good morning everybody. welcome to "street signs". i'm louisa bojesen. >> these are your headlines. >> oil stocks and utilities are the big leaders in europe with the rebound seen in crude price. bank struggle in early trade. we are not erikson. erikson is in crisis warns nokia. its shares hit a three year low as it projected a 2% decline. >> central bankers weighing in

on trumpeconomitrumponomics. >> there's this protectionist threat which is not clear. >> russia's economy minister is detained over an alleged bribe related to mega domestic oil deals. trump brer, brexit, the glo bond selloff. we have a stellar guest lineup just for you. hi, everybody. good morning. welcome to the show. we have a bit of data that's trickling through. italian preliminary third

quarter gdp 0.3% quarter on quarter. 0.9% to the upside year-on-year. consensus was for 0.2%. it's coming through a little bit stronger than anticipated. second quarter gdp revised as well to 0%. it means that the year-on-year figures come down just a tad from 0.8%. the economy in italy growing more than expected in the third quarter by the looks of thing on domestic. >> the divergence with the german data we got out a bit earlier everybody expects the german data to hold up. coming in shy of forecasts. so a bit of a surprise you might say. of course there may be more susceptible to the free trade fears, protectionist fears. >> wonder whether we'll go back to looking back to data or focus don't political environment and with the elections coming up in

italy or the referendum for december. equity markets this morning were flat to a little bit higher seen right now the stocks are up by 600 with a few more stocks trading slightly on the upside than the down side. moving on and showing you european equity markets, a mixed story on equities. the ftse 100 up by .7%. you got the dax and ftse both seeing a in the any bit down. sector positions, trump trade retail, oil and gas, real estate leading the way higher. basic resources flip flopping from yesterday being off by 2.5% one of the main gaining sectors, insurance and banks not far behind. >> join us now to give us a better picture is john baker. john, good morning. thank you for joining us. wondering whether or not we can take our eyes off the trump trade which has been

concentrated in the u.s. we heard some bold statements talking about a new paradigm shift, a new normal when you look at what's happening with rates. do you think investors are getting ahead of themselves? >> in the short term the moves we've seen which has been very aggressive with the u.s. ten year treasury now at 2.2%, 10 year gilt at 1.4% and bond yields moving into positive territory the speed of that fall in prices, rise in yields suggest in the short term there could, indeed be some pull back. i think what's happening is that market is focusing very much on the positives of the trump victory. the market was encouraged in the first instance by the moderation and the tone of his initial speech. that's when we saw developed markets begin to rally. and also clearly pro growth, fiscal policy, infrastructure, tax so on and so forth.

so far the market is ignoring potential negatives. >> and this perceived pull back end free trade coming from a trump white house. the german data out this morning, germany's economy they are concerned about any pull back in globalization. do you think that's a real concern or are there also concerns whether or not that stimulus can be put into place? >> i think we need to see how difficult it will be for donald trump to push his agenda through congress. yes, we do have a republican majority in both the senate and the house of representatives. but trump will not be able to rule by executive decree so, therefore, the actual outlook for the continuation of the north american free trade alliance and wider trade issues with china are still very much questionable. germany, yes, it's europe's largest export economy it will be susceptible to any reduction in global trade but it's the important not to just focus on

one single data point because the trend for the eurozone in general has been positive. >> let's say that parts of what they have been saying that we're moving towards a new world order however you want to interpret that. but in terms of more protectionism coming to the forefront and we see more in europe as well, noirn uk, more coming out of france and germany some other countries as well for how long can a trade to the upside in equities continue before we see a reversal on that on protectionist worries. >> the equity markets we've seen so far this year, certainly the risk of political uncertainty. we're seeing a rise in populism right across europe or populace rhetoric as you mentioned, by the movement in italy and so on and so forth. i think the market is now going to begin to focus on december

4th referendum in italy for reform of the upper house there. a negative result and it's looking very finely balanced at the moment would clearly be negative for markets. but it's much more important to consider the fundamentals. what are the companies themselves actually saying by and large, commentary is positive. q3 reporting season has been strong. 38% of european companies have exceeded expectations by 5% or more. >> go ahead. >> and also valuations are supported as well. if you look at adjusted measure of valuation support for equity markets. >> you would say be long equities? what are your main trading strategies at the moment or investing strategy? >> as an equity investor i think we're always biassed to see the outlook for equities than other asset classes. there's a lot of commentators

out there calling for a fall in bond prices and increase in yields. we would suggest that's not negative for equity markets. equity markets generally trade positively when we are in a period of tightening u.s. monetary policy. so the overall framework as we would perceive it is positive. >> are you encouraged by the gains we're seeing in u.s. financials a lot of it down to the rate adjustment we're seeing but hopes that donald trump may have some deregulation that could be more favorable to bank. >> by extension, yes, it is an environment where regulation is becoming less severe which should allow banks to increase their return on equity which is quite clearly essential for their valuation. but the move in bond yields is definitely positive for european banks as well. it allows them to earn higher what we call net interest margins which is basically the

spread between lending and borrowing for banks. so that environment if it were to continue should suggest earnings upside for the financial industry. >> all right. thank you so much for joining us this morning. that's john baker european fund manager at jpmorgan asset management. we're going to bring you up to speed coming from the german foreign minister about turkey. he's citing increased concern about mass arrests and treatment of the media in turkey. this comes as additional fears over an increased power grab for the turkish government. the government is saying we're trying to improve relations with turkey in a against breaking off talks with turkey as well. >> still very curious to see how the u.s. now plays international foreign relations card and how trump manages to garner these relationships with the turks, the kurds, the iraqis. >> we heard so little because

during the campaign, during the debate so much focus on the domestic picture. by all means, get involved. good morning, everybody. you can find us on e-mail. the address is streetsignseuropeastreetsignse e streetsignseurope@cnbc.com. >> let's get out to carolin. >> we have more coming up from the u.b.s european conference. we'll be talking about how the trump victory might impact the italian refer rern dum. we have lorenzo codogno waiting in the wings. we'll be back in a few. cod

. hi, everybody, welcome back. you're watching "street signs" here on cnbc. italian bond yields hit a one year high after the prime minister gave his biggest hint yet that he'll step down if he loses next month's referendum on constitutional reforms. asked in a radio interview what he would do should a no vote prevail he said if i have to stay on in parliament and do what everyone else has done before me that's to scrape by and float there that doesn't suit me at all. carolin is at the ubs conference in london. a lot of people are to concussion on italy and what happens if it's a no vote. >> reporter: yeah. a lot of people say this is the big next risk event for europe. we're joined by cod vislorenzaoo

visiting professve -- professor. the immediate reaction that we have seen is that in northern italy the far right movement is actually taking a stance and some local alliances with the italian communist party collapsed. and that could be the only thing is who is the underdog. the prime minister is isolated. he looks like he's fighting this battle alone and he might be perceived as the kind of the anti-establishment person oddly enough and so you never know. i think it's very difficult to predict the outcome. >> reporter: that's a real interesting point who is the establishment or who is anti-establishment at this point. we've seen widening in bond

spread they wideened to 180 basis points because there's so much nervousness around this italian referendum. it could be considered as the next shoe to drop after brexit now the italian referendum. you think those fears are overdone. why? >> i think they are overdone. i think, you know, i think the markets are not concerned just about the political situation. the market is concerned because of still relatively poor economic performance. the bank situation which is very good and the political situation. as for the political situation it's not severe enough to justify these concerns keeping in mind they take risks basically in early elections, prolonged. >> built. these are really very small probability events. i'm a bit more concerned about the banking situation which

might be, again, a situation that might actually justify some jittery in the market. but maybe for, not for this reason, for the elections, for the referendum but for the banking sector which is something that's not going to be addressed immediately. i think once the referendum is out of the way, then banks will start, you know, announcing capital increases and then we'll, you know, be a key moment for italy. >> reporter: we've seen successful debt to equities that was announced yesterday. what else do the banks need to do to regain confidence? >> it's a very difficult question, i think. they are stuck in a sense that there's a lot of regulatory pressure and regulators and ecb is forcing banks to recapitalize themselves in a very tight time frame and at the same time clean

up their balance sheet. they are trying to do that and i think it's working in a number of, you know, banks and, indeed, they are very much focused on long capacity. if the capital increased combined with disposal of nonperforming loans is a successful story then i think most problems for the italian banking sector will disappear. >> reporter: let's come back to politics. what if we get a no vote and the polls are too close to call and no one wants to second call. they were wrong with brexit, they were wrong with trump. what happens? >> i think if the no wins there's a very high chance the prime minister will resign. it would be a vote -- doesn't cost much to him because the president would reappoint him immediately because he's a leader of the major party. so he would have a chance to

reform another government which would be effectively very similar to the current one. however, the risk is that some centrist party would no longer support him and if that's the case there's no chance, no other chance but a grand coalition which effectively means buscolini's party back in power. i think we get to something like 98, 95% probability. extreme case is. >> built is very low. >> do they have a viable alternative to renzi? is there another figure that could replace renzi? >> in case we get similar, a government similar to the one we

have now with a majority almost by default renzi would be the prime minister. if we go for a grand coalition renzi would not be prime minister. in that case we would have a weak institutional figure leading the country for about 18 months between now and the next general elections and with limited mandates say passing the budget and reform. >> thank you so much. really appreciate it. lorenzao codogno. we have more coverage coming up from the ubs european conference. we'll be back you in half an hour. sounds good for now. thank you. and on to corporate news. we got quite a lot going on. >> we're looking at shares of nokia because they have been sinking after the company forecast that its network market would fall by 2% next year. updating on its 2017 outlook it said it expects operating

margins in the range of 8% to 10% with sales declining. now addressing fears nokia is in a similar situation to rivaler i canso ---er i er i-er rickson. host europe is one of europe's largest independent web hosting service. it's expected to be valued around 1.7 billion euros. other bidders are go daddy, united internet and center bridge. vodafone reported an earning with a rise. growth was boost bad pick up in italy and germany. however the british narrowed its expectations.

foods fell due to weak grocery sales. its maintained its full year expectations and expecting sales to grow by 2% to 4% during the second half of the year. and land securities have reported a loss. the uk property company says demand for office space in london is hesitant with vacancy rates on the rise. speaking to cnbc earlier, robert knoll was asked how difficult was it to sell in the current market? >> the market is fairly liquid. the point our sales last year we were using very buoyant market conditions to sell secondary assets. and insue late us from market turbulence. so we're sitting here really very relaxed about the position we sit in and on that move we'll be going back into the market to

reinvest. >> now easy jet's profits dropping by 28%. the british low cost airline blamed currency headwinds amaid post-brexit. >> facebook and google made moves to spread accurate information online over concern over fake news site. google is working on a policy to restrict ads on fake news sites. a facebook spokesman said the company updated its ad policy to add fake news site. 13 f filings david einhorn reduced its stake in apple and general motors and bought a stake in u.s. steel. it still remains green light's position. >> warren buffett berkshituber

hathaway revealed substantial stakes in airlines. >> reporter: interesting news out of berkshire hathaway where investors possibly warren buffett himself or one of his stock picking new lieutenants loaded up on airline stocks. starting with united airlines. berkshire bought delta and american bought a position in southwest after the quarter ended. buffett would not explain the reasoning behind these moves. elsewhere in today's filings david tepper was on a buying spree purchasing over 4 million shares of bank of america. he bought 2.5 spider puts.

he hasn't returned my message to try to figure it out. like buffett he bought delta also but sold 3 million shares of southwest leaving just a stub position in that airline per hind. the big investor activity in financials is all over the shop. even as david tepper bought, druggenmiller also bought bank of america. fairholme sold shares of bank of america. back to you. so it is interesting we're seeing the shift. i have to say looking back he was joking back in 2003 he set up a phone line where he had an urge to buy airline stocks he would say iman airoholic.

>> when you talk about investors. 1989 the industry has changed dramatically since then. warren buffett isn't the only one who used to say stay clear of airlines. but when you look at the changes that these airlines have gone through, many people expecting oil to stay relatively low for longer. i wonder about the dollar trade whether or not that will buflt tourism when you think about on the reverse side the pain the uk airlines are going through. >> that they are not going to continue to move lower ploy. united, american airlines, delta and southwest authors the four that he just recently bought. >> stocks certainly liked it. elsewhere japan is planning to lower taxes for small businesses that hike wages in hopes that higher wages will spur economic growth.

let's get out for more from the nikkei. >> reporter: japan's finance minister is in discussions to give larger tax breaks to companies that hike wages and the finance minister is supposed to make an announcement on wednesday. a rare move of the minister to announce anything ahead of the council. the announcement is aimed to show the government's strong will to get businesses to boost wages. now the so-called wage hike tax cut was introduced three years ago and regardless of size that raises wages from the year before will be allowed to deduct 10% of total wage hikes. this time the government is aiming to double the rate of tax deduction from 10% 20% of the total wage hike just to mid and small size companies. in fiscal 0 20e 14, 68 how

businesses applied for the tax cut. the government is hoping greater tax breaks will make it easier for maul business owners to reflect improved earnings. prime minister abe has been urging to wage raises but wean with the tax break it may not be so easy since more businesses are faced with falling revenues this year. that's all from the nikkei. back to you. >> so still much to come on "street signs". keep in touch with us and get us on the world market. >> we'll be back with more on the other side of the break. we'll be talking about u.s. election. we'll head out the saudi and back out to the ubs conference as well. see you in a second. .

good morning and welcome back to "street signs".

>> hi, everybody. your headlines this morning. >> oil stocks and utilities lift equities in europe as crude prices rebound. plus banks drag in early trade shrugging off the rally stateside. >> ericsson is in crisis. president obama gives advice to his successor telling donald trump he'll need to correct his temperament when he takes office and calling on him to send signals of unity. >> he has won. he'll be the next president. and regardless of what experience or assumptions he brought to the office, this office has a way of waking you up. >> and russia's economy minister is detained over an alleged bribe relating to mega domestic oil deal between rosneft and

bashneft. >> trump, brexit, global bond sell off is all topics. we have a stellar guest lineup just for you. hi, everybody. welcome back. you're still watching "street signs". more data hitting the wires. we're looking at the october cpi, the uk cip. 0.9% year-on-year. now year-on-year we're looking at a figure we've been expecting a figure closer to over 1%, 1.1%. they say the uk october core cpi excluding food, energy and tobacco 0% on the month. glancing at some various flashes, housing prices the plus 7.7% versus 7.7% seen in august

and steeptember 10.9% year-on-yr for london. the pound is boosting the price of goods leaving factories no sign of exact on consumer price sos far and that clothing prices and university tuition fees the biggest downward contributor in both of those areas seeing inflation. thanks for that. i want to give you a check on the european markets as we stand but first let's give you a shot how u.s. markets are set to re-open. we're talking about the dow jones having its sixth straight days of gains as treasury yields, dollar hitting multi-month highs. the dollar saw its highest level since brexit. we will watch to see when the currency comes back in play. they are looking at green arrows

once again for the s&p 500. the nasdaq and dow jones, the nasdaq trailed on some concerns over tech this while financials don't lead to the upside. let's give the overall picture in europe. gains on the ftse 100. the dax pushing flat, paring back. the cac higher and ftse in italian lower by .3%. there's a lot of discussion as we digest the u.s. election results. italy comes into focus. as mentioned we're keeping a close eye on the forex. europe higher by almost a .10%. dollar weakening off by a quarter. pound in focus, adjusting the latest inflation data. sterling off by half a percent.

continuing to watch the dollar peso move. lower by 1.2% but not close to reversing the moves we saw in the wake of the election results. >> we've seen sterling falling more on the back of the cpi data. good morning. >> so we're just seeing a little bit of a further move south in the pound sterling. overall trend. i'm assuming people aren't trading on the data points. >> that particular data point was surprising. if you look at estimates from economists they are looking for a much higher number today. coming in as it was, below expectations. expectations were in line with the bank of england expectations. what does it mean going forward. the pound is lower.

in the latest bank of england quarterly inflation report very neutral. had to deal with a very, very quick cpi forecast. so data today suggests perhaps a bit more of a drag. that means markets have to reprice because in the curve there were some hikes priced in by the end of 2017 and 2018. >> do we think the bank of england will be hiking before the ecb and isn't that a play that will be maintained. >> slightly. most important thing really is the back end of the curve in terms of that rate. investors are looking for yield. hungry hippo is trying to find some carrot. your question was the long term trend. we need to ignore the noise. my worry on friday is that after trump there's the before trump and after b.t.. after trump the correlation from sterling went from emerging markets to higher yields in tuck led to lower pound. quite a worrying development for

reserve currency. now after trump it's going to kick back into the normal reserve currency status. uk will be more attractive. you're seeing a position that became a bit self-fulfilling. became aggressive. we had to say to our clients our long term is we're 120 and something about 88 in euros. the problem is we had to match this sort of market shock after trump. likes the market has been much faster than on that. position why it's been done, long term trend is lower. last time we spoke is hard brexit, no change on that development. the politics of anything have gone further towards that. >> do you think the dollar response has been too fast. i was listening to comments saying we still don't know whether or not this will be reagan era inflation where you get growth or cart era where you

get stagflation. are we getting ahead of ourselves on the dollar trade? >> i don't think so. people say where do you expect u.s. treasury ten years with trading by the time trump gets in and does some of his measures. his tax plans highly likely to succeed through congress. it's a control. it's very, very aggressive on tax cuts. so it's simplifies the tax code, 20% corporate rate tax cut. huge deal for u.s. very inflationary. big yield curve. i don't think it's yet finished. very good for the there are and especially versus dollar/yen. >> does it have any bearing what happens with brexit. there was chatter a trump presidency could mean a softer brexit whether it's strengthens the uk position. >> the first impact was people talking about obama's state back

on the cue on free trade agreements. world trade is not a nightclub. let's be a bit more serious. it takes a lot of time to get these things. free trade agreement with the u.s. is quite highly likely and in a post-brexit world we get that done. but it won't be quick or that easy. so what i would say in terms of that is in terms of negotiations, it's not any stronger. one argument was on security concerns. donald trump as a candidate for president was very strongly against nato and at some stages he has a mixed message on that. obama overnight has tried to calm international investors and also their allies abroad in saying after his conversation with trump he'll stick with nato. >> just briefly before i let you go your preferred cross currency trade. >> $yen. trump inflation trade dollar/yen is most sensitive.

>> thank you very much. >> president obama has offered some advice to his successor president-elect donald trump warning that the incoming president must address and correct issues with his temperament. he spoke at a news conference at the white house. >> he has won. he's going to be the next president. and regardless of what experience or assumptions he brought to the office, this office has a way of waking you up, and those -- those aspects of his positions or pre-dispositions that don't match up with reality, he will find shaken up pretty quick because reality has a way of

asserting itself. >> well let's get out to nbc's tracie potts who is in washington with the very latest. good morning. we were just listening to the sitting president obama there talk about a wake up call that one gets in the white house, a lot of optimism that perhaps trump will reorient some of his policies here when he talks about unity but then came the appointment of steve bannon and a lot of backlash with that. where do we stand in washington? >> reporter: right now there's really a back and forth discussion going on about steve bannon who was very close to trump during the campaign as his ceo. he was the architect of really the last couple of months going into what ended up being a victory for mr. trump. however, there are a lot of people very concerned about him. before he joined the campaign he was the heat of breitbart news, a website that attracts white supremacist, extremist groups. they talked in derogerer to

terms about women, muslims, jews. people are very concerned about this man having the ear of the new president. he's been appointed as his chief strategist and the trump team is now going on the defense. we've heard it from kellyanne conway, we've heard it from rudy giuliani. going on defense saying this is a good man and he brought a lot of good things to the table in the campaign. >> do we know what's next on the agenda for mr. trump's team in terms of the things that he needs to do before he gets to january, before he gets to take office? what's the list of what's first to do? >> reporter: so insiders say that the transition is actually ahead of schedule. what he's got to do is fill his cabinet. he's made some decisions. there are a lot of names floating out there. we keep seeing rudy giuliani has been an adviser during the campaign. his name floated as secretary of state important,ly attorney

general although he says he doesn't want that. inside trump tower there are a lot of discussions going on and part of that involves the three oldest trump children who have been close advisors to their father and now we confirmed that the team is looking into, they are inquiring about whether or not the oldest trump children can get security yearance before the inauguration very likely so they can continue as part of those discussions in term of weighing who might be best in various positions, secretary of defense, secretary of state that type of thing. >> good to see you. thank you very much, tracie potts joining us there live via nbc news. now meanwhile fed officials weighed in on trump as economic plans offering a hint whether a rate hike will come in december. when asked about trump's protectionist pledges jim williams said the u.s. should maintain its commitment to free trade and open policies. the richmond federal reserve president meanwhile suggesting that the president-elect trump's

plans to ramp up infrastructure spending could boost fiscal stimulus prompting the fed to raise rates. this as robert kaplan the dallas fed president urged the president-elect mr. trump to enact intelligent fiscal policy to yes, sir growth. >> in the uk prime minister the theresa may addressed london. she argued the uk must not shy away from its role as an advocate for global free trade. >> as we leave the european union we'll use the strength and size of our economy to lead the way in getting out into the world and doing new business with old allies and new partners alike. we will use the freedoms that come from negotiating with partners directly to be flexible, to set our own rules, and forge new and dynamic trade agreements that work for the whole world.

>> now coming up, carolin joins us from the ubs conference in london. >> what's behind brerkt? whalgts behind the trump election? he calls it the dramatic rise of white populism. stick around. we'll be back with plenty more in just a few minutes.

hi, everybody. welcome back. russia's economy minister has been detained over a $2 million bribe. they said that alexei ulyukayev received the money for giving a positive assessment which led to the oil producers rosneft to acquire a stake in bashneft.

alexei ulyukayev is the highest ranked russian statesman to be arrested since the failed coup back in 1991. >> president-elect donald trump and russian president vladimir putin spoke on the telephone and agreed that relations between the two countries were unsatisfactory. according to the kremlin the two will look to normalize u.s.-russia ties. statement said they also talked about the fight against terrorism and the war in syria. donald trump's election continues a populace trend that comes to define politics in 2016. let's get back out to carolin at the ubs conference. many are now looking to europe with key elections coming up wondering whether or not the populist movement will hold. >> we've talked so much about italy this morning. the view is very much split. i want to bring in my next guest the.

you've called it a dramatic rise in white populism. this pho this phenomenon isn't new. what's behind this? >> two causes. one is economics. if the economy doesn't go very well people ask themselves let's try soelgs. then over these last years we've seen that minorities we have protegtd they were the center of attention therefore the others say what about us. listen to us. we have a grievance. >> where did it go wrong. improper handling of financial crisis. stems 20, 30 years ago. what did governments do wrong here? >> everything contributed a little bit. financial crisis and dealt with it but not perfectly.

and all throughout there was this continued giving attention to minorities and the majority said hey we would like to dom the table as well. >> how do you remedy this feeling. you can't ignore it. in the election now with trump, the majority has won. the majority is against protecting the minorities too much. how do you remedy it. >> it's very difficult to trim it. cases like brexit or in the u.s. more about symbolism. economic policy will remain ultimately rather prudent but if the president makes a speech from time to time saying now we look after you, that might be enough. europe is different. >> for the u.s. at least another answer entrenchment when it comes to globalization you think the lights avenue? that will allay fears of the white populist voters. >> there will be a lot of symbolism.

if trump says okay i threatened whatever the mexicans or chinese and therefore they came to me and made a compromise, look i have protected you against global san diego that might be enough because we know that really it's not about global san diego it's much more. >> the problem with these parties the populace parties especially here in europe the leftist parties if you look at syria for example he hasn't delivered. trailing in the polls. spain never made it into the government. actually enacting a populist message is a lot more difficult than containing. >> economic populist message it's very difficult. it doesn't work in the past. overspending, retrenching towards one country does not work. they need to deliver the symbolism without damaging the economy. >> is there a sense that donald trump will roll back on many of his campaign promises and has

struck a lot more conciliatory tone in the last couple of days or so. do you think he'll be a more moderate president? >> i think what he wants to do is to appear not to be moderate, but in the substance especially in the economics sense to remain moderate because that's the only way he can deliver. >> thank you so much for your time. really appreciate it. we got plenty more coming up from the ubs european conference. do stay tuned and we'll see you back tomorrow. bye-bye. sounds good. thank you. and just on that note, we need to head back out to hadley that's been speaking about the post-trump world. >> reporter: so we have a chance to catch up with the former head of the european commission. i asked him about trump. i asked him about brexit. i asked --

>> not who we would have voted for. we now have to adapt to him. at the same time i believe donald trump will have to adapt to the world. donald trump will certainly adapt to his office and to some constraints and realities and facts of life. so i think it's important now that europe and united states specifically remain very committed, namely in terms of trade and economic matters including nato. >> there was a lot of hand wringing from european leaders possibly talk about an emergency meeting on the election of donald trump. do you think that was a bit hysterical. >> i wouldn't have done an emergency meeting. i didn't like the word emergency. certainly that the new situation is assessed by european leaders. i hope that the assessment will be for engagements. i believe it is a big mistake now to try to create a position

between europe and the united states. okay. the president-elect of the united states was not a favorite in all european countries, but we have a lot in common. by far the biggest economic relationship in the world, relationship between europe and united states, much more important than with china or relationship of the united states with china. so in terms of trade and investment it's number one relationship in the world and politically we have nato. so it's very important to clarify also what the commitments to nato are and i believe this is going to happen. of course there will be a period of adjustment. adjustment, i would say, is the key word. the world adjusting to trump and trump adjusting to the world. >> reporter: talk to me a little bit about that engagement. we see theresa may grappling what could be a problem in terms of the brexit of the united kingdom.

how worried are you >> i'm concerned, of course, with the decision taken by the british but i respect it. i mean the british have decided to leave the european union so they will most likely leave the european union. >> reporter: do you think europe will make it difficult? >> not the intention of making it difficult. there's not an idea of punishing the british because it will be self-punishment. what happens it will be very difficult to have a common decision by the 27. first of all it's very important to know what the position of the united kingdom is because so far they have not yet defined it. but also the 27 they need to have a common position and very often europe and i know that by experience when you have to try to put everybody together, what happens is the lowest common denominator not the highest common denominator. i anticipate very difficult -- sometimes extremely complex

negotiations, yes, because the relationship is a very difficult one because britain is very important for the rest of europe. it's natural when you see conditions are difficult. >> reporter: i also asked jose about the rise of populist parties across europe and he weighed in on that. he told me he's worried about seeing this wave of populism and what it can mean in the long term for the european union and whether or not we could see a break up there. there's concern. he did sound optimistic there about a donald trump presidency saying he's going to have to learn how to play by the rules and optimistic about coming to an agreement on brexit he's worried about what's going to happen in france. >> just putting europe aside for one minute and to concussion on saudi they outlined this 2030 saudi vision last year. where are we with that?

>> reporter: well, this conference, it's the deputy crown prince's signature of foundation. it's all about youth, all about employment and this is all part of this 2030 vision. controversy over the last 24 hours in terms of who was behind that vision, theed a advisory companies involved in this, lots ofed a advisory firms that work here in saudi arabia and mckinsey coming out saying they are not the advisory firm to blame that is behind the to 30 vision. it's interesting to note that because that reflects the level of grumbling we hear about the changes here in saudi arabia. a lot of optimism about what the deputy crown prince is trying to do. any movement is a good movement. some people are questioning how fast everything is going. >> thank you very much.

whether it's riyadh or the current in london everyone scratching their heads wondering what this new order looks like when you talk about the rise of populism and pull back on free trade and global san diee san d. angela merkel says we need to strength globalization. before we go just a picture of how european markets are frapgd we're seeing green arrows. bit mixed with the italian market lag. that's it for today's show. our colleagues stateside will take care of you throughout most of the afternoon. see you tomorrow. bye for now.

>> zboorng. stocks jump, bond yields soar and dollar trades near 13 year highs. >> taking flight. warren buffett makes a big bet on u.s. airlines. the details behind the surprise move coming up. >> plus earning central a new read on housing, the economy and american consumer as home depot rolls out its quarterly results. it's tuesday, november 15th. "worldwide exchange" begins right now. a very good morning. welcome to "worldwide exchange" on cnbc.