you? >> do you still want to buy uk
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corporate bonds? you've been -- >> have not been above uk guilts. i think they're clinically insane. any -- needs to get his feet help seriously. if you look at investing in something where the returns are, as you've shown earlier, investors are not actually going to get any returns. we've got a -- invests across the world. it yields maturity. tip clip 3.5 to 4%. it's up about 78 -- [ inaudible ] [ inaudible ] we do not hold any uk government bonds. >> corporate bonds there has been a huge rally to the upside. you're one of them. >> yeah. we've been shifting, actually from long-term bonds or medium term bonds, shorter term bonds.
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uk corporate, you can buy three-year bonds. it's interesting the pmi today, we've been shifting into sterling -- the hedge funds had the biggest short against sterling for 20 years. every single structure has been negative of sterling like always. when everybody is facing one direction, it's normally the opposite happen and we've been reducing overseas exposure within our portfolio. >> the bottom line here, you're not concerned that this corporate bond rally will come to a very abrupt end because the data is so much better than anticipated. >> actually on the long-term of corporate bonds, some of the shorter ones are attractive. emerging market bonds are still often reasonable yields. >> that's if you're in the bond market. tell us your thoughts on equities. when you look at the -- we're
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talking about 8% up since the brexit vote. do you think there's more room to run here or would you be cautious? >> we've said for the last few weeks, we've been in the markets -- they've been trading in a kind of range we've been reducing equities in the last few weeks. we took about 5% out of all our portfolios. we've been moving it more into, as i said, short term corporate bonds. within equities, probably kind of japanese equities. now looking more attractive. i know this is huge fashion now to go into merging market equities. now they've gone up. we're like doing the opposite of what most managers are doing. when i see one of our competitors saying that now is the right time, just after the -- 20% then it makes me more worried than more bullish. >> we have a comment on the uk bank off camera there.
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we were talking about deutsche bank taking a hit today. do you think there's value in these stocks? >> on value screens banks look cheap. year after year the fines and regulator charges, expect them to fall next year. it's interesting this morning, i think the fines this year are greater than last year. notice the low interest rates. not good news for the banks. >> all right. alan, thanks for joining us. alan miller, founding partner, chief investment officer. thanks for joining us. you're looking at live pictures where truckers and farmers plan to block roads and form a human chain in a protest demanded at the cloesh ush of the jungle. this as the population has surged and tensions have risen in recent months. meanwhile, japan has warned in a memo that banks and other companies could relocate to an
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eu member state if the uk did not retain almost all of its current single market privileges. japan is one of the largest investors in the uk. this comes as the bank of japan governor kuroda as new ideas should not be off the table. let's get out to fujita in singapore. hi kick owe. >> hi nancy. certainly a positive start to the week. you can see green across the board in asia. the bright spot over in the nikkei 225 here hitting a three-month high. you can see it closed above that 17,000 mark. up 111 points. on weaker than expected u.s. jobs reports over the weekend, tempering expectations of that fed rate hike this month, that strengthened the yen. you see the dollar yen at 103.38. going back to the comments
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coming from governor kuroda. he's trying to set expectations for the policy meeting later this month. a policy review would not lead to a withdrawal of easing. he said that the bank of japan has yet to reach its limits. there's plenty of room to -- he said he would not rule out further rate cut to negative territory. this coming despite kuroda for the first time admitting that a further rate cut could hurt bank profits and pension investments. look at what that did to the jgb yields here. paired losses on government bonds after speculation of tightening led to a selloff last week. remember, it reached a five-month high. you can see where it is today, minus .014. the larger economy kuroda saying japan was no longer in deflation and that global markets have regained some calmness. looking elsewhere here in asia. at hang seng, reaching a one-month high as well: the
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focus in hong kong, of course, the legislative elections that saw record turnouts in the city. the first election since the umbrella revolution two years ago with pro-independents candidates gaining seats keeping their grip on very important 2/3 veto block. back to you. thank you for that update. meanwhile, a check on shares in han general shipping. they slumped 30% earlier today. the south korean shipping giant plans to take legal action to prevent its ship from being lost in docking ports around the world. this following the company's -- last week. three u.s. companies have taken legal action against han gin shipping. still coming up on street signs, how does angela merkel bound back from her election
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defeat? we'll speak to someone from the cdu party after this. don't go away.
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the major producers in saudi arabia and russia. also the saudi and energy minister will make a significant announcement at a news conference at the g20 summit kurnly being held in china. as soon as we see that announcement and any other commentary, we'll bring that to you. it's causing a lot of speculation and buying in the oil market. >> especially for oil last week.
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there was a bit of an upset. >> yeah. >> reason to buy some smiteth might say there. we'll definitely await the summit. let's bring you up to speed on the case of apple. the eu tax ruling on apple was based on fact and existing rules. peeking at. g20, the decision was not aimed against the u.s. and that investigation is mainly targeted european companies. julia chatterley spoke with the prime minister of poland and asked for his thoughts on the european commission's decision against ireland and apple. >> i should learn more about the merits frt case. that's true. i've been reading some of the reports in the newspaper. we have obviously -- first, the commission is not using powers it does not have. powers over the taxation of the
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corporations. and aggressively or -- to direct, to tell ireland what it should do. the other story is the part of t the deals obtained by people of apple and others not only in ireland but luxembourg but the -- [ inaudible ] so that's -- there are quite numerous aspects of that. >> so it's the european commission overreaching? >> this argument could be formulated. but as i said, i'd be happy to answer these questions when i learn more about the merits of case. because a head-on collision.
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figures quoted by the european commission differ from what others are saying. it's a very provocative issue. >> julia joins us now around the desk here. julia, the drama continues. we're expecting ireland to vote on the issue to repeal it on wednesday. so what happens next? because the criticism from european policy makers keeps on coming. >> this is an interesting one when you're talking about a polish finance minister. they've also got an -- in their country. i think a lot of -- need to look at themselves and go, if we're opening pandora's box and retrospective -- be made according to the european commission. that sets them up for a pretty -- issue with some of these big u.s. multinationals. they have it right to make investment decisions with risks
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they can't mitigate. that's the first thing here. as far as ireland is concerned, if they do decide to push through and take this issue to court, you're -- what could be two, three years of legal issues between them fighting not to receive sort of tax payments -- [ inaudible ] according to the european commission. >> julia, i'm sorry. can i change the topic back to oil. we're seeing more and more flashes from saudi arabia and russia. they're expected to call for oil market cooperation in a statement in roughly one hour's time out of the g20 meeting in china. those are the top oil producers expected to make a joint statement about cooperation. you're seeing the reaction on the back of this. it's bullish on -- more than 4%. 46 now, up 3.5%. you spoke to officials from both countries. >> yes. >> it's fascinating.
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the deputy prime minister of russia said look, we're in a position now, they want to see stability in the market. he said similar thing, obviously, they want to protect market share and -- you do have to the two main producers coming together and say they'd like more stability even though obviously, gangbusters in the -- [ inaudible ] it's been on record. when i said to prince -- you walked a wail from that, you pre vechbted the deal, he said to me, absolutely not. he said the iranians and iraqis were willing to stop increasing production and therefore the whole thing fell apart. i guess it depends what kind of weight they can put on iraq and iran to stop them producing. i don't know. still unsure here. >> look, they just came back on the market.
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it's all good and well to point the finger when you have a microphone. >> couple buy i can't movement. julia, thank you for joining us. let's get back to german politician. the afd party pushed merkel's party into third place in northeast germany. the result is seen as a back against the chancellor's decision to allow more than a million refugees to settle in germany since 2015. we're joined from berlin. >> thank you so much. it's not the first time that the alternative for germany actually got very good showing at a federal election in germany. but it's the first time they overtook the cdu to this -- also the ramifications from that election. i'm joined by internal spokesperson of cdu which is the party of angela merkel's cdu. thank you very much for joining us.
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what's your first lesson learned from that election? >> i'm deeply convinced that this election, this outcome of this election must be a wake-up call for the government, especially for the chancellory. we have taken to consideration that the policy was the decided topic. a lot of former cdu voters are not satisfied, especially with the way this refugee policy and migration policy is communicated in the last month. i think one year ahead of the -- federal election next year in september, this must be a wake-up call. >> the csu, the za hoefer's party is not content with merkel's refugee politics anyway. are you planning to increase the pressure internally?
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>> we don't want to increase the pressure. we want to persuade the cdu that we have to change our communication. i think the last we made within the last 12 or 18 months weren't badment we did a lot legislative work. but the results are -- shows that this is not communicated well enough to the electorate. so i think it must be made clear that we want to restrict the migration to germany, that there must be a clear position in the government that the capacities in germany are not endless and the willingness of our society is not endless to integrate 100,000 of migrants to germany
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every year. >> let us talk also about the event of the alternative for germany. how concerned are you about that party also heading into next year, the year of the general election? >> i'm really concerned about the alternative for germany, which is indeed not at all an alternative for germany. it's a right wing pop list party. and with partially i would say radical elements and anti-constitutional elements within the party. but to be honest, the afd is a challenge, especially to the cdu, also to my party, to the csu. i don't want condemn the voters of the afd, but the high ranking members of the party, so we must do a lot of work, hard work in the next weeks and months to get
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back the potential voters of the afd to the cdu or to the csu. >> is it all about communication or do you also have to present the voters with presents, such as lower taxes to get them back to you? >> certainly the tax politics and the tax legislation will be one decisive topic in the federal election campaign as well. i have the impression that all other topics don't play any role now because the refugee topic is the most decisive topic and it's an umbrella to all the other topics. so we must solve these problems and must make clear that we will undergo a lot of hard measures in order to reduce the numbers
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of refugees in germany and we will withdraw those who don't have the right to stay in germany. this must be clear in the next month. >> thank you very much. good luck with all these efforts. carolyn and nancy, i'm sending it back to you. berlin is a little bit in shock after these election results. but angela merkel's party, she's still in china. >> thank you so much for that. here's a quick check of prices once again. we've seen a surge, brent up by more than 4% and crude up by almost the same percentage. why? saudi arabia and russia are to call for oil market cooperation at the g20. we'll be back with plenty more after the short break.
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welcome to street signs. these are your headlines. a sharp spark in crude prices that saudi arabia and russia will call for oil market cooperation in a joint statement at the g20 today. >> sterling hits a seven-week high against the dollar after pmi data posts a biggest one month gain in the 20-year history. >> backyard backlash as german chancellor angela merkel suffers an embarrassing election defeat


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