i'm karen tso in for carolin and loo louisa today. a banking beat. societe generale and commerzbank post earnings above forecasts sending shares in both lenders higher. >> we are able to look forward in the future with confidence. commerzbank shares turn

negative after accounting changes. we speak first to stephan engles. digital dismay. publicis is the biggest faller in europe as the ad firm books a 1.4 billion euro writedown on its digital business with underlying sales falling 2.5% in the fourth quarter. a holiday nightmare for thomas cook. shares sink as the tour operator reports a big quarterly loss and issues a cautious outlook for the year ahead. welcome. let's look at some of the market action across europe. it's fair to say some of the early confidence has started to cool on the markets. only just holding on to the green for the ftse mib in italy. the french market moving as big name caps are reporting there in the french market, we're ahead 0.4%. the german stock market up about a third. and about 0.10 added to the ftse

100. let's look at the banks. among those reporting today, socgen has been out with numbers today. still trading positive. up 2.5%. commerzbank initially positive, now trading weaker. it is a split picture for the bank stocks. more broadly on wall street, you did see some investor enthusiasm start to cool around the reflation trade as investors questioned how much fiscal stimulus and tax cuts will be coming through from donald trump and what that means for the fed in terms of lifting interest rates this year. financials falling out of favor on wall street. commerzbank shares are sliding after the cfo says he expects moderate negative capital impact due to changes in accounting practices, this despite beating expectations to post a net profit of 183 million euros in the fourth quarter.

germany's lender said it aims to keep the cost base stable this year as it continues to restructure. we'll delve into the earnings and some of those comments that moved the stock price this morning. tune in at 12:15 for our interview with stephan engles. and socgen posted fourth quarter revenues of 6.1 billion euros. net income fell 40% year on year. nancy has been delving into the report and joins us from paris. talk us through the upside for this bank. >> well, the real upside when we talk about net income in the fourth quarter is that it came in ahead of expectations. yes, there was weakness on the revenue side for french retail, but the take away is even on the french retail side that continues to struggle with the low-rate environment it wasn't as bad as many feared. in fact the ceo of socgen was

sounding confident on that performance. yes, they continued to struggle with the low and negative interest rate environment from the ecb, but that's not the only risk factor this bank is navigating around. we're also talking about regulatory risks on the horizon in addition to the political risks in france. when we talk about the basal review coming up sh, people are guard because that will have say in the cet 1 ratios. socgen scored another positive getting a slight uptick in that cet 1 ratio on the full year. i asked the ceo of socgen when he looks at what's going on with the regulatory environment in the united states whether or not he is encouraged that if we get a pare back of dodd-frank, a loosening of financial regulations under president trump, whether that could force european regulators to pare back some of that's regulatory

controls. wait and see exactly what might happen. i understand the focus may be on domestic activities, small banks rather than large banks. and we're not involved in retail banking in the u.s. beyond this, i would like to say with the last ten years a new regulatory framework to ensure security, it would be a shame to review this dramatically. we need to ensure security. second, it's also important to finalize the framework, make the decision so that we can taylor our strategy. what would be good is europe embracing and understanding the challenges and impacts of regulation and focusing first on implementing what has been decided rather than permanently increasing the number of decisions and new regulations. >> do you think there is a threat if we get regulatory

divergence on both sides of the atlantic, that makes wall street banks more competitive? >> can i say from this perspective, it's important to finalize the current agenda, work also on the brexit perspective, which is also important for us. these are the main items beyond what might be decided in the u.s. >> the socgen ceo shrugging off any potential impacts that a pare back in dodd-frank trickling over the atlantic. but he did say the changing rates in the u.s. could impact the ecb, not immediately a rise in rates, but it could give the ecb more room to maneuver as long as the eurozone data continues to improve and inflation data continues to pick up. those are two big ifs for now, and he continues to look at ways the bank can take levers they do

control to improve the retail on both sides of the business and diversify away from their reliance on french retail revenues. that's the message we got from the ceo at socgen. he talked about answering shareholders desire to get that dividend ratio at 50%. that's what they achieved on the year. continue to look for more coming from the bank towards the end of the year. as we get more information on profitability that will be key. the socgen ceo telling me they're constantly looking at ways to get that r.o.e. number close to 10%. karen? >> stay right there. i want to bring gildes sorrey into the conversation. you see socgen wanting to diversify away from the french market at a time you are finally getting improvement in the french economy. is it the right strategy? will socgen be seeing the rewards of that strategy any

time soon? >> when you compare them with bnp paribas on tuesday, they disclosed some setbacks they faced in the french retail business. setbacks due to competition, due to asset quality as well, where they disclosed a specific style. so, impacting q4. socgen on the other hand is coming out strongly from 2016. they are beating on french retail by about 36% on net income expectations. and international businesses are also there to outperform. >> short-term, i want to bring up the upcoming elections in france. you have noted in your comments about the negative sentiment that can be forthcoming. particularly as investors get increasingly nervous around marine le pen's chances at the french presidential election.

how big a risk does this have for the outlook around banks in france? >> interestingly in france the elections will take place over two rounds. in the second round, whoever gets elected still will have to get majority in the parliament two weeks later. if you think about macron even as a doomsday scenario and marine le pen, they will be in weaker position to secure parliamentary majority. even if we get surprise ala trump or brexit 20, still franc will struggle to impose a shift in the course of the european union. so what we have seen from paribas management and this morning is that they are

discounting any risk that france may go off course when it comes to the eurozone. >> gildas, nancy wants to jump back into the conversation. nan nancy? >> just listening to your comments on the election risk, precisely what you said, both ceos saying they will work whatever happens. but we're already seeing impacts on markets when you see german bunds, some concerns that marine le pen's popularity in the first round alone could be a risk factor that keeps the ecb on hold for longer. is that a real threat or do you agree with the comments from socgen ceo that we're getting to the stage where the ecb could have more room to maneuver. what are your thoughts? >> in front of the european parliament they discussed this trend of financial fragmentation

across europe. definitely that's what we are seeing when they are moving away from the bunds. you have politics but also an underlying trend on rates. the move in the spread of the bund is definitely a result of those geo trends, so topolitics and rates. the market does not want to be seen lagging in 2017. >> i want to thank nancy for your information on the french banks. and regarding commerzbank, the stock price was initially trading higher, and then some comments about the accounting position took the stock lower. do you think it was more than that? you mentioned the strategy of

execution around cost reduction for the bank. >> yes, indeed. in the call they disappointed investors when they said staff reduction would only take place to the last part of 2017 or beyond. i think the market is looking into the capacity of new management at commerz, and the delivery will be managed against the investment bank into the commercial bank, so they are effectively dismantling the investment bank. that will result in staff reductions of about 9,000. they're looking also into the capacity to manage their way through competitive environment in germany where you have deutsche bank but also a whole sector which essentially has an

equity target far below what private investors would expect. so 2% to 4% of target rate on equity for commerzbank competitors. and lastly, the capacity of the management to offset this margin pressure by lowering growth. and in a time where there is a demand for credit it's proving to be challenging for commerzbank. >> and it has legacy problems as it tries to shift shipping zones. i wonder if investors are jumpy around the stock because we did have previous profit warnings in the company. so investors do take notice of the comment. do you think it's a bit of an overreaction today? >> i think expectations were higher coming into the results. when you look at the headlines from the report, it's actually quite good. they have come up with solid

numbers. but the top line continues to be weak. quarter over quarter net income has come down about 15%. same in q3 and q2. so there is an underlying trend which puts them on the back foot, and they have to deliver in this adverse environment. >> gildas, thank you for helping us out with commerzbank. gildas surrey with us. coming up on the show, back on track. zurich insurance sees profits soar but they turn lower on the day. we will hear from mario greco after this.

. plenty more reaction for you

to the publicis shares after taking a writedown. they paid $3 billion for the group in 2016, and maybe the targets set were possibly too ambitious. underlying sales of publicis fell in the fourth quarter. the stock currently down 3.7%. eutelsat reported first half ebita of 588 million euros. the group said it expected a return to modest growth in 2018 adding that it was poised to buy viasat satellite in coming months. and zurich insurance which reported a 47% rise in four-year net profit improved underwriting results which helped to boost the business. its operating profit jumped 182%. the stock trading south today by

1.6%. let's get out to carolin for more on zurich. talk to us about some of the positives you saw in the numbers? >> the business operating profit is in line with expectations year on year. we are seeing a major improvement when it comes to profitabilities. for this quarter it may have been a bit higher than many people had expected at 9.5%. but there is definitely improvements year on year. mario greco has been on 11 mont was about simplifying the business, improving profitability and cutting costs. he told me this morning he is on track with this but he sees room for further improvements. >> we're simplifying the business and we report in these numbers about achievements, and they are exactly on track as we promised investors. yes, also the underwriting result is on track with our promises.

>> where do you see further room for improvement? i can't believe that everything is on track. that everything is exactly where you want it to be. >> we have a lot to improve still. we indicated 1.5 billion of cost reduction which is all about simplification and handling the business in a more direct and simple way. and we only achieve 300 of it. so there is further more to go. on combined ratio, the 98.4 we achieved is just the first step. we have to keep improving. every investor knows that. >> mario greco there. karen, you mentioned the stock is down by roughly 1.6% today. may also have something to do with the fact that shares have had a good run over the last 12 months, up roughly 30%. so maybe an element of profit taking in there. the outlook for 2017, rates, policy and market rates are likely to improve further. that would benefit every insurer

and the economic picture is looking more rosy. not just in europe but particularly in the u.s. back over to you. >> thank you very much for that carolin. thomas cook is trading lower this morning. the tour operator said bookings for the summer were up from last year with 31% of holidays already sold. very early bookings. the company provided a cautious outlook for the remainder of 0101 2017. and thyssenkrupp shares are down, this after the german industrial group saw adjusted operating profit rise 40% in the first quarter thanks to a boost from the lift business that was in line with analyst estimates. joining me is investment director from g.a.m. you saw a lot of investors with

conviction around this reflation trade, the final weeks of last year and this year. we got to 20,000, and it was meant to be a go signal for markets, yet momentum seems to have faded and we lost our way what has gone wrong? >> i think it's a difficult time for global investors generally. there's a great deal of uncertainty on politics, both in europe and the u.s. that is leading people to have not a great deal of certainty about their forecasts for the year in 2017. in the u.s., the question about the extent to which donald trump can implement fiscal stimulus through policy, in europe, domestic demand is improving, but investors are cautious given upcoming elections in europe, in the netherlands or in france. >> french politics has been

cited as a risk for investors in europe. it's flashed up different ways this week. you had cautiousness around the french stock market at the start of the week. that's spilled over to bond markets. you have not seen the trade impacted in france the last 48 hours or so what do you do with the intel that we have got? you have two names now that investor may not be that comfortable with because of lack of party infrastructure. what do you do around politics at this point? if we take the french election. that clearly is the big election this year, marine le pen is leading in the french opinion polls. they're on about 25% in the first round. i think having seen brexit last year, which the polls didn't foresee, having seen donald trump elected, which the polls did not foresee, investors are understandably very nervous that we could see that. and it is worth remembering that were marine le pen to be elected

president, she said she would take france out of the euro that could begin the process that leads to the unraveling of the european union. you don't get a much bigger uncertainty in europe than that happening. that being said our view is that marine le pen is significantly less likely to be elected french president than people think. i think it's an extremely unlikely scenario. >> gildas who was just on the set said that he didn't think even if le pen won she would have a majority in parliament, so there would be no removal from the eurozone. >> it is worth remembering that in the french presidential system they give a lot of power to the president, like the americans. if anything even more. as president, marine le pen would have a lot of power. but it's worth putting this in context. if you go back two, three years ago, marine le pen was polling about 32% in the polls. she's now polling about 25%.

while insurgent movements have gone forward in america, the uk, netherlands, in france they have gone backwards. there's no sign of momentum there. >> let me ask you about the domestic story in europe, we've had a whole bunch of surveys that have come through in recent weeks. other european data suggests there is some recovery, even on the inflation numbers which have been so stubborn in recent years. do you think investors are glossing over what could be a recovery story and are so focused on the unknowns around politics they're not trading europe on fundamentals? >> that's absolutely right. if we take the most widely watched economic data points, the pmis, purchasing and management indices, those across europe are at five or six-year highs. the only time in the last decade they've been above these levels are in the immediate aftermath of the global financial crisis. this is the first time we've

seen building economic momentum, building pressure. and if you start to look down even further down to, as you say, some of the inflation data or more importantly consumer lending behavior, we're beginning to see the end of the great de-leveraging of the european consumerment. >> so bulk on european demands? >> that's right. there are some exceptions and thomas cook had some difficult numbers this morning. but generally we are going to see the turning of the rate cycle, turning of reflation. that's good for domestic demand. good to have a compelling trader with all this whitewash across markets at the moment. thank you very much, robert smith. we have news crossing from the kremlin. interesting if you're watching donald trump and how geopolitics play out. the first line says it is unlikely that the east ukraine conflict will be part of a deal with donald trump. so hands off to the u.s. president on that part of the

world. the kremlin says it is possible that a putin-trump meeting, it's not clear what we're preparing for. still uncertainty around russia/u.s. relations. check out world markets live, our blog which runs throughout the european trading day. you can go to that online.

welcome back to "street signs." these are your headlines. net income at socgen falls 40% in the fourth quarter but shares rise as the number beats expectations. the ceo tells cnbc he's pleased with the earnings. >> we scored a lot of points. it enables us to look forward in the future with confidence. commerzbank shares turn negative after the cfo says he sees a negative capital impact due to accounting changes. we speak first to stephan engles. digital dismay. publicis is the biggest faller in europe as the ad firm books a 1.4 billion euro writedown on its digital business with underlying sales falling 2.5% in the fourth quarter. a holiday nightmare for thomas cook. shares sink as the tour operator

reports a big quarterly loss and issues a cautious outlook for the year ahead. we had a mixed finish on wall street yesterday. the dow peeling back, but the nasdaq pushing to a record high. this morning you can see we're looking fairly flat on futures. the market off to a cautious start. the handle in europe has been mixed. we started out very strong, but some of the optimism has been fading as investors have been second guessing the earnings coming across this morning. the ftse flat. stronger for the french market where some big cap stocks have been reporting. and the italian market now sliding into the red down 0.4%. foreign exchange markets, a lot of investors noticed a pick up in the u.s. dollar in the past

24 hours. this morning you're seeing a comeback for euro and sterling trade. though the u.s. dollar is trading firmer to the japanese yen. 112.20. that's a bit of a stumbling block for the japanese yen. shares in yara international are languishing at the bodyttomf the stoxx 600 after a q4 loss as low fertilizer prices hit the norwegian company. th french oil major total is eyeing assets. the ceo said the company's strong balance sheet meant it could look for opportunities to pick up attractive assets from struggling rivals.

this as total posted better than expected fourth quarter numbers. and quarterly core earnings of 380 million krons helped aker solutions. revenues and margins did slide, though, and cautioned 2017 would continue to see that trend. let's delve into the company further. joining us is luis araujo. great to have you on the show today. we noticed there's still pressure coming through. flesh out your outlook for 2017 for us. >> good morning, karen. pleasure to be with you. in terms of '17, we see some high activity in the front end as you call it. clients are look to the projects, that's very

encouraging. but again, there are certain times and confidence curtails with investment, but we have seen good signs ahead of us. >> we've seen a cautious program on exploration from some companies that were cutting their capex programs for this year. i want to know whether the opec and non-opec production cuts have made a difference to the exploration outlook and impact your business? >> yes, we are very involved in all phases of exploration in europe. so we saw a long-term future. what we see for us are great opportunities on the brownfield market, as clients try to produce oil from these assets. so that's where we see the biggest uptick now. >> the norwegian off-shore oil industry has seen a lot of consolidation this year.

three of the biggest operators merged, a deal that involved the billionaire shareholder of your company. how badly hit do you think the sector still is? >> i think that every down down cycle, and it's been a long one, three years now, so it's natural across the globe there is consolidation, but the norwegian market is picking it up now better than other markets that we see. so that's encouraging for us being our home market. >> i was curious about a deal you revealed yesterday with bp, significant one for bp. but also for you. there's not much visibility about the amount of work that you could derive from that deal. how unusual is that? is that a sign of the times? >> yeah. i think this for us is very important. we have not had contracts with bp with some large operators when it comes to engineering. it shows they have interest to learn about our solutions.

and it's not quantifiable because they will start to do call-offs on these agreements as they see fit. so we have some coming into the pipeline. we have huge hopes for the relationship with bp. >> no doubt it has an impact on your own work force. i noticed back in january, 650 jobs were cut. about 100 of them in the uk. is the work force still too large for the supply and level of industry demand out there? what do you see on the employee count for the rest of 2017? >> yeah. i think that we have reduced our work force by about 30% since the beginning of the cycle. which is not too bad. we've been protecting our capacity. we have reduced capacity for 2017 and going for war. >> forward. >> i want to ask about speculation of the sale of your company. reports surfaced earlier in the year that the holding company,

aker, had been having conversations with goldman sachs about the sale of the company for $1.4 billion. do you want to stay independent or are forces too strong at this point and you need to consider pragmatic steps? >> as we said then, we don't comment on speculation. we are a very attractive company. there's a lot of consolidation in the market. so it's natural that rumors about our company would come up. we think we have a future as an independent company. of course we always watch the market. whatever is better for shareholders and employees, it will be done. >> a bit of a poison pill almost on your stock given the norwegian government is still committed to the ownership around your stock. >> i think that as a company, we are very attractive. we continue moving forward. >> we look forward to following that strategy and the

developments for your company. thank you very much for joining us today, luis araujo. president trump has written to the chinese president, xi jinping saying he looks forward to working with him in a construction relationship that benefits the united states and china since his inauguration, president trump has yet to speak directly with xi, however the two countries foreign ministries have been in close touch. the two leaders spoke on the phone after president trump's victory back in november. president trump's nominee for the supreme court, neil gorsuch, called the president's recent attacks on a judge challenging his immigration executive order "disheartening and demoralizing." a spokesman for gorsuch said he used such words when speaking to democratic senator richard bloomenthal. last week trump tweeted the opinion of this so-called judge which essentially takes law enforcement away from our

country is ridiculous and will be overturned. in other developments, donald trump took to twitter to criticize department chain nordstrom after the retailer dropped his daughter's fashion line. hallie jackson has more. >> reporter: tonight, ethics experts sounding the alarm about one of the latest presidential tweets. donald trump writing today, "my daughter ivanka has been treated so unfairly by nordstrom. she is a great person. always pushing me to do the right thing. terrible." it comes after the department store's decision not to buy anything this season from the ivanka trump branded fashion line. a company rep says that's due to sales, not politics, just business. a business, by the way, ivanka trump no longer runs. >> so how is she being treated unfairly if she's not a partner -- >> it's clearly a targeting of her brand. it's her name out there. this is a direct attack on his policies and her name. >> reporter: now, new concerns

about the president's focus on the family businesses he's supposed to be separated from. >> i think that he's putting the bully back in bully pulpit, it's wrong, it's unethical, but also raises profound legal and even constitutional questions. >> reporter: from voters, so far, mixed reaction. >> i think it's an appropriate use of his fatherly power to defend his family. he's got that right as well as a citizen and as a father. >> step outside of policy to influence the economy through twitter, of all things, is just incredibly inappropriate, from my perspective. >> that was hallie jackson. the world's largest tequila maker has raise the $790 million in what was the biggest mexican ipo since 2013. landon dowdy has more. >> jose cuero is seeking to raise $700 million in a twice

delayed initial public offering on thursday. the world's largest tequila maker is hoping third time is the charm. a trump hangover delayed the ipo twice last year after his election to the oval sent the peso to report lows. the ipo comes at a time when tequila sales are on the rise thanks to millennials and the cocktail culture. since 2002, tequila volumes grew more than 100% with last month's sales outperforming the category, up nearly 10% that january. jose cuervo is a big piece of that, commanding a third of the market share. the problem is the firm could be help by president trump's u.s./mexican trade deals. the u.s. makes up more than 70% of its revenue, and americans would likely rather not see a tariff on the product. higher prices could drive consumers to other competitive

brands. >> the pictures showing marg re margaritas there, the message is you are not to dilute the drink with lime, and you are to sip the drink. greece is the word on everyone's lips again. germany and the imf weigh in on the debt crisis once again. all that and more after this.

the british parliament voted by 494 votes to 122 to approve the government's brexit bill unamended. this grants theresa may the authority to trigger article 50. shadow business secretary clyde lewis resigned from the cabinet after voting against the

movement. reports suggest may could trigger article 50 on the 9th of march. there's been market chatter relating moving big banks from london in a post brexit world. the ceo of barclays said that while lots of negotiation is still to be done. london remains the financial hub of europe. >> today the capital market center of europe is clearly the united kingdom and london. and there's a lot of things to be negotiated, brexit brings up a lot of complex issues. i don't think the european union will go close to cutting off its access to the capital markets oxygen. and goldman sachs is moving from london to the united

states. it manages about $3.5 billion. that reduction is linked to dodd-frank when it came into force. goldman pulled 2.8 billion from that fund back then. media need yo mediobanca isg q2 net profit. commen >> at the center of investors minds today, during the conference call with the ceo, he did say regarding the generale stake that he always supported generale's growth through acquisitions, but didn't make

any official comment regarding intesa sanpaolo's ambitions on generale saying we will sell or 3% that we already decide, the rest is speculation and hi hypothes hypotheses. so nothing came out in terms of what they'll be doing moving forward, but the market is applauding those moves. they brought in for the first six months an increase of 30% in terms of net profit. operating profits also rose by 14% at mediobanca and revenues rose by 6% to an all-time high over the 1 billion euro level at 1.72 billion. overall strong numbers for this investment bank here in italy. but you mentioned it, the speculation is all around what will happen with generale as well as what unicredit will be doing. also unicredit has underway a

capital hike that will be reporting later today. they old an 8.3% stake in mediobanca. we'll watch that stock. that stock is down and need yo banker is higher by 1.16%. >> claudia, thank you very much. in other news, germany's finance minister ruled out a hair cut on greek debt. speaking on a german talk show, wolfga wolfgang schaeuble said greece's problem is competitiveness not debt. christine lagarde said the fund would not back down from the view that greece needs further reforms to the pension and tax systems. this is how bonds are tacking across europe. you have the ten-year german bund tracking firmer on the yield. but pulling back on france. it's been choppy on french paper. it was higher this morning.

now pulling back below the 1% mark. gilt is moving higher. the italian paper, moving a bit south. joining us to talk us through the greek story, lynn graham taylor, here we are again talking about greek paper and the potential for a greek crisis again. what do we do with this intel? beauty is in the eye of the beholder, the imf doesn't see any attractiveness around greece and its finances. should investors be concerned? >> it's become an inopportune moment. we have election risks, we have the trump presidency, and the tapering of qe purchases by the ecb. adding all that together, it is not a great moment. >> it sounds bad, but those taking an overarching view say there is no way greece will be cut loose at this point. you have seen the commitment

from many european partners to keep greece apart. why would we have question marks about debt being written off? >> we also fall into the camp that we think greece will stay in the eurozone, certainly all the past history suggests some compromise will be reached to keep them in the eurozone. it's just uncertainty for the market. the negotiations themselves naturally affect the other peripheral countries in the eurozonement. >> what is christine lagarde aiming for here? headlines, noise, higher profile for the imf or something deep their goes into the comments that she's been making? >> really it's a fundamental division in the imf. i think there's still an annoyance heading back to three, four, five, six years ago that they got not hoodwinked but the growth forecasts were too ambitious. you have european countries pressing for the imf to

participate, and noneuropean countries upset about how much money has been led to greece with not great safeguards in place. >> bones in greece trade on thin volumes, you have specialized investors up close and personal willing to take on some of the debt. we had an investor this week saying bring it on, look at the yield on the two-year, i'll have some of that. it's decent for the level of risk you're taking on. how do you see the story? >> i think we choose to trade in other peripheral debt markets. for most it's not a rating they can touch any way. i think we would go trading it through most likely italy in terms of how we trade it. >> i was noting the movement on france. you have seen the peel back below the 1% mark on the ten-year. election risk has been concentrated around french paper, marine le pen has a chance of becoming the next president of france. what do you see the fortunes of

the election story for bonds, how are they linked to this point? and will we march much higher closer to the election? i think there's further room for widening of french spreading heading into the first round. we see 15 points as the key level based on what happened in brexit and the u.s. elections. we look to ender longs once that first round has been concluded. >> is the risk konconcentrated the two, five or ten. >> we like going long france versus holland, because of the consensus building nature and the lack of the pvb being a part of any government. >> on the ten-year because there's more liquidity? >> yeah, basically. >> i'm scurious about the movement we see on the curve. looking to france, there has been gyrations of the bund.

what type of layer are we seeing in the way they trade fixed income? is there a greek contagion coming into the peripheral? a french element in the bund? >> there's a bit of general political risk priced into the peripheral countries. i think the background is political risk is being priced into spreads. at the same time, curve shape, you're seeing a pull back on the steepening we saw. so the glass half full trading with trump, a step back from it is interesting when you put the u.s. into the mix. yesterday you had investors questioning the trump reflation story and in the sense saying we may not get those three fiscal rate hikes. the tax cuts may not be forthcoming in 2017, that has to change your view of the fed delivers on three rate hikes. if you don't get three rate hikes and more investors question that profile, how does that move the needle on german bunds? >> drives the curve flatter. we've been in the camp always

thinking there will only be one hike in '17. hasn't changed our fundamental views. that's why u.s. ten years are going to 2% at the end of the year. >> appreciate your time. a lot to talk to you about after the action we're seeing this week on fixed income markets. lynn graham taylor, thank you. want to get you up to speed with european markets as we sit on the flat line of the ftse 100. we crack through 7,200 out of the gates this morning on the open. the dax still holding on. french market about a third of a percent. we are now weaker on the italian market. futures for the states have been flat. let's all for today's show. i'm karen tso. coming up next, "worldwide exchange."

good morning. trumponomics, some of the nation's best known ceos react to the president's first weeks in office. twitter on tap. has president trump given the social media firm a bump? we'll get expert predictions this morning. and the northeast braces for thunder snow. thousands of flights canceled, schools closed. an up to date forecast is next. "worldwide exchange" begins right now. ♪