good morning, everybody. welcome. you're watching "street signs." i'm louisa bojesen. >> i'm carolin roth. these are your headlines. shares in ocado leading the way in europe as the online grocer said it is busier than ever in talks with potential overseas partners. >> h & m shares on course for the best day in three years as retailers earnings beat and it pledges on opening more than 70 new stores. more spring cleaning for deutsche bank. it's paying $425 millions to u.s. authorities and 163 million

pounds to the fca, and that's to settle a russian laundering probe. u.s. stocks suffering their worst day so far this year after donald trump's travel ban rattles investors. the president also fires acting attorney general sally yates saying she betrayed the department of justice by refusing to enforce immigration orders. good morning, everybody. welcome to the show. >> good morning. >> another eventful 24 hours in terms of that political direction. european markets this morning a bit higher. yes, it is worth noting we did, indeed, see some weakness out there. stocks at six-week lows heading into the session but well above where we were before the u.s. election on the 8th of november. keep that in mind as we look at the markets. some of the bigger movers out there, you're looking at ocado. shares leading the way in europe after full-year revenues hit

almost 1.3 billion pounds. pretax profits jumping by 21.8%. this online grocer said it is busier than ever in talks with overseas partners and that they expect to sign multiple deals with multiple partners in the medium term. >> and we need to talk about h & m. shares in the company are getting a boost after surprising the street with fourth quarter numbers, reporting a rise in pre-tax profit to $840 million, versus the 2% fall forecast by analysts. the swedish fashion retailer set a new growth target to increase local currency turnover by 10% to 15% annually and announced that it plans to open around 430 new stores over the next year. let's get more analysis on this with tony shirrat. is this more than a cosmetic change when it comes to increasing the forecast? >> i think that's both h & m and

o ocado are the same story, scalability. today they have changed their longstanding target for growth from a store-based target to a sales-based target. new stores typically don't convert into sales at one to one rates. so they increased their medium term sales growth targets. so it's fairly significant. >> that's also to account for the rising importance of e-commerce. the underlying issue with the likes of h & m is they have falling margins and the returns from existing stores is not enough. how can h & m get the profitability up, not just the sales? >> that is a very, very good

question. over the last seven years, their ebit margin has fallen from 2.7% of sales to 12.4%. that is a pretty material change. some things they're doing have injected more cost into the business, much more ethical than they were seven, eight years ago. that's grown the cost base. there's a big investment phase going on in h & m and that's been expensed into the p & l, and we look for that to even out so we can see the sales growth coming through to the bottom line. >> investors liking what they're hearing. the stock up 5.5%, 6%. a real fall from grace over the past two years compared to where the share price was before that. what do you think they need to do to keep this investor momentum going? >> you know, the longer-term

trend has been disappointing. >> we went from 3.60 to 2.50 swedi swedish korona per share. >> they beat on the fourth quarter expectation by 4%, 5%, but they only had a 4% increase in profit in the fourth quarter. the first three quarters were down. the full year down 12%. so sort of not out of the woods yet frankly. >> the roll-out, that's pretty extraordinary always. i think back to all the years we've been covering h & m, it always seems like they're announcing we're rolling out an additional 450 stores, 500 stores, 300 stores. how long can they continue at that pace? the announcement today, 430 new stores. >> yeah. sorry to be a bit of a mr. miserable, but they actually opened 427 last year, so it's not actually a big increase. you need to keep increasing the

amount of stores that you're opening, not keeping it the same. so the presumption is that there's going to be more growth coming from the online than the stores. that's a reasonable thing to expect. >> tony, one issue you always focused on is the importance of currency. you say in your recent note that h & m has not benefited from the depreciation of the renminbi. when do you think that will come through? >> i'm glad someone reads my -- >> i actually do. >> i would not like to say at this stage. >> we move on to ocado what is

your target for h & m? >> a target price of 3.05 korona. >> so what are your thoughts on ocado? >> ocado is a scale story. the issues are that it's facing a difficult uk market. there's been some negotiations with morrisons over time. so it needs new business, new, more profitable business to let people justify the view they'll make in the long-term. >> how big a chance do you think there is for us actually seeing a material new deal with overseas partners? >> you're probably asking the wrong person, but it's been going on for two years now. they need to bring something to the table.

>> tony, thank you very much. >> all right. let's talk about givaudan, that company at the bottom of the stoxx 600 after reporting a miss on the top and bottom line. 2016 net profit came in at 644 million swiss francs. despite this, the swiss fragrance brand kept midterm guidance on hold. shares down 3.4%. not smelling too good, i would say. excuse the pun. >> a friend of mine said if you cook fish you should put vanilla sticks out in your home at the same time. >> is that true? >> yeah. >> 2016 sales at luxottica rose by almost 1%. the group's total revenue for the year came in roughly in line with analyst estimates at 9.1 billion euros. earlier this month luxottica announced plans to merge to establish an eye wear powerhouse with 15 billion euros in joint annual sales. not a lot of movement on the

share price. >> we'll take a small gain of 0.2%. e-mail the show. yesterday we got plenty of controversial e-mails, that's because we spent a lot of time talking about trump. the address is streetsignseurope@cn streetsignseurope@cnbc.com. we appreciate feedback, whether positive or negative. you can also follow us on twitter, and tweet us directly at -- >> @louisabojesen. >> or @carolincnbc. coming up, you're fired. president gives marching orders to his interim attorney general. more on that story after the break. take one.

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welcome back. you're still watching "street signs." shell will be selling a number of assets in the uk north see to chrysaor for $3.8 billion. sanofi, nova nordisk and eli lilly are being sued by patients for price fixing for diabetes treatments. the lawsuit claims the drugmakers lifted the price of insulin by 150% in five years. uninsured patients are particularly vulnerable to the rising prices, according to the plaintiffs. however a sanofi spokesperson said the lawsuit has no merit. unicredit says it expects to book a net loss of 11.8 billion euros for 2016. the italian lender said its ct 1 ratio would fall 8%. and more spring cleaning coming from deutsche bank. the bank agreed to settle claims

relating to its part in a russian money laundering scheme, they will pay $425 million fine. they were found to have moved money out of russia with a mirror trading scam. shares up by 1.7%. i guess any news that removes litigation is good news for deutsche bank share holders now. the french presidential elections pose the "greatest existential risk" for europe. that's according to strategists at credit suisse. they said the victory of francois fillon would be a positive for the economy, and emanuel macron could also be constructive for growth. even if marine le pen were to win, her powers would be limited as her party would fail to gain a majority in france's lower

house. now tens of thousands of people continue to rally in cities and at airports across the u.s. voicing their opposition to president trump's executive order on immigration. protesters gathering in cities including new york, washington, boston, also here in london where thousands of uk residents gathered outside 10 downing street, which is where the prime minister resides. some of them chanting shame on may for the prime minister's invitation to mr. trump to visit the uk on an official state visit. earlier president trump responded to reports of chaos at airports across the country in a tweet. he blamed the disruption on a delta computer outage. protesters and the tears of senator schumer, a reference to the new york center's emotional press conference where he choked up while speaking about the executive order. the delta computer issues did not begin until sunday evening. president trump also fired

the interim attorney general, sally yates after she said the department of justice would not defend his executive order on immigration in court, effectively defying his directive. in a statement the white house said yates betrayed the department of justice by refusing to enforce a legal order designed to protect the scitizens of the united states. >> good morning, everyone. >> reporter: after she announced she would not defend the president's immigration order, president trump fired acting attorney general sally yates. a statement from the white house press office called yates "weak on borders and very weak on illegal immigration." dana boente, the u.s. attorney for the eastern district of virginia has been appointed to replace yates. yates refused to enforce the president's executive order which bans travelers from seven predominantly countries from

entering the u.s. >> i happen to think this is a terrible mistake. but how i feel about it, or more importantly how a federal judge feels about it, is not the issue. the issue is whether the president can do it. and historically the answer has been yes. >> the ban ignited protests across the country which continued monday night. >> trump's new pick for acting attorney general, dana boente issuing a statement saying he would rescind yates' guidance and direct the doj to defend the lawful orders of our president. he will be serving until the senator, jeff sessions, trump's pick for the post is confirmed by the senate. sessions had been questioning yates before she took over the role of attorney general on whether or not she would be willing to go up against the president if she deemed the president was doing something unlawful and illegal. she said yes at the time. now she's doing it and sessions is taking over. >> reminds me of the nixon

episode when he removed an attorney general, not that i remember it personally. >> president trump said he would announce his choice for a supreme court justice tonight at 8:00 p.m. he is considering neil gorsuch, and thomas hardiman. head to cnbc.com to see why president trump's pick is likely to spark another battle in the senate. the bank of japan kept monetary policy on hold, but policymakers are more bullish on the economy forecasting stronger growth in the coming years. following a two-day board meeting, the central bank raised the gdp forecast and said it remains on course to meet its 2% inflation target by 2018. did a minute pass already? simon derrick, let's bring trump

back into the picture. the bank of japan leaving rates on hold. indicating we would be looking at stronger growth. does that mean we switch into yen trade, the safe haven trade, the economy trade from the japanese? >> as always with dollar/yen it's about the yield differentials but equally about the issues what those yield differentials are being used for. listening to mr. kuroda how many times did he say we're not targeting foreign exchange rates. there's more driving dollar/yen differentials. you only have to look at what's happened since they brought in yield control back in october, the way they controlled the jdb yields and how dollar/yen soared when you start to see u.s. yields going up. it's interesting this is happening now because we have mr. abe visiting in the not too distant future, and the last

thing japan wants to be is called something like a currency manipulator. >> so far we're ten days into office for donald trump. just under ten days. he's fulfilled so far or is attempting to fulfill all the pledges that he promised before the election. he also has indicated hesitation with regards to the strong dollar. is that another thing we should be taking seriously h? and again, should we look at the yen twice about that? >> we have to look at the dollar over the course of the last 12 months. it is a very consistent thing. we heard president trump talking to the "journal," i think it was in early january. he mentioned strong dollar. mr. mnuchin mentioned it. it's been raised by a number of other officials or potential officials that it is at least in the short-term potentially an issue. that's the hint. so, clearly it's a concern.

your question is if you're concerned about a strong dollar, how do you deal with it? one thing you can do is go directly to the people you think are manipulating those currencies and pressure them to ease up on policy. the thing you can do, and the easiest and most effective thing is take easier monetary policy. monetary policy that lags behind inflation. that's why i think tomorrow's meeting matters. that's why i think the issue about who comes in to fill those other board member places on the fomc board matters. >> let's talk about the fed. given the gdp growth in the last quarter, that was a bit underwhelming, only 1.9%. the slowest growth rate in a couple years and a wave of protectionism coming from the trump administration. does it mean the fed should be hiking three times this year? isn't that a little bit too far?

i think if you're looking at their mandates, purely in terms of the inflationary story, there's a gap between where headline inflation is and where the yield is. so, if you look at it purely from that perspective, what janet yellen is arguing certainly makes sense. the question is how concerned she is and how the other board members are concerned about a strong dollar. remember, they themselves have over the course of the last few years raised dollar strength as an issue on a number of occasions, specifically the impact it's had on international markets. i think what happens is if you look at what last friday tells us, it maybe does tell us about the economy that's slowing down, maybe some of those inflationary pressures do start to ease. equally we have to wait to see what's happening with the non-farm payrolls number. the key is they're going to get three moves, maybe they have to start talking about a march move, so they're under a lot of pressure to come up with a carefully balanced statement

tomorrow. that's the key. what they say tomorrow will color what we think about the fed and dollar. >> as a currency investor, where do you put your money now? it seems like the dollar is in a crowded trade that also seems to be petering out and is also of course hit by the protectionist comments by trump. the yen is probably oversold. what do you do? >> the comment about a strong dollar to me says you have to be cautious about this highly crowded long dollar trade. i've been looking at the other side, which of the currencies are the most heavily shorted over the last couple of years. >> that's the pound? >> the pound. >> okay. simon, thank you very much for that. simon derrick from bny melon. the french canadian student has been charged with the attack on a mosque in quebec, canada. the 27-year-old is the sole suspect in the shooting and faces six counts of first degree murder and five of attempted

murder. kevin tibbles reports on the latest from quebec city. >> reporter: gunfire erupted amidst evening prayers at the islamic cultural center in quebec city. some 50 worshippers were inside as police and paramedics rushed to the scene. six members of the mosque, men ranging in age from 39 to 60, were killed. eight others injured. shot by a lone gunman in what police are calling an act of terror. the suspect is alexandre bissonnette, charged with six counts of murder. tonight police searched his home where his family has lived for decades. >> i'm really shocked by all of this. >> reporter: canadian prime minister, justin trudeau who pledged to assist those barred from the united states condemned sunday's shooting. adding canadians will not be

broken by this violence. tonight in spite of the frigid cold streaming through the streets of quebec city for an outdoor vigil as security is stepped up at mosques in canada and the united states. kevin tibbles, nbc 6, quebec city. >> we need to take a quick break. find us on twitter, @carolincnbc or @louisabojesen. also live on the world markets live blog. it runs throughout the european trading day. much more to come on "street signs."

hello. you're still watching "street signs." i'm carolin roth. >> i'm louisa bojesen. these are your headlines. shares in ocado leading the way in europe as the online grocer said it is busier than ever in talks with potential overseas partners. >> h & m shares on course for the best day in three years as retailers earnings beat and it pledges on opening more than 70 new stores. more spring cleaning for deutsche bank. it's paying $425 million to u.s. authorities and 163 million pounds to the fca, and that's to settle a russian money laundering probe. u.s. stocks suffering their worst day so far this year after donald trump's travel ban

rattles investors. the president also fires acting attorney general sally yates saying she betrayed the department of justice by refusing to enforce immigration orders. it was the worst day of the year for u.s. indices yesterday. we saw modest declines off the lows, the dow was back below the 20,000 handle. the nasdaq off by 0.8%. futures this morning pointing to more negativity. the s&p 500 seen off by 4 points, the dow jones set to fall by 36 points. this is all given the jitters around trump's immigration ban and that's unsettling the markets. we've seen a bit of a rebound in european trade today. we were down 1.1% for the stoxx 600 yesterday, but some buying back. this morning in the ftse 100, up by 0.3%. the xetra dax showing some gains. ocado and h & m rallying on the

back of better than expected numbers. for january we are looking at gains in the european markets to the tune of 0.2%. let's show you the currency markets. you have dollar/yen up by 0.1%, 113.86. the boj news, there was no news from the boj, that wasn't too big of a factor here. the bigger news was the safe haven flows into the end given the trump worries. euro/dollar 1.05. >> want to update you on the data hitting our wires in the last minute or so. uk december mortgage approvals coming in at 678,098, the highest level since march of 2016. also looking at it being below where the poll had been putting it. 69,000 is what reuters had been anticipating. net-net looking at consumer

credit, the smallest rise since may of 2015. just over a billion pounds sterling. mortgage lending, 3.8 versus a figure below that in november. the biggest rise seen since march of 2016. the data indicating consumers are still out there spending. >> what are they spending on? apple products? it was the holiday quarter. >> maybe. >> we will be hearing from apple later on today. the all-important holiday quarter. we expect 77 million iphones to have been sold, an increase of 3%. the first increase in sales in roughly three quarters. will we see anything along those lines? >> investors are hoping for it. this is the first quarter we'll really understand how the iphone 7 and 7 plus have performed. that was in the back of the year that phone released. investors are hoping the iphones can reverse course after three consecutive quarters of

declines. that's the main numbers today, investors will be looking for them. >> the focus is always on iphones. they account for two-thirds of the company's sales. why do we not hear more about the watches? why do we not hear more about ipods? it's unsettling how much focus there is on that smartphone. >> i think when the apple watch came out, investors were hoping for a huge up tick in sales, this will be the next blockbuster product, but that never materialized. so we don't get those breakout numbers. the big focus is the iphone and the services revenue. how much is apple getting from apple music, from the app store, all the other services it provides to millions of customers. last quarter it was $6.3 billion of revenue in that. if you compare that to what facebook made overall, 7 billion. you can see it's a huge business for apple. this is only going to increase. this is what investors are hoping will move the needle in

revenues. >> hang on for a second. we are looking at live pictures from dublin. the eu's competition commissioner is expected to defend her position that ireland gave billions of dollars in state aid to apple. >> goes back almost 60 years. we just are about to celebrate the treaty of rome, and our founding fathers found that if there were to be a level playing field, well, then we needed competition legislation. and they gave us three different tools. one was merger control, second was antitrust. third was state aid control. the thing was that part of that they, of course, learned and took from the u.s. you see the merger control. part of that is done nationally, part at the european level.

good example of that would be the ge ouster merger last year, the mergers we're now reviewing, london stock exchange, it's an ongoing business to make sure after a merger there is a competitive pressure that benefits customers. antitrust tools, in europe we done have a ban of monopolies. you can grow, grow yourself stronger, but congratulation stops if you start to misuse your dominant position. the example of that would be the three google cases, and the g gaspron case. the last thing is the state aid control. the founding fathers found that this was necessary in order to create a level playing field. they wanted businesses from small and bigger member states to have a fair chance of making

it. i think when ireland and denmark for that matter joined the eu in 1973, they entered in an organization where they knew that small countries would have a fair chance of making it as well. businesses from smaller countries would have a fair chance of making it. because the competition would be about your efficiency, your skills, innovation, what you could present to customers. and that, of course, is still important. because fair competition, level playing field, it's still what makes any company tick and allows them to grow. i think we all, at least i do, feel the uncertainty coming from present day political situation. the brexit, of course, very close to home, that the uk have

chosen to leave our community is, of course, something that creates uncertainty in every member state and probably here in ireland, both because of the geographic proximity an because of a lot of export going to the uk. obviously there is some open questions as to what will happen. i think also in this respect, it is very important that sort of the basic of our values, that big and small which treat a treaty the same way that we honor and put these values into real life. on the state aid side of things, very early days back in the '90s, the commission gave guidance as to what is state aid, also when it comes to taxation. in order to make it clear that no matter what you do, you should enable companies to be treated in the same way.

>> all right. we're going to continue to monitor this. once we do get more breaking news out of dublin we'll bring that to you. other breaking news from the kremlin and comments that do need to be taken with a pinch of salt. the kremlin says it is concerned about the flair up of fighting in eastern ukraine and says ukrainian backed forces launched an attack on rebels which was rep repelled. it says this complicates the minsk peace accord and that ukraine is trying to distract attention from its own problems. >> all extremely political. cynics might say the kremlin making a statement like this now is also an attempt to get the u.s. on board. >> of course. even though when we saw that phone call between donald trump and the russian president, there was no mentioning of the lifting of sanctions. everyone said it was way too early. we need to see the implementation of minsk first. >> back to technology. snap has chosen the new york

stock exchange for its initial public offering according to sources. the parent company behind snapchat could file for an ipo early this week. the stock debut could take place around march. fitbit has announced a profit warning forecasting a fourth quarter adjusted loss per share along with lower than expected revenues. the wearables company cited disappointing demand over the holiday season. fitbit said it would cut 6% of the work force signs of stiff competition from apple. nintendo cut its full-year operating profit to 20 billion yen from 30 billion. nintendo still managing to log

its first quarterly profit in a year. arjun is still with us. cutting the operating profit. heading in the right direction when you look at the year performance. >> yeah. i think that's one of the most important numbers to look at, that quarterly increase in revenues. what they're showing is that this bet they've made on mobile gaming is translate nothing meaningful growth. so the pokemon go effect, as it were, is taking hold. they noted in the earnings report that the pokemon go game, which is released on mobile, has increased demand for other pokemon games on other consoles such as the 3ds, one of the handheld consoles. those have seen an uptick thanks to the hype around the brand. it's positive news for nintendo today. >> boosting production of the switch console. do we know by how much? >> we have not got any -- i think the company forecast 2 million shipments of this device in the first quarter this year.

they've said that the initial shipments of this device have been fully allocated, people have already bought them and preordered them. they plan to boost production. that's seen as a positive sign. nintendo struggled in the console market against the likes of play station, the x-box, they are making a comeback because at the end of the day the console is the main business, they hope all the bets will translate into big brand recognition from nintendo. >> on that note, how much money can you make with online gaming? you had an amazing stat saying 5% of those who download mario run are paying. that's not much. >> that's not much at all. the model that nintendo chose is an old school mobile game model. most mobile games nowadays are free to download but you make players pay for in-app purchas s

purchases. nintendo is releasing an android version in march, that could boost sales. >> the last time i played a video game, the original mario. >> grade game. >> doesn't get better than that. >> mine was pacman. sony pacman. not that it was in the '80s. >> what are you playing now? >> a mixture of fifa and a wrestling game as well. >> fifa is definitely popular at my house. definitely. okay. a group of silicon valley companies will get together today to discuss potential legal action against president trump and his travel ban. google, airbnb and net flick are among the invited guests. josh lipton has more. >> reporter: it was just last month that then president-elect trump donald trump met with tech

leaders at trump tower in new york city. often at odds on the campaign trail, the two sides tried to find common ground. so much more that truce. now tech has come out swinging against trump's executive order on immigration. ceos and executives from most of the major tech companies voiced their concerns over the weekend including those from facebook, alphabet, apple and netflix. there is no issue more critical or personal in silicon valley than immigration. by one estimate, immigrants started more than half of the u.s. start-ups valued at $1 billion or more. immigrants run some of the most iconic tech companies like google. in response to that executive order, pichai said it is painful to see the personal cost of this executive order on our colleagues. we've always made our view on immigration issues known publicly and will continue to do so. it's not just talk. tech executives are also taking

action. google co-founder, sergey brin who immigrated to the u.s. from the soviet union, joined protesters at san francisco international airport. the lyft cofounders say they will donate $1 million to the aclu over the next four years to defend the constitution. and uber's ceo is being vocal on the issue creating a $3 million defense fund for drivers who may be impacted by the ban. but it's important that these tech leaders still maintain a relationship with the white house, given the range of issues in front of them, from tax reform and increencryption to antitrust issues and trade. it's not clear the impact will be on these businesses, because the issue is being litigated what is clear is the issue creates uncertainty for the sector. coming up, when kenny met

may. yesterday's meeting between the irish and british leaders, and how brexit was overshad owed by donald trump.

hi, everyone. welcome back. you're still watching "street signs." shares in seadrill are on track for their biggest one day fall in a year. they say the $8 billion restructuring talks about be more complicated and take longer than originally anticipated. seadrill's stock shed more than 90% over the course of the last three years hit by the decline in oil prices. the company was worth $22 billion and a leader in that particular sector. brexit was the only item on the agenda, but theresa may's meeting yesterday with irish counterpart, enda kenny, was overshadowed by the growing

reaction to donald trump's travel ban. the two leaders reiterated their stance against trump's measures. >> uk takes a different approach. i was home secretary for six years. at no stage did i offer those sorts of arrangements. obviously president trump has been elected by the people of the united states, he is moving to put into place what he said he would do. we have a different approach to these matters in the uk. >> in respect of the policies put in place by the american government, i disagree with this. i obviously will say that to the president and vice president when i meet with them. >> i have a feeling that many of these press conferences will be hijacked by trump. trump issues. >> i think so as well. >> someone like may just coming into office playing a delicate balance. needing those trade agreements with the u.s., at the same time also thousands of people are really upset in the uk about the presidential visit.

moving on, the uk mps will begin a two-day debate over the bill that would allow theresa may to trigger article 50. the vote is expected to pass without major amendments. the conservative and labour parties are set to back the bill while liberal democrats and nationals signaled they would vote against it. speaking at chatham house, the eu's chief brexit negotiator said europe needs to be fair to those uk citizens who still felt connected to the bloc. >> we need also to be open and generous to the individual uk citizens. i can tell you i receive every day tens of letters, i don't know how many already, i didn't summarize them, every day i receives tens of millions of citizens who say don't let us

alone. we feel still european citizens. we want to continue to have our link with europe because we make part of a same civilization. that is what we don't understand in europe. that is we have a common heritage, a common civilization, history, architecture, culture, literature, you name it. >> 222 billion euros was raised across leveraged loans and high-yield bond markets in 2016 in europe. that's a 24% increase on the previous year. that's according to detweiler analytics which says the leveraged finance market will be influenced by political matter. we are joined by nick seville. thank you very much for coming in to talk about your report. not a single bond was placed in the first quarter of 2016. that tells you a lot about the brexit risks. how would that change in 2017 as we are still going through the

motions when it comes to triggering article 50 and waiting for the negotiations with the eu? >> yeah. coming into 2017, the uk is one of the most active issuers so far this year. however once the formal process to trigger article 50 takes place, and we see the effects of rising inflation, what that might do to the uk economy, i think you're likely to see issuance in the country slow down. had a slow start to last year. that did pick up throughout the year. >> leveraged finance depends on financing means but also m&a. m&a has been slower in 2016 because of some of the political risks. how would that fair in 2017 given that rates are rising? >> rates are rising. we've seen a lot to of moves in current sis as wcies which has impact on m&a transactions. going forward, a lot depends on how the markets play through

this level of fairly enhanced uncertainty. how will trump react. what will happen when article 50 is triggered, and will there be that certainty to enable companies to complete those transactions. >> what is the difference between loans and bonds at the moment? how much is being issued in each area? >> you have seen a very active market in both so far this year. last year we saw far fewer bonds than previous years. i think a lot of that is explained by the -- the closing between the relative advantages of issuing loans versus bonds. you've seen companies with greater flexibility to run their business as they see fit, when

you bring the factors together, you have to ask yourself what's the relative advantage of issuing bonds compared to prior years. what do you think could be a market changer in this particular area of the market? is it politics in europe we're looking out for? is it what happens with protectionism stateside? what would make a difference to that needle. >> i think there are two things. looking at the end of last year, you had brexit. you had trump, you had the italian referendum, all of these things didn't slow down issuance as much as we would have thought, 3q and 4q were quite strong. this year you have french and german elections, based on the impact of last year, will those have the same impact? what changes things this year is trump. it's article 50, which could

alter the way the world works. similarly you have rising inflation and will fixed income investors want to put money to work for these yields in times of rising inflation. >> let's talk about yields. the average coupon is 5.3%, the lowest since 2007. 5.3% is not bad when you compare it to 50 basis points for ten-year bunds, but lower than what you would have historically have gotten. why is that? >> you've seen a lot of domination of the issuance by those higher rated corporates. that's brought that down. the deals that we tracked last year, 28% were below single b rated, down from 40% the prior year. you have also got the ecb buying corporate debt, which has pushed people down the risk spectrum, created demand for that higher rated corporate debt. going forward, that could change.

rising inflation, will central banks continue to be so accommodative as we go forward? >> nick, thank you very much. we need to check in on the u.s. futures and see how we're setting ourselves up for trade 4 1/2 hours away. we are indicated slightly lower on the right-hand side of the screen. we saw some trading out yesterday on the back of some of these controversial moves coming through from the trump administration. though, again, keeping in mind that markets are still at very high levels compared to heading into the election. >> yeah. that's it for today's show. thank you very much for watching. >> i'm louisa bojesen. >> i'm carolin roth. "worldwide exchange" is up next.

good morning. u.s. stocks coming off their worst day of the year. can the bulls battle back on this final trading session of january? developing story. president trump firing the acting attorney general who defied his immigration orders. the details coming up. and can apple return to growth? that's what the ceo tim cook promised today. we'll find out if that's what he delivered. it's tuesday, january 31, 2017. "worldwide exchange" begins right now. good morning.