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tv   Street Signs  CNBC  September 14, 2017 4:00am-5:00am EDT

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. hello. welcome to "street signs." i'm carolin roth these are your headlines russia begins its war games, launching a huge exercise to display its military might as nato's secretary-general tells cnbc that president putin's forces are becoming increasingly assertive. >> the danger of incidents or accidents has increased. because there are more troops, more military forces along our borders. hitting the next level shares in the british clothing
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retailer soar after the company raises its full-year profit guidance on the back of a boost in demand to its directory business. and munich re shares hold steady after the german re-insurer warns of a hit to full-year profits following hurricane season in the united states good morning great to have you with us once again. it's thursday, that means it's one of those days where it's boe day once again we'll talk about that later. let's kick things off with a look at the european equity markets. just slightly lower to the tune of 0.1%. two things going on today. one is the weakness of basic resources. on the back of chinese data and the strength of retail the secoeuropean markets, a lotf
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red here ftse 100 off 0.1%. the xetra dax falling by 0.25% now we comeback to the sectors basic resources lower after chinese's fixed asset investment grew at its slowest pace in 18 years between january and august weaker than expected industrial output and retail sales were also reportedingi worries that economy may be slowing down as profits rise. next is trading at the top of the stoxx 600 after raising its full-year guidance for sales and profit for the second time in less than two months. this despite posting a 9.5% drop in first half profit slower consumer spending on fashion and footwear weighed on profit in the past few years morrisons shares are plunging after the company warned that the impact of inflation will start unwinding at the next of the fiscal year
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shares off by 4.5% the company did report a nearly 13% increase in first half profit this is the seventh consecutive quarter of underlying sales growth for britain's fourth largest supermarket. not really helping the shares today. another interesting stock this morning shares in hermes are trading lower after warning that the strong euro could weigh on next year's profit. the company is fully ledged against currency headwinds the french luxury goodsmaker reported record operating margins in the first half of the year a lot to talk about. olaf, always great to see you. let's talk about the euro strength, which is proving to ab headache for luxury retailers in the past couple of weeks and months do you still like european equities because of it or despite the euro strength? >> i think because of it in the sense that the strength of the euro will not really derail the european recovery
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the strength of europe is more domestic now than export-led clearly the stronger euro does have an effect on inflation, does have an effect on monetary policy keeping it lower for longer. and as we see today it has an effect on corporate profits. >> most of the strategists i have around this desk tell me that they're overweight europe and japan and underweight u.s. you're clearly one of them you told me this last month. you're sticking to that view i do wonder that now u.s. markets are back to record highs, should you rethink that view at least a little bit the u.s. keeps on surprising >> the u.s. keeps on surprising. though i would argue that the u.s. market is getting smaller and smaller, it's basically tech leading it and the bond proxies as rates get lower instead of higher i understand why the u.s. is doing what it's doing. but in that sense, i think the
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european market looks good the global economy is picking up that would translate in higher rates and higher rates would then also lead to europe outperforming. the problem with europe is that we don't have enough tech. >> we should have more tech. but we've been working on that we've only got the likes of spotify, that's not enough clearly. want to come back to the u.s. market over the last few days we've seen a change when it comes to u.s. treasury yields they've been picking up. maybe the absence of aggression coming from north korea but also some better data, also some supportive comments when it came to the tax reform. do you think that this could potentially be a turning point for the u.s. dollar and u.s. treasury yields? >> hopefully i was getting a bit concerned that we would break the 2% level, and we didn't do that i think it also -- the change in tone also came from the fact that trump is reaching across the aisle and is doing a deal with democrats, which if you look back 2, 3 months ago,
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nobody would have predicted that that is changing the tone. what's changing the tone is the data keeps coming through pretty good does that automatically mean you're a dollar bull or do you not want to go that far? >> i wouldn't go that far. forecasting currency is not my thing. if you agree, as we do, that growth in the u.s. is picking up and that inflation is brewing, then you do need to make the case that the market is underappreciating the fact that there will be more rate hikes that would lead into a stronger dollar >> so as you say, the markets are underpricing interest rate risk how exactly would you trade the market then if you're very firm on that view what does that mean? >> it means that -- the market is basically discounting less than -- the rate hike for the next -- last time it was 18 months, it's now like 24 months which is not enough. so what you want to doning is
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tra doing is trading the short end of the curve >> let's step away from government bonds and credit, let's come back to equities. there's one market you say is underappreciated nobody pays a lot of attention to it, that's japan. why is that? >> japan has been unloved for a long time. if you look at it, nobody has invested there and people are underappreciating the fact that the earnings revisions are picking up the earnings revisions are up, the market is not doing anything with it. it's more of a sentiment trade in the sense that this rally -- the global equity rally is long in the tooth by then you want to look at laggards japan is clearly one of the laggard. >> you will stick around for longer in the meantime, banca carige
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forecast net profit rising to 146 million euros by 2020. the italian bank has confirmed a stronger capitalization this year through a rights issue and asset sales with a position strengthening by more than a billion euros under its new plan e-mail the show. let us know whether you agree or disagree with the thoughts about the strength of the european ekky mek ek ekky equity markets, and about japan. streetsignseurope@cnbc, and streetsignseurope@cnbc.com and tweet me at @carolincnbc we will go for a quick coffee break, we hear from an egyptian billionaire on the situation in qatar as the gulf nation burns reserves to cushion the impact of the trade embargo. that's in two. .
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welcome back to the show north korea threatened to use nuclear weapons to sink japan and reduce the u.s. to ashes and darkness for supporting a u.n. security council resolution over its latest nuclear test. japan criticized the statement as provocative and said it is working with u.s. missile defense ships in monitoring the threat from north korea. steve spoke to the nato secretary jae-general and askedm if we feared a nuclear war >> the north korean missile and fuguel nuclear program is a global threat and requires a global response it's a threat to international peace and security that's why we take it seriously. it's a blatant violation of many, many u.n. security council resolutions. it's a threat to neighbors, but also to global society nato is stepping up our cooperation with partners in the
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region especially south korea and japan. i will visit the region next month, south korea and japan and our experts are looking into how we can exchange information related to missile defense our biggest ally, the united states, is heavily involved in the region we need to work for a peaceful solution military solution will really, really be exhausted for many people in the region so we continue to work for a peaceful solution. this is interesting, hadley gamble also spoke to a businessman who has invested in north korea, and hadley joins us now. that is not just any businessman. >> good morning. essentially what we know now is given all of the pressure certainly from the egyptians, for example, a long-term ally of north korea, they just announced in the last couple of days they will be cutting military ties with that country. that comes off the back of a u.s. decision from president
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trump and the congress that they wouldn't be giving them their usually amount of aid, we're talking millions of dollars of aid that egypt receives from united states. they stopped that. much of that due to the pressure over north korea i asked naguib sawiris, the man who has the only telecom license in north korea f he's divesting his assets as a result. >> our relations with north korea, they were historic. we had the '73 war with israel, it's a historic thing. i think our minister of defense just visit ee eed south korea ad announced they have stopped all military cooperation with north korea. i don't think cutting aid is a smart move we were so happy between the u.s. and egypt has been restored, relations are coming to a good stance, so cutting
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this aid is not a good idea. >> so president trump on the wrong track? >> i don't think it was his decision, to be honest he's not alone there i think it was more the congress or the senate. >> following on to this, given the escalation in tensions with north korea, have you had any thoughts about dpi investive di asset there's? you have the only telecom license in north korea >> i believe i extended a good service to the nentd peopinnoce of north korea, they have parents to live miles away, they are allowed to have the simple service that everybody in the west has it has nothing to do with politics as an investor, i abide by all the u.n. resolutions, coordinating making sure we're not violating sanctions or rules. >> how large is that investment in north korea >> i think we invested 2$250 million. >> given the war of words and
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what we heard from the north korean regime that they're going to "cause the u.s. the greatest pain they ever felt as a result of escalating these u.n. sanctions, is this really a country you still want to do business with? >> don't judge -- politics or wars are not won by rhetoric especially when one side starts to threaten, the other threatens. if you threaten and you don't act, you look stupid so it's best not to. >> so, naguib sawiris saying, you know, there's no reason that this diplomatic crisis should impact his business in north korea. he seems to think that talking, all parties coming to the table and talking is the way forward from one crisis to another, i also asked naguib sawiris for his thoughts on the qatar crisis >> that's a position against terrorism. people have not spent enough time to figure out who is financing all this when a country is hosting all the advocates of terror, whether
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they are the leaders of the muslim brotherhood or hamas, when they host clergymen that are illiterate, that tell young people go blow up this place, kill innocent people, you will end up in heaven, then there's no more to talk about. it's not diplomatic. it's just a stand against terrorism saying enough is enough >> strong words there on the qataris. also i asked naguib sawiris about other things as well certainly the economy in egypt, his investments in europe. the most striking part of the conversation, i reminded him several years ago after the revolution, is this good for business he said, yes, revolutions can be good for business. i asked him again. he said i was wrong completely, we suffered greatly in egypt but he thinks egypt's economy is getting back on track. >> hadley, thank you very much for that excellent interview as always.
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now let's focus in on the german elections the german industry group vdma is forecasting the engineering sector will grow 3% next year thanks to strong demand in europe the continuing strength of the german economy could help angela merkel in the country's election on september 24th. speaking to annette, the vdma offered this assessment on how the vote will affect german industry will not speculate on who will be our next chancellor, however german policy or politics is relatively stable. it is not that -- if one government comes after the other that there is an interruption like we have seen in america so, actually we expect some changes. we hope for some changes, but in general we assume that the
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political direction will pretty much stay the same than what we have experienced >> what kind of changes do you want to see from a new government as the machinery industry >> we need better infrastructure we need better environmental or environment for our industry it starts with education of the children being more technical when it comes to physics, chemical, math, and then we need to have digital sfrinfrastructue for all the data we want to transport in the future. all of that is in the agenda, that's what we wish. that's our wish list for the politics >> the outlook for german industry may appear bright, but could a growing wave of protectionism dent its growth prospects? annette asked whether he believes an international trade war is likely.
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>> i wouldn't say we're afraid but there's a concern that borders would be raised, being it taxes or non-tariff borders however we think it's beneficial for all sides if we wouldn't do that >> looking at the situation that germany has such a huge surplus, do you think that will change in the foreseeable future by other means? >> the surplus depends on many factors. the quality of the goods germany is exporting it is depending on the shape of the industry wie sending our goods to it's depending on currency exchange rates it is depending on imports germany is doing
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if you look at oil, if the oil price goes up, the surplus from germany will be much minor than it is right now. >> all right let's get back to olaf there is so much fanfare about the dutch elections, about the french elections, now the german elections. they seem like a sleep campaign, that's what the german media is saying do we care about the german elections at all there's no major threat of populism there >> at the beginning of the year we were worried about these three elections, least worried about the german ones. in fact, whether we get merkel or shultz, it doesn't matter that much for growth or for inflation or for the outlook of germany. i must say that i completely agree with what's said by the vdma guy it is about domestic growth and germany exporting a lot. the same goes for holland. current account surpluses are big. the real story for germany has
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to be investment in the domestic economy. it's a country plagued by demographics >> even if the euro is strong, it won't dent things much? >> will dent the export side a bit but won't derail the german economy. >> let's talk about the bigger project that is europe and closer integration mr. macron has been active on this front we saw the state of the union address by mr. juncker yesterday mirroring what mr. macron has in mind the germans have been more hesitant about too much interaction there, too much integration, when it comes to burden sharing is this the right time to forge that closer union? >> it's the only time. we started earlier about the elections. all these elections have not given way to populism. basically you have a window of four, five years to get europe together and for europe to work we have to get the french to act more like the germans, ie reform
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more and have the germans act more like the french, spend more. that's the only way it will work it's time now to build on that >> are you in favor of a common finance ministry, common budget and all that that seems like too much integration that maybe some states would take advantage of, and others wouldn't be so happy about. >> clearly >> if you ask any person in germany or the netherlands, they would object to it completely. they would keep their sovereignty. they don't want to have the transfer union in the end if you want a banking union or monetary union, you can't stop and not have a fiscal union or political union it's the choice we made. we're only halfway >> thank you very much for that. >> secretary of state rex tillerson is set to arrive at
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downing street to meet boris johnson. he should be arriving any minute now. he will also be meeting the british prime minister theresa may at downing street. after that, he'll be meeting the foreign minister, boris johnson. north korea, libya, they're expected to dominate the talks which are being held 9:30 is the expected time for that arrival there disgraced pharma executive martin shkreli has been jailed while awaiting sentencing for securities fraud he's been out on a $5 million bail a yuj revojudge revoked the bonr shkreli offered a $5,000 bounty for a chunk of hillary clinton's hair on social media speaking outside the court following the ruling, his lawyer, benjamin brafman, said the decision was avoidable. >> we are obviously disappointed we believe the court arrived at
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the wrong decision but she's the judge. right now we will have to live with this decision it's unfortunate it was unfortunately avoidable, but the judge has ruled. she's the judge. >> as always, e-mail the show. the address is streetsignseurope@cnbc.com you can find us on twitter, streetsignseurope@cnbc and tweet me at @carolincnbc coming up, war games with fake enemies we get the view on russia's military exercises from the nato secretary-general. more after this short break. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall.
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welcome back to "street signs. i'm carolin roth these are your headlines russia begins its war games, launching a huge exercise to display its military might as nato's secretary-general tells cnbc that president putin's forces are becoming increasingly assertive. >> the danger of incidents or accidents has increased. because there are more troops, more military forces along our borders. hitting the next level
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shares in the british clothing retailer soar after the company raises its full-year profit guidance on the back of a boost in demand to its directory business. and munich re shares hold steady after the german re-insurer warns of a hit to full-year profits following hurricane season in the united states just to let you know, the german chancellor angela merkel will open the frankfurt motor show before delivering a speech at event we'll keep you updated on the key points throughout the show that's no angela merkel clearly. is that live downing street? i doubt that that's the frankfurt motor show. when merkel starts speaking, we'll bring you the highlights let's show you what the european equity markets are up to
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slightly under water a bit of a mixed picture the cac who off 40 off by 0.2% the xetra dax off by 0.3%. it's a tale of two sector stories today. we have retail outperforming on the back of the good performance and the hike in the profit guidance coming from the british clothing retailer, next. on the other side of the coin, basic resources are underperforming because of weaker than expected chinese data the aussie dollar brushing that off today on the back of better than expected labor data i want to tell you the snb, that's the aussie dollar there, up by 0.25% on the back of jobs data we have pound sterling against u.s. data unchanged. 1.32 is the level close to a one-year high. euro/dollar, 1.1898.
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the dollar is still strong on the back of the big rise in the u.s. treasury yields this week and the absence of risk aversion when it comes to u.s. futures, we're expecting a slight movetrn the dow jones seen off by 5 points after rising 39 points in yesterday's session. russia's biggest war games since 2013 are set to officially start today. moscow says the exercises conducted across belarus, the baltic sea, and western russia will involve 13,000 troops and 250 tanks. but nato believes the scale could be much large wr with up o 100,000 troops and nuclear capel ballistic missiles being deployed steve sat down and asked why the war games have become more dangerous. >> this is part of a pattern which we have seen develop over
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several years with a more assertive russia, russia which tripled defense spending over the last year. which is using force against neighbors and exercising much more modern capabilities in a more aggressive way. russia has the right to exercise forces, but it's important this is done in a transparent way to prevent misunderstandings, miscalculations. we've seen before that russia has used military exercises as a disguise for aggressive actions against other countries. that was the case in 2008. that was the case in 2014 when they annexed crimea, that was under the pretext of a military conflict >> do you fear there is a real
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chance of something similar to georgia, ukraine, crimea happening in 2017 in the baltics? >> no the reason is the baltic countries are a member of nato nato is there to defend and protect all allies. we just deployed four battle groups, nato battle groups to the two baltic countries and poland they are multinational and by being multinational with forces from 15 different nato allies, they send a very strong signal that an attack on one ally, onone baltic country wil trigger the response from the whole alliance this provides credible det deterren deterrence >> you talked about the tripling of russian defense spending. you're after a lot more defense spending from nato, on a handful
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of nations are spending 2% of gdp. the danger of an accident if you have extra military forces from the west, extra military forces from rush sharks the danger of an accident is heightened very much so, isn't it? >> the danger of incidents or accidents has increased. because there are more troops, more military force along the borders, more exercises, that's why we are focused on transparency, predictability and why we call on russia to be transparent. nato is transparent. we invite observers to our exercises. russia has not invited international observers to their exercises since the end of the cold war and what you call the vienna document, the b international agreement. >> so the russians are lying about the number of troops
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they stay 12,700, some observers say it's up to 130,000 troops. the russians are lying >> it's unknowns will participa, but before russia underestimated in 2009 and 2013 the number of troops participating were much higher than the russians reported so we call on russia to be transparent but also to sit down and work with nato to modernize this agreement, to close the loopholes and make them more efficient to prevent incidents and accidents. >> earlier the lithuanian president spoke to cnbc and called for more support for her country and herb baltic neighbors. we asked about one nato soldier against ten russian soldiers in the western districtof russia.
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so, i don't know what kind of thing could be coming our direction. i think our neighbor russia is still unpredictable. >> let's get more analysis from christopher grandville christopher, what the lithuanians are concerned about is an accidental conflict. do you share those concerns? i think lithuania and other baltic states fear russian aggression the problem with all this revival of cold war style, tension and confrontation, both sides fear the other this is partly propaganda. we're talking about this today because the russians are exercising the russian media are talking about the same things a few weeks ago when nato was exercising in the baltics. but what interests financial markets is whether the geopolitical tensions escalate further or decline
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the tensions matter to market participants sometimes directly. there's some fund managers who think russia is a threat and don't want to invest there mainly through the effect on government action and policy will there be sanctions or military build up? these exercises are very ritual what really counts is the underlying at ttitudes of the public from you say the war games are a side show because these happen every four years y they've been reinstated at some point about a decade ago. this is nothing unusual. maybe we're paying too much attention to them after the 2013 aggression when it came -- or 2014 aggression when it came to crimea is that so >> absolutely. everyone can agree on that if there had not been the ukraine crisis no one would be paying attention to russian military exercises in the western district on the frontier with nato.
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nato frontier moved much further east than the old cold war and there wouldn't be nato deployment in the baltic states and poland but i come back to my earlier point. the -- if you look at public opinion in germany and even the -- some central and eastern european countries you see increasing numbers of people who want more security cooperation with russia. so it's not as if the public feels that there's a huge threat, which you hear about from officials the russian media is always going on about the threat from the united states. the russian government views the u.s. as the only actor but the russian public has no appetite for conflict or any instability. so it's a question of when the public attitudes are going to bubble up. i think the german election is interesting. if you look at the german
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political parties contesting the election a week on sunday most support an easing of tensions with russia. more constructive relations. attention to one detail is important for markets. there's a peacekeeping initiative with regards to the conflict in southeastern ukraine. this is the focal point of the confrontation now. it's the immediate cause of the most serious sanctions if that peacekeeping initiative flies in the u.n. in the coming weeks, that's a positive signal on geopolitical risk for russian assets >> if you say the public whether it's in germany or russia is not concerned about the war games happening on both sides, some of these exercises, whether it's coming from the nato side or the russian side, do we need to deescalate this conflict or is there not a conflict to begin with >> the answer is that russia is not going to invade the baltic states or anyone else despite what happened in ukraine certainly the united states and its allies will not invade russia market participants could just
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ignore this whole question, were it not for the political effects of the ukraine confrontation and the sanctions. that has an effect on market sentiment, it has an effect on real economic outcomes therefore the right focus is on what could change that sanctions picture. there i repeat people need to look at the situation in southeastern ukraine >> you say that the conventional forces in europe, that could be quite an ice breaker tell us how. explain to us what that is >> let's cast our mind backs to when it was love between russia and the west it was gorbachev, margaret thatcher, george h.w. bush and the treaty of paris in 1990 i hope your viewers are sitting comfortably. it won't take long both sides, that was still the soviet union and the warsaw pack, they agreed not only to reduce the numbers of tanks, troops so on, but crucially also
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to draw them apart from each other. there was strict controls on what could be deployed where the only thing was to pull everything back if that treaty could be revived, then, of course, the tensions would largely evaporate in the military sense, so you wouldn't have much closer proximity of military deployments on either side, which you're seeing today. also in the political sense. if no military forces are anywhere near the sensitive zones, ukraine, belarus, baltic, georgia, then political decisions about who is in which alliance or who is aligned with who politically becomes much less fraught and much less poisonous. that's something to look at for the longer term. you heard it here first. >> christopher, for some reason i don't think this will happen any time soon as long as russia is embroiled into the investigation into u.s. election meddling let's put this aside for the time being let's talk about what the market
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is worried about we've seen the outperformance of russian equities and assets. can that continue? >> it's been a good run for russian equities in the last couple months. after an extremely poor period in the first half of the year, when em equities were rallying strongly across the board, kr constructive global environment for equities which were beaten down during the fed's taper period, russia did not take part in the first half of the year because of disappointed expectations and last winter everyone thought it would be geopolitical thaw, but that didn't happen you mentioned the election hacking controversy. there are many other factors as well now at long last markets want to buy em russia has been left out it's cheap the economy is growing great central bank great monetary policy. reasonable fiscal december palestinian, earnings growth,
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the economy grows. that momentum has further to run. it's not at all impeded by the oil price being up by 55 i think the russia story is gradually being more divorced from the oil price personally we would be structural bears on the oil price. >> thank you very much for that. thousand of people were evacuated from buildings across moscow yesterday following a series of bomb threats russia's ria news agency says the three train stations and 20 other buildings were checked after a flurry of anonymous phone calls claimed the locations had been mined ria says there had been a wave of bomb threats affecting more than 20 russian towns and cities this week. all of which have turned out to be hoaxes. u.s. president donald trump says that taxes on the rich might rise the president told reporters that if taxes on the wealthy have to go higher, they'll go higher trump's statement comes as he
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looks for bipartisan support to overhaul the tax code. >> much lower than that for individuals. the rich will not be gaining at all with this plan we're looking for the middle class and we're looking for jobs jobs meaning companies we're looking for the middle class and we're looking at jobs. leading congressional democrats say they have agreed to a deal to shield about 800,000 young immigrants from deportation or the so-called dreamers top senate and house democrats chuck schumer and nancy pelosi made the announcement following a dinner with president trump. the democrats say the deal excludes the building of a border wall, a claim trump administration officials reject. president trump harbor rowed a takeover bid by canyon bridge capitol for lattice. it was rebuffed after revealed
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that the business was partly funded by beijing. hurricane jose strengthened slightly, now spins about 500 miles south of bermuda jose packs winds of up to 75 miles per hour but could weak ton a tropical storm soon. residents in the caribbean hit hard by irma are starting to get food, water and help following the storm's destruction. here's the latest report from the region >> reporter: this is ron mott on st. thomas, where weary survivors lined up for meals how long is this food going to last you >> all this food here? >> reporter: yeah. >> two days. >> two days. >> reporter: basics still hard to come by power mostly out debris everywhere. and a sense by some the local government wasn't quite ready. >> it's in pretty bad shape. >> reporter: andrew capteville's
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room with a view both stunning and harrowing, thankful for his survival on antigua and barbuda, clear destruction. families struggling to find supplies and strength. "nothing left" this woman cries. animals left to wander on tortola, 90% of homes and businesses gone. for some, it may be gone for good >> i don't know if we'll ever make it back to live on st. john again, and that breaks our heart because it was a wonderful place. >> reporter: tonight this cruise ship behind me will set sail for san juan, puerto rico, with yet another group of tourists and evacuees off st. thomas before turning back to hard-hit st. martin to do much the same it's all hands on deck in this recovery in connection with the warning that the losses from hurricane harvey and irma could weigh on munich re, the company estimates that harvey alone could cost 20 billion to $30
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billion. the figure would put the storm on the same scale as hurricane sandy in 2012. worth noting that shares in m munich re are resilient to that today. shares up by 0.3%. coming up on the show, holding steady the bank of england has it's latest announcement due in a few hours time and a woman lands on the ten pound note details on "street signs" coming up my name is jeff sheldon, and i'm the founder of ugmonk. before shipstation it was crazy. it's great when you see a hundred orders come in, a hundred orders come in, but then you realize i've got a hundred orders i have to ship out. shipstation streamlined that wh the order data, the weights of , everything is seamlessly put into shipstation, so when we print the shipping ll everything's pretty much done. it's so much easier so now, we're ready, bring on t. shipstation. the number one ch of online sellers. go to shipstation.com/tv
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this is a live shot of the german chancellor, angel speaking at the frankfurt motor show she says speaking about the automotive industry, given that this is a huge campaign topic, she said we should never be
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complacent, learn from our mistakes and cast our mine backs to two years ago, shortly before the vw diesel emissions scandal hit. she said two years later we're seeing that some companies, not majority, but a few companies are exploiting some gaps they've disappointed regulators, disappointed the consumers and the automobile industry has to do everything to restore trust on the part of the consumers let's move on. u.s. senator al franken sent a letter to apple asking for information on its privacy safeguards for biometric data. franken says he is concerned customer information gathered through facial recognition technology used to unlock the iphone x could be shared with third parties. the uk chancellor philip hammond vowed to fight back against any eu attempts to undermine britain's final services sector after brexit he said we will not accept protectionist agendas disguised as arguments about financial
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stability. he did acknowledge the eu's legitimate concerns over post-brexit financial regulations saying he would work cooperatively with his european counterparts to address those fears. the prices of central london properties fell at their fastest rate since 2008 last month that's according to research from the royal institution of chartered surveyors or rix the survey found house prices across the uk as a whole rose modestly in the month of august. this trend will continue with rix surveyors saying london will be the only region in britain where house prices will decline over the next 12 months. markets await the latest from the bank of england in a few hours time the august announcement saw the vote split 6-2 in favor of keeping rates at 0.25% since then a lot has happened. we saw an inflation print of 2.9% and a weak wage number once again.
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that is another dilemma for mark carney what is he going to do. >> i would imagine and everyone thinks that rates will be kept on hold. what the real question is is whether it will be 7/2 which is the consensus opinion, moving up from 6/2 vote we had last month or whether it will be 6/3. now, the boe has been trying hard to push up rate expectations unsuccessfully. trying to talk it up in the minutes and in speeches around the enl edges during the summer. what could shift rates higher is a 6-3 vote rather than 7-2 >> do you think it will be halding who will switch over to the hawks? >> he is one who is watched as a switch candidate people expect that we don't know too much about others. the two most haven't jorecent joiners to the committee if someone switches camps, it
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could be him you eluded to the fact that mr. carney is trying to sound more hawkish but investors don't want to listen to it i don't know if consumers wanted to listen to it. last time at the inflation report he sounded a hawkish note by saying markets may be underestimating the rate of future hikes why is no one listening to that? >> he keeps on saying it and they're not doing anything about it it's a low expectation the markets are look at only two hikes in the next three years. next people don't anticipate any hike until the end of next year which is a flat trajectory he's trying to build some momentum into that, the more he says expectations should be higher, the less anything happens, the less the market believes him today expectations for a rate hike are 10% what is interesting is that we have pound sterling trading at a one-year high against the u.s. dollar this is probably helping the boe a little bit
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when it comes to dampening inflation expectations >> that's right. massive falloff in sterling at this point, reversal of the rally and then some. if we get that, that's something that could push them to alter rates. absent that, that's not what many people anticipate not sure there's impetus from the currency side to move rates. >> tune in to our live coverage of the bank of england's decision today that's at 12:55 cet. a quick look at u.s. futures we are expecting a slightly weaker start to the trading session. the dow jones seen off by two points the s&p 500 could fall by 4 or 5 after yesterday's record close i'm carolin roth "worldwide exchange" is up next. live-stream your favorite sport
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a record run all three major averages hit new highs. china crackdown. president trump just blocked a big beijing-backed deal over security concerns. and behind bars. the pharma bro martin shkreli jailed after asking for a lock of hillary clinton's hair. it's thursday, september 14, 2017 "worldwide exchange" begins right now. ♪ good morning very warm welcome to "worldwide exchange." i'm wilfred

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