tv Street Signs CNBC November 21, 2016 4:00am-5:01am EST
>> translator: this decision is after four years of being in office and is anything but trivial. > and oil prices provide a boost to stocks. and the president-elect meets critics and supporters in a bid to assign key cabinet roles. good morning, everybody. welcome. i am surprised with the french primaries and the landslide. >> i remember you saying last week that you thought that the polls were turning. a lot of analysts didn't realize how much the polls were turning on the ground in france. >> it just happened within the
space of the last week. that was a last-minute turnaround for him. >> precisely. we'll be talking about this coming up. the european markets are down by .30% heading into trade. we've got quite a bit of activity in looking at the various sectors out there. you are looking at the main european market being mixed. the xetra is down along with the cac 40. you have the opec meeting in a week's time, so we'll be talking more about oil. the first week saw gains over a month or so. and we are seeing that move through to this sector. and basic resources are the main sector to push us higher. we are continuing to see mile pile into basic resources
although we see a strong dollar. back to the top story, francois fillon tops the poll as the first republican primary. nicholas sarkozy's comeback was short as he has been pushed into third place. now he says it's time to live a less public life. >> translator: i have no bitterness, no sadness. and i wish the best for my country for you, my fellow citizens, and for the one that will lead the country that i love so much. the right gave a great image of itself. i was happy to participate in this battle. good-bye to all. >> following his victory, former prime minister fillon told supporters change is on the way.
>> reporter: with me i bring the votes from the right and the center toward the victory of their values. and my convictions are enough to stop a nation to rise up for its prize. the first round of the primary was dignified and responsible. my opponents not in the second round, i say they stood up for their, ideals. >> we are joined by a european economist now, thank you for joining us. how do you explain the surge in the polls about prime minister fillon? he's seen as an economic liberal. so what galvanizes liberals? >> reporter: i think it is very mainstream and i think the number of voters that turned up in the open primary didn't have to be a member of the party to cast a ballot. it meant french voters don't want to see a repeat of sarkozy
running for president. it was the natural choice of the right and a lot of folks decided that mr. fillon is a capable prime minister. he was the first prime minister to last a presidential term. and he's the candidate of change. so the polls got it right with the momentum, if not the favorite in second place. >> what exactly would france look like under a president fillon? because he's in favor of raising the retirement age, he wants to extend the working hours, he's got a different approach to the economy. why do you think that the french are voting for that or want to go for that avenue? >> i think that we have had an experiment with president hollande and implementing tight policies in the three years of his mandate. i think the french workers want
the real thing now. there are very little differences between he and mr. fillon. but where structural reforms have to be put in place, i'm not sure what the appeal is to mainstream voters. but certainly he's going to be most likely the best candidate for the right in this particular framework. >> good morning. the anti-establishment status that the far right have, do you think this is going to prove an advantage regardless of whether or not she possibly ends up against fillon? >> it is very difficult to see her break the glass ceiling. we have had a number of elections in 2015, regional mayoral elections, and in both cases she did very well in the first round, around the 30% level that she'll be at in 2017.
but it is really hard for french voters to countenance the election on the national front. it means that we'll have candidates from the left in the first round in 2017. the splinter ring of the vote on the left means that, yes, in the second round most likely fillon will win. >> precisely we have seen this traditionally a socialist country, france. do you think there's a chance at all that a socialist contender could make it through to the final rounds? >> i think you have the wrong end of the stick. i think it is a conservative country that looks perhaps socially from the outside. but france tends to vote to the
right. it's the exception for presidents. so normal service will resume in 2017. >> i take your point. i guess thinking in terms of the actual implemented policies, many from the outside world, they would be looking out front and precisely thinking that it's been more in the socialist camp with regards to the policies approved. >> yes. i think 2017 will see a return of the mainstream conservativism and policymaking. it's very clear to me that there's going to be a shift toward taxation and probably expenditure. whether this program can be sold to french voters immediately after the election depends on the majority that a candidate could win. but i think she will find it hard to break the glass ceiling. >> it is really hard not to be cynical about polls right now, but do you think all polls could be wrong when we look at who could be prime minister next year and president? >> i think the french polls are
pretty good generally in terms of trying to find where the momentum lies. remember, these are unprecedented. we have never had one on the right and finding the winner was always a tricky exercise. now what we find out is that there is just broad level of support for mainstream candidates as long as they embody a reasonable idea of what a policy is about. you can't have mrs. la penn thinking about the overall changes for fiscal austerity watered down quite a bit if the new government is led by a conservative president to be in power in 2017. >> thank you very much for your time this morning.
speaking of the approach to islamic terrorism, he wrote a book on this and favors diplomatic ties to russia as well. other far leaders would be fans of this, too. cnbc world will speak to the national front leader later on "today," marine le pen. and the politics don't end there. angela merkel said she'll be seeking a fourth term as chancellor in germany's election to be held next year. fourth term. the leader of europe's largest economy has helped navigate germany through the financial and eurozone debt crisis while playing a pivotal role in the global stage as a stock defender of liberal values. speaking to reporters in berlin, she ended speculation about her next month. >> translator: being prepared to be the leader of the cdu to me
always meant being prepared to be chancellor. and so today that includes being ready to run again for the post of german chancellor for the 2017 federal election. i thought about this for an e endlessly long time. the decision to run for a fourth term in office is anything but trivial. okay. we'll look at the economic legacy under merkel's government. the german gdp growth slowed to 0.2% in october, but the german economy has seen strengthening over merkel's tenure. the job rate fell just short of 4% last month and inflation is at the highest level in more than two years. in her 11 years in office, merkel has helped drive significant growth for europe's largest economy, evidence by the dax gaining more than 50% during her three terms in office. when assuming the chancellor in 2005, unemployment was at a 70-year high has now reached record lows. so a lot of people say she was
the steady hand that got germany throughout the financial crisis. but also now they want her steady hand when it comes to the rise of grassroots and populus politics in the name of brexit. a lot of people want her to run for the fourth term because she wants to be the person that saves the western alliance against the likes of trump. >> it's interesting because she came in before the financial crisis starting unwinding. a lot of times before we see the political shift, we say financial changes as well obama came in during 2008 and he's had a heck of a time navigating through the financial crisis. but merkel started the recovery and the unemployment level that was really dire even before the financial crisis took place. i completely agree with you. merkel also stating that this is going to be the toughest campaign yet. she's talked about how this is a fight for our values and our ways of life. and according to the very latest
polls, around 55% of germans if they had to vote today would vote for merkel. so she still has overwomhelming support despite the polls and her being so pro-immigration tearing germany apart. >> that is a big surprise. and that tells me there's no alternative. she's had a big part over immigration and the open door policy. is she really going to run for a fourth term because there is no one else out there? >> you're right. who would possibly get more votes than her currently? and it's about also the largest parties out there, the largest party to get support. we'll go out to annetta covering the story in berlin. annetta, why is her support so high amongst the german public? all right. it seems as though we've got
some mike problems, but she was going to say that she's seen as germany's mother figure. and she's had a steady hand throughout multiple crises. >> and it comes back to, again, the alternatives as you were saying. and more so, maybe, people realizing that in order to try to continue this role that germany's been on, with regards to the economy recovering, that she's done a pretty good job given everything they have been up against. we'll try to reconnect to annetta and see if it can be done. she is there. she is there in berlin. >> she's listening to everything we're saying. i hope she's nodding and saying, hey. >> you also have to wonder if merkel is voting in again, would that have a knock on impact on this post-brexit world that we're going to have to get used to, if france is moving more
right. some are saying we need a quick divorce. none of this trying to commit to deals -- >> but that is exactly what she's been saying, too, right? we'll come back to annetta. matteo renzi is counting on celebrities. 80 chefs, artists and athletes have signed an appeal to endorse the prime minister's reforms. among them, andrea boccelli, and the oscar-winning director palo sarentino. cnbc spoke to italy's economic development minister about his expectations ahead of the vote. >> we know that the polls are not very reliable at the moment, so we do think that we will win
because we have been discussing this for 30 years in italy. it is a very important modernization of our institution. we'll have institutional stronger, and in this difficult moment of history with a lot of pensions and a lot of competition, we definitely need to have this, not only for economic growth, but also for security. >> all right. e-mail the show, the address is firstname.lastname@example.org. we still have trump, right? he's still active on twitter. i don't know if you follow him, but he's very active in the early morning hours. and his main targets are "hamilton" and "snl." >> but a lot of people don't know what "hamilton" is. i was talking to friends over the weekend, it's a broadway show, but they are critical of this coming in. they won't give an apology as trump wants.
welcome back. we'll check on markets in asia. pauline is in singapore. we have seen mixed markets in your session, pauline. >> we have seen mixed markets. you could call it a dichotomy in one day's session, louisa. the weaker yen continued to help corporates there. and this is despite another round of disappointing trade out of japan. exports for the month of october slid 10.3% versus the expected decline of 8.6%. imports were also down significantly down 16.5%. in a merging market, this is where we felt the impact of the stronger dollar as investors continue to pull money out of indonesia, the philippines and malaysia to chase those high yields that we're seeing in the u.s. now the benchmark index of the philippines closed down 1.25% today. the peso hit the weakest level against the stronger u.s. dollar since the financial crisis.
since november of 2008, jakarta also closing lower down .40. also, the kospi ending down .40 as the political leadership calls for the president to resign. prosecutors in south korea say she was involved in influence peddling by her long-time friend. but here's the thing, she's immune from criminal prosecution while she's in office. her term, however, ends in a few months. that's your asian market minute here on this monday. louisa, back to you. pauline, thank you. mighty issued a warning on the four-year results for the second time this year triggering a decline to orders in an uncertainty brought on by brexit. they posted the loss of 100 million pounds from the first half of the year down from a profit of 45 million pounds a year earlier. mitie is assessing the results for its business looking at a change in ownership.
and novartis will buy selexys pharmaceuticals for $665 million. it will broaden their expansion into medicines to combat blood diseases. and the bank bailout fund atlante to buy $.75 been in bad loans from italy's bmps. >> let me try and do the bond markets with passion. we'll see if we are still seeing selling that we have seen the last couple of weeks. more of a mixed picture with the ten-year german just barely there at 0.2%. and the u.s. under
president-elect trump is looking okay. we have seen the dollar on a tear since trump's victory triggering a massive sell-off. let's talk more about where the dollar is headed. you are bringing us the euro dollar against the u.s. dollar. is it just because of donald trump? >> i chose the euro dollar as we are talking about the dollar's strength over the last two weeks. i think it was very interesting with the dollar going into the election, it was interesting if trump was going to win. this is actually the dollar -- this is the most competitive thing for the dollar over a long-term basis.
back in 2014, this is a very long-term chart. that big collapse in 2014 reached a huge top. since march 2015 we have had a sideways range. and if you look at this, we are above the 2015 highs, so we do think the dollar value will continue over the long-term. we are in a durable market and we have a lot further to go. if you look at the euro dollar, you're right there lowering the reigns. i think the euro dollar will see a setback now as we see a bounce in the dollar, something to move the foreign trade, but i think any bounce that we sell off to we'll see a break. this is a significantly durable market. what we are seeing with the euro
is the euro trading on its own and starting signs of growing itself. >> do you think there's a chance that we are completely overdoing our inflation expectations and that given that we are still looking at a low growth, low rate environment, even though it's a bit faster, it is very low. that we are not going to see a massive jump in inflation? >> i think probably yes at the moment. we have seen a big jump in the last few weeks, but if you look at five-year ratings in europe, more importantly, all europe has done is take it from the low to the top of the trend and hasn't broken above it. there's that argument that this was a correction move that made a trend. and you have not damaged anything else yet. we certainly haven't seen a big move changing cord yet. it could be the early starting point for that, but certainly at the moment i don't think you can say the big trend over the last
few years has been broken. and so no, it's more than just about the headline itself. >> let's move on to your next chart, you brought us the ten-year u.s. yield. and you talked about the unstoppable rise in the u.s. dollar. does that go hand-in-hand with the unstoppable rise in the u.s. yields? >> i think so. i mean, the interesting thing for yields is they were, unlike the dollar that rallied before the election, and the yield hasn't and post-election we got this real huge dynamic change in yields. 2% in ten-year u.s., we broke a whole level of trends, et cetera. we have moved upwards sharply. for us now at the beginning of what has been our timing, which is the ten-year 2.57 in here, this is probably getting to the point where we are getting to the point and the more interesting thing for yields is
the significant yield low than on pace. with u.s. economic low, it's difficult to answer that. if you look at jgbs and the gilds, you can make the case of what we're seeing is a really significant long-term change for the single markets. if that is right for the u.s., you're under like that. but it could be more of a step move, but i think that case is definitely there. >> finally, you get 20 seconds for the nikkei. that's now in a bull market, i hear. >> and one of the more positive things is. two things, one, if the equity market in the correction u.s. was a correction price, which it still looks like it is, what will the markets do out of it? japan is looking at the doll dollar/yen moving higher. >> well done. that was 20 seconds on the do. david, thank you so much. he is a technical strategist at credit suisse. check out our blog that runs
run for a fourth term in office is anything but trivial. and europe is following a similar rally in asia as oil prices provide a boost. and the trump transition reaches fever temperature as the president-elect moves critics and supporters alike in a bid to assign key cabinet roles. good morning, everyone. it's going to be a somewhat slower week for u.s. markets given that we have the thanksgiving holiday. but all gearing up to black friday on friday, the s&p 500 seen up now but just fractionally by a couple points. this is after friday u.s. stocks fell, but they were still higher for the weak given the trump trade. even though that seems to be losing momentum. but u.s. stocks are close to record highs. we'll look at the european markets slightly under water. the ftse off by 1/3 this
morning. this could be a technical bounceback. the xetra dax is up by 0.60% as angela merkel announces she's running for a fourth term, but it's not impacting the foreign markets. we are seeing the dollar weakness coming through to allow the euro dollar to pop higher to the tune of .50%, almost 1.0639. still at the lowest levels in aer yoocha year. and failure to achieve education for all could cost $1.8 trillion by 2050 and exacerbate in the quality and contribute to tun rest. we'll go to the report of advocates closing the skill gap with 2 billion jobs at risk by 2030 as automation plays a bigger role in the workforce.
the head of investing at bank of america merrill lynch is here with us. we are talking about the longer term political impact on the globe. talk us through the main key findings. >> firstly, we have made incredible strides within the space in terms of the basic building blocks, whether it is the literacy rate, open rollment and years of schooling, but the reality is we are falling short in terms of education for all around the world. there's 263 million children who are not in school. there are 758 million illiterate adults. and there's a 100-year imbalance between developed and emerging markets. at the current pace, we are not going to achieve education for all the primary level until 2042. and education for all at the secondary level in the 2084. the choice is quite simple. we see this as the biggest civil rights issue of our era facing $1.8 trillion worth of losses if
we don't act off the back of this, or potential $3 billion to the economy if we achieve education for all. >> but are more people and more children being educated now than ever before even though we are not at the maximum? >> we are improving, but there's still a massive way to go. just to put it in perspective, eight days worth of military spending would be the equivalent of educating everybody around the world. eight days. the equivalent of eight days. >> wow. i especially love your stat when you talk about how a four-year college degree is a better investment for your personally than investing in the stock market. i guess a lot of people wouldn't see that. what are the stats here? >> that's right. we have to look at this from the return on investment perspective both from the personal level and the country level. at country level every dollar invested in education means economic returns are between $4 to $10 for the governmental authorities. at a personal level, if you look at the return on investment of a four-year college degree, we are
talking about a 15% return on average over the course of the last 60 years. and that compares to about 7% for the global markets. just to put it in perspective, in america, somebody with a four-year college degree will earn over $1 million more than a high school dropout over the course of their lifetime. somebody with a science, technology, engineering or math degree, a huge space in the coming years is going to earn on average $1.5 million in a high school dropout. >> you say the global education market is expected to grow to $6.3 trillion u.s. dollars by 2020. how exactly, as an investor, do you want to position yourself to benefit from that? >> that's right. it's currentliest mated at $4.9 trillion. we believe it will grow to $6.3 trillion. you want to position yourself in high growth markets. the fastest growth around the world is coming from emerging markets, specifically asia pacific, china and india. we are stepping up governmental
investment as well as spending within the space. in terms of opportunities, we anticipate educational technology or ed-tech, one of the fastest growing areas growing at 17% per year over the next four years. it will hit about $252 billion by the end of the decade. and to put it in perspective, despite the year-end which we live, only 2% of education around the world is actually digital. the second is kindergarten through secondary, which is the largest area of spending around the world. the third is publishing and content. and then the fourth is student housing and accommodation. >> so i just want to ask, i hear what you're saying in regards to a college degree earning more and their prospects are greater, et cetera, but doesn't that apply to my generation? like, 20 years ago when you were graduating and you were in university versus kids today, because in business today, i have a choice between hiring somebody who has a b.a. in social sciences or something
like that versus somebody who knows how to navigate social media, for example, who has a zillion followers and knows how to connect the dots. in the technology world we live in, wouldn't you want person number two? >> i think both. we are facing a massive miss-match. 50% of employers and students don't feel like education is preparing them for the world of work. one-third of corporations are finding it extremely difficult to find qualified employees. we're going to be facing a shortage of 40 million people post-secondary with degrees. if you look at american alone, they are going to be facing the shortage of 2.4 million stem graduates by 2020. and we have to be cognizant of inequality. the so-called people not in the workforce, these are 7 million people in america. they don't count to the unemployment figures. the young people between the ages of 18 to 24, and 17% of
these are not in employment, education or training. we need to step up our efforts in stem and in vocational training and apprenticeships to approach people with jobs of the future. technology is changing our world at a pace we have never seen before and we are simply not prepared for it. >> interesting. thank you very much, the managing director of investing at bank of america merrill lynch. >> so what do i tell my daughter, college does pay off, right? >> i was just thinking that. but also because we sometimes say the more you know, the more you know. and if you are better educated, you're less viable to hate what you don't know of the unniknown. going into the election, it turned out to be the educated would vote for hillary, but a lot of them voted for trump. let's talk about teresa may
looking to pledge money to spark technology. she will unveil an ambitious strategy in an effort to win over big business. this after the cbi's director general last month accused may of closing the door on britain's open economy. the prime minister is also expected to reiterate her call for the lowest level of corporation tax among the g20. u.k. chancellor phillip hammond is focusing on infrastructure spending in the first major budget since the brexit votes. however, in speaking to the bbc, hammond said his spending options are limited. >> we have an eye-wateringly large debt. we still have a significant deficit in this country. and we have to prepare the economy for the period that lies ahead. i want to make sure that the economy is water-tight. that we have enough head room to deal with any unexpected challenges over the next couple of years. and most importantly, that we're ready to seize the opportunities
of leaving the european union. >> switching over to u.s. politics, the white house chief of staff designate reince priebus, one of donald trump's first appointments, spoke to "meet the press" about criticism of trump's stance on terrorism and his controversial plan to ban muslims from entering the u.s. >> i'm not going to rule out anything, but i wouldn't -- we're not going to have a registry based on a religion. but what i think what we're trying to do is say that there are some people, certainly not all people, chuck, there are some people that are radicalized. and there are some people that have to be prevented from coming into this country. and donald trump's position, president trump's position, is consistent with bills in the house and the senate that say the following. if you come, if you want to come from a place or an area around the world that harbors and trains terrorists, we have to temporarily suspend that operation until a better vetting system is put in place.
and when that happens, when the better vetting system is put in place, then those radical folks, or excuse me, they will not be allowed in, but others will be allowed in. but only until that is done. >> what about home-grown terrorism? >> yeah. also speaking on "meet the press," former presidential candidate bernie sanders said donald trump should apologize for his racist remarks made on the campaign trail. >> when donald trump helped lead the birther movement, that was not less than a racist effort to undermine the legitimacy of the first african-american president we have had. that was racist, that was disgraceful, and the african-american community and all of us deserve an apology. when he talks about latinos or mexicans as criminals and rapists, that is outrageous. >> on friday u.s. president-elect donald trump agreed to a $25 million settlement in the fraud cases against trump university despite insisting during his campaign that he would not settle.
the settlement will be divided among the former students who sued. the deal does not require the president-elect to admit wrongdoing. trump took to social media again tweeting, quote, the only bad thing about winning the presidency is that i did not have the time to go through a long but winning trial on trump university. too bad. now, donald trump held a number of meetings this weekend in a bid to reach key cabinet decisions. retired general james mattis is a front-runner for defense secretary with trump tweeting that mattis was very impressive. meanwhile, the 2012 presidential mitt romney had a long stay about the secretary of state role according to vice president-elect mike pence. tracie potts is with us from washington, his cabinet is starting to take shape. can i say that it looks incredibly white, very hawkish from a policy standpoint and very old?
>> so far, at least. we have not seen all of his appointments yet, but based on what we have seen coming in and out with few exceptions, that does seem to be the case. we'll see what happens when all of this shakes out. you talked about mitt romney, they had such a rocky relationship. and over the weekend they did get a chance to sit down and talk. mike pence, the vice president-elect says romney is an active and serious candidate for secretary of state. and so is rudy giuliani who is, has been a very close confidant. we know that president-elect trump believes in and rewards loyalty. you would think that giuliani, obviously, much more so than mitt romney, would fit that category. but there were so many people, there were 21 people in all in and out of bedminster over the weekend, which is where his golf club is located in new jersey. those interviews will pick up again today in trump tower. he's also looking at the kansas
secretary of state for a possible position, someone who has been very tough on immigration. we'll see where he may fit in. and then, finally, democrats here set to push back on a lot of what he will likely bring to capitol hill, but we're also hearing from the senate democratic leaders they might be able to work together to get an infrastructure bill done in the first 100 days. >> tracie, how much attention is the supposed push by donald trump to get his son-in-law jared kushner into somewhat of an advisory role? >> reporter: we are watching it. he can't be in a cabinet position because of the rules or anything like that, but an unpaid advisory role that would have a lot of influence, absolutely. and it is not clear at this point what his role might be. and it's also not clear in some cases how president-elect trump is going to separate his business interests from
governing the country. >> tracie, thank you for that. the rules that apply to all presidents will be severely tested on trump. >> they are. but especially because critics can say hillary clinton held a position while her husband was in office. apparently she was very involved in the education scene, things like that. they might try to test it that way. >> that's true. meantime, russian president vladimir putin has confirmed that donald trump is willing to mend ties between the two countries. however, he cautioned that there is a difference between election rhetoric and real politics. putin was in lima for the apec meeting where he had a brief conversation with president obama about syria. meanwhile, president obama suggested that he may speak out against donald trump after his term ends, breaking with the presidential convention to avoid commenting on subsequent leaders. obama said he wants to respect mr. trump but will nevertheless
depend american ideals if need be. >> as an american citizen who cares deeply about our country, if there are issues that have less to do with the specifics of some legislative proposal or battle, but go to more questions about our values and our ideals, and if i think that it's necessary or helpful for me to defend those ideals, then i'll examine it when it comes. >> the president is also striving to e lay market fears a the apec meeting. he said it was important for the u.s. to look at trade deals as they benefit both the american and global economy. >> i believe that the answer is not to pull back or try to erect barriers to trade given the economy and global supply chains
that would hurt us all, but rather the answers to do trade right. making sure that it has strong labor standards, strong environmental standards, that it addresses ways in which workers and ordinary people can benefit rather than be harmed by global trade. all of this is the central work of apec. as this debate moves forward in the united states, it's important to remember how vital the asia-pacific is to america's prosperity. >> all right. let's talk tennis. i told you before i was very excited about what happened this weekend. >> you saw all of it, right? >> not in person but on the tele, front-row seats. andy murray won his first atp worldwide tour by defeat iing d djokovic. he locks down the match on his
third match after jodjokovic missed it with his backhand. murray two years ago was call in to play for federer injured at the time and he would have never thought he would play in the real finals contending for the number one position. >> they are such powerhouses, both of them. i spoke to djokovic a few years back, they are stunning athletes. good on you that you watched it. i was watching movies instead. coming up on "street signs" we're finding more news about oil output. follow us on cnbc and on twitter. cdw brought i.t. orchestration to printing, dramatically increasing print security with enterprise printers by hp. which is great,
unless you're a corporate spy. unsecured printing makes your network vulnerable. enterprise printers by hp help prevent costly security breaches that can compromise your network and reputation. so i'm stuck spying the old fashioned way. hey. i'm not spying. secure printing by hp. i.t. orchestration by cdw.
all things i know -- >> the u.k. prime minister teresa may is speaking live at the cbi conference currently in london. in fact, let's listen to a little bit more of what she's saying. >> i have no doubt at all about the vital role business plays, not just in the economic nation, but in our society, too. but as prime minister, i want to support you to do even more. that is why when the chancellor delivers the government's state
on wednesday, he'll lay out the agenda ambitious for business and ambitious for britain. he will commit to providing a strong and stable foundation for our economy, continuing the task of bringing the deficit down and getting our debt falling so that we can live within our means once again. he will build on the action that is are independent that the bank of england is taking to support our economy. and he will do more to boost britain's long-term economic success, setting out how we will take the big decisions we need to invest in our nation's infrastructure, so that we can get the country and business moving. and he will show how we will do everything possible to make the u.k. outside the eu the most attractive place for business to go and invest, grow and invest. i know that leaving the european union creates uncertainty for business. i know that symptom are unsure about the road ahead or what your future operating
environment will look like. and it will certainly be challenging. and a negotiation like the one on which we are about to embark cannot be done quickly or without give and take on both sides, but there are opportunities, too. opportunities to get out into the world and do new business -- >> teresa may speaking there live at the cbi. let's leave that for just a second and talk a little bit about goldman sachs recently. they have been advising the data over the last two months and they are confident that the global oil market will shift into deficit by the second half of 2017 even with opec production above the current levels. the company went on to say that oil fundamentals have weakened sharply since announcing a tentative agreement to curb production. oil prices are higher this morning, close to three-week highs benefiting from a weaker dollar. brent crude at 47.34 up by 1%. wti crude adding roughly 1% at
46.15. it also merged that opec was closer to agreeing to an output cut. the prime minister said he will make suggestions at the upcoming opec meeting to help facilitate an agreement to restrain crude supply. let's talk more about the oil market, the outlook for that very crucial opec meeting. we have a senior oil strategist here with us at the effect the. it is really give or take. one day we are super optimistic about the opec meeting, the other day we are pessimistic and oil prices are trading around that. do you give credence to reports over the weekend that we'll be seeing a cut? >> a lot of volatility because we have good news and bad news around the cut. we think some agreement will be agreed on the 30th of november, but our concern is that the size of the cuts could be insufficient to lead to a significant, meaningful draw-down in stocks. and we need a draw-down in stocks to remove the overhanging of crude investment over the last few years. so as a consequence, we remain
cautious. so although there may be a positive response to some announcement on the 3rd of november, once you look at the barrel arithmetic, the market will soon realize it is not significant and meaningful and as a consequence we feel the price weakens in the aftermath of that meeting. >> gareth, even if we get a cut, you expect price weakness. can oil substantially rally sustainbly if we see that strong dollar in place? >> well, the dollar is creating a headwind for oil prices because the countries that pay for oil in dollars are the -- the cost to them increases if the dollar strengthens. the consequence of the new presidency will likely be the e reflationary stock. it will create some headwinds,
but the key thing is around the massive supply and demand. that is the key determination for how oil prices move. >> how does this agreement happen practically, especially when looking at how far apart many of them are. there are disruptions to the oil fields. you have iraq saying the measurement data isn't sufficient. i mean, we're all over the place. >> well, that's the reason why we are cautious at bnp paribas. many countries are excluded from the agreement. iraq complains about the number and think they can produce a higher level. so if opec uses a lower number, the cut could be far greater. just to hit the target of 33 million barrels a day is something like 670,000 barrels a day. but that will be done just by four countries within the center of opec. and then you need far more cuts from the four counties because the other members are likely to increase production. and that is why we feel that you
have to remain very cautious. if some agreement comes, members won't make the necessary cuts. so it is all down to wait and see. and that is leading to price volatility at the moment. >> thank you very much. gareth is a senior strategist at bnp paribas. >> that's it for the show. "worldwide exchange" is up next. see you tomorrow, bye-bye.